SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                                    FORM 10-K

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                   For the Fiscal year ended December 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


                         Commission file number 0-10958


                         DROVERS BANCSHARES CORPORATION
             (Exact name of registrant as specified in its charter)


                      PENNSYLVANIA                                23-2209390
(State or other jurisdiction of incorporation or organization)(IRS Employer ID)

            30 SOUTH GEORGE STREET, YORK, PA                        17401
         (Address of principal executive office)                  (Zip Code)

Registrant's telephone number, including area code  (717) 843-1586

Securities registered pursuant to Section 12(g) of the act:

                 COMMON STOCK $5.00 PAR               OVER-THE-COUNTER
                 (Title of each class)    (Name of exchange on which registered)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter periods that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to the
Form 10-K. [X]


The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 28, 1997 was $50,182,678.  The number of shares of
Drovers Bancshares Corporation Common Stock, $5.00 par value, outstanding at
February 28, 1997 was 2,809,180.


DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report for the year ended December 31, 1996 are
incorporated by reference into Parts I, II and IV.  Portions of the Proxy
Statement for the annual shareholders meeting to be held May 23, 1997
incorporated by reference in Part III.








<PAGE>
Drovers Bancshares Corporation and Subsidiaries
CONTENTS

PART I

Item 1.  Business ......................................................... 4 

Item 2.  Properties ....................................................... 9 

Item 3.  Legal Proceedings 
  The information required by this item is contained on page 19 of the
  Corporation's 1996 Annual Report.

Item 4.  Submission of Matters to a Vote of Security Holders
  This item is omitted since it is not applicable.

PART II

Item 5.  Market for the Registrant's Common Equity and Related
  Stockholder Matters
  The information required by this item is contained on page 1 and 19 of the
  Corporation's 1996 Annual Report.

Item 6.  Selected Financial Data 
  The information required by this item is contained on pages 10-11 of the
  Corporation's 1996 Annual Report.

Item 7.  Management's Discussion and Analysis of Financial Condition and 
  Results of Operation
  The information required by this item is contained on pages 30-37 of the 
  Corporation's 1996 Annual Report.

Item 8.  Financial Statements and Supplementary Data ...................... 11
  Additional information required by this item is contained on pages 13-28
  and page 38 of the Corporation's 1996 Annual Report.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
  Financial Disclosure
  This item is omitted since it is not applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant ............... 21
  Additional information required by this item is contained on pages 3-11
  of the Definitive Proxy Statement dated April 18, 1997.

Item 11. Executive Compensation
  The information required by this item is contained on pages 9-16
  of the Definitive Proxy Statement dated April 18, 1997.

Item 12. Security Ownership of Certain Beneficial Owners and Management
  The information required by this item is contained on pages 3-9
  of the Definitive Proxy Statement dated April 18, 1997.

Item 13. Certain Relationships and Related Transactions
  The information required by this item is contained on pages 17-19
  of the Definitive Proxy Statement dated April 18, 1997.











<PAGE>
Drovers Bancshares Corporation and Subsidiaries
CONTENTS

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

  A.  Financial statements are incorporated by reference to pages 1-38 of the
      Corporation's 1996 Annual Report.

  B.  There were no filings on Form 8-K for the year ended December 31, 1996.

  C.  Listing of Exhibits.

    Exhibit 3 - Articles of Incorporation and By-laws.  Filed December 31, 1991
      with the Securities and Exchange Commission

    Exhibit 4 - Instruments Defining the Rights of Security Holders
      (incorporated by reference to Exhibit B to the Holding Company's
      Registration Statement on Form S-14, No. 2-77871 filed June 29, 1982,
      with the Securities and Exchange Commission)

    Exhibit 13 - Annual Report to Security Holders.

    Exhibit 21 - Subsidiaries of the Registrant. (incorporated by reference
      to page 30 of the Corporation's 1996 Annual Report)

    Exhibit 23 - Consents of experts and Counsel.

    Exhibit 27 - Financial Data Schedule.


SIGNATURES ................................................................ 22



Page numbers of Annual Report to shareholders and Definitive Proxy Statement
referenced in this document refer to hard copy only.  See electronic copy of
documents for corresponding page numbers.





























<PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 1.  BUSINESS

GENERAL

Drovers Bancshares Corporation was organized on October 27, 1982, under
Pennsylvania Business Corporation Law and held all the stock of Drovers Interim
Bank, a Pennsylvania state-chartered bank established to effect the
reorganization.  The Interim Bank was then merged into The Drovers & Mechanics
Bank and the Common Stock of the Interim Bank was converted into and exchanged
on a share-for-share basis for Common Stock of Drovers Bancshares Corporation.
The Management of The Drovers & Mechanics Bank formed Drovers Bancshares
Corporation for greater flexibility in providing a wider variety of banking
services and in engaging in nonbanking activities permitted under the Bank
Holding Company Act of 1956, as amended.

The Drovers & Mechanics Bank is a wholly-owned subsidiary of Drovers Bancshares
Corporation.  The Bank is chartered pursuant to the laws of the Commonwealth of
Pennsylvania and is subject to the supervision of the Banking Department of the
Commonwealth and the Federal Deposit Insurance Corporation.  The Drovers &
Mechanics Bank was organized in 1883 as a national bank and became a state-
chartered non-member of the Federal Reserve System on February 14, 1979.

