UNITED STATES 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

                  For the Fiscal Year ended December 31, 2004

                                       or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

     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 No.)
     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

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes |X| No |_|

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

      Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

                                 Yes |X| No |_|

      The aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold on June 30, 2004, the last business day of the registrant's most
recently completed second fiscal quarter was $389,787,645. (1)

      There were 12,597,446 shares of the registrant's common stock outstanding
as of February 24, 2005.


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<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, 2004 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, 2004 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 2005 Annual Meeting of Shareholders are incorporated by
reference in Part III of this Report; provided, however, that the Compensation
Committee Report, the Audit Committee Report and the graph showing performance
of the Company's stock and any other information in such Proxy Statement that is
not required to be included in this Annual Report on Form 10-K, shall not be
deemed to be incorporated herein or filed for the purposes of the Securities Act
of 1933 or the Securities Exchange Act of 1934.

      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
June 30, 2004, the last business day of the registrant's most recently completed
second fiscal quarter. 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.

<PAGE>

                                     PART I

Item 1: Business

GENERAL

      Omega Financial Corporation ("Omega" or the "Company") is a Pennsylvania
business corporation that is registered as a bank holding company and has
elected to be a financial 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. On October 20, 2001,
Hollidaysburg and Penn Central Bank were merged into Omega Bank.

      On October 1, 2004, Sun Bancorp, Inc. ("Sun"), a bank holding company was
merged into Omega. On that same date, Sun's banking subsidiary, Sun Bank, was
merged into Omega Bank. In connection with the Sun merger, the Company issued a
total of 4,117,116 shares of its common stock, and paid a total of $35,921,000,
to the former shareholders of Sun. Also as a result of this merger, Omega
acquired Sun's wholly-owned subsidiaries: Beacon Life Insurance Company, Sun
Bancorp Statutory Trust I, Sun Investment Services, Inc., SUBI Services, Inc.,
Mid-Penn Insurance Associates, Bank Capital Services Corporation and Sentry
Trust Company. The Company currently has one banking subsidiary, Omega Bank, and
its current non-banking subsidiaries consist of Central Pennsylvania Life
Insurance Company, Central Pennsylvania Investment Company, Omega Insurance
Agency, Inc., Omega Financial Company LLC, Central Pennsylvania Leasing, Inc.,
Beacon Life Insurance Company, Sun Investment Services, Inc., SUBI Services,
Inc., Mid-Penn Insurance Associates, Bank Capital Services Corporation and
Sentry Trust Company. The Company also owns two subsidiaries that are
unconsolidated: Omega Financial Capital Trust 1 and Sun Bancorp Statutory Trust
I. Unless the context otherwise requires, the "Company" refers to Omega
Financial Corporation and its consolidated subsidiaries and the "Bank" refers to
the Company's banking subsidiary.

BANKING SERVICES

      The Bank currently provides retail and commercial banking services through
68 full service offices in Bedford, Blair, Centre, Clinton, Cumberland,
Huntingdon, Juniata, Mifflin, Snyder, Union, Northumberland, Lycoming, Dauphin
and Luzerne counties in northeastern and central Pennsylvania.

      The Bank provides 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, auto and equipment leases, 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 lending,
commercial cash management services, lockbox service, and repurchase agreements.
The Bank also provides a variety of trust and asset management services.


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<PAGE>

      Omega's primary loan products include commercial loans, commercial real
estate loans, real estate construction loans, real estate mortgage loans, home
equity and other personal/consumer products.

      Omega's underwriting policies are updated periodically and are presented
for approval by the Board of Directors of the Bank. The purpose of the policies
is to grant loans on a sound and collectible basis; to invest available funds in
a safe, profitable manner; to serve the legitimate credit needs of the
communities of Omega's primary market area; and ensure that all loan applicants
receive fair and equal treatment in the lending process. It is the intent of the
underwriting policies to minimize loan losses by carefully investigating the
credit history of each applicant, verify the source of repayment and the ability
of the applicant to repay, collateralize those loans in which collateral is
deemed to be required, exercise care in the documentation of the application,
review, approval and origination process and administer a comprehensive loan
collection program.

      The major types of investments held consist of obligations and securities
issued by U.S. Treasury or other government agencies or corporations,
obligations of state and local political subdivisions, corporate and other
securities, mortgage-backed securities, common stock and other investments.
Other investments held include limited partnership low-income housing projects
and other real estate owned. Our investment policy directs that investments be
managed in a way that provides necessary funding for the Company's liquidity
needs, provides adequate collateral to pledge for public funds held and, as
directed by the Asset Liability Committee, is managed to control interest rate
risk. The investment policy provides limits on types of investments owned,
credit quality of investments and limitations by investment types and issuer.

      The Company's primary source of funds is deposits that are gathered by the
Bank. These deposits consist of transaction type accounts such as demand
deposits and savings accounts and time deposits such as certificates of
deposits. The majority of deposits have been gathered by the Bank in the
Company's market area. No material portion of the deposits has been obtained
from a single or small group of customers and the Company believes that the loss
of any customer's deposits or a small group of customers' deposits would not
have a material adverse effect on the Company.

