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

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                  For the quarterly period ended September 30, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                         Commission file number 0-10958


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

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

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

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



                                      NONE
      (Former name, address and fiscal year, if changed since last report.)


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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.



               Class                      Outstanding at September 30, 1999
           Common Stock                         4,698,897 Shares












<PAGE>
Drovers Bancshares Corporation and Subsidiaries
CONTENTS
PART I  FINANCIAL INFORMATION

 ITEM 1.  FINANCIAL STATEMENTS

  Consolidated Statements of Condition ....................................  4
   September 30, 1999 and December 31, 1998

  Consolidated Statements of Income .......................................  5
   Three Months Ended September 30, 1999 and 1998
   Nine Months Ended September 30, 1999 and 1998

  Consolidated Statements of Comprehensive Income .........................  6
   Three Months Ended September 30, 1999 and 1998
   Nine Months Ended September 30, 1999 and 1998

  Consolidated Statements of Cash Flows ...................................  7
   Nine Months Ended September 30, 1999 and 1998

  Notes to Consolidated Financial Statements ..............................  8

 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS ............................. 13

 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
          MARKET RISK ..................................................... 20

PART II  OTHER INFORMATION

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       A.  Listing of Exhibits.

        Exhibit 3(i) - Articles of Incorporation. (incorporated by
         reference to Exhibit 3(i) to the Corporation's June 30, 1999 10-Q)

        Exhibit 3(ii) - By-laws. (incorporated by reference
         to Exhibit 3(i) to the Corporation's June 30, 1999 10-Q)

        Exhibit 4 - Instruments Defining the Rights of Holders of Long-term
         Debt of the Corporation and its subsidiaries are not filed as
         Exhibits because the amount of debt under each instrument is less
         than 10 percent of the consolidated assets of the Corporation.
         The Corporation undertakes to file these instruments with the
         Commission on request.

        Exhibit 10(a) - Amended and Restated Supplemental Pension Plan,
         dated September 28, 1994, between the Bank and A. Richard Pugh
         and First Amendment thereto, dated November 14, 1995.
         (incorporated by reference to the Corporation's 1998 10-K)

        Exhibit 10(b) - Amended and restated Change of Control Agreement,
         dated September 30, 1999, among the Corporation, the Bank and
         A. Richard Pugh ................................................. 22

        Exhibit 10(c) - Form of Change of Control Agreement among the
         Corporation the Bank and each of the following Executive Vice
         Presidents of the Company:  Debra A. Goodling, Michael J. Groft
         and Shawn A. Stine.  (incorporated by reference to the Corporation's
         1998 10-K)






2 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
CONTENTS, continued


        Exhibit 10(d) - Form of Change of Control Agreement among the
         Corporation the Bank and each of the following Senior Vice
         Presidents of the Company:  Michael E. Kochenour and John D.
         Blecher ........................................................... 30

        Exhibit 10(e) - The Corporation's 1995 Stock Option Plan.
         (incorporated herein by reference to Exhibit 99.1 to the
         Corporation's Registration Statement on Form S-8, as filed with
         the Securities and Exchange Commission on December 31, 1998)

        Exhibit 10(f) - The Corporation's Incentive Stock Option Plan.
         (incorporated herein by reference to Exhibit 99.1 to the
         Corporation's Registration Statement on Form S-8 as filed with
         the Securities and Exchange Commission on May 24, 1995)

        Exhibit 11 - Statements Regarding Computation of Per Share
         Earnings ..........................................................  8

        Exhibit 21 - Subsidiaries of the Registrant ........................ 38

        Exhibit 27 - Financial Data Schedule ............................... 39
       B.  The Corporation filed the following reports on Form 8-K:

         (i)  On September 20, 1999 a Form 8-K was filed to announce the
              Corporation's issuance of $7.5 million in Trust Preferred
              Securities through a wholly owned subsidiary, Drovers Capital
              Trust I, on September 17, 1999 in a private placement.

         (ii) On October 18, 1999 a Form 8-K was filed to report the
              Corporation's 1999 Third Quarter earnings and to announce the
              Corporation's commencement of a $5.0 million common stock
              offering to the general public in a community and shareholder
              offering.

 SIGNATURES ................................................................ 21



























3 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CONDITION

(In thousands)

                                                            SEPT 30,   DEC 31,
ASSETS                                                         1999     1998
Cash and due from banks ..................................  $ 18,069  $ 24,145
Money market investments .................................       843       479
Investment securities (fair value $199,125 and $162,556)..   198,747   161,619

Loans (net of unearned income of $3,118 and $3,253) ......   436,834   390,109
Reserve for loan losses ..................................     4,352     3,912
Net loans ................................................   432,482   386,197

Bank premises and equipment ..............................    16,126    15,901
Other assets .............................................    11,949     9,452
TOTAL ASSETS .............................................  $678,216  $597,793

LIABILITIES
Deposits:
Noninterest-bearing ......................................  $ 47,541  $ 55,339
Interest-bearing .........................................   440,873   402,333
Total deposits ...........................................   488,414   457,672
Federal funds purchased and securities sold under
 agreements to repurchase ................................    41,124    23,325
Other borrowings .........................................    85,303    62,830
Corporation-obligated mandatorily redeemable capital
 securities of subsidiary trust ..........................     7,500         0
Other liabilities ........................................     6,252     5,773
TOTAL LIABILITIES ........................................   628,593   549,600

SHAREHOLDERS' EQUITY
Common stock -- no par, 15,000,000 shares authorized;
  issued and outstanding-4,698,897 shares in 1999 and
  4,468,461 shares in 1998 ...............................    38,850    33,772
Retained earnings ........................................    12,114    13,173
Accumulated other comprehensive income ...................    -1,341     1,248
TOTAL SHAREHOLDERS' EQUITY ...............................    49,623    48,193
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...............  $678,216  $597,793

See notes to consolidated financial statements.
















4 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME


(In thousands, except per share data)          THREE MONTHS         NINE MONTHS
                                              ENDED SEPT 30,     ENDED SEPT 30,
                                              1999     1998     1999      1998
INTEREST INCOME
Interest and fees on loans ................   $8,892  $7,859   $25,421  $22,560
Interest on deposits with banks ...........        7       4        20       36
Interest and dividends on
 investment securities ....................    2,978   2,557     8,185    7,968
Total interest income .....................   11,877  10,420    33,626   30,564
INTEREST EXPENSE
Interest on deposits ......................    4,624   4,470    13,396   12,973
Federal funds purchased and securities
 sold under agreements to repurchase ......      422     426       890    1,217
Interest on borrowed funds ................    1,165     636     3,027    2,061
Total interest expense ....................    6,211   5,532    17,313   16,251
Net interest income .......................    5,666   4,888    16,313   14,313
Provision for loan losses .................      213     179     1,064      647
Net interest income after
 provision for loan losses ................    5,453   4,709    15,249   13,666
OTHER INCOME
Trust income ..............................      362     342     1,036      930
Service charges on deposit accounts .......      496     427     1,417    1,220
Securities gains ..........................        0      31        67      262
Net gains on loan sales ...................      104     213       653      796
Equity in losses of real estate ventures ..      -96     -20      -207      -75
Other .....................................      364     296       988      874
Total other income ........................    1,230   1,289     3,954    4,007
OTHER EXPENSES
Salaries and employee benefits ............    2,346   1,941     6,711    5,954
Occupancy and premises ....................      361     292     1,005      837
Furniture and equipment ...................      354     407     1,033    1,002
Marketing .................................      173     192       523      495
Net (gain) cost of operation
 of other real estate .....................       15      -8        -9       10
Supplies ..................................      167     134       422      376
Other taxes ...............................      107      91       324      285
Other......................................      813     735     2,395    2,236
Total other expenses ......................    4,336   3,784    12,404   11,195
Income before income taxes ................    2,347   2,214     6,799    6,478
Applicable income taxes ...................      422     524     1,186    1,540
NET INCOME ................................   $1,925  $1,690   $ 5,613  $ 4,938
PER SHARE DATA
Net income ................................   $ 0.41  $ 0.36   $  1.20  $  1.06
Net income, assuming dilution .............   $ 0.41  $ 0.36   $  1.18  $  1.04
Dividends .................................   $ 0.12  $ 0.11   $  0.35  $  0.32

See notes to consolidated financial statements.







5 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(In thousands)                                 THREE MONTHS        NINE MONTHS
                                              ENDED SEPT 30,     ENDED SEPT 30,
                                              1999     1998      1999      1998
Net income ................................  $1,925   $1,690    $5,613   $4,938
Other comprehensive income:
Unrealized gains (losses) on securities
  arising during period ...................    -619      525    -3,897      590
Reclassification adjustment for gains
  included in net income ..................       0      -31       -25     -262
Other comprehensive income (loss) before
  tax .....................................    -619      494    -3,922      328
Income taxes (benefits) related to other
  comprehensive income ....................    -210      168    -1,333      112
Other comprehensive income (loss) .........    -409      326    -2,589      216
COMPREHENSIVE INCOME ......................  $1,516   $2,016    $3,024   $5,154

See notes to consolidated financial statements.





































