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 (FEE REQUIRED)

                   For the Fiscal Year ended December 31, 1999

                                       or

  |_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
           EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

     For the transition period from __________________ to __________________

                           Commission File No. 0-13599

                           Omega Financial Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Pennsylvania                                 25-1420888
-------------------------------           ------------------------------------
(State or other jurisdiction of           (IRS Employer Identification Number)
 incorporation or organization)

          366 Walker Drive
          State College, PA                               16801
----------------------------------------         -----------------------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (814) 231-7680

Securities registered pursuant to Section 12(b) of the Act: None

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

    Common Stock, par value $5.00                       8,801,400
   -------------------------------           -----------------------------------
          (Title of Class)                      (Number of shares outstanding
                                                   as of February 22, 2000)

      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, 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 this Form 10-K or any amendment to this
Form 10-K. |_|

      The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of February 22, 2000 was $245,505,140. (1)

                                        1
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

  (Specific sections incorporated are identified under applicable items herein)

      Certain portions of the Company's Annual Report to Shareholders for the
year ended December 31, 1999 are incorporated by reference in Parts II and IV of
this Report.

      With the exception of the information incorporated by reference in Parts
I, II and IV of this Report, the Company's Annual Report to Shareholders for the
year ended December 31, 1999 is not to be deemed "filed" with the Securities and
Exchange Commission for any purpose.

      Certain portions of the Company's Proxy Statement to be filed in
connection with its 2000 Annual Meeting of Shareholders are incorporated by
reference in Part III of this Report.

      Other documents incorporated by reference are listed in the Exhibit Index.

--------------------------------

(1) The aggregate dollar amount of the voting stock set forth equals the number
of shares of the Company's Common Stock outstanding, reduced by the amount of
Common Stock held by officers, directors, shareholders owning in excess of 10%
of the Company's Common Stock and the Company's employee benefit plans
multiplied by the last reported sale price for the Company's Common Stock on
February 22, 2000. The information provided shall in no way be construed as an
admission that any officer, director or 10% shareholder of the Company, or any
employee benefit plan, may be deemed an affiliate of the Company or that such
person or entity is the beneficial owner of the shares reported as being held by
such person or entity, and any such inference is hereby disclaimed. The
information provided herein is included solely for record keeping purposes of
the Securities and Exchange Commission.


                                       2
<PAGE>

                                     PART I
Item 1: Business

GENERAL

      Omega Financial Corporation ("Omega" or the "Company") is a Pennsylvania
business corporation which is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended. Omega was formed, effective
December 31, 1986, as a result of the merger of Heritage Financial Services
Corporation ("Heritage") into Peoples National Bancorp, Inc. ("Peoples") and the
change of Peoples' name to Omega.

      Peoples was incorporated on June 24, 1982 and became an active bank
holding company on December 7, 1982 through the acquisition of all of the
outstanding shares of Peoples National Bank of Central Pennsylvania ("Peoples
Bank"). Heritage was incorporated on June 21, 1982 and became an active bank
holding company on December 31, 1982 through the acquisition of all of the
outstanding shares of The Russell National Bank ("Russell Bank"). As a result of
the merger of Heritage into Peoples, Omega became the holding company for both
Peoples Bank and Russell Bank. On January 28, 1994, Penn Central Bancorp, Inc.
("Penn Central"), a bank holding company, merged into Omega. As a result of the
merger of Penn Central into Omega, Omega became the holding company for Penn
Central's five wholly-owned subsidiaries: Penn Central National Bank ("Penn
Central Bank"), Hollidaysburg Trust Company ("Hollidaysburg"), the First
National Bank of Saxton ("Saxton Bank"), Penn Central Bancorp Life Insurance
Company and Penn Central Bancorp Investment Company. On February 18, 1995,
Saxton Bank merged into Penn Central Bank and on March 18, 1995, Peoples Bank
and Russell Bank merged to form Omega Bank N.A. ("Omega Bank"). On August 1,
1995, Omega acquired all of the outstanding shares of Montour Bank ("Montour").
On December 31, 1996, Montour was merged into Omega Bank. The Company's current
banking subsidiaries consist of Omega Bank, Penn Central Bank and Hollidaysburg
and its current non-banking subsidiaries consist of Central Pennsylvania Life
Insurance Company, Central Pennsylvania Investment Company and Central
Pennsylvania Leasing, Inc. Unless the context otherwise requires, the "Company"
refers to Omega Financial Corporation and its consolidated subsidiaries and the
"Banks" refers to the Company's banking subsidiaries.

BANKING SERVICES

      The Banks currently provide retail and commercial banking services through
42 offices in Central Pennsylvania. Omega Bank operates 24 full service banking
offices in Centre, Clinton, Mifflin and Juniata counties. Penn Central Bank
operates 8 full service banking offices in Huntingdon and Bedford counties, and
Hollidaysburg operates 10 full service banking offices in Blair County.

      The Banks provide a full range of consumer and commercial services.
Consumer services include Internet and telephone banking, an automated teller
machine network, personal checking accounts, interest checking accounts, savings
accounts, insured money market accounts, debit cards, investment certificates,
fixed and variable rate certificates of deposit, club accounts, secured and
unsecured installment loans, construction and mortgage loans, safe deposit
facilities, credit lines with overdraft checking protection, IRA accounts and
student loans. Commercial banking services include small and high-volume
business checking accounts, on-line account management services, ACH
origination, payroll direct deposit, commercial cash management services and
repurchase agreements. The Banks also provide a variety of trust and asset
management services.

      As of December 31, 1999, the Banks operated an aggregate of 41 automated
teller machines (ATMs) at various locations. The Banks are members of the Money
Access Center ("MAC") System and the "Plus System." The MAC System operates
throughout Pennsylvania and the "Plus System" operates nationwide.

      The Banks have a relatively stable deposit base with no major seasonal
depositor or group of depositors. Most of their commercial customers are small
and midsized businesses in Central Pennsylvania.