The Bank offers a wide variety of banking and trust services to individuals and
commercial customers in its service area.  Personal banking services include
checking accounts, savings and time accounts, certificates of deposit, personal
and mortgage loans, home improvement loans, safe deposit services, estate
planning and administration, personal trust management and discount brokerage
services.  Commercial banking services are provided to businesses, nonprofit
organizations and local municipalities.  These services include checking
accounts, savings and time accounts, financing activities and corporate trust
services in the areas of pension, profit sharing and employee benefit plans.

On December 31, 1996, the Bank employed 193 full-time equivalents throughout its
offices. The Main Office of the Bank is located at 30 South George Street, York,
Pennsylvania.  A Research and Administrative Services Center and eight branches
are located in the surrounding suburbs of York City.  On September 27, 1996, our
Windsor Office was closed.  On November 16, 1996, our first full-service
bank/convenience store office opened in Dover, PA.  In addition, there are four
other out-of-town offices located in Emigsville, York Haven, Dover and Red Lion,
Pennsylvania.  The Bank also has five remote service facilities located at the
York Fairgrounds, Harley Davidson, Inc., York College of Pennsylvania,  Shipley
Stores, Inc.-Dallastown Exxon, and Shipley Stores Inc.- Shrewsbury Exxon.

In December 1993, the Bank purchased the office building attached to the Bank's
main office and corporate headquarters.  The five-story complex, known as 96
South George, provides for future growth and enables the Corporation to maintain
its headquarters in downtown York.  In January of 1996, the executive offices of
the Bank were relocated to the fifth floor of 96 South George.

The Bank is the sole limited partner in two ventures to renovate and operate
apartment buildings.  The first building opened in 1994.  The second opened in
March 1996.  Both buildings provide low income housing to qualified families.
The investments are accounted for under the equity method of accounting.  The
combined carrying values of the investments at December 31, 1996 and 1995 were
$2,391,000 and $2,527,000, respectively.




4 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 1.  BUSINESS

COMPETITION

The principal competition with the service area of the Corporation is provided
by other financial institutions, including commercial banks, savings and loan
associations, credit unions, brokerage firms and mortgage and insurance
companies.  The competition within the banking industry has increased
significantly due to the elimination of many distinctions between various types
of financial institutions.

SUPERVISION AND REGULATION OF THE HOLDING COMPANY

Drovers Bancshares Corporation is a bank holding company as defined by the Bank
Holding Company Act of 1956, as amended, "the Act".  As a bank holding company,
we are required to file with the Federal Reserve Bank an annual report and such
additional information as the Board may require pursuant to the Act.  The
Federal Reserve Board also makes examinations of the Holding Company and its
subsidiaries.  The Federal Reserve Board has the authority to issue cease-and-
desist orders against a bank holding company and its nonbank subsidiaries if it
determines their actions represent unsafe or unsound practice or violation of
law.

Under Pennsylvania law, a holding company is permitted to control one or more
banks in Pennsylvania.  However, a holding company is required under the Act to
obtain prior approval from the Federal Reserve Board to acquire all or
substantially all of the assets of any bank, or acquire ownership or control of
any voting shares of any bank other than the Bank, if after such acquisition, it
would own or control more than five percent of the voting shares of such bank.
The Act does not permit the Federal Reserve Board to approve the acquisition by
the holding company or any subsidiary of any voting shares of, or interest in,
all or substantially all of the assets of any bank located outside the
Commonwealth of Pennsylvania, unless the acquisition is specifically authorized
by laws of the state in which that bank is located.

Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Banking and Branch Act"), bank holding companies can
acquire a bank located in any state subject to certain limitations.  The Act
limits the activities which may be engaged in by the Holding Company and its
subsidiaries to certain specified activities, including those activities which
the Federal Reserve Board may find, by order of regulation, to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto.

Although, the United States Supreme Court has rendered a decision in favor of
nationwide insurance sales by banks and which also bars states from blocking
insurance sales by national banks in towns with populations of no more than
5,000, the entrance of banks into the insurance industry is hotly contested.  On
the heels of the Supreme Court's ruling, the Office of the Comptroller of the
Currency has issued draft guidelines for national banks to sell insurance.  The
federal guidance, however, will not necessarily ease state restrictions which
currently hinder bank insurance sales.  States that have traditionally been
opposed to bank insurance sales could impose licensing requirements and other
restrictions hampering bank insurance activities.  Because the insurance
industry is opposed to banks selling and underwriting insurance, it is difficult
to determine to what extent banks will be allowed to engage in insurance
activities and the regulatory costs that will be attached to such activities.


5 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 1.  BUSINESS

Congress is currently considering legislative reform centered on repealing the
Glass-Steagall Act which prohibits commercial banks from engaging in the
securities industry.  The major initiative proposed by the House Banking
Committee Chairman, James Leach, has recently been defeated.  Leach's proposal
required a financial services holding company structure which would be permitted
to own a bank and a separately capitalized securities firm.  Under Leach's
proposal, banks, however, would be prohibited from affiliating with insurance
companies or nonfinancial firms.  The holding company structure would be
regulated by the Federal Reserve Board, and its subsidiaries would be supervised
by the applicable regulator based on their respective functions.  Alternatively,
Leach's proposal also permitted a securities firm to establish an investment
bank holding company to own an uninsured wholesale financial institution and a
securities unit.  Although Leach's proposal, as currently drafted, has been
canceled, he has announced his plans to introduce legislation proposing limited
regulatory relief.

From time to time, various types of federal and state legislation have been
proposed that could result additional regulation of, and restrictions on, the
business of the Corporation and the Bank.  It cannot be predicted whether such
legislation will be adopted or, if adopted, how such legislation would affect
the business of the Corporation and the Bank.  As a consequence of the extensive
regulation of commercial banking activities in the United States, the
Corporation's and the Bank's business is particularly susceptible to being
affected by federal legislation and regulations that may increase the cost of
doing business.