6 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)                                              NINE MONTHS
                                                        ENDED SEPTEMBER 30,
                                                          1999       1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..........................................   $  5,613   $  4,938
Adjustments to reconcile net income to net cash
 from operating activities:
Depreciation and amortization .......................      1,129      1,144
Net amortization of investment security premiums ....        196        257
Provision for loan losses ...........................      1,064        647
Gain on sale/calls of securities held-to-
 maturity ...........................................        -42          0
Gain on sale of securities available-for-sale .......        -25       -262
Loans originated for sale ...........................    -45,364    -52,244
Proceeds from sales of loans ........................     46,220     52,712
Gain on sale of loans ...............................       -653       -796
Gain on sale of other real estate ...................        -23        -13
Net deferred loan fees ..............................       -390        -76
Equity in loss of real estate ventures ..............        207         75
Increase in interest/dividends receivable ...........       -574       -110
Increase in interest payable ........................        388        454
Increase in other assets ............................       -340       -194
Increase (decrease) in other liabilities ............        -96        953
Net cash provided by operating activities ...........      7,310      7,485
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from calls and maturities of securities
 held-to-maturity ...................................     11,945      6,925
Proceeds from sales and maturities of securities
 available-for-sale .................................     28,021     30,085
Purchases of securities held-to-maturity ............          0          0
Purchases of securities available-for-sale ..........    -81,146    -21,124
Increase in net loans ...............................    -47,628    -62,469
Capital expenditures ................................     -1,333     -1,627
Proceeds from sale of fixed assets ..................          0          2
Net (purchase) of investment in real estate
 ventures ...........................................       -194     -1,076
Proceeds from sale of other real estate .............        392        252
Net cash used in investing activities ...............    -89,943    -49,032
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits and
 savings accounts ...................................     11,169     14,973
Net increase in certificates of deposit .............     19,573     14,392
Net increase (decrease) in federal funds purchased
 and repurchase agreements ..........................     17,799       -806
Net increase in other borrowings and capital
 securities of subsidiary trust .....................     30,008     14,861
Payments made for capital leases ....................        -34        -30
Dividends paid ......................................     -1,663     -1,514
Proceeds from issuance of common stock ..............         69        248
Net cash provided by financing activities ...........     76,921     42,124
NET INCREASE IN CASH & CASH EQUIVALENTS .............     -5,712        577
CASH & CASH EQUIVALENTS AT JANUARY 1, ...............     24,624     14,928
CASH & CASH EQUIVALENTS AT SEPT 30, .................   $ 18,912   $ 15,505
See notes to consolidated financial statements.


7 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

In the opinion of management, the accompanying consolidated financial
statements contain all adjustments (including normal recurring accruals)
considered necessary to present fairly Drovers Bancshares' financial position
as of September 30, 1999 and December 31, 1998.  Operating results and changes
in cash flows for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1999.  For further information, refer to the consolidated financial statements
and footnotes included in the Annual Report for the year ended December 31,
1998.

Certain reclassifications have been made to prior information to conform to
current year's presentation.

NOTE B - CALCULATION OF EARNINGS PER SHARE

On May 28, 1999, the Corporation issued a 5% stock dividend to shareholders of
record on May 7, 1999.  Par value was adjusted from $3.33 per share to no par
value per share.  Net income per share is computed based on the weighted
average number of shares outstanding each period, giving retroactive effect to
the 5% stock dividend issued in 1999 and the 3-for-2 stock split issued in 1998.
Earnings per common share, assuming dilution gives effect to all dilutive
potential common shares during each period.

Net income per share and net income per share, assuming dilution, were
calculated as follows:
                                              THREE MONTHS        NINE MONTHS
                                              ENDED SEPT 30,     ENDED SEPT 30,
                                              1999     1998     1999     1998
Net income ..............................    $1,925   $1,690   $5,613   $4,938
Average shares outstanding ..............     4,698    4,684    4,695    4,674
Effect of dilutive securities:
 Stock options ..........................        50       76       53       75
Average shares outstanding,
 assuming dilution ......................     4,748    4,760    4,748    4,749
Net income per share ....................    $ 0.41   $ 0.36    $1.20    $1.06
Net income per share, assuming dilution .    $ 0.41   $ 0.36    $1.18    $1.04



















8 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE C - INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities
Classified as held-to-maturity as of September 30, 1999 are as follows:

                                                     Gross      Gross
                                        Amortized Unrealized Unrealized   Fair
(In thousands)                             Cost      Gains      Losses    Value
US Treasury securities and obligations
 of US government corp and agencies ...   $ 1,489     $ 29       $ 0    $ 1,518
Obligations of states and political
 subdivisions .........................    14,926      295         2     15,219
Mortgage-backed securities and
 collateralized mortgage obligations ..     5,996       71        15      6,052
Total investment securities ...........   $22,411     $395       $17    $22,789

The amortized cost and estimated fair value of investment securities classified
as available-for-sale as of September 30, 1999 are as follows:

                                                    Gross      Gross
                                       Amortized Unrealized Unrealized   Fair
(In thousands)                            Cost      Gains      Losses    Value
US Treasury securities and obligations
 of US government corp and agencies ..  $ 16,473     $  8     $  267   $ 16,214
Obligations of states and political
 subdivisions ........................    20,065       59        550     19,574
Corporate obligations ................    12,395        6        348     12,053
Mortgage-backed securities and
 collateralized mortgage obligations..   107,998      301      1,673    106,626
Total debt securities ................   156,931      374      2,838    154,467
Equity securities ....................    21,437      565        133     21,869
Total investment securities ..........  $178,368     $939     $2,971   $176,336

The amortized cost and estimated fair value of investment securities classified
as held-to-maturity as of December 31, 1998 are as follows:

                                                    Gross      Gross
                                       Amortized Unrealized Unrealized    Fair
(In thousands)                            Cost      Gains     Losses      Value
US Treasury securities and obligations
 of US government corp and agencies ..  $ 8,476      $139       $ 0     $ 8,615
Obligations of states and political
 subdivisions ........................   16,926       697         0      17,623
Mortgage-backed securities and
 collateralized mortgage obligations .    8,857       124        23       8,958
Total investment securities ..........  $34,259      $960       $23     $35,196










9 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE C - INVESTMENT SECURITIES, continued

The amortized cost and estimated fair value of investment securities classified
as available-for-sale as of December 31, 1998 are as follows:

                                                    Gross      Gross
                                       Amortized Unrealized Unrealized    Fair
(In thousands)                            Cost      Gains     Losses      Value
US Treasury securities and obligations
 of US government corp and agencies ..  $  7,014   $  105       $ 0    $  7,119
Obligations of states and political
 subdivisions ........................     7,541      243        24       7,760
Corporate obligations.................     4,726       21        81       4,666
Mortgage-backed securities and
 collateralized mortgage obligations .    88,304      973       243      89,034
Total debt securities ................   107,585    1,342       348     108,579
Equity securities ....................    17,884      930        33      18,781
Total investment securities ..........  $125,469   $2,272      $381    $127,360

For additional information, see pages 22-23 of the Corporation's 1998 Annual
Report.

NOTE D - LOANS

Loans are comprised of the following as of September 30, 1999 and December 31,
1998:

                                                           SEPT 30,   DEC 31,
(In thousands)                                               1999      1998
Commercial, financial and industrial loans .............   $123,060  $117,997
Real estate mortgage loans:
  Real estate construction-related .....................     18,218    13,523
  Real estate mortgage loans secured by
     1-4 family residential properties .................    136,200   126,542
  Other real estate ....................................    128,010   100,585
Total real estate mortgage loans .......................    282,428   240,650
Consumer loans:
  Monthly payment ......................................     30,308    30,498
  Other revolving credit ...............................        778       791
Total consumer loans ...................................     31,086    31,289
Leasing and other ......................................        260       173
Total loans ............................................   $436,834  $390,109














10 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE D - LOANS, continued


Changes in the reserve for loan losses for the periods ended September 30, were
as follows:

(In thousands)                                               1999       1998
Balance, beginning of year .............................    $3,912     $3,304
Provision for loan losses ..............................     1,064        647
LESS: Loans charged-off ................................       701        192
Recoveries .............................................        77         89
Balance, September 30 ..................................    $4,352     $3,848

As of September 30, 1999, the total recorded investment in impaired loans was
$6,316,000.  Nonaccrual loans at September 30, 1999 were $1,200,000 compared to
$1,435,000 at December 31, 1998.

Residential mortgage loans with a book value of $2,697,000 were held for sale
at September 30, 1999.  The cumulative fair value exceeded the book value of
these loans.  Loans held for sale are included in total loans.  During the
first nine months of 1999, the Corporation capitalized $215,000 in loan
servicing rights and amortized $146,000.

For additional information, see pages 23-24 of the Corporation's 1998 annual
report.

NOTE E - COMPREHENSIVE INCOME

The income tax expense or benefit allocated to each component of other
comprehensive income for the periods ended September 30, were as follows:

 (In thousands)                                THREE MONTHS       NINE MONTHS
                                              ENDED SEPT 30,     ENDED SEPT 30,
                                              1999     1998     1999     1998
Unrealized gains (losses) on securities
  arising during period ...................   $-210    $179     $-1,324   $201
Reclassification adjustment for gains
  included in net income ..................       0     -11          -9    -89
Income taxes (benefits) related to other
  comprehensive income ....................   $-210    $168     $-1,333   $112















11 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE E - COMPREHENSIVE INCOME, continued

Accumulated other comprehensive income as of September 30, was as follows:

(in thousands)                                                 1999      1998

Balance, January 1, ......................................   $ 1,248    $1,593
Current-period change ....................................    -2,589       216
Balance, September 30, ...................................   $-1,341    $1,809

All components of accumulated other comprehensive income were as a result of
unrealized gains (losses) on investment securities available-for-sale.