                                       3
<PAGE>

OTHER ACTIVITIES

      On January 22, 1986, the Company formed Central Pennsylvania Life
Insurance Co., an Arizona corporation, for the purpose of underwriting credit
life insurance for the Company's bank subsidiaries.

      On December 26, 1985, the Company formed Central Pennsylvania Investment
Co., a Delaware corporation, for the purpose of holding and managing certain
investments of the Company.

      On January 14, 1988, the Company formed Central Pennsylvania Leasing,
Inc., for the purpose of leasing of personal property and real estate.

COMPETITION

      The Banks service areas are characterized by intense competition for
banking business among commercial banks, savings and loan associations, mutual
savings banks and other financial institutions. The Banks actively compete with
such banks and institutions for local retail and commercial accounts. The Banks
also are subject to competition from other banks and financial institutions in
central Pennsylvania, as well as other financial institutions outside their
service areas, for certain types of banking business. Many competitors have
substantially greater financial resources and larger branch systems than those
of the Banks.

      In commercial transactions, it's Company believes that the Banks'
respective legal lending limits to a single borrower (approximately $12,843,000
for Omega Bank, $4,046,000 for Penn Central Bank, and $5,753,000 for
Hollidaysburg Trust Company, as of December 31, 1999) enable them to compete
effectively for the business of small and midsized businesses. However, this
legal lending limit is considerably lower than that of various competing
institutions and thus may act as a constraint on each Bank's effectiveness in
competing for financings in excess of the limit.

      In consumer transactions, the Banks believe that they are able to compete
on a substantially equal basis with larger financial institutions because they
offer competitive interest rates on savings and time accounts and loans.

      In competing with other banks, savings and loan associations and other
financial institutions, the Banks seek to provide personalized services through
management's knowledge and awareness of their service areas, customers and
borrowers. In management's opinion, larger institutions often do not provide
sufficient attention to the retail depositors and the relatively small
commercial borrowers that comprise the Banks' customer base.

      Other competitors, including credit unions, consumer finance companies,
insurance companies, and money market mutual funds, compete with certain lending
and deposit gathering services offered by the Banks. The Banks also compete with
insurance companies, investment counseling firms, mutual funds and other
business firms and individuals in corporate and trust investment management
services.

      As a result of the repeal of the Glass-Steagall Act which separated the
commercial and investment banking industries, all banking organizations are
likely to face an increase in competition. See "Supervision and Regulation --
Recent Legislation".


                                       4
<PAGE>

SUPERVISION AND REGULATION

      The following discussion sets forth certain of the material elements of
the regulatory framework applicable to bank holding companies and their
subsidiaries and provides certain specific information relevant to the Company.
The regulatory framework is intended primarily for the protection of depositors,
other customers and the federal deposit insurance funds and not for the
protection of security holders. To the extent that the following information
describes statutory and regulatory provisions, it is qualified in its entirety
by reference to the particular statutory and regulatory provisions. A change in
applicable statutes, regulations or regulatory policy may have a material
adverse effect on the business, assets or results of operations of the Company.

      The Company. The Company is registered as a "bank holding company" under
the Bank Holding Company Act of 1956, as amended (the "BHC Act"), and is
therefore subject to supervision and regulation by the Board of Governors of the
Federal Reserve System (the "FRB"). The Company is also regulated by the
Pennsylvania Department of Banking.

      Under the BHC Act, the Company is required to secure the prior approval of
the FRB before it can merge or consolidate with any other bank holding company
or acquire all or substantially all of the assets of any bank that is not
already majority owned by it or acquire direct or indirect ownership, or control
of, any voting shares of any bank that is not already majority owned by it, if
after such acquisition it would directly or indirectly own or control more than
5% of the voting shares of such bank. See "Interstate Banking".

      The Company is generally prohibited under the BHC Act from engaging in, or
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any company engaged in nonbanking activities unless the FRB, by order
or regulation, has found such activities to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In making such
determination, the FRB considers whether the performance of these activities by
a bank holding company can reasonably be expected to produce benefits to the
public which outweigh the possible adverse effects. The FRB has by regulation
determined that certain activities are closely related to banking within the
meaning of the BHC Act. These activities include, among others, operating a
mortgage, finance, credit card or factoring company; performing certain data
processing operations; providing investment and financial advice; acting as an
insurance agent for certain types of credit-related insurance; leasing personal
property on a full-payout, non-operating basis; and certain stock brokerage and
investment advisory services.

      Satisfactory financial condition, particularly with regard to capital
adequacy, and satisfactory Community Reinvestment Act ratings are generally
prerequisites to obtaining federal regulatory approval to make acquisitions. All
of the Company's subsidiary banks are currently rated "satisfactory" under the
Community Reinvestment Act.

      Under the policy of the FRB with respect to bank holding company
operations, a bank holding company is deemed to serve as a source of financial
strength to its subsidiary depository institutions and to commit resources to
support such institutions in circumstances where it might not do so absent such
policy. Under the Federal Deposit Insurance Corporation Improvement Act of 1991
(the "1991 Act"), a bank holding company is required to guarantee that any
"undercapitalized" (as such term is defined in the statute) insured depository
institution subsidiary will comply with the terms of any capital restoration
plan filed by such subsidiary with its appropriate federal banking agency to the
lesser of (I) an amount equal to 5% of the institution's total assets at the
time the institution became undercapitalized, or (ii) the amount which is
necessary (or would have been necessary) to bring the institution into
compliance with all capital standards as of the time the institution failed to
comply with such capital restoration plan.

      Under the BHC Act, the Company is required to file periodic reports and
other information of its operations with, and is subject to examination by, the
FRB. In addition, under the Banking Code of 1965, the Pennsylvania Department of
Banking has the authority to examine the books, records and affairs of any
Pennsylvania bank holding company or to require any documentation deemed
necessary to ensure compliance with the Banking Code.


                                       5
<PAGE>

      The Company is under the jurisdiction of the Securities and Exchange
Commission and various state securities commissions for matters relating to the
offer and sale of its securities and is subject to the Securities and Exchange
Commission's rules and regulations relating to periodic reporting, reporting to
shareholders, proxy solicitation and insider trading.