Federal Reserve Board approval may be required before a holding company or its
non-bank subsidiary, if any, may begin to engage in any such activity and before
any such business may be acquired.  The Federal Reserve Board is empowered to
differentiate between activities commenced by acquisition of a going concern.
The Holding Company and its subsidiaries are prohibited from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property or furnishing of services.

SUPERVISION AND REGULATION OF THE BANK

The Drovers & Mechanics Bank is a state chartered, FDIC insured bank which makes
it subject to the regulations of the Pennsylvania Department of Banking and the
FDIC.  Although the Bank is not a member of the Federal Reserve System, it can
access Federal Reserve Bank services, including the discount window. The
Pennsylvania Department of Banking and the FDIC regularly examine such areas as
reserves, loans, investments, management practices and other aspects of
operation.  These examinations are designed primarily for the protection of the
Bank's depositors rather than its shareholders.  The Bank is also required to
furnish annual and quarterly reports to the FDIC.  The FDIC  has the authority
under the Financial Institutions Supervisory Act to prevent a bank under its
regulation from engaging in any unsafe or unsound practices in the conduct of
business.

Federal and state banking laws and regulations govern, among other things, the
scope of a bank's business, the types of investments a bank makes, the reserves
a bank maintains, loans a bank makes and collateral it accepts and the
activities of a bank with respect to mergers, consolidations and the
establishment of branches.  Under Pennsylvania law, the amount of funds which
the Bank may lend to a single borrower may not exceed fifteen percent of the
Bank's capital, surplus, undivided profits, loan loss reserve  and capital
securities.  The amount of indebtedness which the Bank is permitted to incur is
6 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 1.  BUSINESS 

also limited, with certain exceptions, to the aggregate of its capital and one-
half of the amount of its surplus.

A subsidiary bank of a bank holding company is subject to certain restrictions
imposed by the Federal Reserve Act on any extensions of credit to the bank
holding company or its subsidiaries, on investments in the stock or other
securities of the bank holding company or its subsidiaries and on taking such
stock or securities as collateral for loans.  The Federal Reserve Act and
Federal Reserve Board regulations also place certain limitations and reporting
requirements on extensions of credit by a bank to principal shareholders of its
parent holding company, among others, and to related interest of such principal
shareholders.  In addition, such legislation and regulations may affect the
terms upon which any person becoming a principal shareholder of a holding
company may obtain credit from banks with which the subsidiary bank maintains a
correspondent relationship.

Federal law also prohibits acquisition or control of a bank or bank holding
company without prior notice to certain Federal bank regulators.  Control is
defined for this purpose as the power, directly or indirectly, to direct the
management or policies of the bank or bank holding company or to vote 25% or
more of any class of voting securities of the bank or bank holding company. From
time to time, various types of federal and state legislation have been proposed
that would result in additional regulations of, and restrictions on, the
business of the Bank.  The Corporation and the Bank are affected by the credit
policies of the Federal Reserve System.  An important function of the Federal
Reserve System is to regulate the national supply of bank credit.  Among the
instruments of monetary policy which have been used by the Federal Reserve
System are open market operations in U.S. Government securities, changes in the
discount rate on bank borrowings and changes in reserve requirements on bank
deposits.  These instruments are used in varying combinations to influence
overall growth and distribution of Bank loans, investments, and deposits.  Their
use may also affect interest rates charged on loans or paid for deposits.

The Federal Deposit Insurance Corporation Improvement Act of 1991 addresses
recapitalization of the insurance fund.  The Act contains provisions concerning
the utilization of risk-based assessments in generating deposit insurance funds,
a nominal charge to insurance coverage, assessment reductions for banks involved
in community related activities and miscellaneous regulatory procedures and
standards to ensure bank safety and limit systemic risk.  Implementation has not
had and is not expected to have a material adverse impact on the Corporation.
Under FDICIA, institutions must be classified in one of five defined categories
as illustrated below.
                                                                     Under a
                                                           Tier 1    Capital
                                Total Risk- Tier 1 Risk-   Leverage   Order or
                                Based Ratio Based Ratio    Ratio    Directive
CAPITAL CATEGORY    
Well capitalized .............. > or = 10.0 > or = 6.0  > or = 5.0      No
Adequately capitalized ........  > or = 8.0 > or = 4.0  > or = 4.0* 
Undercapitalized ..............       < 8.0      < 4.0       < 4.0* 
Significantly undercapitalized.       < 6.0      < 3.0       < 3.0  
Critically undercapitalized ...                         < or = 2.0  

* 3.0 for those banks having the highest available regulatory rating.



7 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 1.  BUSINESS

In the event an institution's capital deteriorates to the undercapitalized
category or below, FDICIA prescribes an increasing amount of regulatory
intervention.  For well capitalized institutions, FDICIA provides authority for
regulatory intervention where the institution is deemed to be engaging in unsafe
or unsound practices or receives a less than satisfactory examination report
rating for asset quality, management, earnings or liquidity.  All but well
capitalized institutions are prohibited from accepting brokered deposits without
prior regulatory approval.

Under FDICIA, financial institutions are subject to increased regulatory
scrutiny and must comply with certain operational, managerial and compensation
standards to be developed by Federal Reserve Board regulations.  FDICIA also
requires the regulators to issue new rules establishing certain minimum
standards to which an institution must adhere including standards requiring a
minimum ratio of classified assets to capital, minimum earnings necessary to
absorb losses and minimum ratio of market value to book value for publicly held
institutions.  Additional regulations are required to be developed relating to
internal controls, loan documentation, credit underwriting, interest rate
exposure, asset growth and excessive compensation, fees and benefits.