NOTE F - CAPITAL SECURITIES OF SUBSIDIARY TRUST

On September 17, 1999, the Corporation issued $7,735,000 of 9.25% junior
subordinated deferrable interest debentures to Drovers Capital Trust I, a
Delaware business trust, in which the Corporation owns all of the common
equity.  The debentures are the sole asset of the Trust.  The Trust issued
$7,500,000 of preferred securities to investors.  The Corporation's
obligations under the debentures and related  documents, taken together,
constitute a full and unconditional guarantee by the Corporation of the
Trust's obligations  under the preferred  securities.  The preferred
securities are redeemable by the Corporation on or after September 30, 2004,
or earlier in the event the deduction of related  interest for federal income
taxes is  prohibited, treatment as Tier 1  capital  is no  longer  permitted,
or  certain  other contingencies arise. The preferred securities must be
redeemed upon maturity of the debentures on September 30, 2027.



























12 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

The following comparison of actual balances indicates how the Corporation has
generated and employed its funds for the nine months ending September 30, 1999:

                                        BALANCE                       BALANCE
                                        SEPT 30,  INCREASE            DEC 31,
(In thousands)                           1999    (DECREASE)     %      1998
FUNDING USES:
Money market investments ............  $    843    $   364   75.99%  $    479
Investment securities ...............   198,747     37,128   22.97%   161,619
Loans (net) .........................   432,482     46,285   11.98%   386,197
Total interest-earning assets .......   632,072     83,777   15.28%   548,295
Noninterest-earning assets ..........    46,144     -3,354   -6.78%    49,498
TOTAL USES ..........................  $678,216    $80,423   13.45%  $597,793
FUNDING SOURCES:
Interest-bearing demand deposits ....  $ 51,649    $   438    0.86%  $ 51,211
Savings deposits ....................   137,295     15,816   13.02%   121,479
Time deposits .......................   251,929     22,286    9.70%   229,643
Short-term borrowings ...............    41,124     17,799   76.31%    23,325
Long-term borrowings ................    92,803     29,973   47.70%    62,830
Total interest-bearing liabilities ..   574,800     86,312   17.67%   488,488
Noninterest-bearing demand deposits .    47,541     -7,798  -14.09%    55,339
Other liabilities ...................     6,252        479    8.30%     5,773
Shareholders' equity ................    49,623      1,430    2.97%    48,193
TOTAL SOURCES .......................  $678,216    $80,423   13.45%  $597,793

Total assets have increased $80,423,000, or 13.45%, since December 31, 1998.
Net loans grew $46,285,000 while investment securities grew $37,128,000.
Strong commercial loan demand continued in the third quarter. Commercial loans
grew $37,851,000, or 16.5%, of which $30,827,000 was secured by real estate.
Commercial loans were $267,036,000 at September 30, 1999. Residential real
estate loans grew $24,638,000, or 21.6% and stood at $138,453,000 at the end
of third quarter 1999.

During the first nine months of 1999, management increased holdings in
investment securities $37,128,000 to leverage the Corporation's capital base.
Total investment purchases were $81,225,000.  The purchases included fixed and
variable rate mortgage-backed and collateralized mortgage obligations, fixed
and variable rate corporate obligations, fixed rate municipal bonds and fixed
rate agency notes.  The Corporation also sold $5,991,000 of U.S. government
agency bonds, classified as held-to-maturity.  These bonds were within three
months of a probable call date.  The sales resulted in gains of $26,000.

Deposits continued to fund a significant portion of the asset growth.
Deposits have grown $30,742,000, or 6.7%, in the last nine months.  A majority
of the deposit growth was in certificates of deposit, which increased
$25,689,000, or 11.6% from a year ago.  This growth was boosted by the recent
Double Take CD Promotion.  The Corporation's Indexed Money Fund and Statement
Savings increased by $13,269,000 and $5,417,000, respectively.




13 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

FINANCIAL CONDITION, continued
The remaining assets were funded with customer repos and short-term and long-
term borrowings.  Customer repos and short-term borrowings have increased
$17,799,0000 so far this year.  Long-term borrowings increased $29,973,000
during the same period and include $7,500,000 of Capital Securities of
Subsidiary Trust issued in September 1999.  The Corporation also borrowed
$17,654,000 from the Federal Home Loan Bank of Pittsburgh with fixed interest
rates until at least 2004.

LIQUIDITY

Liquidity management focuses on the ability to meet the cash flow requirements
of customers wanting to withdraw or borrow funds for their personal or
business needs. Liquidity needs may be met by either reducing assets or
increasing liabilities.  Sources of asset liquidity include short-term
investments, maturing and repaying loans and monthly cash flows from mortgage-
backed securities and collateralized mortgage obligations. The loan portfolio
provides an additional source of liquidity due to the Corporation's
participation in the secondary mortgage market.  The Corporation designates a
substantial portion of its investment portfolio as available-for-sale.  At
September 30, 1999, this segment totaled $176,336,000, or 88.7%, of the
investment portfolio.

On the liability side, liquidity needs may be met by attracting deposits with
competitive rates, using repurchase agreements, buying federal funds or
utilizing the facilities of the Federal Reserve or the Federal Home Loan Bank
of Pittsburgh.  The Corporation maintains a formal arrangement with the
Federal Home Loan Bank, which allows the Corporation to borrow short and
intermediate advances up to approximately 80% of its investment in assets
secured by one-to-four family residential real estate.  The maximum
borrowings under this agreement at September 30, 1999 were $170,025,000, of
which $112,869,000, or 66.4%, was borrowed.  The ability to renew funding
sources depends on the financial institution's strength, asset portfolio,
diversity of depositors and types of deposit instruments offered.

LOAN QUALITY

Impaired loans at September 30, 1999 were $6,316,000 compared to $1,748,000 at
December 31, 1998.  Two loans secured by trade receivables totaling $5,320,000
were recently classified as impaired when possible credit problems became known.
Preliminary estimates of reserves on these two loans totaled $572,000.  The
reserve for loan losses on all impaired loans was $717,000 at September 30,
1999.  Nonaccrual loans at September 30, 1999 were $1,200,000 compared to
$1,435,000 at December 31, 1998.  Overall loan quality remains very good.

Loan charge-offs were $701,000 for the first nine months of 1999, of which
$512,000 were commercial loans and $189,000 were consumer loans.  Recoveries
were $77,000. Third quarter net charge-offs were $12,000.

During the second quarter, management fully charged off a commercial loan when
it became likely that the remaining balance was uncollectable. A portion of
the credit had been charged-off in the fourth quarter of 1998 and the first
quarter of 1999, as it was becoming apparent that the balance due may not be
repaid according to the original terms.
14 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

RESULTS OF OPERATION

Drovers Bancshares recorded net income of $5,613,000 and $4,938,000 for the
nine months ended September 30, 1999 and 1998, respectively.  The return on
assets (ROA) and return on equity (ROE) for the nine months ended September 30,
1999 were 1.19% and 15.06%, respectively.  This compares to an ROA and ROE for
the same period last year of 1.20% and 14.44%, respectively.

Net income for the quarter was $1,925,000 compared to $1,690,000 for the third
quarter last year.  The ROA and ROE for the third quarter of 1999 were 1.16%
and 15.39%, respectively, compared to 1.19% and 14.31% for the same period in
1998.

NET INTEREST INCOME

Net interest income is the difference between the interest earned on loans and
investments and the interest paid on deposits and other sources of funds.  The
following table presents the trends in net interest income:

                                      THREE MONTHS           NINE MONTHS
                                   ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
(In thousands)                  1999     1998   99/98    1999     1998   99/98
Interest income ............  $11,877  $10,420  14.0%  $33,626  $30,564  10.0%
Interest expense ...........    6,211    5,532  12.3%   17,313   16,251   6.5%
Net interest income ........    5,666    4,888  15.9%   16,313   14,313  14.0%
Provision for loan losses ..      213      179  19.0%    1,064      647  64.5%
Net interest income after
 provision for loan losses .  $ 5,453  $ 4,709  15.8%  $15,249  $13,666  11.6%

The Corporation's largest category of earning assets consists of loans to
businesses and individuals.  The majority of earning assets are supported by
commercial and consumer deposits and shareholders' equity. Changes in net
interest income are determined by variations in the volume and mix of assets
and liabilities as well as their sensitivity to interest rate movements.

Net interest income increased $778,000 in the third quarter and $2,000,000
during the first nine months of 1998.  Average earning assets increased
13.6% to $589,399,000 for the first nine months of 1999 compared to
$518,683,000 for the same period last year.  The margin for the first nine
months was 3.70% compared to 3.69% for the first nine months of 1998 and 3.67%
for all of last year.  The average yield on interest-bearing liabilities
decreased 0.33% for the first nine months in 1999 due mainly from a decline in
the yield on time deposits.  The decline in yield on time deposits and the
increase in average earning assets offset a decline in yield on
interest-earning assets.