      Other sources of funds used by the Company include retail repurchase
agreements, borrowings from Federal Home Loan Bank of Pittsburgh, and lines of
credit established with various correspondent banks for overnight funding.

      As of December 31, 2004, the Bank operated an aggregate of 111 automated
teller machines (ATMs) at various locations. The Bank is a member of the First
Data/Star System and the "Plus System." The First Data/Star and Plus Systems
operate nationwide.

      The Bank has a relatively stable deposit base with no major seasonal
depositor or group of depositors. Most of its commercial customers are small and
mid-sized businesses in northeastern and central Pennsylvania.


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<PAGE>

OTHER ACTIVITIES

      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. In 2001, Central Pennsylvania Investment Co. formed
a subsidiary, Omega Insurance Agency Inc., a Pennsylvania corporation, for the
purpose of offering certain insurance and investment services within Omega's
market area.

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

      In November 2002, Omega Bank formed its subsidiary, Omega Financial
Company, LLC, a Delaware limited liability company whose purpose is to hold
certain investments of the Company.

      In September 2004, the Company formed Omega Financial Capital Trust I, for
the purpose of issuing trust preferred securities through a pooled trust
preferred program.

      On October 1, 2004, in connection with the Sun merger, the Company
acquired the following subsidiaries of Sun:

      Beacon Life Insurance Company, an Arizona corporation, for the purpose of
      providing credit life and disability insurance;

      Sun Bancorp Statutory Trust I, a wholly owned Connecticut corporation, for
      the purpose of issuing trust preferred securities through a pooled trust
      preferred program;

      Sun Investment Services, Inc. offers mutual funds and annuity products to
      Omega's customers;

      SUBI Services, LLC, an employee services company, solely owned by Omega
      Bank;

      Mid-Penn Insurance Associates, an independent insurance agency, to
      diversify the financial services available to Sun's customers;

      Bank Capital Services Corporation provides leasing alternatives to Omega's
      customers and also services leases for several other financial
      institutions;

      Sentry Trust Company provides trust and wealth management services for
      clients throughout central Pennsylvania.

COMPETITION

      The Bank's 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 Bank actively competes with
such banks and institutions for local retail and commercial accounts. The Bank
also is subject to competition from other banks and financial institutions in
central and northeastern 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 Bank.

      In commercial transactions, the Company believes that the Bank's legal
lending limit to a single borrower (approximately $31,927,000 as of December 31,
2004) enables it to compete effectively for the business of small and mid-sized
businesses. However, this legal lending limit is considerably lower than that of
various competing institutions and thus may act as a constraint on the Bank's
effectiveness in competing for financings in excess of the limit.


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<PAGE>

      In consumer transactions, the Bank believes that it is able to compete on
a substantially equal basis with larger financial institutions because it offers
competitive interest rates on savings and time accounts and loans.

      In competing with other banks, savings and loan associations and other
financial institutions, the Bank seeks 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 Bank's 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 Bank. The Bank also competes 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
facing increased competition. See "Supervision and Regulation -
Gramm-Leach-Bliley Act".

SUPERVISION AND REGULATION

      The following discussion sets forth certain of the material elements of
the regulatory framework applicable to bank holding companies and financial
holding companies and their subsidiaries and provides certain specific
information relevant to the Company and its subsidiaries. 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" and has
elected to be a "financial 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").
For a discussion of regulations applicable to a financial holding company, see
"Gramm-Leach-Bliley Act".

      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 that outweigh the possible adverse effects.

      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 and
open branch offices. As of December 31, 2004, the Bank was rated "satisfactory"
under the Community Reinvestment Act.

      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


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<PAGE>

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.

      The Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA")
contains a "cross-guarantee" provision that could result in any insured
depository institution owned by the Company being assessed for losses incurred
by the Federal Deposit Insurance Corporation ("FDIC") in connection with
assistance provided to, or the failure of, any other depository institution
owned by the Company. Also, under FRB policy, the Company is expected to act as
a source of financial strength to each of its banking subsidiaries and to commit
resources to support each such bank in circumstances where such bank might not
be in a financial position to support itself. Consistent with the "source of
strength" policy for subsidiary banks, the FRB has stated that, as a matter of
prudent banking, a bank holding company generally should not maintain a rate of
cash dividends unless its net income available to common shareholders has been
sufficient to fully fund the dividends and the prospective rate of earnings
retention appears to be consistent with the corporation's capital needs, asset
quality and overall financial condition.

      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.

      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. Omega Bank, as a national bank, is subject to the National
Bank Act. The Bank also is subject to the supervision of, and is regularly
examined by, the Office of the Comptroller of the Currency (the "OCC") and is
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 Bank, may establish branches within any
county in Pennsylvania, subject to prior regulatory approval.