FDICIA also requires that banking agencies reintroduce loan-to-value ("LTV")
ratio regulations which were previously repealed by the 1982 Act.  LTV's limit
the amount of money a financial institution may lend to a borrower, when the
loan is secured by real estate, to no more than a percentage to be set by
regulation of the value of the real estate.

On September 30, 1996, the President signed into law the Deposit Insurance Funds
Act of 1996 to recapitalize the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC") and to
provide for repayment of the FICO (Financial Institution Collateral Obligation)
bonds issued by the United States Treasury Department.  The FDIC levied a one-
time special assessment on SAIF deposits equal to 65.7 cents per $100 of the
SAIF-assessable deposit base as of March 31, 1995.  During the years 1997, 1998
and 1999, the Bank Insurance Fund ("BIF") will pay $322 million of FICO debt
service, and SAIF will pay $458 million.

During 1997, 1998 and 1999, the average regular annual deposit insurance
assessment is estimated to be about 1.29 cents per $100 of deposits for BIF
deposits and 6.44 cents per $100 of deposits for SAIF deposits.  Individual
institution's assessments will continue to vary according to their capital and
management ratings.  As always, the FDIC will be able to raise the assessments
as necessary to maintain the funds at their target capital ratios provided by
law.  After 1999, BIF and SAIF will share the FICO costs equally.  Under current
estimates, BIF and SAIF assessment bases would each be assessed at the rate of
approximately 2.43 cents per $100 of deposits.  The FICO bonds will mature in
2018-2019, ending the interest payment obligation.

The law also provides that BIF and SAIF are to merge to form the Deposit
Insurance Fund ("DIF") at the beginning of 1999, provided that there are no SAIF
institutions in existence at that time.  Merger of the Funds will require state
laws to be amended in those states authorizing savings associations to eliminate
that authorization.  This provision reflects Congress's apparent intent to merge
thrift and commercial bank charters by January 1999; however, no law has yet
been enacted to achieve that purpose.  The Act also provides regulatory relief
to the financial services industry relative to environmental risks, frequency of
examinations, and the simplification of forms and disclosures.

8 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 2.  PROPERTIES

The Corporation and Subsidiaries own in fee simple unencumbered the following
land and buildings:

Main Office                        Northwest Office - closed July 29, 1994
30 S George Street                 1120 Roosevelt Avenue 
York, PA  17401                    York, PA  17404 

Research & Administrative          Westgate Office 
Services Center                    1500 Kenneth Road 
915 Indian Rock Dam Road           York, PA  17404 
York, PA  17403

Richland Avenue Office             Memory Lane Office 
905 Indian Rock Dam Road           200 Memory Lane 
York, PA  17403                    York, PA  17402 

York Haven Office                  Emigsville Office 
Landvale Street                    2123 N George Street 
York Haven, PA  17370              Emigsville, PA  17318 


The Drovers & Mechanics Bank is the sole occupant of all land and buildings
listed above.  The Windsor Office, located at 2 East Main Street, Windsor, PA
17366, was closed on September 27, 1996 and sold on October 30, 1996.  The
Northwest Office, listed above, was sold on January 6, 1997.

The following property is pledged as collateral for a mortgage loan secured
to purchase the property:

96 South George Office Building
96 South George Street
York, PA 17401

The five-story office building adjacent to the Main Office provides for
future growth and enables the Corporation to maintain headquarters in
downtown York.  In January of 1996, the executive offices of The Drovers &
Mechanics Bank relocated to the fifth floor of the office building.

The following branch offices are leased:

Queensgate Office
Queensgate Shopping Center
York, PA  17403

$1,750.00 per month rental; lease expires October 1, 2000.

Dover Office
Dover Square, adjacent to Shipley Stores, Inc.
1 South Main Street
Dover, PA  17315

$4,800.00 per month rental; lease expires November 10, 2006.













9 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 2.  PROPERTIES


South York Plaza Office
275 Pauline Drive
in the Giant Food Store
York, PA 17402

$2,916.67 per month rental; lease expires August 22, 2000, and is renewable for
one five-year option.

Cape Horn Office
Cape Horn Square
RD#2 Lombard Street
Red Lion, PA 17356

$2,500.00 per month land rental; lease expires March 1, 2012, and is renewable
six five-year options.  Building owned by the Corporation.

West Manchester Office
1750 Loucks Road
in the Giant Food Store
York, PA 17404

$2,500.00 per month rental; lease expires March 1, 1999, and is renewable for
two five-year options.

York Marketplace Office
2415 East Market Street
in the Giant Food Store
York, PA 17402

$2,500.00 per month rental; lease expires May 1, 1999, and is renewable for
two five-year options.

Mt. Rose Avenue Office
Mt. Rose Avenue at
Albemarle Street
York, PA 17403

$20,000.00 per year land rental; lease expires January 1, 2001.  Additionally,
and leased equipment of $45,840.00 per year is required to be paid by the Bank.
This transaction has been classified as a capitalized lease.

Although the facilities currently owned or leased by the Corporation are
sufficient for its operations, the Corporation may obtain additional space as
required.

The Corporation is planning to increase its branch office network in York County
by two newly constructed offices in 1997.  The new sites would target high
growth areas in the immediate market.  Construction would be funded out of
operations.  The expanded branch network would provide for continued deposit
growth.