      There are various legal restrictions on the extent to which the Company
and its non-bank subsidiaries can borrow or otherwise obtain credit from its
banking subsidiaries. In general, these restrictions require that any such
extensions of credit must be secured by designated amounts of specified
collateral and are limited, as to any one of the Company or such non-bank
subsidiaries, to ten percent of the lending bank's capital stock and surplus,
and as to the Company and all such non-bank subsidiaries in the aggregate, to 20
percent of such lending bank's capital stock and surplus. Further, a bank
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.

      Omega Bank and Penn Central Bank. Omega Bank and Penn Central Bank, as
national banks, are subject to the National Bank Act. Such banks are also
subject to the supervision of, and are regularly examined by, the Office of the
Comptroller of the Currency (the "OCC") and are required to furnish quarterly
reports to the OCC. The approval of the OCC is required for the establishment of
additional branch offices by any national bank, subject to applicable state law
restrictions. Under current Pennsylvania law, banking institutions, such as the
Banks, may establish branches within any county in Pennsylvania, subject to
prior regulatory approval.

      Omega Bank and Penn Central Bank are members of the Federal Deposit
Insurance Corporation (the "FDIC") and members of the Federal Reserve System
and, therefore, are subject to additional regulation by these agencies. Some of
the aspects of the lending and deposit business of these banks which are
regulated by these agencies include personal lending, mortgage lending and
reserve requirements.

      Hollidaysburg Trust Company. Hollidaysburg Trust Company is a state
chartered non-member banking institution subject to regulation by the
Pennsylvania Department of Banking. As an insured bank under the Federal Deposit
Insurance Act, Hollidaysburg is also regulated by the FDIC. Some of the aspects
of the lending and deposit business of Hollidaysburg which are regulated include
personal lending, mortgage lending, and reserve requirements. Representatives of
the Pennsylvania Department of Banking and the FDIC regularly conduct
examinations of Hollidaysburg, and Hollidaysburg must furnish quarterly reports
to the Pennsylvania Department of Banking and the FDIC.

      The operations of each of the Banks are also subject to numerous Federal,
state and local laws and regulations which set forth specific restrictions and
procedural requirements with respect to interest rates on loans, the extension
of credit, credit practices, the disclosure of credit terms and discrimination
in credit transactions. The Banks also are subject to certain limitations on the
amount of cash dividends that they can pay. See Note 18 of Notes to the
Company's Consolidated Financial Statements, contained in Exhibit 13.1.

      The OCC has authority under the Financial Institutions Supervisory Act to
prohibit national banks from engaging in any activity which, in the OCC's
opinion, constitutes an unsafe or unsound practice in conducting their
businesses. The FRB has similar authority with respect to the Company and the
Company's non-bank subsidiaries. The FDIC has similar authority with respect to
Hollidaysburg Trust.

      Substantially all of the deposits of the banking subsidiaries are insured
up to applicable limits by the Bank Insurance Fund ("BIF") of the FDIC and are
subject to deposit insurance assessments to maintain the BIF. The insurance
assessments are based upon a matrix that takes into account a bank's capital
level and supervisory rating. Effective January 1, 1996, the FDIC reduced the
insurance premiums it charged on bank deposits insured by the BIF to the
statutory minimum of $2,000 annually for "well capitalized" banks. On September
30, 1996, the Deposit Insurance Funds Act of 1996 ("DIFA") was enacted and
signed into law. DIFA reduced the amount of FDIC insurance premiums for savings
association deposits acquired by banks to the same levels assessed for deposits
insured by BIF. DIFA


                                       6
<PAGE>

further provides for assessments to be imposed on all insured depository
institutions with respect to deposits to pay for the cost of Financing
Corporation bonds; however, banks are assessed for this purpose at only
one-fifth the rate of the assessment on savings associations until December 31,
1999. As a result of these changes, the deposit insurance assessment for banks
and for thrifts has been nearly equalized and will be identical for comparably
rated institutions after January 1, 2000, at which time banks will share equally
in the FICO assessment and the BIF and SAIF funds will be merged.

      Capital Regulation. The Company and each of the Banks are subject to
risk-based capital standards by which all bank holding companies and banks are
evaluated in terms of capital adequacy. These standards relate a banking
company's capital to the risk profile of its assets. The risk-based capital
standards require that bank holding companies and banks must have Tier 1 capital
of at least 4% and total capital, including Tier 1 capital, equal to at least 8%
of its total risk-adjusted assets. Tier 1 capital includes common stockholders'
equity and qualifying perpetual preferred stock together with related surpluses
and retained earnings. The remaining portion of this capital standard, known as
Tier 2 capital, may be comprised of limited life preferred stock, qualifying
subordinated debt instruments, and the reserves for possible loan losses.

      Additionally, banking organizations must maintain a minimum leverage ratio
of 3% measured as the ratio of Tier 1 capital to adjusted average assets. This
3% leverage ratio is a minimum for the top-rated banking organizations without
any supervisory, financial or operational weaknesses or deficiencies and other
banking organizations are expected to maintain leverage capital ratios 100 to
200 basis points above the minimum depending on their financial condition.

      See Note 20 of Notes to the Company's Consolidated Financial Statements,
contained in the Company's Annual Report, for a table that provides a comparison
of Omega's and each of the Bank's risk based capital ratios and the leverage
ratio to minimum regulatory requirements.

      Federal Banking Agencies have broad powers to take corrective action to
resolve problems of insured depository institutions. The extent of these powers
depends upon whether the institutions in question are "well capitalized,"
"adequately capitalized," "under capitalized", "significantly undercapitalized,"
or "critically undercapitalized."