      Under the Community Reinvestment Act, as amended ("CRA"), a bank has a
continuing and affirmative obligation, consistent with its safe and sound
operation, to help meet the credit needs of its entire community, including low
and moderate income neighborhoods. The CRA does not establish specific lending
requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The CRA requires the applicable regulatory agency to assess an institution's
record of meeting the credit needs of its community. The CRA requires public
disclosure of an institution's CRA rating and requires that the applicable
regulatory agency provide a written evaluation of an institution's CRA
performance utilizing a four-tiered descriptive rating system. An institution's
CRA rating is considered in determining whether to grant charters, branches and
other deposit facilities, relocations, mergers, consolidations and acquisitions.
Performance less than satisfactory may be the basis for denying an application.
For its most recent examinations, the Bank received a "satisfactory" rating.

      Omega Bank is a member of the FDIC and a member of the Federal Reserve
System and, therefore, is subject to additional regulation by these agencies.
Some of the aspects of the lending and


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deposit business of the Bank that are regulated by these agencies include
personal lending, mortgage lending and reserve requirements.

      The operations of the Bank 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 Bank also is subject to certain limitations on the amount of
cash dividends that it can pay. See Note 24 of Notes to the Company's
Consolidated Financial Statements, contained in the Company's 2004 Annual Report
to Shareholders filed as Exhibit 13.1. The Bank's recently acquired subsidiary,
Sentry Trust Company, is a Pennsylvania non-depository trust company, which is
also subject to regulations and periodic examination by the Pennsylvania
Department of Banking.

      The OCC has authority under the Financial Institutions Supervisory Act to
prohibit national banks from engaging in any activity that, 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.

      Deposits of the Bank are insured up to applicable limits by 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.

      Capital Regulation. The Company and the Bank 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 24 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 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." As of December 31, 2004, the Bank was a
"well-capitalized" bank as defined by the FDIC.

      The FDIC has issued a rule that 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 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


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<PAGE>

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.

      Other. Central Pennsylvania Life Insurance Co., Beacon Life Insurance
Company, Mid-Penn Insurance Associates and Omega Insurance Agency, Inc. are
subject to regulation by applicable state insurance regulatory authorities. The
Company's non-bank subsidiaries are subject to the laws and regulations of both
the federal government and various states in which they conduct business.


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<PAGE>

Gramm-Leach-Bliley Act

      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 legislation creates a 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 and (2) the holding company must have made
an effective election to be a financial holding company to engage in activities
that would not have been permissible before the Act. In order for the election
to be effective, all of the depository institution subsidiaries must have a CRA
rating of "satisfactory" or better at its most recent examination. Omega's
election to be a financial holding company became effective on February 21,
2002. 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.

      Omega may engage directly or indirectly in activities considered financial
in nature, either de novo or by acquisition, as long as it gives the FRB
after-the-fact notice of the new activities

      If any banking subsidiary of Omega ceases to be "well capitalized" or
"well managed" under applicable regulatory standards, the FRB may, among other
things, place limitations on Omega's ability to conduct the broader financial
activities permissible for financial holding companies or, if the deficiencies
persist, require Omega to divest the banking subsidiary. In addition, if any
banking subsidiary of Omega receives a CRA rating of less than satisfactory,
Omega would be prohibited from engaging in any additional activities other than
those permissible for bank holding companies that are not financial holding
companies.

      The 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 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 foregoing discussion is qualified in its entirety by reference to the
statutory provisions of the Act and the related regulations, which are adopted
by various government agencies pursuant to the Act.

NATIONAL MONETARY POLICY

      In addition to being affected by general economic conditions, the earnings
and growth of the Bank 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


                                       10
<PAGE>

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 effects of such policies upon the future
businesses, earnings and growth of the Company cannot be predicted.

EMPLOYEES

      As of December 31, 2004, the Company had a total of 691 full-time
employees and 108 part-time employees.

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 that 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 a material adverse impact on the Company's ability
to remain profitable.

      Effect of Interest Rates on the Bank 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 that 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, 2004, total interest bearing
liabilities maturing or repricing within one year exceeded total interest
earning assets maturing or repricing during the same time period by $59.440
million, representing a cumulative one-year sensitivity ratio of 0.93.
Simulation of interest rate changes suggests that if interest rates decreased,
net interest income would likely 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 Bank 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


                                       11
<PAGE>

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 that 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 Bank's competitors have higher legal
lending limits than does the Bank. Particularly intense competition exists for
sources of funds including savings and retail time deposits and for loans,
deposits and other services that the Bank offers. 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 face an
increase in competition. See "Item 1: Business - Supervision and Regulation -
Gramm-Leach-Bliley Act".

      Allowance for Loan Losses. The Company has established an allowance for
loan losses which management believes to be adequate to offset probable losses
on the Company's existing loans. However, there is no precise method of
estimating 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 Registrant's
Common Equity and Related Stockholder 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
Registrant's Common Equity 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


                                       12
<PAGE>

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.