The margin in the fourth quarter of 1998 was 3.61% compared to 3.73% in the
first quarter of 1999, 3.74% in the second and 3.64% in the third.  The decline
in yield from the second quarter was primarily due to an increase in yields on
short-term and long-term borrowings of 0.25%.




15 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

NET INTEREST INCOME, continued

The provision for loan losses was $213,000 for the quarter and $1,064,000 so
far in 1999.  This compares to a third quarter provision last year of $179,000
and a provision of $647,000 for the first nine months.  The increase in the
provision for loan losses for the year is related to the second quarter
charge-off of the commercial loan and also to the increase in total loans.  The
loan loss provision as a percentage of loans was 1.00% at September 30, 1999.

NONINTEREST INCOME
                                       THREE MONTHS              NINE MONTHS
                                     ENDED SEPTEMBER 30,    ENDED SEPTEMBER 30,
(In thousands)                       1999   1998  99/98    1999    1998   99/98
Trust income ...................... $ 362  $ 342    5.8%  $1,036  $  930   11.4%
Service charges on deposit accounts   496    427   16.2%   1,417   1,220   16.1%
Securities gains .................      0     31 -100.0%      67     262  -74.4%
Net gains on loan sales ..........    104    213  -51.2%     653     796  -18.0%
Equity in losses of real
 estate ventures .................    -96    -20  380.0%    -207     -75  176.0%
Other ............................    364    296   23.0%     988     874   13.0%
Total ............................ $1,230 $1,289   -4.6%  $3,954  $4,007   -1.3%

Noninterest income declined $59,000 for the third quarter and $53,000 for the
nine months ended September 30, 1999. The gain on sale of loans declined
$109,000 for the quarter and $143,000 for the nine month period as the
mortgage refinancing boom ended.  The gain on sale of securities decreased
$31,000 for the quarter and $195,000 for the nine month period.  The
Corporation sold a portion of its community bank stock portfolio during the
first quarter of 1998, which accounted for most of the gain in 1998.

Offsetting the decline in gains from asset sales was an increase in service
charges on deposit accounts and trust income, which increased $69,000 and
$20,000, respectively, for the quarter and $197,000 and $106,000, respectively,
for the nine month period.  An increase in collection of insufficient fund and
return check charges caused most of the growth in service charges on deposit
accounts.

The fair value of investments managed by the Investment Services and Trust
Division was $255,068,000 at September 30, 1999, an increase of $32,681,000,
or 14.7%, over the prior year.  The division has experienced growth in
employee benefits, personal trust and investment management accounts.  Overall
increases in the equity markets continued to boost the value of assets managed
and the related fee income.

The loss on real estate partnerships increased by $76,000 for the third
quarter and $132,000 for the first nine months in 1999.  The Corporation's
subsidiary, The Drovers & Mechanics Bank, is a partner in five limited
partnerships that provide low-income housing to qualified families.  The two
newest partnerships began operating in the third quarter of 1999.







16 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


NONINTEREST EXPENSE
                                       THREE MONTHS          NINE MONTHS
                                   ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
(In thousands)                    1999    1998   99/98    1999    1998    99/98
Salaries and employee benefits . $2,346  $1,941   20.9%  $6,711  $5,954   12.7%
Occupancy and premises .........    361     292   23.6%   1,005     837   20.1%
Furniture and equipment ........    354     407  -13.0%   1,033   1,002    3.1%
Marketing expense ..............    173     192   -9.9%     523     495    5.7%
Net cost of operation
 of other real estate ..........     15      -8 -287.5%      -9      10 -190.0%
Supplies .......................    167     134   24.6%     422     376   12.2%
Other taxes ....................    107      91   17.6%     324     285   13.7%
Other...........................    813     735   10.6%   2,395   2,236    7.1%
Total .......................... $4,336  $3,784   14.6% $12,404 $11,195   10.8%

Noninterest expenses increased $552,000 for the third quarter and $1,209,000 so
far this year.  Salaries and benefits are the largest component of noninterest
expense and increased $405,000 for the quarter and $757,000 for the first nine
months of 1999. Staff levels have increased from a year ago due primarily to
the addition of the Hellam branch in January 1999 and in preparation for the
Dillsburg branch opening in the fourth quarter of 1999.  Average full-time
equivalent staffing levels were 230 during the third quarter compared to 212
for the same period last year.  Accrued incentive compensation increased
$47,000 for the third quarter and $141,000 for the first nine months of 1999.

Occupancy and premises expense increased $69,000 for the third quarter and
$168,000 for the nine month period ended September 30, 1999.  The opening of
the Hellam office and loan production offices in Mechanicsburg, Pennsylvania
and Frederick, Maryland contributed to this increase.  Furniture and equipment
expense declined $53,000 for the quarter and increased $31,000 for the nine
month period.  The third quarter of 1998 included personal computer software
upgrades and software upgrades needed for Year 2000 compliance.  This expense,
which was not repeated in 1999, was offset by increases in equipment
depreciation and maintenance contracts.

Marketing expense decreased $19,000 in the third quarter and increased $28,000
for the first nine months in 1999.  Beginning in the third quarter of 1998,
the Corporation incurred expenses for an extensive image and branding
campaign, which focused on the Corporation's community bank image and
commitment to the markets it serves.

Other noninterest expense increased $78,000 for the quarter and $159,000 year-
to-date.  Affecting this increase were increases in data processing, legal,
loan servicing rights amortization and over and short charges. The increase in
expenses for the nine month period were partially offset by a decrease in
consulting services, which were paid in the first quarter of 1998.







17 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

TAXATION

The Corporation recognized a provision for income taxes of $1,186,000 for the
nine months ending September 30, 1999.  The average tax rate, applicable income
taxes divided by income before taxes, was 17.4%.  This compares to an average
tax rate of 16.6% for all of 1998.  The Corporation manages its tax rate
through the purchase of tax-exempt investment securities and investments in
low-income housing partnerships that provide historic and low-income tax
credits.

FUTURE OUTLOOK

On October 15, 1999, the Corporation announced the commencement of a $5 million
common stock offering to the general public in a community and shareholder
offering.

The Corporation plans to construct two new branch offices. Construction of the
new branch located near Dillsburg, Pennsylvania began in July 1999.  The office
is scheduled to open in November.  A contract has been signed to purchase land
at the Newberrytown exit of I-83 in Newberry Township for a new branch office.
Construction of this branch should be completed in the second quarter of 2000.

The Financial Accounting Standards Board issued Statement of Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities."  The Statement establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities.  The
Board recently delayed the Standard which now becomes effective for
fiscal years beginning after June 15, 2000.  The Corporation has not
completed its assessment of the impact, if any, to earnings from applying
this Standard.

YEAR 2000 ISSUE

The following contains forward-looking statements, which involve risks and
uncertainties.  The actual impact on the Corporation of the Year 2000 issue
could materially differ from that which is anticipated in the forward-looking
statements as a result of certain factors identified below.

The Year 2000 issue ("Y2K") is the result of some computer systems' inability
to recognize and process a date in the year 2000.  This could result in system
failures, miscalculations and disruptions of normal business operations.

Corporation's State of Readiness

The Corporation relies heavily on various internal information technology (IT)
and non-information technology (Non-IT) systems and third parties.  The
Corporation has identified and tested all critical IT and Non-IT systems.  A
small number of systems were found to be noncompliant.  As of December 31,
1998, remediation, testing and implementation of all mission critical systems
was complete.  The Corporation continues to assess all new systems and
significant upgrades to existing systems.

Year 2000 certification information was requested from all material third
parties, including loan customers.  Based on the responses received and
information gathered, the Corporation has not identified any material third
parties with Year 2000 issues that would interrupt normal business operations.



18 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

YEAR 2000 ISSUE, continued

Costs of Year 2000

The costs to remediate the Corporation's IT and Non-IT systems have been minor
and are expected to total less than $100,000.  As of December 31, 1998,
$65,000 had been expended on Year 2000 costs.  An additional $12,500 was
expensed in the  first nine months of 1999.  The Corporation does not expect
the amounts required to be expensed over the next three months to have a
material effect on the financial position or results of operations.  However,
if compliance is not achieved in a timely manner by the Corporation or any of
its significant related third parties, be it a supplier of services or a
customer, the Y2K issue could possibly have a material effect on the
Corporation's operations and financial position.

Risks of Year 2000

At present, the Corporation believes its progress in remedying the critical
systems and monitoring its third parties' Y2K readiness is on target.  The Y2K
computer problem creates risk for the Corporation from unforeseen problems in
its own computer systems and from third party vendors' computer systems, which
interface with the Corporation's computer applications.  Failure of third
party systems relative to the Y2K issue could have a material impact on the
Corporation's ability to conduct business.

Contingency Plans

At the present time, the Corporation is not aware of any reasonably likely
scenarios that would materially disrupt business operations.  The Corporation
has developed contingency plans that address situations that could arise
despite a low probability of occurrence.  The plans have been approved by the
Board and submitted to and reviewed by the FDIC.  The Corporation has adopted
the FFIEC four step plan: organizational planning, business impact analysis,
development of plan and validation.  The first three phases have been
completed.  The Corporation will continue testing and validating the plan
throughout the year.

For additional information, see pages 38-39 of the Corporation's 1998 Annual
Report.





