10 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INVESTMENT PORTFOLIO

The following table sets forth the carrying amount of investment securities at
the dates indicated:

(In thousands)                       1996            1995          1994
U.S. Government .............      $10,538          $6,562        $5,937
U.S. Agencies ...............       90,348          66,188        65,260
Municipal ...................       18,465          14,488        16,430
Corporate ...................          500           1,782         3,566
Total debt securities .......      119,851          89,020        91,193
Equity securities ...........        8,231           2,803         3,166
Total investment securities .     $128,082         $91,823       $94,359


The following table sets forth the contractual maturities of debt securities
classified as held-to-maturity at December 31, 1996:

                                 AFTER       AFTER
                      ONE YR    ONE TO     FIVE TO    OVER 
(In thousands)       OR LESS   FIVE YRS    TEN YRS   TEN YRS      TOTAL
U.S. Government ..       $ 0     $1,000        $ 0       $ 0       $1,000
U.S. Agencies ....       227      3,366        566     8,620       12,779
Municipal ........       860      5,199      2,811     5,879       14,749
Total ............    $1,087     $9,565     $3,377   $14,499      $28,528

The following table depicts the average weighted yields of the held-to-maturity
investments by maturity at December 31, 1996:

                                 AFTER       AFTER
                      ONE YR    ONE TO     FIVE TO    OVER 
                     OR LESS   FIVE YRS    TEN YRS   TEN YRS      TOTAL
U.S. Government ..     0.00%      7.00%      0.00%     0.00%      7.00% 
U.S. Agencies ....     9.45%      5.70%      9.33%     6.34%      6.36% 
Municipal ........     6.01%      7.31%      5.89%     5.20%      6.12% 
Total ............     6.73%      6.71%      6.46%     5.88%      6.26% 





























11 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INVESTMENT PORTFOLIO (continued)

The following table sets forth the contractual maturities of debt securities
classified as available-for-sale at December 31, 1996:

                                 AFTER      AFTER
                      ONE YR    ONE TO     FIVE TO    OVER 
(In thousands)       OR LESS   FIVE YRS    TEN YRS   TEN YRS      TOTAL
U.S. Government ..    $2,504     $7,034        $ 0       $ 0       $9,538
U.S. Agencies ....     2,306      9,537      9,623    56,102       77,568
Municipal ........       200      1,595        899     1,023        3,717
Other ............         0          0          0       500          500
Total ............    $5,010    $18,166    $10,522   $57,625      $91,323

The following table depicts the average weighted yields of the available-for-
sale investments by maturity at December 31, 1996:

                                 AFTER       AFTER
                      ONE YR    ONE TO     FIVE TO    OVER 
                     OR LESS   FIVE YRS    TEN YRS   TEN YRS      TOTAL
U.S. Government ..     5.96%      6.09%      0.00%     0.00%      6.06% 
U.S. Agencies ....     5.13%      6.97%      6.93%     7.02%      6.94% 
Municipal ........     4.75%      4.35%      5.15%     5.10%      4.77% 
Other ............     0.00%      0.00%      0.00%     7.90%      7.90% 
Total ............     5.53%      6.40%      6.77%     6.99%      6.77% 

The average yields are computed by dividing annual interest income, including
the accretion of discounts and amortization of premiums, by the amortized cost
of securities at December 31, 1996.  The yield on Municipal investments has not
been restated on a fully tax equivalent basis.

For additional information see Note 6 on pages 20-21 of the Corporation's 1996
Annual Report.
































12 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

LOAN DATA

Loans are comprised of the following:
                                             YEAR ENDED DECEMBER 31, 
(In thousands)                    1996      1995      1994      1993      1992
Domestic loans:     
  Commercial, financial and     
   industrial ................  $72,776   $66,798   $59,943   $54,714   $52,415
  Real estate:     
    Construction .............    8,908     5,910     7,163     5,831     1,927
    Mortgage .................  167,751   141,565   120,392   114,320   100,259
  Consumer ...................   37,150    45,548    46,168    37,802    31,809
  Leasing and other (net) ....       26         9         6        15        10
Total domestic loans .........  286,611   259,830   233,672   212,682   186,420
Foreign loans ................        0         0         0         0         0
Total domestic and
 foreign loans ...............  286,611   259,830   233,672   212,682   186,420
Unearned income ..............   -3,494    -4,425    -4,297    -3,736    -3,342
Loans net of unearned ........  283,117   255,405   229,375   208,946   183,078
Reserve for loan losses ......   -3,130    -2,937    -2,638    -2,332    -2,022
Net loans .................... $279,987  $252,468  $226,737  $206,614  $181,056

For additional information see Note 7 on page 21-22 of the Corporation's 1996
Annual Report.









































13 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MATURITIES AND RATE SENSITIVITY OF THE LOAN PORTFOLIO
(EXCLUDING CONSUMER AND RESIDENTIAL REAL ESTATE LOANS)

The following table shows the amounts of loans (excluding consumer, residential
real estate and other loans) outstanding as of December 31, 1996 which, based on
remaining scheduled repayments of principal, are due in the periods indicated:

                                                    AFTER
REMAINING MATURITIES                      ONE YR   ONE TO     OVER    
(In thousands)                           OR LESS   FIVE YRS  FIVE YRS    TOTAL
Domestic loans:    
  Commercial, financial and industrial . $60,958   $ 8,652    $3,166  $ 72,776
  Real estate construction .............   6,245     2,012       651     8,908
Foreign loans ..........................       0         0         0         0
Total .................................. $67,203  $ 10,664  $  3,817  $ 81,684
    
Rate sensitivity:    
  Predetermined rate ...................  $2,756    $6,937    $3,789  $ 13,482
  Floating or adjustable rate ..........  64,447     3,727        28    68,202
Total .................................. $67,203  $ 10,664  $  3,817  $ 81,684

Drovers Bancshares Corporation has no set rollover policy.  Many of our loans
are made on a short-term basis with full intention of renewal at time of
maturity.  All loans, however,  are reviewed on a continual basis for
creditworthiness.  Should a loan become questionable or approach problem loan
status, it then undergoes a formal review process by all appropriate levels of
authority.






