      Internal Controls. If the Company fails to maintain an effective system of
internal controls, it may not be able to accurately report its financial results
or prevent fraud. As a result, current and potential shareholders could lose
confidence in the Company's financial reporting, which could harm its business
and the trading price of its common stock. Beginning in early fiscal 2004, the
Company began a process to document and evaluate its internal controls over
financial reporting in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 and the related regulations, which require annual
management assessments of the effectiveness of the Company's internal controls
over financial reporting and a report by the Company's independent auditors
addressing these assessments. In this regard, management has dedicated internal
resources, engaged outside consultants and adopted a detailed work plan to (i)
assess and document the adequacy of internal controls over financial reporting,
(ii) take steps to improve control processes, where appropriate, (iii) validate
through testing that controls are functioning as documented and (iv) implement a
continuous reporting and improvement process for internal control over financial
reporting. The Company's efforts to comply with Section 404 of the
Sarbanes-Oxley Act of 2002 and the related regulations regarding the Company's
assessment of its internal controls over financial reporting and the Company's
independent auditors' audit of that assessment have resulted, and are likely to
continue to result, in increased expenses. The Company's management and audit
committee have given the Company's compliance with Section 404 the highest
priority. The Company cannot be certain that these measures will ensure that the
Company implements and maintains adequate controls over its financial processes
and reporting in the future. Any failure to implement required new or improved
controls, or difficulties encountered in their implementation, could harm the
Company's operating results or cause the Company to fail to meet its reporting
obligations. If the Company fails to correct any issues in the design or
operating effectiveness of internal controls over financial reporting or fails
to prevent fraud, current and potential shareholders could lose confidence in
the Company's financial reporting, which could harm its business and the trading
price of its common stock.

      Sun Merger. Since the acquisition of Sun became final, Omega has been
instituting its uniform policies, procedures and controls over the former Sun
operation. Omega expects to realize expected operating efficiencies, eliminate
redundant costs and operate the business profitably. The successful
integration of Omega and Sun could be adversely affected by one or more of the
following risks:

   o  The cost, in both money and human effort, required to continue successful
      integration of the operations of the companies may be greater than the
      Company expects;

   o  It may be more difficult than expected to control expenses after the
      merger, which would make it more difficult to improve the Company's
      overall operating efficiencies and obtain the benefits of economies of
      scale;

   o  Over time, customers of Sun Bank may choose not to maintain their
      deposits, loans and other banking relationships with Omega; and

   o  It may be more difficult than anticipated to completely integrate Sun's
      personnel into Omega's operations.

      ADDITIONAL INFORMATION

      We file annual, quarterly and current reports, proxy statements and other
information with the SEC. So long as we are subject to the SEC's reporting
requirements, we will continue to furnish the reports and other required
information to the SEC.

      You may read and copy any reports, statements and other information we
file at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operations of the Public Reference Room. Our SEC filings are also available on
the SEC's Internet site (http://www.sec.gov).


                                       13
<PAGE>

      The Company's common stock is traded on the NASDAQ National Market under
the symbol "OMEF." You may also read reports, proxy statements and other
information we file at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, DC 20006.

      Our Internet address is www.omegafinancial.com. We make available free of
charge on www.omegafinancial.com our annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act, as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC.

      In addition, we will provide, at no cost, paper or electronic copies of
our reports and other filings made with the SEC (except for exhibits). Requests
should be directed to David N. Thiel, Corporate Secretary, 366 Walker Drive,
State College, PA 16801.

      The information on the websites listed above, is not and should not be
considered to be part of this annual report on Form 10-K and is not incorporated
by reference in this document

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 M&T Bank. 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 Bank
operates branch offices and/or automated teller machines, indicated by (ATM), at
the following locations that are owned by the Company.

         Omega Bank

              117 South Allen Street, State College, PA  (Main Office) (ATM)
              222 South Allen Street, State College, PA  (ATM)
              1480 East College Ave., State College, PA (ATM)
              137 North Allegheny Street, Bellefonte, PA (ATM)
              Fourth and Olive Streets, Snow Shoe, PA
              121 W. Main Street, Rebersburg, PA
              101 E. 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   (ATM)
              1250 West Fourth St., Lewistown, PA
              111 North Logan Blvd., Burnham, PA (ATM)
              Main and Juniata Streets, Mifflin, PA
              Main and Mill Streets, Thompsontown, PA
              10 Carriage House Lane, Reedsville, PA  (ATM)
              109 East Main Street, Allensville, PA
              Route 522 North, Lewistown, PA (ATM only)
              366 Walker Drive, State College, PA  (ATM Only)
              218 - 224 Allegheny Street, Hollidaysburg, PA
              113 West Allegheny Street, Martinsburg, PA (ATM)
              215 High Street, Williamsburg, PA
              1567 East Pleasant Valley Boulevard, Altoona, PA (ATM)
              430 East 25th Avenue, Altoona, PA (ATM)
              431 Penn Street, Huntingdon, PA
              16-20 East Shirley Street, Mount Union, PA (ATM)
              Main Street, Alexandria, PA
              Route 26, James Creek, PA
              911 Church Street, Saxton, PA
              8th and Main Street, Saxton, PA (ATM only)
              14th and Moore Streets, Huntingdon, PA (ATM)