19 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

REGULATORY CAPITAL

The following table shows the Corporation exceeds all minimum capital
adequacy standards:
                                                   BALANCE     BALANCE
                                                   SEPT 30,     DEC 31,
(in thousands)                                       1999        1998
Tier 1 capital .................................    $58,404     $46,891
Tier 2 capital .................................      4,547       4,315
  Total risk-based capital .....................    $62,951     $51,206

Risk-adjusted on-balance sheet assets ..........   $462,852    $400,895
Risk-adjusted off-balance sheet exposure .......     14,256      14,180
  Total risk-adjusted assets ...................   $477,108    $415,075

Ratios:
  Tier 1 risk-based capital ratio ..............       12.2%       11.3%
  Minimum required .............................        4.0%        4.0%

  Total risk-based capital ratio ...............       13.2%       12.3%
  Minimum required .............................        8.0%        8.0%

  Tier 1 leverage ratio ........................        8.6%        7.8%
  Minimum required .............................        4.0%        4.0%

Comparing September 30, 1999 to December 31, 1998, the Corporation's Tier 1
capital ratio increased due to an increase in Tier 1 capital of $11,513,000
offset by a $62,033,000 increase in risk-weighted assets.  The $7,500,000 of
corporation-obligated mandatorily redeemable capital securities of subsidiary
trust issued on September 17, 1999 is included in Tier 1 capital.  The
leverage ratio increased due to the increase in Tier 1 capital offset by the
increase in total assets of $80,423,000.

For additional information, see page 41 of the Corporation's 1998 annual
Report and page 7 of the Corporation's 1998 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Corporation's primary market risk is the risk of changes in net interest
income caused by changes in interest rates.  Interest rate sensitivity
management focuses on minimizing interest rate risk.  Management measures
ongoing interest rate risk through monthly "gap" reports and quarterly
computer simulations of net interest income.  A "gap" report measures the net
dollar exposure to changes in interest rates, at a given time, for various
repricing periods.  Results can sometimes be misleading since many
interest-bearing liabilities are not as sensitive to interest rate movements
as the repriceable assets which they help fund.  A better measure of interest
rate risk is simulations which project net interest income in rising, falling
and stable interest rate cycles.  The Corporation performs and reviews income
simulations on a quarterly basis.  The interest rate risk has not changed
materially from December 31, 1998.









20 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART II  OTHER INFORMATION
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   DROVERS BANCSHARES CORPORATION




                                   _/s/ A. Richard Pugh ___________________
                                   A. Richard Pugh, Chairman, President
                                   and Chief Executive Officer




                                   _/s/ Debra A. Goodling___________________
                                   Debra A. Goodling, Executive Vice President
                                     and Treasurer
                                   Principal Financial Officer




                                   _/s/ John D. Blecher____________________
                                   John D. Blecher, Senior Vice President
                                     and Secretary
                                   Principal Accounting Officer


                                   Date: November 10, 1999
























21 <PAGE>


Exhibit 10(b)
                           AMENDED AND RESTATED
                         CHANGE OF CONTROL AGREEMENT



     AGREEMENT made as of this _____ day of _____________, 1999, by and
between DROVERS BANCSHARES CORPORATION and THE DROVERS & MECHANICS BANK, a
Pennsylvania corporation and a Pennsylvania state chartered bank,
respectively, each with offices in York, Pennsylvania, hereinafter
collectively called "Company", and A. RICHARD PUGH, hereinafter called
"Executive."


                                 BACKGROUND

     Executive is employed by Company as President and Chief Executive
Officer.  In consideration of Executive's past and future services, Company
entered into a Change of Control Agreement with Executive as of September 28,
1994, as amended and restated as of November 14, 1995 ("Prior Agreement") to
provide Executive compensation and other benefits upon his termination of
employment after a corporate change of control.

     In consideration of the mutual covenants and agreements herein, and
intending to be legally bound hereby, the parties agree to amend and restate
the Prior Agreement as follows:

     1.     TERM - The term of this Agreement shall commence on the date
hereof and end on the earliest to occur of the following:

            (a)  Executive's death;

            (b)  Executive's permanent disability resulting in his
     inability to fully perform or complete his duties as President and
     Chief Executive Officer for a period anticipated to exceed one hundred
     eighty (180) consecutive days, provided, however, that in the event
     Company maintains a long-term disability insurance plan on the date
     Executive becomes disabled, Executive's permanent disability shall be
     Determined under the criteria of the insurance policy;

            (c)  Retirement at or after age sixty-five (65);

            (d)  The date five (5) years after a Change of Control as defined
     in Section 2;

            (e)  The date thirty-six (36) months after a Change of Control
     Termination as defined in Section 2.

            (f)  The date eighteen (18) months after the termination of
     Executive's employment if there is no Change of Control as defined in
     Section 2 in the interim.

     However, if Executive's death, permanent disability or retirement, as
defined above, occurs after a Change of Control Termination, this Agreement
shall terminate on thirty-six (36) months after such Change of Control
Termination.

     2.     CHANGE OF CONTROL TERMINATION - Change of Control Termination
shall be deemed to have occurred if there is a Change of Control regarding
either or both corporations constituting Company and, during the Employment
Security Period, either of the following occurs: (i) Company terminates the
employment of Executive other than for Good Cause; or (ii) Executive terminates
his employment with Company following a Change in Control and for
Good Reason.

22<PAGE>
            (a)  "Change of Control" with respect to the Drovers Bancshares
     Corporation or the Drovers & Mechanics Bank ("Target Company") shall mean
     the occurrence of any of the following:

                 (i)   the change in the Board of Directors of Target Company,
     during any twenty-four (24) month period ending on or after the date of
     this Agreement, if the individuals who were directors of Target Company
     at the beginning of the period cease during such period to constitute at
     least a majority of the Board of Directors;

                 (ii)  the commencement of a tender offer or exchange offer by
     any entity, person or group (including any affiliates of such entity,
     person or group, by other than an affiliate of Company) for twenty-five
     percent (25%) or more of the outstanding voting power of all capital
     stock of Target Company;

                 (iii) the acquisition by any entity, person or group
     (including any affiliates of such entity, person or group) of beneficial
     ownership, as that term is defined in Rule 13d-3 under the Securities
     Exchange Act of 1934, of Target Company capital stock entitled to
     twenty-five percent (25%) or more of the outstanding voting power of all
     capital stock of Target Company;

                 (iv)  the effective time of the merger, consolidation,
     division, share exchange, or any other transaction or a series of
     transactions outside the ordinary course of business ("Business
     Combination"), as a result of which the holders of the outstanding
     Voting capital stock of Target Company immediately prior to such
     Business Combination, excluding any shareholder who is a party to the
     Business Combination (other than Company) or is such party's affiliate
     as defined in the Securities Exchange Act of 1934, hold less than
     seventy-five percent (75%) of the voting capital stock of the surviving
     or resulting corporation;

                 (v)   the transfer of substantially all of the Target
     Company's assets other than to a wholly owned subsidiary of Target
     Company.

            (b)  "Employment Security Period" shall mean the period commencing
     eighteen (18) months prior to the Change of Control and ending five (5)
     years after the Change of Control.

            (c)  "Good Cause" shall mean the occurrence of one or more of the
     following events:

                 (i)   Executive's willful engagement in gross misconduct
     that is materially injurious to Company;

                 (ii)  Excessive alcohol or drug abuse by Executive which
     continually and materially interferes with Executive's ability to perform
     his duties as President and Chief Executive Officer;

                 (iii) Executive's conviction or plea of nolo contendere of a
     crime involving fraud, misappropriation, embezzlement or other violation
     of the law of like nature or severity;

                 (iv)  The voluntary filing or application by Executive for
     relief in bankruptcy or other moratorium law, or for the appointment of a
     receiver, trustee or liquidator, or the making by Executive of a general
     assignment of all his assets for the benefit of creditors, which is not
     dismissed within sixty days, unless any such action or event is
     attributable to a judgment rendered against the Executive arising out of
     his charitable or civic activities.

                 (v)   Executive's willful failure to perform his duties as
     President and Chief Executive Officer in a manner generally consistent
     With his past service;
23<PAGE>
            (d)  "Good Reason" shall mean the occurrence of one or more
     of the following without Executive's prior written consent:

                 (i)   an assignment to Executive of any duties materially
     inconsistent with his position as President and Chief Executive Officer;

                 (ii)  a reduction in Executive's fixed salary or elimination
     of, or material adverse modification to any incentive or other
     supplemental currently taxable compensation plan, except any such
     reduction, elimination or modification that is applied generally to
     senior executive officers of Company;

                 (iii) a relocation of Executive's principal executive office
     outside of York County, Pennsylvania, or any requirement that Executive
     be based other than at Company's principal executive offices in York,
     Pennsylvania, except on a temporary basis in the ordinary course of
     business;

                 (iv)  a termination or material adverse modification to any
     nonqualified deferred compensation plan in which Executive participates
     without substitution of comparable benefits, except any such termination
     or modification that is applied generally to senior executive officers
     who had such benefits.