      The FDIC has issued a rule which sets the capital level for each of the
five capital categories established in the 1991 Banking Law. Under the rule a
bank is deemed to be "well capitalized" if the bank has a total risk-based
capital ratio of 10% or greater, has a Tier 1 risk-based capital ratio of 6% or
greater, has a leverage ratio of 5% or greater, and is not subject to any order
of final capital directive by the FDIC to meet and maintain a specific capital
level for any capital measure. A bank is deemed "adequately capitalized" if the
bank has a total risk-based capital ratio of 8% or greater, a Tier-1 risk-based
capital ratio of 4% or greater and a leverage capital ratio of 4% or greater (or
3% or greater for the most highly rated banks), and does not meet the definition
of a "well capitalized" bank. A bank that has total risk-based capital, Tier-1
risk-based capital and leverage capital that is less than 8%, 4% and 4%,
respectively, is deemed "undercapitalized." Under the regulation "significantly
undercapitalized" banks are those with total risk-based capital, Tier-1
risk-based capital and leverage capital that is less than 5%, 3% and 3%,
respectively. Finally, "critically undercapitalized" banks are defined as those
banks which have a ratio of tangible equity to total assets that is equal to or
less than 2%. A depository institution may be deemed to be in a capitalization
category that is lower than is indicated by its actual capital position if it
received an unsatisfactory examination rating.

      All of the bank regulatory agencies have issued final rules that amend
their capital guidelines for interest rate risk and requires such agencies to
consider in their evaluation of a bank's capital adequacy the exposure of a
bank's capital and economic value to changes in interest rates. These final
rules do not establish an explicit supervisory threshold. The agencies intend,
at a subsequent date, to incorporate explicit minimum requirements for interest
rate risk into their risk based capital standards and have proposed a
supervisory model to be used together with bank internal models to gather data
and hopefully propose at a later date explicit minimum requirements.


                                       7
<PAGE>

INTERSTATE BANKING

      On September 29, 1994, the President signed into law the "Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994" (the "Interstate Act").
Among other things, the Interstate Act permits bank holding companies to acquire
banks in any state after September 29, 1995. Beginning June 1, 1997, a bank may
merge with a bank in another state so long as both states have not opted out of
interstate branching between the date of enactment of the Interstate Act and May
31, 1997. States may enact laws opting out of interstate branching before June
1, 1997, subject to certain conditions. States may also enact laws permitting
interstate merger transactions before June 1, 1997 and host states may impose
conditions on a branch resulting from an interstate merger transaction that
occurs before June 1, 1997, if the conditions do not discriminate against
out-of-state banks, are not preempted by Federal law and do not apply or require
performance after May 31, 1997. Pennsylvania has enacted a law opting in
immediately to interstate merger and interstate branching transactions.
Interstate acquisitions and mergers would both be subject, in general, to
certain concentration limits and state entry rules relating to the age of the
bank.

      Under the Interstate Act, the Federal Deposit Insurance Act is amended to
permit the responsible Federal regulatory agency to approve the acquisition of a
branch of an insured bank by an out-of-state bank or bank holding company
without the acquisition of the entire bank or the establishment of a "de novo"
branch only if the law of the state in which the branch is located permits
out-of-state banks to acquire a branch of a bank without acquiring the bank or
permits out-of-state banks to establish "de-novo" branches. Pennsylvania has
passed such a law.

RECENT LEGISLATION

       On November 12, 1999 the Gramm-Leach-Bliley Act (the "Act") became law,
repealing the 1933 Glass-Steagall Act's separation of the commercial and
investment banking industries. The Act expands the range of nonbanking
activities a bank holding company may engage in, while preserving existing
authority for bank holding companies to engage in activities that are closely
related to banking. The new legislation creates a new category of holding
company called a "Financial Holding Company," a subset of bank holding companies
that satisfy the following criteria: (1) all of the depository institution
subsidiaries must be well capitalized and well managed; (2) the holding company
must file with the Federal Reserve Board a declaration that it elects to be a
financial holding company to engage in activities that would not have been
permissible before the Act; and (3) all of the depository institution
subsidiaries must have a CRA rating of "satisfactory" or better. Financial
holding companies may engage in any activity that (i) is financial in nature or
incidental to such financial activity or (ii) is complementary to a financial
activity and does not pose a substantial risk to the safety and soundness of
depository institutions or the financial system generally. The Act specifies
certain activities that are financial in nature. These activities include --
acting as principal, agent or broker for insurance; -- underwriting, dealing in
or making a market in securities; and -- providing financial and investment
advice. The Federal Reserve Board and the Secretary of the Treasury have
authority to decide whether other activities are also financial in nature or
incidental to financial activity, taking into account changes in technology,
changes in the banking marketplace, competition for banking services and so on.

      These new financial activities authorized by the Act may also be engaged
in by a "financial subsidiary" of a national or state bank, except for insurance
or annuity underwriting, insurance company portfolio investments, real estate
investment and development, and merchant banking, which must be conducted in a
financial holding company. In order for the new financial activities to be
engaged in by a financial subsidiary of a national or state bank, the Act
requires each of the parent bank (and its sister-bank affiliates) to be well
capitalized and well managed; the aggregate consolidated assets of all of that
bank's financial subsidiaries may not exceed the lesser of 45% of its
consolidated total assets or $50 billion; the bank must have at least a
satisfactory CRA rating; and, if that bank is one of the 100 largest national
banks, it must meet certain financial rating or other comparable requirements.

      The Act establishes a system of functional regulation, under which the
federal banking agencies will regulate the banking activities of financial
holding companies and banks' financial subsidiaries, the Securities and Exchange
Commission will regulate their securities activities and state insurance
regulators


                                       8
<PAGE>

will regulate their insurance activities. The Act also provides new protections
against the transfer and use by financial institutions of consumers' nonpublic,
personal information.