                                       14
<PAGE>

             2 South Market Street, Selinsgrove, PA (ATM)
             200 Susquehanna Trail, Selinsgrove, PA (ATM)
             Market and Plum Streets, New Berlin, PA (ATM)
             11 South Second Street, Sunbury, PA (ATM)
             Route 522 and Dock Hill Road, Middleburg, PA (ATM)
             300 Main Street, Watsontown, PA (ATM)
             96 Duke Street, Northumberland, PA (ATM)
             311 Market Street, Lewisburg, PA (ATM)
             40 Bellefonte Avenue, Lock Haven, PA (ATM)
             349 Main Street, Mill Hall, PA (ATM)
             10 South Market Street, Shamokin, PA (ATM)
             36 East Main Street, Nanticoke, PA (ATM)
             46 South Mountain Boulevard, Mountain Top, PA (ATM)
             2378 State Route 118, Hunlock Creek, PA (ATM)
             639 South Main Street, Wilkes Barre, PA (ATM)
             51 South Front Street, Steelton, PA (ATM)
             1100 Spring Garden Drive, Middletown, PA (ATM)
             90 Maynard Street, Williamsport, PA (ATM)
             2131 West Fourth Street, Williamsport, PA (ATM)
             2 South Main Street, Hughesville, PA (ATM)
             301 Broad Street, Montoursville, PA (ATM)
             1110 East Simpson Street, Mechanicsburg, PA (ATM)

      The Bank operates branch offices and ATMs at the following locations that
are leased by the Company. The leases for these properties have expiration dates
ranging from 2005 to 2024.

         Branches
             460 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.
             366 East College Avenue, State College, PA  (ATM)
             Routes 45 and 144, Centre Hall, PA (ATM) building owned, land
               leased.
             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.
             1402 Logan Avenue, Tyrone, PA (ATM) building owned, land
               leased.
             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
             205 Park Place, Bellefonte, PA (ATM)
             5th and Penn Streets, Huntingdon, PA (ATM)
             141 Plaza 15, Lewisburg, PA (ATM)
             814 Westminster Drive, Williamsport, PA (ATM)

         ATMs
             Weis Shopping Plaza, Mifflintown, PA
             414 East College Avenue, State College, PA
             Interstate 80 Exit 147 and Rt 144, Snow Shoe, PA
             Martin General Store, Route 22, Alexandria, PA
             Martin General Store, 300 High Street, Williamsburg, PA
             Service Mart of Mifflin, 2 Mowery Street, Mifflin, PA
             Centre County Visitors Center, 800 East Park Avenue, State College,
               PA
             Ingram's Market, Interstate 80 Exit 185, Rt. 477, Loganton, PA
             A Plus Convenience Store, 522 Allegheny St., Hollidaysburg, PA
             Lewistown Hospital, 400 Highland Ave., Lewistown, PA


                                       15
<PAGE>

             155 North Fifteenth Street, Lewisburg, PA
             284 Hogan Boulevard, Lock Haven, PA
             Dunkin' Donuts, Route 11, Bloomsburg, PA
             Short Stop Mart, State Route 487, Light Street, Bloomsburg, PA
             Amoco Food Shop, 105 McCracken Road, Danville, PA
             Amoco Food Shop, 11 A Street, Danville, PA
             Short Stop Mart, New Columbia, PA
             108 West Pine Street, Selinsgrove, PA
             Short Stop Mart, Route 522, Selinsgrove, PA
             Weis Markets, 700 Broad Street, Selinsgrove, PA
             1 College Avenue, Williamsport, PA
             Dunkin' Donuts, Routes 11 and 15, Hummel's Wharf, PA
             Short Stop Mart, Route 11, Northumberland, PA
             Dunkin' Donuts, Route 15, Lewisburg, PA
             Susquehanna University, Selinsgrove, PA
             Variety Stop, 15 East Main Street, Glen Lyon, PA
             Beer Super, 485 Scott Street, Wilkes Barre, PA
             Pump N Pantry, Routes 118 and 29, Hunlock Creek, PA
             Redner's Market, 156 Dolson Avenue, Middletown, NY
             Redner's Market, 4870 Penn Avenue, Sinking Springs, PA
             Redner's Market, 801 Carsonia Avenue, Reading, PA
             Redner's Market, 220 Campbell Road, Palmyra, PA
             Redner's Market, 3985 Columbia Avenue, Columbia, PA
             Redner's Market, Routes 422 and 662, Douglasville, PA
             Redner's Market, 3745 Nicholas Street, Easton, PA
             CSIU, 90 Lawton Lane, Milton, PA
             Brodart, 500 Arch Street, Williamsport, PA
             Redner's Market, 423 North Reading Road, Ephrata, PA
             Redner's Market, 2323 Lehigh Street, Allentown, PA
             Redner's Market, 2975 Route 22, Fredericksburg, PA
             Redner's Market, 3 Quarry Road, Reading, PA
             Redner's Market, 3215 North Fifth Street, Reading, PA
             Redner's Market, Route 11, Edwardsville, PA
             Redner's Market, 2000 North Township Boulevard, Pittston, PA
             Redner's Market, 550 Seventh Avenue, Scranton, PA
             Pump N Pantry, Montrose, PA
             Pump N Pantry, 620 State Route 29 South, Tunkhannock, PA
             Pump N Pantry, Exit 320 Interstate 80, Great Bend, PA
             Pump N Pantry, Exit 233, New Milford, PA
             Pump N Pantry, 530 Elmira Street, Troy, PA
             Pump N Pantry, 81 Victory Highway, Painted Post, NY
             Pump N Pantry, 58 North Main Street, Lawrence, PA
             Pump N Pantry, 1 North Main Street, Tioga, PA
             Pump N Pantry, State Route 307, Lake Winola, PA
             Pump N Pantry Exit 211 Interstate 80, Kingsley, PA
             Pump N Pantry, 622 State Route 6 West, Tunkhannock, PA
             Pump N Pantry, Route 11, Nicholson, PA
             Pump N Pantry, 114 N German Street, Dunshore, PA
Other