     3.     COMPENSATION AND BENEFITS - Upon a Change of Control Termination,
Company shall provide Executive, in addition to any other rights or benefits
to which Executive may be entitled by contract or under any policy or custom
of Company, subject however, to Section 7 below, the following:

            (a)  For a term commencing with such termination and
     extending for three (3) years thereafter, Company shall pay Executive an
     annual compensation equal to Executive's highest compensation received
     in that calendar year included with the period commencing with the
     calendar year in which this Agreement is executed initially and
     extending to the calendar year in which termination occurs (annualized
     as necessary).  For purposes of the foregoing, "compensation" shall be
     (i) salary without reduction for any contribution to (aa) cash or
     deferred arrangements under Section 401(k) of the Internal Revenue Code
     of 1986, as amended [or successor provision] and (bb) any nonqualified
     deferred compensation plan, plus (ii) non-deferred incentive compensation
     (collectively "Compensation"), and shall be payable in equal installments
     with such frequency as Company customarily pays its payroll.  For
     purposes of this paragraph (a), Executive's Compensation will be reduced,
     beginning with the first month following his re-employment with another
     employer, by fifty percent (50%) of the Form W-2 income, with the new
     employer.  Executive shall have no obligation to mitigate his damages by
     seeking employment following his termination of employment with Company.

            (b)  Company shall provide, at its expense, for the continuation
     in full force and effect for a period ending upon the earlier to occur of
     Executive's death or three (3) years following the Change of Control
     Termination, all health, dental, life insurance and disability plans,
     programs and arrangements in which Executive was entitled to participate
     immediately prior to such termination, provided that his continued
     participation is possible under the terms and provisions of such plans,
     programs and arrangements, and under the laws and regulations applicable
     thereto.  If Executive's participation in any plan, program or
     arrangement is barred, Company shall use its best efforts to obtain and
     pay for, on Executive's behalf, individual insurance policies, plans,
     programs or arrangements which provide benefits equivalent to those which
     Executive is entitled to receive prior to the date of termination.
     However, Company may, at any time, deny Executive coverage under a
     health, dental, life insurance or disability plan, program or
     arrangement, to the extent such coverage is duplicate of coverage
     provided Executive by any subsequent employer.  At the end of the period
     of coverage, to the extent permitted by the plans and programs, Executive

24<PAGE>
     shall have the option to have assigned to him, any assignable insurance
     policy owned by Company and relating specifically to him, including,
     without limitation, CNA-Continental Assurance Company policy #3348167,
     #3363137 and #3393056 if then in force and owned by Company.  Executive's
     right to continuation of health and medical coverage under the
     Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, shall
     commence at the end of the three (3) year period following the Change of
     Control Termination.

            (c)  Company shall provide, at its expense, for the continuation
     in full force and effect for a period ending upon the earlier to occur of
     Executive's death, retirement, or three (3) years following the Change of
     Control Termination, all pension, profit-sharing, savings, and
     nonqualified deferred compensation plan including the supplemental
     retirement income plan in which Executive was entitled to participate
     immediately prior to such termination, provided that his continued
     participation is possible under the terms and provisions of such plans,
     programs and arrangements, and under the laws and regulations applicable
     thereto.  If Executive's participation in any plan, program or
     arrangement is barred, Executive shall be entitled to receive, upon a
     Change of Control Termination, a lump sum payable annually equal to the
     annual contribution, payments, credits or allocations Company would have
     provided him, to his account or on his behalf under such plan, program or
     arrangement had his participation and eligibility continued for the three
    (3) year period following termination.

            (d)  Executive may exercise stock options issued to him pursuant
     to the Drovers Bancshares Corporation 1995 Stock Option Plan ("Stock
     Option Plan").  Such stock options shall be exercisable fully, and
     closing shall occur, within ninety (90) days of the Change of Control
     Termination whether or not:

                 (i)   A period of one (1) year has elapsed from the date of
     grant to the date of exercise.

                 (ii)  Any installment exercise terms as stipulated by the
     Stock Option Plan's administrative committee ("Committee").

                 (iii) The Committee has extended the option period upon
     Executive's termination, provided, however, in no event shall Executive
     exercise any stock option after the earlier of (i) ten (10) years from
     the date of grant, or (ii) the expiration of the option period as
     stipulated in the Stock Option Plan, as applicable to said option(s).

     4.     CONSULTATION.  For a period of six (6) months following the Change
of Control Termination, Executive shall be available upon reasonable request
of Company to assist in the transition of management provided that Executive
shall not be required to be physically present at the offices of Company for
any material time nor to expend substantial time.  For such availability and
consultation services, Company shall pay to Executive as an independent
contractor a gross amount equal to forty percent (40%) of his Compensation,
payable monthly in advance in six (6) equal installments.  Executive may at
any time terminate his services hereunder, in which event the consultation fee
shall terminate effective upon the date of termination.  This consultation
arrangement shall also terminate upon Executive's death.  In the event of a
premature termination, the Executive or his estate shall reimburse Company for
any unearned portion of any fees paid hereunder in advance.

     5.     RIGHT TO HEARING.  In the event Company believes that a Good Cause
for termination of Executive's employment may exist, Company shall provide
Executive with written notice of its intention to terminate for Good Cause and
the facts upon which Company bases such belief, which notice shall be given at
least sixty (60) days prior to the proposed effective date for the
termination.  For such termination to be effective, Executive shall be
provided with an opportunity within the said sixty (60) day period to be heard
by the Board of Directors of Company.  Thereafter, the Board may at its
discretion elect to terminate Executive's employment by majority vote.
25<PAGE>
     6.     CONTINUANCE OF BENEFITS.  If Executive has commenced receiving
benefits hereunder, such benefits shall continue (subject however, to the
specific terms and conditions applicable to each benefit as set forth herein),
for the full term as provided in Section 3, above, notwithstanding that
Executive subsequently dies, becomes permanently disabled, or retires at or
after age sixty-five (65).  Executive may, at any time and by written notice
to Company in the form attached hereto as Exhibit A, name one or more
beneficiaries of any such benefits in the event of his death; provided,
however, that upon Executive's death, the distribution of Executive's benefits
under a qualified pension plan shall be made in accordance with the terms,
including any beneficiary designation provision, of such plan.  A designation
of beneficiary under this Agreement shall be effective on the date actually
received by Company.  If Executive fails to designate a beneficiary, or if no
beneficiary survives Executive, the benefits provided herein shall be paid:

            (a)  to his surviving spouse;

            (b)  if there is no surviving spouse, to his living descendants
     per stirpes; or

            (c)  if there is neither a surviving spouse nor descendants, to
his duly appointed and qualified executor or personal representative.

      7.  LIMITATION UPON PAYMENTS - The parties believe that the benefits
payable under Sections 3 and 4, above, represent reasonable compensation for
personal services and as such no portion thereof constitutes an "excess
parachute payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended (or successor provision) ("Excess").  If, however, it is
finally determined that there is Excess, then the benefits payable shall be
reduced pro rata by the minimum amount(s) necessary to remove the Excess, and
if such reduction exceeds the balance of payments to thereafter be paid
thereunder, the Executive shall reimburse the Company for any net overpayment.

     8.     WITHHOLDING - Company may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

     9.     SOURCE OF PAYMENT - All payments provided under this Agreement may
be paid in cash from the general funds of the Company and no special or
separate fund shall be required to be established.  Executive shall have no
right, title or interest whatever in or to any investment which Company may
make to fund its obligations hereunder.  Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed
to create a trust of any kind or a fiduciary relationship between Company and
Executive or any other person.

     10.    RABBI TRUST - The Company is establishing contemporaneously
herewith that rabbi trust attached hereto as Exhibit "B" ("Trust"), to which
it is contributing an initial corpus of $100.  In the event of a change of
control as defined herein, the Company shall, in accordance with the terms of
the Trust, contribute thereto the amount described in Section 1(e) thereof.
Thereafter, amounts payable hereunder shall be paid first from the assets of
such Trust and the income thereon.  To the extent that the assets of the Trust
and the income thereon are insufficient, Company shall pay Executive the
amount due hereunder.

     11.    NONASSIGNABILITY - Neither this Agreement nor any right or
interest hereunder shall, without Company's prior written consent, be subject
to any sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind.

     12.    ATTACHMENT - Except as required by law, the right to receive
payments under this Agreement shall not be subject to anticipation, sale,
encumbrance, charge, levy, or similar process or assignment by operation of
law.


26<PAGE>
     13.    SUCCESSORS AND ASSIGNS - This Agreement shall inure to the benefit
of and be binding upon any corporate or other successor of the Company which
shall acquire, directly or indirectly, by merger, acquisition, consolidation,
purchase, or otherwise, all or substantially all of the assets of the Company,
and shall otherwise inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
assigns.  Nothing in the Agreement shall preclude Company from consolidating
or merging into or with or transferring all or substantially all of its assets
to another person, provided such other person shall assume this Agreement and
all obligations of Company hereunder.  Upon such a consolidation, merger, or
transfer of assets and assumption, the term "Company" as used herein, shall
mean such other person and this Agreement shall continue in full force and
effect.

     14.    WAIVERS NOT TO BE CONTINUED - Any waiver by a party or any breach
of this Agreement by another party shall not be construed as a continuing
waiver or as a consent to any subsequent breach by the other party.

     15.    NOTICES - All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed by certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice:


     A.     If to Executive, to:  A. Richard Pugh
                                  70 Walden Court
                                  York, PA  17404-9730

     B.     If to Company, to:    Drovers Bancshares Corporation
                                  30 South George Street
                                  York, PA  17401

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

     16.    ARBITRATION - Any claim or controversy arising out of or relating
to this Agreement or any breach thereof shall be settled by arbitration.  Any
such arbitration shall take place in York, Pennsylvania, in accordance with
the rules of the American Arbitration Association.  Judgment upon the written
award rendered by a majority of the arbitrators may be entered in the Court
having jurisdiction thereof.  The written decision of a majority of the
arbitrators shall be valid, binding, final, and nonappealable.