      The Act has only recently became law. Regulations of the banking agencies
implementing the legislative changes can be expected in the near future. Except
for the increase in competitive pressures faced by all banking organizations
that is a likely consequence of the Act, the legislation and implementing
regulations are likely to have a more immediate impact on large regional and
national institutions than on community-based institutions engaged principally
in traditional banking activities. Because the legislation permits bank holding
companies to engage in activities previously prohibited altogether or severely
restricted because of the risks they posed to the banking system, implementing
regulations can be expected to impose strict and detailed prudential safeguards
on affiliations among banking and nonbanking companies in a holding company
organization. Additionally, because the legislation allows various affiliates
within a single holding company organization to serve a broader array of
customers' financial goals, including their banking, insurance and investment
goals, implementing regulations can be expected to impose strict safeguards on
sharing of customer information among affiliated entities within an
organization.

      The foregoing discussion is qualified in its entirety by reference to the
statutory provisions of the Act and the implementing regulations which are
adopted by various government agencies pursuant to the Act. The exact impact of
the Act on the Company and its subsidiaries, if any, cannot be predicted at this
time.

NATIONAL MONETARY POLICY

      In addition to being affected by general economic conditions, the earnings
and growth of the Banks and, therefore, the earnings and growth of the Company,
are affected by the policies of regulatory authorities, including the OCC, the
FRB and the FDIC. An important function of the FRB is to regulate the money
supply and credit conditions. Among the instruments used to implement these
objectives are open market operations in U.S. government securities, setting the
discount rate and changes in reserve requirements against bank deposits. These
instruments are used in varying combinations to influence overall growth and
distribution of credit, bank loans, investments and deposits, and their use may
also affect interest rates charged on loans or paid on deposits.

      The monetary policies and regulations of the FRB have had a significant
effect on the operating results of commercial banks in the past and are expected
to continue to do so in the future. The affects of such policies upon the future
businesses, earnings and growth of the Banks cannot be predicted.

EMPLOYEES

      As of December 31, 1999, the Company had a total of 460 full-time
employees and 90 part-time employees.


                                       9
<PAGE>

INVESTMENT CONSIDERATIONS

      In analyzing whether to make or to continue an investment in the Company,
investors should consider, among other factors, the following:

      ECONOMIC CONDITIONS AND RELATED UNCERTAINTIES. Commercial banking is
affected, directly and indirectly, by local, domestic, and international
economic and political conditions, and by governmental monetary and fiscal
policies. Conditions such as inflation, recession, unemployment, volatile
interest rates, tight money supply, real estate values, international conflicts
and other factors beyond the Company's control may adversely affect the
potential profitability of the Company. Any future rises in interest rates,
while increasing the income yield on the Company's earnings assets, may
adversely affect loan demand and the cost of funds and, consequently, the
profitability of the Company. Any future decreases in interest rates may
adversely affect the Company's profitability because such decreases may reduce
the amounts which the Company may earn on its assets. Economic downturns could
result in the delinquency of outstanding loans. Management does not expect any
one particular factor to materially affect the Company's results of operations.
However, downtrends in several areas, including real estate, construction and
consumer spending, could have an adverse impact on the Company's ability to
remain profitable.

      EFFECT OF INTEREST RATES ON THE BANKS AND THE COMPANY. The operations of
financial institutions such as the Company are dependent to a large degree on
net interest income, which is the difference between interest income from loans
and investments and interest expense on deposits and borrowings. An
institution's net interest income is significantly affected by market rates of
interest which in turn are affected by prevailing economic conditions, by the
fiscal and monetary policies of the federal government and by the policies of
various regulatory agencies. At December 31, 1999, total interest bearing
liabilities maturing or repricing within one year exceeded total interest
earning assets maturing or repricing during the same time period by $110.936
million, representing a cumulative one-year sensitivity ratio of 0.76.
Simulation of interest rate changes indicates that if interest rates were
decreased, net interest income would likewise decrease over the next twelve
months. Like all financial institutions, the Company's balance sheet is affected
by fluctuations in interest rates. Volatility in interest rates can also result
in disintermediation, which is the flow of funds away from financial
institutions into direct investments, such as US Government and corporate
securities and other investment vehicles, including mutual funds, which, because
of the absence of federal insurance premiums and reserve requirements, generally
pay higher rates of return than financial institutions. See "Item 7:
Management's Discussion of Financial Condition and Results of Operations" and
Item 7a: Quantitative and Qualitative Disclosure about Market Risk".

      FEDERAL AND STATE GOVERNMENT REGULATIONS. The operations of the Company
and the Banks are heavily regulated and will be affected by present and future
legislation and by the policies established from time to time by various federal
and state regulatory authorities. In particular, the monetary policies of the
Federal Reserve Board have had a significant effect on the operating results of
banks in the past, and are expected to continue to do so in the future. Among
the instruments of monetary policy used by the Federal Reserve Board to
implement its objectives are changes in the discount rate charged on bank
borrowings and changes in the reserve requirements on bank deposits. It is not
possible to predict what changes, if any, will be made to the monetary polices
of the Federal Reserve Board or to existing federal and state legislation or the
effect that such changes may have on the future business and earnings prospects
of the Company.

      During the past several years, significant legislative attention has been
focused on the regulation and deregulation of the financial services industry.
Non-bank financial institutions, such as securities brokerage firms, insurance
companies and money market funds, have been permitted to engage in activities
that compete directly with traditional bank business.

      COMPETITION. The Company faces strong competition from other banks,
savings institutions and other financial institutions which have branch offices
or otherwise operate in the Company's market area, as well as many other
companies now offering a range of financial services. Many of these competitors


                                       10
<PAGE>

have substantially greater financial resources and larger branch systems than
the Company. In addition, many of the Banks' competitors have higher legal
lending limits than do the Banks. Particularly intense competition exists for
sources of funds including savings and retail time deposits and for loans,
deposits and other services that the Banks offer. See "Item 1:
BUSINESS -- Competition."

      As a result of the repeal of the Glass Steagall Act, which separated the
commercial and investment banking industries, all banking organizations are
likely to face an increase in competition. See "Item 1: Business -- Supervision
and Regulation -- Recent Legislation".