      The Company also leases buildings and/or office space for several of its
subsidiaries including: Fulton County, Greencastle, and Emporium, PA offices for
Sentry Trust; Pittston offices for Bank Capital Services Corporation; and
Sunbury and Shamokin Dam, PA offices for Mid-Penn Insurance Associates.

      The Bank leases office space in Bedford, PA for a Trust Services office.


                                       16
<PAGE>

Item 3: Legal Proceedings

      The Company and the Bank are involved in various legal proceedings
incidental to their business. Neither the Company, the Bank 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 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    58     Executive Vice President and Chief Financial Officer of the Company since
                           1987; Executive Vice President of Omega Bank since 1983.

Donita R. Koval     44     President of the Company since 2004; Chief Operating Officer of the Company
                           since 2003; President of Omega Bank since 2002 and Chief Executive Officer of
                           Omega Bank since 2003.

David N. Thiel      61     Senior Vice President and Corporate Secretary of the Company since 1987; Vice
                           President, Secretary and Cashier of Omega Bank since 1973.

JoAnn N. McMinn     52     Senior Vice President and Corporate Controller of the Company since 1988;
                           Director of Investor Relations since 2003; Vice President and Controller of
                           Omega Bank since 1976.
</TABLE>


                                       17
<PAGE>

                                     PART II

Item 5: Market for Registrant's Common Equity 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, 2004.

      In October 2003, the trustees of the Omega Employee Stock Ownership Plan
elected to convert 219,781 shares of Class A cumulative convertible preferred
stock into 346,155 shares of Omega Common Stock pursuant to a conversion right
in such preferred stock. The issuance of the Common Stock was exempt from
registration under the Securities Act pursuant to Section 3(a)(9) of the
Securities Act.

      On October 1, 2004, Omega issued 4,117,116 shares of its common stock as
part of the consideration paid by Omega, which was a mix of cash and stock, to
the former shareholders of Sun in connection with Omega's acquisition of Sun.
The issuance of Omega common stock in the merger was registered under the
Securities Act of 1933.

      The Company did not sell any other equity securities during 2004 that were
not registered under the Securities Act.

      For information concerning Omega's Equity Compensation Plans, see "Item
12: Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters."

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, 2004.

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,
2004.

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, 2004.

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,
2004.

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

      Not applicable.

Item 9A: Controls and Procedures

      Attached as exhibits to this Form 10-K are certifications of the Company's
Chief Executive Officer (CEO) and Chief Financial Officer (CFO); which are
required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934,
as amended (the Exchange Act). This "Controls and Procedures" section includes
information concerning the controls and controls evaluation referred to in the
certifications. Also preceding the Company's financial statements included in
the Company's Annual Report which is attached as Exhibit 13.1 to this Form 10-K
is the report of Ernst & Young LLP, our independent registered public accounting
firm, regarding its audit of the Company's internal control over financial
reporting and of


                                       18
<PAGE>

management's assessment of internal control over financial reporting which is
also included at the beginning of the financial statements. This section should
be read in conjunction with the certifications, the Ernst & Young LLP report for
a more complete understanding of the topics presented.

      Conclusion Regarding the Effectiveness of Disclosure Controls and
Procedures

      The Company's management, with the participation of its CEO and CFO,
conducted an evaluation, as of December 31, 2004, of the effectiveness of the
Company's disclosure controls and procedures (as defined in Exchange Act Rule
13a-15(e)). Based on this evaluation, the Company's CEO and CFO concluded that,
as of the end of the period covered by this annual report, the Company's
disclosure controls and procedures were effective in reaching a reasonable level
of assurance that management is timely alerted to material relating to the
Company during the period when the Company's periodic reports are being
prepared.

      Changes in Internal Control Over Financial Reporting

      The Company's management, with the participation of the Company's chief
executive officer and chief financial officer, also conducted an evaluation of
the Company's internal control over financial reporting, as defined in Exchange
Act Rule 13a-15(f), to determine whether any changes occurred during the quarter
ended December 31, 2004 that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial reporting.
Based on that evaluation, there was no such change during the quarter ended
December 31, 2004.

      A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been
detected. The Company conducts periodic evaluations of its controls to enhance,
where necessary, its procedures and controls. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.

