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, 1996

                                       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                          6,025,348
  -----------------------------                -----------------------------
        (Title of Class)                       (Number of shares outstanding
                                                  as of February 26, 1997)

         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 26, 1997 was $224,271,221.(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, 1996 are incorporated by reference in Parts II and IV of
this Report.

         With the exception of the information incorporated by reference in
Parts II and IV of this Report, the Company's Annual Report to Shareholders for
the year ended December 31, 1996 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 1997 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 26, 1997. 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,
Peoples Bank and Russell Bank merged to form Omega Bank N.A. ("Omega Bank") and
on March 18, 1995, Saxton Bank merged into Penn Central 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. 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 41 offices in Central Pennsylvania. Omega Bank operates 25 full service
banking offices in Centre, Clinton, Montour, Mifflin, and Juniata counties. Penn
Central Bank operates six full service banking offices in Huntingdon and Bedford
counties, and Hollidaysburg operates nine full service banking offices in Blair
County.

         The Banks provide a full range of banking services including an
automatic teller machine network, checking accounts, NOW accounts, savings
accounts, money market certificates, investment certificates, fixed rate
certificates of deposit, club accounts, secured and unsecured commercial and
consumer loans, construction and mortgage loans, safe deposit facilities, credit
loans with overdraft checking protection and student loans. The Banks also
provide a variety of trust services.

         As of December 31, 1996, the Banks operated an aggregate of 37
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.

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.

                                       3
<PAGE>


         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.

         As a result of the merger of Penn Central into Omega on January 28,
1994, the Company also acquired Penn Central Bancorp Life Insurance Company and
Penn Central Bancorp Investment Company.

         Penn Central Bancorp Life Insurance Company was incorporated on
December 13, 1985 under the laws of the State of Arizona and was authorized to
underwrite credit life and disability insurance on credit obligations granted by
the Banks. On December 31, 1994, Penn Central Bancorp Life Insurance Company was
liquidated, with all existing business being transferred to Central Pennsylvania
Life Insurance Company.

         Penn Central Bancorp Investment Company was incorporated on July 24,
1986 under the laws of the State of Delaware for the purpose of acquiring high
quality debt and equity investments. On August 4, 1994, Penn Central Bancorp
Investment Company was merged into Central Pennsylvania Investment Company.

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, the Banks' respective legal lending limits
to a single borrower (approximately $8,918,000 for Omega Bank, $3,189,000 for
Penn Central Bank, and $3,699,000 for Hollidaysburg Trust Company, as of
December 31, 1996) 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.

SUPERVISION AND REGULATION

         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 regulation by the Board of Governors of the Federal Reserve
System (the "FRB").


                                       4
<PAGE>


         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.

         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.

         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.

         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.

         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
these banking subsidiaries, may establish branches within any county in
Pennsylvania, subject to the prior approval of the OCC.

         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.


                                       5
<PAGE>

         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 the extension of
credit, credit practices, the disclosure of credit terms and discrimination in
credit transactions. The deposits of the Banks are insured by the Bank Insurance
Funds ("BIF") of the FDIC. 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.

         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 21 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.


                                       6
<PAGE>

RECENT LEGISLATION

         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 one year after enactment. Pennsylvania law was amended to
authorize any out-of-state bank holding company to acquire control of any state
or national bank located in Pennsylvania after it receives prior written
approval from the Pennsylvania Department of Banking. 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.

         The foregoing necessarily is a summary and general description of
certain provisions of the Interstate Act and does not purport to be complete.
Many of the provisions will be implemented through the adoption of regulations
by the various Federal banking agencies. Moreover, many of the significant
provisions of the legislation have not yet become effective. As of the date
hereof, the Company is continuing to study the legislation and regulations
relating to the legislation but cannot yet assess its impact on the Company.

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, 1996, the Company had a total of 459 full-time
employees and 101 part-time employees.



                                       7
<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, 1996, total interest earning assets
maturing or repricing within one year exceeded total interest bearing
liabilities maturing or repricing during the same time period by $2.380 million,
representing a positive cumulative one year sensitivity ratio of 1.01. If
interest rates fall, the Company would experience a decrease in net interest
income. 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."

         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 which 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
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."


                                       8
<PAGE>

         Allowance for Loan Losses. The Company has established an allowance for
loan losses which management believes to be adequate to offset potential loses
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 loses.

         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 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 automated teller machines,
indicated by (ATM), at the following locations which are owned by the Company.


                                       9
<PAGE>

         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)
                  1519 Bloom Road, Danville, PA

         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)

         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 1997 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.

         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 
                  

                                       10
<PAGE>
                  
                  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 
                  I-80 Exit 22 and Rt 144, Snow Shoe, PA 
                  Sheetz Store, 1671 East Pleasant Valley Boulevard, Altoona, PA
                  Sheetz Store, 1100 Blair Street, Hollidaysburg, 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



                                       11
<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.

<TABLE>
<CAPTION>

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

<S>                                <C>               <C>
Daniel L. Warfel                   50                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                     53                Senior Vice President and Secretary of the Company since
                                                     1987; Vice President, Secretary and Cashier of Omega Bank
                                                     since 1973.

JoAnn N. McMinn                    44                Senior Vice President and Controller of
                                                     the Company since 1988; Vice President and
                                                     Controller of Omega Bank since 1976.
                                                     
</TABLE>

                                       12
<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, 1996. As of February 26, 1997, the number of
shareholders of the Company's common stock was 2,877.

         The company did not sell any equity securities during 1996 which were
not registered under the Securities Act.

         On March 25, 1997 the Company declared a 3 for 2 stock split to be
issued in the form of a stock dividend for shareholders of record April 18,
1997, to be distributed on April 30, 1997.

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, 1996.


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,
1996.


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,
1996.


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

         None


                                       13
<PAGE>


                                    PART III


Item 10:  Directors and Executive Officers of the Registrant

         Incorporated by reference from the Company's Proxy Statement relating
to the 1997 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 1997 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 1997 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 1997 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.



                                       14
<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, 1996,
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, 1996 and 1995

         Consolidated Statements of Income
                  Years ended December 31, 1996, 1995 and 1994

         Consolidated Statements of Shareholders' Equity -
                  Years ended December 31, 1996, 1995 and 1994

         Consolidated Statements of Cash Flows
                  Years ended December 31, 1996, 1995 and 1994

         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

<TABLE>
<CAPTION>

           Number                                       Title
           ------                                       -----
<S>                                 <C>
           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


                                       15
<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(3)                Salary Continuation Agreement, dated January 15, 1985, between the Company and
                                    Charles H. Zendt, Jr.

           *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.



                                       16
<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                    Second Amendment to Omega Amended and Restated Employee Stock Ownership Plan
                                    (filed herewith)

           13.1                     Annual Report to Shareholders for the year ended December 31, 1996 (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 L.L.P.

           27.1                     Financial Data Schedule

</TABLE>

           (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.


                                       17

<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.


                                       18
<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 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.

<TABLE>
<CAPTION>

Signatures                                  Title                               Date
----------                                  -----                               -----
<S>                                 <C>                                         <C>

______________________              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


______________________              Executive Vice President -                  __________________
Robert T. Gentry                    Director


______________________              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                                    __________________
David K. Goodman, Sr.


                                       19
<PAGE>


_______________________             Director                                    __________________
George R. Lovette



_______________________             Director                                    __________________
Robert N. Oliver


_______________________             Director                                    __________________
James W. Powers, Sr.


_______________________             Director                                    __________________
Stanton R. Sheetz


_______________________             Director                                    __________________
Robert A. Szeyller

</TABLE>


                                       20
<PAGE>