      ALLOWANCE FOR LOAN LOSSES. The Company has established an allowance for
loan losses which management believes to be adequate to offset potential losses
on the Company's existing loans. However, there is no precise method of
predicting loan losses. There can be no assurance that any future declines in
real estate market conditions, general economic conditions or changes in
regulatory policies will not require the Company to increase its allowance for
loan losses.

      DIVIDENDS. While the Board of Directors expects to continue its policy of
regular quarterly dividend payments, this dividend policy will be reviewed
periodically in light of future earnings, regulatory restrictions and other
considerations. No assurance can be given, therefore, that cash dividends on
common stock will be paid in the future. See "Item 5: Market for the
Registrant's Common Stock and Related Shareholder Matters."

      MARKET FOR COMMON STOCK. Although the Company's Common Stock is listed on
the Nasdaq National Market System, there has been only limited trading in the
Common Stock. There can be no assurance that a regular and active market for the
Common Stock will develop in the foreseeable future. See "Item 5: Market for the
Registrant's Common Stock and Related Stockholder Matters." Investors in the
shares of Common Stock must, therefore, be prepared to assume the risk of their
investment for an indefinite period of time.

      "ANTI-TAKEOVER" AND "ANTI-GREENMAIL" PROVISIONS AND MANAGEMENT
IMPLICATIONS. The Articles of the Company presently contain certain provisions
which may be deemed to be "anti-takeover" and "anti-greenmail" in nature in that
such provisions may deter, discourage or make more difficult the assumption of
control of the Company by another corporation or person through a tender offer,
merger, proxy contest or similar transaction or series of transactions. The
overall effects of the "anti-takeover" and "anti-greenmail" provisions may be to
discourage, make more costly or more difficult, or prevent a future takeover
offer, prevent shareholders from receiving a premium for their securities in a
takeover offer, and enhance the possibility that a future bidder for control of
the Company will be required to act through arms-length negotiation with the
Company's Board of Directors. Copies of the Articles of the Company are on file
with the Securities and Exchange Commission and the Pennsylvania Secretary of
State.

      STOCK NOT AN INSURED DEPOSIT. Investments in the shares of the Company's
Common Stock are not deposits insured against loss by the FDIC or any other
entity.

      BESPEAKS CAUTION DOCTRINE. Investors should be aware that the United
States Court of Appeals for the Third Circuit, in a case entitled In Re: Donald
J. Trump Casino Securities Litigation - Taj Mahal Litigation (No. 92-5350, filed
October 14, 1993), adopted a legal doctrine entitled the "Bespeaks Caution
Doctrine" which may prevent holders of the Company's Common Stock from
recovering from the Company based upon material misstatements and omissions
contained in the Annual Report on Form 10-K and the Company's other disclosure
documents to the extent that this Form 10-K or such other documents contained
cautionary statements to apprise investors of the risks of the Company's
securities. The foregoing investment considerations may have the effect of
bringing this Form 10-K, as well as other Company disclosure documents, within
the purview of the Bespeaks Caution Doctrine.

Item 2: Properties

      The Company's corporation headquarters are located at 366 Walker Drive,
State College, Pennsylvania. This building is owned by the Company, subject to a
mortgage in the original principal amount of $5,000,000 held by Mid-State Bank
and Trust Co. The Company occupies the first two floors


                                       11
<PAGE>

and a portion of the third floor of this building and is leasing office space on
the third floor. In addition, the Banks operate branch offices and/or automated
teller machines, indicated by (ATM), at the following locations which are owned
by the Company.

      Omega Bank

            117 South Allen Street, State College, PA (Main Office) (ATM)
            222 South Allen Street, State College, PA
            1480 East College Ave., State College, PA (ATM)
            137 North Allegheny Street, Bellefonte, PA (ATM)
            Fourth and Olive Streets, Snow Shoe, PA
            Main Street, Rebersburg, PA
            Main Street, Millheim, PA
            400 East Boal Avenue, Boalsburg, PA (ATM)
            100 High Street, Port Matilda, PA (ATM)
            Main and Mill Streets, Loganton, PA
            201 Mill Street, Milesburg, PA
            32 East Market St., Lewistown, PA (Main Office) (ATM)
            1250 West Fourth St., Lewistown, PA
            111 North Logan Blvd., Burnham, PA
            Main Street, Mifflin, PA
            On the Square, Thompsontown, PA
            10 Carriage House Lane, Reedsville, PA (ATM)
            East Main Street, Allensville, PA
            Route 522 North, Lewistown, PA (ATM only)

      Hollidaysburg Trust Company

            218-224 Allegheny Street, Hollidaysburg, PA (Main Office)
            113 West Allegheny Street, Martinsburg, PA (ATM)
            215 High Street, Williamsburg, PA
            1567 East Pleasant Valley Boulevard, Altoona, PA
            430 East 25th Avenue, Altoona, PA (ATM)

      Penn Central National Bank

            431 Penn Street, Huntingdon, PA  (Main Office)
            16-20 East Shirley Street, Mount Union, PA
            Main Street, Alexandria, PA Route 26, James Creek, PA
            911 Church Street, Saxton, PA
            708 Main Street, Saxton, PA (ATM only)
            14th and Moore Streets, Huntingdon, PA

      The Banks operate branch offices and ATMs at the following locations which
are leased by the Company. The leases for these properties have expiration dates
ranging from 2000 to 2011.

      Branches
            Westerly Parkway, State College, PA (ATM)
            1811 South Atherton Street, State College, PA (ATM) building owned,
            land leased.
            1667 North Atherton Street, State College, PA (ATM) building owned,
            land leased.
            Routes 45 and 144, Centre Hall, PA
            366 East College Avenue, State  College, PA (ATM)
            520 Third Avenue, Duncansville, PA (ATM)
            3014 Pleasant Valley Boulevard, Altoona, PA (ATM)
            300 Spring Plaza, Roaring Spring, PA (ATM)
            5812 Sixth Avenue, Altoona, PA (ATM) building owned, land leased.