Item 9B: Other Information

Omega had adopted a Code of Conduct that applied to all of its directors,
officers and employees. Additionally, it had adopted a Code of Ethics for Senior
Financial Officers, which included the Chief Executive Officer, the Chief
Financial Officer and the Corporate Controller (the "SFO Code"). Effective as of
November 22, 2004, the Board approved a Code of Ethics & Comprehensive Insiders
Activity Policy (the "New Code") applicable to the Company's directors, officers
and employees, including Chief Executive Officer, the Chief Financial Officer
and the Corporate Controller. The New Code imposed the


                                       19
<PAGE>

same obligations on the senior financial officers, as required by Item 406 of
SEC Regulation S-K, as did the SFO Code. On March 14, 2004, the Board determined
that the New Code replaced the SFO Code. The New Code is filed herewith as
Exhibit 14.1 and is incorporated herein by reference. The New Code also is
available for review on Omega's website at www.omegafinancial.com, under the
Corporate Governance section.


                                       20
<PAGE>

                                    PART III

Item 10: Directors and Executive Officers of the Registrant

      Incorporated by reference from the Company's Proxy Statement relating to
the 2005 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.

      Omega had adopted a Code of Conduct that applied to all of its directors,
officers and employees. Additionally, it had adopted a Code of Ethics for Senior
Financial Officers, which included the Chief Executive Officer, the Chief
Financial Officer and the Corporate Controller (the "SFO Code"). Effective as of
November 22, 2004, the Board approved a Code of Ethics & Comprehensive Insiders
Activity Policy (the "New Code") applicable to the Company's directors, officers
and employees, including Chief Executive Officer, the Chief Financial Officer
and the Corporate Controller. The New Code imposed the same obligations on the
senior financial officers, as required by Item 406 of SEC Regulation S-K, as did
the SFO Code. On March 14, 2004, the Board determined that the New Code replaced
the SFO Code. The New Code is filed herewith as Exhibit 14.1 and is available
for review on Omega's website at www.omegafinancial.com, under the Corporate
Governance section. Omega intends to satisfy the applicable disclosure
requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver
from, a provision of its New Code on its website, except as otherwise required
by applicable Nasdaq requirements.

Item 11: Executive Compensation

      Incorporated by reference from the Company's Proxy Statement relating to
the 2005 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 and
Related Stockholder Matters

      Incorporated by reference from the Company's Proxy Statement relating to
the 2005 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.

      The following table details information regarding Omega's existing equity
compensation plans as of December 31, 2004:

<TABLE>
<CAPTION>
                                                                                    (c)
                                                                           Number of securities
                                       (a)                   (b)            remaining available
                               Number of securities    Weighted-average     for future issuance
                                to be issued upon     exercise price of        under equity
                                   exercise of           outstanding        compensation plans
                               outstanding options,   options, warrants    (excluding securities
        Plan Category          warrants and rights        and rights     reflected in column (a))
---------------------------------------------------------------------------------------------------
<S>                                  <C>                  <C>                     <C>
Equity compensation plans
approved by security
holders                              924,922              $    31.50             857,302

Equity compensation plans
not approved by security
holders                                   --                      --                  --

                             ----------------------------------------------------------------------
Total                                924,922              $    31.50              857,302
                             ======================================================================
</TABLE>

Item 13: Certain Relationships and Related Transactions


                                       21
<PAGE>

      Incorporated by reference from the Company's Proxy Statement relating to
the 2005 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.

Item 14: Principal Accountant Fees and Services

      Incorporated by reference from the Company's Proxy Statement relating to
the 2005 Annual Meeting of Shareholders to be filed pursuant to General
Instruction G(3) to Form 10-K.


                                       22
<PAGE>

                                     PART IV

Item 15: Exhibits and Financial Statement Schedules

      (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, 2004,
and the report of independent public accountants which is also included in such
Annual Report, are incorporated by reference into Item 8 of this Report:

      Consolidated Balance Sheets -
               December 31, 2004 and 2003

      Consolidated Statements of Income
               Years ended December 31, 2004, 2003 and 2002

      Consolidated Statements of Shareholders' Equity -
               Years ended December 31, 2004, 2003 and 2002

      Consolidated Statements of Cash Flows
               Years ended December 31, 2004, 2003 and 2002

      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
         ------                                    -----

           2.1(14)       Agreement and Plan of Merger with Sun Bancorp

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

           3.2(4)        Articles of Amendment to the Amended and Restated
                         Articles of Incorporation.

           3.3(7)        Articles of Amendment to the Amended and Restated
                         Articles of Incorporation

           3.4 (12)      Amended and Restated By-Laws of Omega

           *10.2(2)      Peoples (now Omega) Stock Option Plan (1986).

           *10.2(5)      Amendment No. 1 to Stock Option Plan (1986).

           *10.3(3)      Omega Executive Incentive Compensation Plan.

           10.4(5)       Purchase Agreement (with Exhibits) between Omega and
                         Mid-State Bank & Trust Company ("Mid-State").


                                       23
<PAGE>

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

           10.5(5)       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").

           10.6(5)       Pledge and Security Agreement between Omega and the
                         ESOP Trust.

           10.7(5)       Mortgage from Omega to Mid-State.