     17.    MISCELLANEOUS -

            (a)  In the event that a party hereto wrongfully fails to
     perform its obligations hereunder as determined and evidenced by a
     final and nonappealable determination of a board of arbitration or
     court, as the case may be, such party shall thereupon be obligated
     to promptly pay and reimburse the other party hereto for its costs
     and expenses incurred (including attorney, accounting, actuary and
     other professional consultants) in enforcing its or his
     entitlements hereunder.

            (b)  Executive shall be under no obligation to execute a
     covenant against competition as a condition to receive any benefit
     otherwise payable hereunder.

            (c)  Upon request, Executive shall promptly provide Company
     with information regarding his subsequent employment as contemplated
     herein, including that described in Section 3 hereof.

            (d)  This Agreement constitutes the entire agreement between
     the parties with respect to the subject matter hereof, and supersedes
     and replaces all prior agreements between the parties.  No amendment,

27<PAGE>
     waiver or termination of any of the provisions hereof shall be effective
     unless in writing and signed by the party against whom it is sought to
     be enforced.  Any written amendment, waiver or termination hereof
     executed by Company and Executive shall be binding upon them and upon
     all other persons, without the necessity of securing the consent of any
     other person, and no person shall be deemed to be third-party beneficiary
     under this Agreement.

            (e)  This Agreement shall not limit or infringe upon the
     right of Company to terminate the employment of Executive at any
     time, nor upon the right of Executive to terminate his employment
     with Company, each subject however to the specific provisions hereof.
            (f)  "Person" as used in this Agreement means a natural
     person, joint venture, corporation, sole proprietorship, trust,
     estate, partnership, cooperative, association, non-profit
     organization or any other legal, cognizable entity.

            (g)  This Agreement may be executed in one or more counterparts,
     each of which shall be deemed an original, but all of which taken
     together shall constitute one and the same Agreement.

            (h)  Except as otherwise expressly set forth herein, no failure
     on the part of any party hereto to exercise and no delay in exercising
     any right, power or remedy hereunder shall operate as a waiver thereof,
     nor shall any single or partial exercise of any right, power or remedy
     hereunder preclude any other or further exercise thereof or the exercise
     of any other right, power or remedy.

            (i)  The headings of the sections of this Agreement have been
     inserted for convenience of reference only and shall in no way restrict
     or modify any of the terms or provisions hereof.

            (j)  This Agreement shall be governed and construed and the legal
     relationships of the parties determined in accordance with the laws of
     the Commonwealth of Pennsylvania applicable to contracts executed and to
     be performed in the Commonwealth of Pennsylvania.

            (k)  The obligation of Company hereunder shall be joint and
     several.

            (l)  In the event that a party hereto wrongfully fails to
     perform its obligations hereunder as determined by a final and
     nonappealable determination of a board of arbitrator or court, such
     party shall thereupon be obligated to promptly pay and reimburse
     the other party hereto for its costs and expenses incurred
     (including attorney, accounting, actuary and other professional
     consultants) in enforcing its or his entitlements hereunder.

ATTEST:                             COMPANY:
                                    DROVERS BANCSHARES CORPORATION


______________________________      By____________________________________


                        [SIGNATURES CONTINUED ON FOLLOWING PAGE]
ATTEST:                              THE DROVERS & MECHANICS BANK


______________________________      By____________________________________


WITNESS:                            EXECUTIVE


______________________________      ________________________________(SEAL)
                                    A. Richard Pugh
28<PAGE>
                                   EXHIBIT A


                          BENEFICIARY DESIGNATION FORM



     I hereby designate the person(s) named below as beneficiary (or
beneficiaries) to receive all amounts payable under the Amended and Restated
Change of Control Agreement by and between Drovers Bancshares Corporation and
Drovers & Mechanics Bank ("Company"), and A. Richard Pugh, dated as of
______________, 1999, which have not been paid at the date of my death.

Name of Beneficiary:                  Address:





     I acknowledge that this Beneficiary Designation shall become effective on
the date actually received by Company and shall render all prior Beneficiary
Designations, if any, void.


WITNESS


__________________________________        _____________________________(SEAL)
                                          A. Richard Pugh




Date received by Company:

__________________________________



COMPANY



























29<PAGE>
Exhibit 10(d)
                         CHANGE OF CONTROL AGREEMENT



     AGREEMENT made this ____ day of _________________, 1999, by and between
DROVERS BANCSHARES CORPORATION and THE DROVERS & MECHANICS BANK, a
Pennsylvania corporation and a Pennsylvania state chartered bank,
respectively, each with offices in York, Pennsylvania, hereinafter
collectively called "Company", and "Named Senior Vice President", hereinafter
called "Executive."


                                  BACKGROUND

     Executive is employed by Company as a Senior Vice President.  In
consideration of Executive's past and future services, Company wishes to enter
into a Change of Control Agreement with Executive to provide Executive
compensation and other benefits in the event of his or her termination of
employment after a corporate change of control.

     In consideration of the mutual covenants and agreements herein, and
intending to be legally bound hereby, the parties agree as follows:

     1.     TERM - The term of this Agreement shall commence on the date
hereof and end on the earliest to occur of the following:

            (a)  Executive's death;

            (b)  Executive's permanent disability resulting in his
     inability to fully perform or complete his or her duties as Senior
     Vice President for a period anticipated to exceed one hundred
     eighty (180) consecutive days, provided, however, that in the event
     Company maintains a long-term disability insurance plan on the date
     Executive becomes disabled, Executive's permanent disability shall
     be determined under the criteria of the insurance policy;

            (c)  Retirement at or after age sixty-five (65);

            (d)  The date two (2) years after a Change of Control as defined
     in Section 2;

            (e)  The date eighteen (18) months after a Change of Control
     Termination as defined in Section 2.

            (f)  The date twelve (12) months after the termination of
     Executive's employment if there is no Change of Control as defined in
     Section 2 in the interim.

     However, if Executive's death, permanent disability or retirement, as
defined above, occurs after a Change of Control Termination, this Agreement
shall terminate on eighteen (18) months after such Change of Control
Termination.

     2.     CHANGE OF CONTROL TERMINATION - Change of Control Termination
shall be deemed to have occurred if there is a Change of Control regarding
either or both corporations constituting Company and, during the Employment
Security Period, either of the following occurs: (i) Company terminates the
employment of Executive other than for Good Cause; or (ii) Executive
terminates his or her employment with Company following a Change in Control
and for Good Reason.

            (a)  "Change of Control" with respect to the Drovers Bancshares
Corporation or the Drovers & Mechanics Bank ("Target Company") shall mean the
occurrence of any of the following:


30<PAGE>
                 (i)   the change in the Board of Directors of Target Company,
     during any twenty-four (24) month period ending on or after the date of
     this Agreement, if the individuals who were directors of Target Company
     at the beginning of the period cease during such period to constitute at
     least a majority of the Board of Directors;

                 (ii)  the commencement of a tender offer or exchange offer by
     any entity, person or group (including any affiliates of such entity,
     person or group, by other than an affiliate of Company) for twenty-five
     percent (25%) or more of the outstanding voting power of all capital
     stock of Target Company;

                 (iii) the acquisition by any entity, person or group
     (including any affiliates of such entity, person or group) of beneficial
     ownership, as that term is defined in Rule 13d-3 under the Securities
     Exchange Act of 1934, of Target Company capital stock entitled to
     twenty-five percent (25%) or more of the outstanding voting power of all
     capital stock of Target Company;

                 (iv)  the effective time of the merger, consolidation,
     division, share exchange, or any other transaction or a series of
     transactions outside the ordinary course of business ("Business
     Combination"), as a result of which the holders of the outstanding voting
     capital stock of Target Company immediately prior to such Business
     Combination, excluding any shareholder who is a party to the Business
     Combination (other than Company) or is such party' affiliate as defined
     in the Securities Exchange Act of 1934, hold less than seventy-five
     percent (75%) of the voting capital stock of the surviving or resulting
     corporation;

                 (v)  the transfer of substantially all of the Target
     Company's assets other than to a wholly owned subsidiary of Target
     Company.

            (b)  "Employment Security Period" shall mean the period commencing
     twelve (12) months prior to the Change of Control and ending two (2)
     years after the Change of Control.

            (c)  "Good Cause" shall mean the occurrence of one or more
     of the following events:

                 (i)   Executive's willful engagement in gross misconduct that
     is materially injurious to Company;

                 (ii)  excessive alcohol or drug abuse by Executive which
     continually and materially interferes with Executive's ability to perform
     his duties as Senior Vice President;

                 (iii) Executive's conviction or plea of nolo contendere of a
     crime involving fraud, misappropriation, embezzlement or other violation
     of the law of like nature or severity;

                 (iv)  The voluntary filing or application by Executive for
     relief in bankruptcy or other moratorium law, or for the appointment of a
     receiver, trustee or liquidator, or the making by Executive of a general
     assignment of all his or her assets for the benefit of creditors, which
     is not dismissed within sixty days, unless any such action or event is
     attributable to a judgment rendered against the Executive arising out of
     his or her charitable or civic activities.