                                       12
<PAGE>

            Morrison's Cove Home, 429 South Market Street, Martinsburg, PA
            Westminster Woods, 360 Westminster Woods Drive, Huntingdon, PA
            Foxdale Village, 500 Marylyn Avenue, State College, PA

      ATMs
            Weis Shopping Plaza, Mifflintown, PA
            Penn State University Campus, State College, PA (2)
            414 East College Avenue, State College, PA
            2844 West College Avenue, State College, PA
            110 1/2 Burrowes Street, State College, PA
            Centre Community Hospital, 1800 East Park Avenue, State College, PA
            116 W. College Ave., State College, PA
            135 S. Pugh Street, State College, PA
            I80 Exit 22 and Rt 144, Snow Shoe, PA
            Sheetz Store, 1671 East Pleasant Valley Boulevard, Altoona, PA
            Martin General Store, Route 22, Alexandria, PA
            JC Blair Memorial Hospital, Warm Springs Avenue, Huntingdon, PA
            Ames Store, Route 22 Plaza, Huntingdon, PA
            Sheetz Store, 4th Street and Rt. 22, Huntingdon, PA
            Sheetz Store, Jefferson Street, Mount Union, PA
            Sheetz Store, 14th and Moore Streets, Huntingdon, PA
            Martin General Store, 300 High Street, Williamsburg, PA
            Service Mart of Mifflin, 2 Mowery Street, Mifflin, PA
            Warm Springs Avenue, Huntingdon, PA


                                       13
<PAGE>

Item 3: Legal Proceedings

      The Company and the Banks are involved in various legal proceedings
incidental to their business. Neither the Company, the Banks nor any of their
properties is subject to any material legal proceedings, nor are any such
proceedings known to be contemplated by any governmental authority.

Item 4: Submission of Matters to a Vote of Security Holders

      None

Item 4.1: Executive Officers of the Registrant

      Set forth below is certain information concerning the executive officers
of the Company who are not also directors.

      On March 18, 1995, Omega's banking subsidiaries, Peoples National Bank of
Central Pennsylvania ("Peoples Bank") and The Russell National Bank ("Russell
Bank"), merged to form Omega Bank. Any reference below to service with Omega
Bank includes service with Omega Bank's predecessors prior to such merger.

    Name               Age                           Position
    ----               ---                           --------

Daniel L. Warfel       53           Executive Vice President and Chief Financial
                                    Officer of the Company since 1987; Executive
                                    Vice President and Director of Omega Bank
                                    since 1983.

David N. Thiel         56           Senior Vice President and Secretary of the
                                    Company since 1987; Vice President,
                                    Secretary and Cashier of Omega Bank since
                                    1973.

JoAnn N. McMinn        47           Senior Vice President and Controller of the
                                    Company since 1988; Vice President and
                                    Controller of Omega Bank since 1976.

Donita R. Koval        39           Senior Vice President of the Company since
                                    1995.


                                       14
<PAGE>

                                     PART II

Item 5: Market for the Registrant's Common Stock and Related Stockholder Matters

      Incorporated by reference from the section entitled "Common Stock Market
Prices and Dividends" in the Company's Annual Report to Shareholders for the
year ended December 31, 1999. As of February 22, 2000, the number of
shareholders of the Company's common stock was 2,777.

      The company did not sell any equity securities during 1999 which were not
registered under the Securities Act.

Item 6: Selected Financial Data

      Incorporated by reference from the section entitled "Selected Financial
Data" in the Company's Annual Report to Shareholders for the year ended December
31, 1999.

Item 7: Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      Incorporated by reference from the sections entitled "Management's
Discussion and Analysis -- Results of Operations" and "Financial Condition" in
the Company's Annual Report to Shareholders for the year ended December 31,
1999.

Item 7A: Quantitative and Qualitative Disclosure about Market Risk

      Incorporated by reference from the sections entitled "Management's
Discussion and Analysis -- Financial Condition" in the Company's Annual Report
to Shareholders for the year ended December 31, 1999.

Item 8: Financial Statements and Supplementary Data

      Incorporated by reference from the Company's Consolidated Financial
Statements and the Notes to Consolidated Financial Statements thereto included
in the Company's Annual Report to Shareholders for the year ended December 31,
1999.

Item 9: Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

      None


                                       15
<PAGE>

                                    PART III

Item 10: Directors and Executive Officers of the Registrant

      Incorporated by reference from the Company's Proxy Statement relating to
the 1999 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K, except information concerning certain Executive
Officers of the Company which is set forth in Item 4.1 hereof.

Item 11: Executive Compensation

      Incorporated by reference from the Company's Proxy Statement relating to
the 2000 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.

Item 12: Security Ownership of Certain Beneficial Owners and Management

      Incorporated by reference from the Company's Proxy Statement relating to
the 2000 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.

Item 13: Certain Relationships and Related Transactions

      Incorporated by reference from the Company's Proxy Statement relating to
the 2000 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.


                                       16
<PAGE>

                                     PART IV

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

      (a)   Documents filed as part of this report:

            (1) Financial Statements. The following consolidated financial
statements and the notes thereto of the Company, which are included in the
Company's Annual Report to Shareholders for the year ended December 31, 1999,
and the report of independent public accountants which is also included in such
Annual Report, are incorporated herein by reference into Item 8 of this Report:

      Consolidated Balance Sheets --
            December 31, 1999 and 1998

      Consolidated Statements of Income
            Years ended December 31, 1999, 1998 and 1997

      Consolidated Statements of Shareholders' Equity --
            Years ended December 31, 1999, 1998 and 1997

      Consolidated Statements of Cash Flows
            Years ended December 31, 1999, 1998 and 1997

      Notes to Consolidated Financial Statements

      Report of Independent Certified Public Accountants

            (2) Financial Statement Schedules. Financial statement schedules are
omitted because they are not applicable or the required information is shown in
the financial statements or notes thereto.

Exhibits filed pursuant to Item 601 of Regulation S-K

        Number                                    Title
        ------                                    -----

        3.1(1)          Amended and Restated Articles of Incorporation of Omega

        3.2(6)          Articles of Amendment to the Amended and Restated
                        Articles of Incorporation.