14 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NONACCRUAL, RESTRUCTURED LOANS AND NONPERFORMING ASSETS

The following table shows loans on nonaccrual status or loans which have been
restructured for the past five years:

                                   PRINCIPAL AMOUNT AT YEAR END DECEMBER 31,
(In thousands)                         1996    1995    1994    1993    1992
Domestic:     
  Nonaccrual loans ................. $  615  $  934  $  416  $  385   $   237
  90 days past due still accruing ..      0       9       6       2         3
  Restructured loans ...............  1,139     791     818       0         0
Foreign:     
  Nonaccrual loans .................      0       0       0       0         0
  90 days past due still accruing ..      0       0       0       0         0
  Restructured loans ...............      0       0       0       0         0
Total .............................. $1,754  $1,734  $1,240  $  387  $    240

Nonaccrual loans as a percentage of net loans decreased from 0.37% in 1995 to
0.22% at December 31, 1996.  The change is attributed to decreases in nonaccrual
loans secured by real estate and commercial loans of $167,000 and $151,000, 
respectively.  Restructured loans consists of commercial loans to one party.
Interest is recognized under the accrual method of accounting.

Additionally, the Corporation held $1,501,000 of impaired loans at December 31,
1996 under court-ordered restructuring due to bankruptcy.  All loans are fully
colateralized.

The following table presents the changes in the balance of other real estate
over the past five years:

(In thousands)                         1996    1995    1994    1993    1992
Balance at beginning of year ....... $  195  $    0  $  141  $   25  $   131
Assets acquired by foreclosure     
 or repossession ...................    822     300       0     161      199
Dispositions .......................   -203    -106    -152     -32     -281
Other (net) ........................    -11       1      11     -13      -24
Balance at end of year ............. $  803  $  195  $    0  $  141  $    25

Other real estate consists of assets which have been repossessed or acquired
through workout situations on defaulted loans.

For additional information on nonperforming assets see Note 1 and Note 7 on
pages 17-18 and 21-22, respectively, of the Corporation's 1996 Annual Report.






















15 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ANALYSIS OF RESERVE FOR LOAN LOSSES

                                               YEARS ENDED DECEMBER 31, 
(In thousands)                        1996     1995     1994     1993     1992  
Balance, January 1, ............... $ 2,937  $ 2,638  $ 2,332  $ 2,022  $ 1,630 
Provision for loan losses .........     645      501      382      447      552 
Charge-offs:     
  Commercial, financial
   and industrial .................      25       31       19        0       48 
  Real estate - construction ......       0        0        0        0        0 
  Real estate - mortgage ..........     215       45        0        0       15 
  Consumer ........................     369      257      157      179      155 
Total charge-offs .................     609      333      176      179      218
Recoveries:     
  Commercial, financial
   and industrial .................       6       11        0        0        5
  Real estate - construction ......       0        0        0        0        0
  Real estate - mortgage ..........      36        0        6        0        0
  Consumer ........................     115      120       94       42       53
Total recoveries ..................     157      131      100       42       58
Net charge-offs ...................     452      202       76      137      160
Balance, December 31, ............. $ 3,130  $ 2,937  $ 2,638  $ 2,332  $ 2,022
Ratio of net charge-offs to average     
 loans outstanding ................   0.17%    0.08%    0.04%    0.07%    0.09%

Drovers Bancshares Corporation manages the risk characteristics of its  loan
portfolio through various control processes.  Risk is further controlled through
the application of lending procedures such as the holding of adequate
collateral, contractual guarantees, and compensating balances.

Management also considers the amount of recent and expected charge-offs, the
loan portfolio mix and changes in the economy when determining the provision for
loan losses.  Management believes these procedures provide adequate assurance
against losses and the level of the Reserve for Loan Losses is sufficient to
meet any present or potential risks.

For additional information see Note 1 and Note 7 on pages 17-18 and 21-22,
respectively, of the Corporation's 1996 Annual Report.



























16 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ALLOCATION OF RESERVE FOR LOAN LOSSES

The following table presents the amount of the reserve allocated to each of
the loan categories and the percentage of total loans for the past five years:

                                        YEARS ENDED DECEMBER 31,
                              1996             1995             1994
                                 Percent          Percent          Percent
                                of Loans         of Loans         of Loans
                        Reserve to Total Reserve to Total Reserve to Total
(In thousands)           Amount   Loans   Amount   Loans   Amount   Loans
Commercial, financial      
  and industrial ......   $657     25.7%   $515     26.2%   $630     26.2%
Real Estate:      
  Construction ........     46      3.1%     16      2.3%     29      3.1%
  Mortgage ............    321     59.1%    327     55.3%    204     52.3%
Consumer ..............    123     12.1%    140     16.2%    120     18.4%
Leasing and other .....      0      0.0%      0      0.0%      0      0.0%
Unallocated ...........  1,983      n/a   1,939      n/a   1,655      n/a 
Total ................. $3,130    100.0% $2,937    100.0% $2,638    100.0%

                              YEARS ENDED DECEMBER 31,
                              1993            1992
                                 Percent          Percent
                                of Loans         of Loans
                        Reserve to Total Reserve to Total
(In thousands)           Amount   Loans   Amount   Loans
Commercial, financial   
  and industrial ......   $723     26.2%   $964     28.6%
Real Estate:    
  Construction ........     48      2.8%     45      1.1%
  Mortgage ............    328     54.4%    419     54.4%
Consumer ..............    110     16.6%     86     15.9%
Leasing and other .....      0      0.0%      0      0.0%
Unallocated ...........  1,123      n/a     508      n/a 
Total ................. $2,332    100.0% $2,022    100.0%

For additional information see Note 1 and Note 7 on pages 17-18 and 21-22,
respectively, of the Corporation's 1996 Annual Report.


