           *10.8(6)      1994 Stock Option Plan for Non-Employee Directors

           *10.9(7)      Directors Deferred Compensation Agreements for Peoples
                         National Bank and Omega Financial Corporation

           *10.10(8)     1996 Employee Stock Option Plan

           *10.11(9)     Omega Bank, National Association Amended and Restated
                         Salary Continuation Agreement with David B. Lee

           *10.12(9)     Omega Bank, National Association Salary Continuation
                         Agreement with Daniel Warfel

           *10.13(10)    Omega Financial Corporation Employee Stock Ownership
                         Plan (Restated Effective January 1, 1997)

           *10.14 (12)   Amendment No. 1 to Omega Employee Stock Ownership Plan

           *10.15 (12)   Amendment No. 2 to Omega Employee Stock Ownership Plan

           *10.16 (12)   Amendment No. 3 to Omega Employee Stock Ownership Plan

           *10.17 (12)   Amendment No. 4 to Omega Employee Stock Ownership Plan

           *10.18 (12)   Employment Agreement with D. Stephen Martz

           *10.19 (13)   Severance Agreement by and between Omega Financial
                         Corporation and Daniel L. Warfel

           *10.20 (13)   Severance Agreement by and between Omega Financial
                         Corporation and Donita R. Koval

           *10.21 (13)   First Amendment to the Omega Bank, National Association
                         Amended and Restated Salary Continuation Agreement with
                         David B. Lee

           *10.22 (13)   Employment Agreement with David B. Lee

           *10.23 (13)   First Amendment to the Omega Bank, National Association
                         Amended and Restated Salary Continuation Agreement with
                         Daniel L. Warfel

           *10.24 (13)   Omega Bank, National Association Salary Continuation
                         Agreement with Donita Koval

           *10.25        Employment Agreement with Maureen Bufalino (filed
                         herewith)

           *10.26        Compensation Arrangements for Directors and Executive
                         Officers (Filed herewith)

           13.1          Annual Report to Shareholders for the year ended
                         December 31, 2004 (such report, 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).


                                       24
<PAGE>

           14.1          Omega Financial Corporation Code of Ethics and
                         Comprehensive Insiders Activities Policy (filed
                         herewith)

           16.1(11)      Letter concerning Change in Certifying Accountant

           21.1          Subsidiaries of the Registrant
                         (filed herewith)

           23.1          Consent of Ernst and Young
                         (filed herewith)

           31.1          Certification of Chief Executive Officer pursuant to
                         Rule 13a-14(a) and Rule 15(d)-14(a) of the Securities
                         Exchange Act, as amended

           31.2          Certification of Chief Financial Officer pursuant to
                         Rule 13a-14(a) and Rule 15(d)-14(a) of the Securities
                         Exchange Act, as amended

           32.1          Certification of Chief Executive Officer and Chief
                         Financial Officer pursuant to 18 U.S.C. 1350, as
                         adopted pursuant to Section 906 of the Sarbanes-Oxley
                         Act of 2002.

---------------
*     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, 1988.

(4)   Incorporated by reference from Omega's Quarterly Report on Form 10-Q for
      the period ended June 30, 1990.

(5)   Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 1990.

(6)   Incorporated by reference from Omega's Registration Statement on Form S-8
      (Registration No. 33-82214).

(7)   Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 1994.

(8)   Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 1995.

(9)   Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 2000.

(10) Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 2001.

(11)  Incorporated by reference from Omega's Current Report on Form 8-K filed on
      April 11, 2002.

(12)  Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 2002.

(13)  Incorporated by reference from Omega's Annual Report on Form 10-K for the
      year ended December 31, 2003.

(14)  Incorporated by reference from an exhibit to Omega's Current Report on
      Form 8-K filed on April 21, 2004.


                                       25
<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


         Date:  03/15/2005                By: /s/ David B. Lee
                                              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.


Signatures                            Title                         Date

/s/ David B. Lee              Chairman of the Board and             03/15/2005
----------------              Chief Executive Officer and
David B. Lee                  Director (Principal Executive
                              Officer)


/s/ Daniel L. Warfel          Executive Vice President and          03/15/2005
--------------------          Chief Financial Officer (Principal
Daniel L. Warfel              Financial Officer)


/s/ JoAnn N. McMinn           Senior Vice President and Controller  03/15/2005
-------------------           (Principal Accounting Officer)
JoAnn N. McMinn

                              Director
----------------------
Raymond F. Agostinelli


/s/ Philip E. Gingerich       Director                              03/15/2005
-----------------------
Philip E. Gingerich


 /s/ D. Stephen Martz         Director                              03/15/2005
---------------------
D. Stephen Martz


/s/ Robert N. Oliver          Director                              03/15/2005
--------------------
Robert N. Oliver


/s/ James W. Powers, Sr.      Director                              03/15/2005
------------------------
James W. Powers, Sr.


/s/ Stanton R. Sheetz         Director                              03/15/2005
---------------------
Stanton R. Sheetz


                              Director                              03/15/2005
----------------------
Robert A. Szeyller


                              Director                              03/15/2005
-----------------------
Maureen M. Bufalino


                                       26
<PAGE>

                              Director                              03/15/2005
------------------------
Dennis J. Van Benthuysen

                              Director                              03/15/2005
------------------------
Robert A. Hormell


                                       27