        3.3(13)         Articles of Amendment to the Amended and Restated
                        Articles of Incorporation

        3.4(8)          Amended and Restated By-Laws of Omega, as amended.

        10.1            Intentionally Omitted

        10.2            Intentionally Omitted


                                       17
<PAGE>

        Number                                    Title
        ------                                    -----

        *10.3(7)        Severance Agreement by and among David B. Lee, the
                        Company, and Peoples Bank dated March 15, 1990.

        *10.4(7)        Severance Agreement by and among Daniel L. Warfel and
                        the Company dated December 18, 1990.

        *10.5(2)        Peoples (now Omega) Employee Stock Purchase Plan.

        *10.6(2)        Peoples (now Omega) Stock Option Plan (1986).

        *10.7(7)        Amendment No. 1 to Stock Option Plan (1986).

        *10.8(7)        Omega Amended and Restated Employee Stock Ownership
                        Plan.

        *10.8.1(7)      ESOP Trust Agreement

        *10.9(4)        Peoples (now Omega) Employee Retirement Plan.

        *10.10(4)       Second Amendment to Peoples (now Omega) Employee
                        Retirement Plan.

        *10.11(7)       TRA '86 Amendments to Peoples (now Omega) Employee
                        Retirement Plan.

        *10.12(5)       Form of Peoples Bank Executive Supplemental Income
                        Agreement.

        *10.13(1)       Form of Russell Bank Deferred Compensation Agreement for
                        Directors.

        10.14(1)        Credit Agreement, dated December 6, 1985, between the
                        Company and Pittsburgh National Bank.

        *10.15          Intentionally omitted.

        *10.16          Intentionally omitted.

        *10.17(4)       Omega Executive Incentive Compensation Plan.

        10.18           Intentionally omitted.

        10.19           Intentionally omitted.

        10.20(7)        Purchase Agreement (with Exhibits) between Omega and
                        Mid-State Bank & Trust Company ("Mid-State").

        10.21(7)        Assignment of Promissory Note from Omega to Mid-State
                        together with $5,000,000 Secured Promissory Note of
                        Omega Financial Corporation Employee Stock Ownership
                        Plan Trust ("ESOP Trust").

        10.22(7)        Pledge and Security Agreement between Omega and the ESOP
                        Trust.

        10.23(7)        Mortgage from Omega to Mid-State.


                                       18
<PAGE>

          Number                                    Title
          ------                                    -----

        *10.24(10)      Severance Agreement, as amended, with D. Stephen Martz.

        *10.25(10)      Severance Agreement, as amended, with Robert T. Gentry

        *10.26(11)      1994 Stock Option Plan for Non-Employee Directors

        10.27           Intentionally omitted.

        *10.28(13)      Directors Deferred Compensation Agreements for Peoples
                        National Bank and Omega Financial Corporation

        *10.29(14)      1996 Employee Stock Option Plan

        10.30(15)       Second Amendment to Omega Amended and Restated Employee
                        Stock Ownership Plan

        13.1            Annual Report to Shareholders for the year ended
                        December 31, 1999 (such reports, except for those
                        portions expressly incorporated by reference in this
                        Annual Report on Form 10-K, is furnished for the
                        information of the Commission and is not to be deemed
                        filed as part of this Report).

        21.1            Subsidiaries of the Registrant (filed herewith)

        23.1            Consent of Arthur Andersen LLP (filed herewith)

        27.1            Financial Data Schedule

        (b)  Reports on Form 8-K.
              None.

-------------------------
      *     Indicates management contract or compensatory plan, contract or
            arrangement.

      (1)   Incorporated by reference from Omega's (formerly Peoples') Annual
            Report on Form 10-K for the year ended December 31, 1986.
      (2)   Incorporated by reference from Omega's (formerly Peoples'
            Registration Statement on Form S-4 (File No. 33-9045).
      (3)   Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1987.
      (4)   Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1988.
      (5)   Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1989.
      (6)   Incorporated by reference from Omega's Quarterly Report on Form 10-Q
            for the period ended June 30, 1990.
      (7)   Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1990.
      (8)   Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1992.
      (9)   Incorporated by reference from Omega's Registration Statement on
            Form S-4 (File No. 33-71070).
      (10)  Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1993.


                                       19
<PAGE>

      (11)  Incorporated by reference from Omega's Registration Statement on
            Form S-8 (Registration No. 33-82214).
      (12)  Incorporated by reference from Omega's Registration Statement on
            Form S-4 (Registration No. 33-91472).
      (13)  Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1994.
      (14)  Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1995.
      (15)  Incorporated by reference from Omega's Annual Report on Form 10-K
            for the year ended December 31, 1996.


                                       20
<PAGE>

                                   SIGNATURES

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

                                    OMEGA FINANCIAL CORPORATION


                                    By: _________________________________
                                        David B. Lee, Chairman of the Board and
                                         and Chief Executive Officer

      Pursuant to the requirements 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 dates indicated.

Signatures                    Title                           Date


______________________  Chairman of the Board, and            __________________
David B. Lee            Chief Executive Officer and
                        Director (Principal Executive)
                        Officer


______________________  President and Chief                   __________________
D. Stephen Martz        Operating Officer and Director


______________________  Director                              __________________
Robert T. Gentry


______________________  Executive Vice President and          __________________
Daniel L. Warfel        Chief Financial Officer (Principal
                        Financial Officer)


_______________________ Senior Vice President and Controller  __________________
JoAnn N. McMinn         (Principal Accounting Officer)


_______________________ Director                              __________________
Raymond F. Agostinelli


_______________________ Director                              __________________
Merle K. Evey


_______________________ Director                              __________________
Philip E. Gingerich



_______________________ Director                              __________________
Robert N. Oliver

                                       21
<PAGE>

_______________________ Director                              __________________
James W. Powers, Sr.



_______________________ Director                              __________________
Stanton R. Sheetz



_______________________ Director                              __________________
Robert A. Szeyller


                                       22