17 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DEPOSIT STRUCTURE

Maturities of time deposits of $100,000 or more outstanding at December 31, are
summarized as follows:

(In thousands)                              1996          1995          1994
Three months or less ...............       $3,674        $3,996        $1,149 
Over three months to six months ....          927         2,336         2,213 
Over six months to twelve months ...        7,047         3,061         1,289 
Over twelve months .................        6,354         6,798         6,935 
Total ..............................      $18,002       $16,191       $11,586



SHORT-TERM BORROWINGS

Short-term borrowings are borrowed funds generally with an original maturity of
one year or less.  Securities sold under repurchase agreements and federal funds
purchased mature in one day.  Other short-term borrowings have a maturity of
greater than one day.

(In thousands)                                     1996      1995      1994
Federal funds purchased and securities sold under repurchase agreements
     Balance at year-end                         $15,254   $ 7,302   $11,893
     Average amount outstanding                   12,210     7,530     4,357
     Maximum amount outstanding at any month-end  18,843    14,707    13,743
     Average interest rate for the year             4.75%     5.60%     5.12%
     Average interest rate on year-end balance      5.24%     5.31%     6.39%

Other short-term borrowings
     Balance at year-end                          $    0    $    0    $2,699
     Average amount outstanding                       77         0        66
     Maximum amount outstanding at any month-end   4,000         0     2,699
     Average interest rate for the year             5.47%     0.00%     5.61%
     Average interest rate on year-end balance      0.00%     0.00%     6.22%






























18 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

QUARTERLY FINANCIAL DATA

Unaudited
1996
(In thousands,                FIRST      SECOND     THIRD    FOURTH  
 except per share data)      QUARTER    QUARTER    QUARTER   QUARTER   TOTAL
Net interest income ......    $3,646     $3,746     $3,889   $3,983   $15,264
Provision for loan losses        105        180        105      255       645
Total noninterest income .       902        863        727      872     3,364
Total noninterest expense     
  and income taxes .......     3,295      3,218      3,306    3,315    13,134
Net income ...............    $1,148     $1,211     $1,205   $1,285    $4,849
PER SHARE DATA     
Net income ...............     $0.41      $0.43      $0.43    $0.46    $ 1.73

1995
(In thousands,                FIRST      SECOND     THIRD    FOURTH  
 except per share data)      QUARTER    QUARTER    QUARTER   QUARTER   TOTAL
Net interest income ......    $3,563     $3,653     $3,667   $3,641   $14,524
Provision for loan losses        105        155        105      136       501
Total noninterest income .       659        683        763      732     2,837
Total noninterest expense     
  and income taxes .......     3,085      3,093      3,120    3,281    12,579
Net income ...............    $1,032     $1,088     $1,205    $ 956    $4,281
PER SHARE DATA     
Net income ...............     $0.37      $0.39      $0.43    $0.34    $ 1.53


Data adjusted for the 5 for 4 split in the form of a 25% stock dividend issued
in 1996 and the 7% stock dividend issued in 1995.



































19 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INTEREST DIFFERENTIAL

                                                  December 31,
                                           1996                1995 
(In thousands)                     VOLUME  RATE  TOTAL VOLUME  RATE TOTAL
INTEREST INCOME      
Increase (decrease) in:      
Money market investments and      
 Interest-bearing deposits
 with banks ......................   $ 73  $-12    $61   $-26   $52    $26
Federal funds sold ...............      0     0      0      0    -2     -2
Total money market investments ...     73   -12     61    -26    50     24
Investment securities      
 Taxable investment securities ...    519   -31    488   -129   594    465
 Equity securities ...............    157     3    160     41    15     56
 Tax-exempt investment securities     -68  -116   -184     -9   -58    -67
Total investment securities ......    608  -144    464    -97   551    454
Total loans ......................  1,819  -342  1,477  2,736 1,539  4,275
Total interest income ............  2,500  -498  2,002  2,613 2,140  4,753
      
INTEREST EXPENSE      
Increase (decrease) in:      
Interest-bearing deposits      
 Demand ..........................     58  -210   -152    -12    15      3
 Savings .........................    136    90    226   -326   130   -196
 Time ............................    801   189    990  1,587 1,043  2,630
Total interest-bearing deposits ..    995    69  1,064  1,249 1,188  2,437
Borrowed funds      
 Short-term borrowings ...........    226   -64    162    174    21    195
 Long-term borrowings ............    120   -84     36    380   111    491
Total borrowed funds .............    346  -148    198    554   132    686
Total interest expense ...........  1,341   -79  1,262  1,803 1,320  3,123
Increase in interest differential  $1,159 $-419 $  740   $810  $820 $1,630

The change in interest due to both rate and volume has been allocated to volume
and rate changes in proportion to the relationship of the absolute dollar
amounts of the change in cash.




























20 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The principal executive officers of Drovers Bancshares Corporation and its
principal subsidiary, The Drovers & Mechanics Bank, as of January 1, 1997, are
as follows:

Name:  A. Richard Pugh                   Age:  56
Position and Office:  Chairman of the Board, President, and Chief Executive
Officer of Drovers Bancshares Corporation and The Drovers & Mechanics Bank.
Mr. Pugh joined the organization in 1988, he was appointed President in 1990 and
C.E.O. in 1994.  He has extensive and diversified experience in bank management.
Mr. Pugh succeeded Mr. Linder as Chairman of the Board on March 1, 1996.

Name:  George L.F. Guyer, Jr.            Age:  63
Position and Office:  Senior Vice President and Secretary of Drovers Bancshares
Corporation and The Drovers & Mechanics Bank.  Mr. Guyer joined the organization
in 1964.  He served as Marketing Coordinator from 1972 to 1990.

Name:  Michael J. Groft                  Age:  41
Position and Office:  Executive Vice President of Drovers Bancshares Corporation
and Executive Vice President and Senior Loan Officer of The Drovers & Mechanics
Bank.  Mr. Groft joined the organization in March 1978.  He has served in
various loan officer positions since 1978.

Name:  Debra A. Goodling                 Age:  38
Position and Office:  Executive Vice President and Treasurer of Drovers
Bancshares Corporation and Executive Vice President, Treasurer and Chief
Financial Officer of The Drovers & Mechanics Bank.  Ms. Goodling joined the
organization in February 1977.  She has served in various financial officer
positions since 1981.

Name:  Lorie Y. Runion                   Age:  45
Position and Office:  Senior Vice President-Marketing and Human Resources of The
Drovers & Mechanics Bank.  Ms. Runion joined the organization in 1983.  She has
served in various Human Resource positions since 1983 and assumed responsibility
for Marketing in 1990.

Name:  Kerry McLaughlin                  Age:  42
Position and Office:  Senior Vice President and Senior Trust Officer of The
Drovers & Mechanics Bank.  Mr. McLaughlin joined the organization in April 1992.
He has extensive experience in the banking industry, specializing in the Trust
function.  Prior to joining Drovers Bank, Mr. McLaughlin was employed with the
Trust Group of United Carolina Bank of South Carolina in the position of Vice
President and Trust Officer.

Name:  Shawn A. Stine                    Age:  41
Position and Office:  Senior Vice President and Senior Corporate Banking Officer
of The Drovers & Mechanics Bank.  Mr. Stine joined the organization in August
1991 in the position of Vice President and Senior Corporate Banking Officer.

Richard M. Linder retired March 1, 1996.  He continues to serve on the Board of 
Directors.

Additional information required for this item is contained on pages 3-11 of the
Definitive Proxy Statement dated April 18, 1997.












21 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART IV.  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

 DROVERS BANCSHARES CORPORATION       Date __March 26, 1997_____
        (Registrant)

                 By__/s/_A._Richard_Pugh__________________
                   A. Richard Pugh, Chairman of the Board,
                   President and Chief Executive Officer

Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.


   __/s/_L._Doyle_Ankrum____________     _________________________________
   L. Doyle Ankrum, Director             Frank Motter, Director


   __/s/_Josephine_D._Appell________     __/s/_Robert_L._Myers____________
   Josephine D. Appell, Director         Robert L. Myers, Jr., Director


   __/s/_J._Samuel_Gregory__________     __/s/_Harlowe_R._Prindle_________
   J. Samuel Gregory, Director           Harlowe R. Prindle, Director


   __/s/_Daniel_E._Hess_____________     __/s/_Basil_A._Shorb,_III________
   Daniel E. Hess, Director              Basil A. Shorb, III, Director


   __/s/_George_W._Hodges___________     __/s/_D._John_Sparler,_Jr._______
   George W. Hodges, Director            D. John Sparler, Jr., Director


   __/s/_Herbert_D._Lavetan_________     __/s/_Gary_A._Stewart____________
   Herbert D. Lavetan, Director          Gary A. Stewart, Director


   __/s/_Richard_M._Linder__________     __/s/_Robert_H._Stewart,_Jr._____
   Richard M. Linder, Director           Robert H. Stewart, Jr., Director


   __/s/_David_C._McIntosh__________     __/s/_Delaine_A._Toerper_________
   David C. McIntosh, Director           Delaine A. Toerper, Director


   __/s/_Debra_A._Goodling__________     __/s/_John_D._Blecher____________
   Debra A. Goodling, Executive Vice     John D. Blecher, Vice President
   President and Treasurer               and Assistant Treasurer
   Principal Financial Officer           Principal Accounting Officer













22 <PAGE>

EXHIBIT 23
DROVERS BANCSHARES CORPORATION AND SUBSIDIARIES

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We consent to the incorporation by reference in this Form 10-K of Drovers
Bancshares Corporation and Subsidiaries of our report dated January 15, 1997,
included in the 1996 Annual Report to Shareholders of Drovers Bancshares
Corporation and Subsidiaries.

We also consent to the incorporation by reference in the Registration Statement
on Form S-3 pertaining to the shelf registration of the Dividend Reinvestment
and Stock Purchase Plan of Drovers Bancshares Corporation and Subsidiaries and
the Registration Statement on Form S-8 pertaining to the Drovers Bancshares
Corporation Incentive Stock Option Plan of our report dated January 15, 1997,
with respect to the consolidated financial statements incorporated herein by
reference.


/S/ Stambaugh Ness P.C.

(Successor to Harry Ness & Company)

York, Pennsylvania

March 25, 1997