                 (v)   Executive's willful failure to perform his or her
     duties as Senior Vice President in a manner generally consistent with his
     or her past service;




31<PAGE>
            (d)  "Good Reason" shall mean the occurrence of one or more
     of the following without Executive's prior written consent:

                 (i)   an assignment to Executive of any duties materially
     inconsistent with his or her position as Senior Vice President;

                 (ii)  a reduction in Executive's fixed salary or
     elimination of, or material adverse modification to any incentive or
     other supplemental currently taxable compensation plan, except any such
     reduction, elimination or modification that is applied generally to
     senior executive officers of Company;

                 (iii) a relocation of Executive's principal executive office
     outside of York County, Pennsylvania, or any requirement that Executive
     be based other than at Company's principal executive offices in York,
     Pennsylvania, except on a temporary basis in the ordinary course of
     business;

                 (iv)  a termination or material adverse modification to any
     nonqualified deferred compensation plan in which Executive participates
     without substitution of comparable benefits, except any such termination
     or modification that is applied generally to senior executive officers
     who had such benefits.

     3.     COMPENSATION AND BENEFITS - Upon a Change of Control Termination,
Company shall provide Executive, in addition to any other rights or benefits
to which Executive may be entitled by contract or under any policy or custom
of Company, the following:

            (a)  For a term commencing with such termination and extending for
eighteen (18) months thereafter, Company shall pay Executive an annual
compensation equal to Executive's highest compensation received in that
calendar year included with the period commencing with the calendar year in
which this Agreement is executed initially and extending to the calendar year
in which termination occurs (annualized as necessary).  For purposes of the
foregoing, "compensation" shall be (i) salary without reduction for any
contribution to (aa) cash or deferred arrangements under Section 401(k) of the
Internal Revenue Code of 1986, as amended [or successor provision] and (bb)
any nonqualified deferred compensation plan, plus (ii) non-deferred incentive
compensation (collectively "Compensation"), and shall be payable in equal
installments with such frequency as Company customarily pays its payroll.  For
purposes of this paragraph (a), Executive's Compensation will be reduced,
beginning with the first month following his re-employment with another
employer, by fifty percent (50%) of the Form W-2 income, with the new
employer.  Executive shall have no obligation to mitigate his or her damages
by seeking employment following his or her termination of employment with
Company.

            (b)  Company shall provide, at its expense, for the continuation
     in full force and effect for a period ending upon the earlier to occur of
     Executive's death or eighteen (18) months following the Change of Control
     Termination, all health, dental, life insurance and disability plans,
     programs and arrangements in which Executive was entitled to participate
     immediately prior to such termination, provided that his or her continued
     participation is possible under the terms and provisions of such plans,
     programs and arrangements, and under the laws and regulations applicable
     thereto.  If Executive's participation in any plan, program or
     arrangement is barred, Company shall use its reasonable best efforts to
     obtain and pay for, on Executive's behalf, individual insurance policies,
     plans, programs or arrangements which provide benefits equivalent to
     those which Executive is entitled to receive prior to the date of
     termination.  However, Company may, at any time, deny Executive coverage
     under a health, dental, life insurance or disability plan, program or
     arrangement, to the extent such coverage is duplicate of coverage
     provided Executive by any subsequent employer.  At the end of the period
     of coverage, to the extent permitted by the plans and programs, Executive

32<PAGE>
     shall have the option to have assigned to him or her, any assignable
     insurance policy owned by Company and relating specifically to him or
     her.  Executive's right to continuation of health and medical coverage
     under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
     amended, shall commence at the end of the eighteen (18) month period
     following the Change of Control Termination.

            (c)  Company shall provide, at its expense, for the continuation
     in full force and effect for a period ending upon the earlier to occur of
     Executive's death, retirement, or eighteen (18) months following the
     Change of Control Termination, all pension, profit-sharing, savings, and
     nonqualified deferred compensation plan including the supplemental
     retirement income plan in which Executive was entitled to participate
     immediately prior to such termination, provided that his or her continued
     participation is possible under the terms and provisions of such plans,
     programs and arrangements, and under the laws and regulations applicable
     thereto.  If Executive's participation in any plan, program or
     arrangement is barred, Executive shall be entitled to receive, upon a
     Change of Control Termination, a lump sum payable annually equal to the
     annual contribution, payments, credits or allocations Company would have
     provided him or her, to his or her account or on his or her behalf under
     such plan, program or arrangement had his or her participation and
     eligibility continued for the eighteen (18) month period following
     termination.

            (d)  Executive may exercise any stock options issued to him or
     her pursuant to the Drovers Bancshares Corporation 1995 Stock Option
     Plan ("1995 Plan") in accordance with the provisions thereof.

     4.     RIGHT TO HEARING.  In the event Company believes that a Good Cause
for termination of Executive's employment may exist, Company shall provide
Executive with written notice of its intention to terminate for Good Cause and
the facts upon which Company bases such belief, which notice shall be given at
least sixty (60) days prior to the proposed effective date for the
termination.  For such termination to be effective, Executive shall be
provided with an opportunity within the said sixty (60) day period to be heard
by the Board of Directors of Company.  Thereafter, the Board may at its
discretion elect to terminate Executive's employment by majority vote.

     5.     CONTINUANCE OF BENEFITS.  If Executive has commenced receiving
benefits hereunder, such benefits shall continue (subject however, to the
specific terms and conditions applicable to each benefit as set forth herein),
for the full term as provided in Section 3, above, notwithstanding that
Executive subsequently dies, becomes permanently disabled, or retires at or
after age sixty-five (65).  Executive may, at any time and by written notice
to Company in the form attached hereto as Exhibit A, name one or more
beneficiaries of any such benefits in the event of his or her death; provided,
however, that upon Executive's death, the distribution of Executive's benefits
under a qualified pension plan shall be made in accordance with the terms,
including any beneficiary designation provision, of such plan.  A designation
of beneficiary under this Agreement shall be effective on the date actually
received by Company.  If Executive fails to designate a beneficiary, or if no
beneficiary survives Executive, the benefits provided herein shall be paid:

            (a)  to his or her surviving spouse;

            (b)  if there is no surviving spouse, to his or her living
     descendants per stirpes; or
            (c)  if there is neither a surviving spouse nor descendants, to
     his or her duly appointed and qualified executor or personal
     representative.

     6.     NO LIMITATION UPON PAYMENTS - The parties believe that the
benefits payable under Section 3, above, represent reasonable compensation for
personal services and as such no portion thereof constitutes an "excess


33<PAGE>
parachute payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended (or successor provision).  The parties acknowledge that,
should any portion be so characterized, substantial adverse tax consequences
would result to both the payor (no tax deduction) and to the payee (excise
tax). Nonetheless, the parties intend that the amounts be paid in full as
provided herein, notwithstanding any such characterization and tax
consequence.

     7.     WITHHOLDING - Company may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

     8.     SOURCE OF PAYMENT - All payments provided under this Agreement may
be paid in cash from the general funds of the Company and no special or
separate fund shall be required to be established.  Executive shall have no
right, title or interest whatever in or to any investment which Company may
make to fund its obligations hereunder.  Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed
to create a trust of any kind or a fiduciary relationship between Company and
Executive or any other person.

     9.     RABBI TRUST - The Company has established a rabbi trust at Hershey
Trust Company.  In the event of a change of control as defined herein, the
Company shall, in accordance with the terms of the Trust, contribute thereto
the amount described in Section 1(e) thereof.  Thereafter, amounts payable
hereunder shall be paid first from the assets of such Trust and the income
thereon.  To the extent that the assets of the Trust and the income thereon
are insufficient, Company shall pay Executive the amount due hereunder.

     10.    NONASSIGNABILITY - Neither this Agreement nor any right or
interest hereunder shall, without Company's prior written consent, be subject
to any sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind.

     11.    ATTACHMENT - Except as required by law, the right to receive
payments under this Agreement shall not be subject to anticipation, sale,
encumbrance, charge, levy, or similar process or assignment by operation of
law.

     12.    SUCCESSORS AND ASSIGNS - This Agreement shall inure to the
benefit of and be binding upon any corporate or other successor of the Company
which shall acquire, directly or indirectly, by merger, acquisition,
consolidation, purchase, or otherwise, all or substantially all of the assets
of the Company, and shall otherwise inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.  Nothing in the Agreement shall preclude Company from
consolidating or merging into or with or transferring all or substantially all
of its assets to another person, provided such other person shall assume this
Agreement and all obligations of Company hereunder.  Upon such a
consolidation, merger, or transfer of assets and assumption, the term
"Company" as used herein, shall mean such other person and this Agreement
shall continue in full force and effect.

     13.    WAIVERS NOT TO BE CONTINUED - Any waiver by a party or any breach
of this Agreement by another party shall not be construed as a continuing
waiver or as a consent to any subsequent breach by the other party.

     14.    NOTICES - All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed by certified or registered mail, return receipt







34<PAGE>
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice:

     A.     If to Executive, to:    Named Senior Vice President
                                    ________________
                                    York, PA ________

     B.     If to Company, to:      Drovers Bancshares Corporation
                                    30 South George Street
                                    York, PA  17401

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

     15.    ARBITRATION - Any claim or controversy arising out of or relating
to this Agreement or any breach thereof shall be settled by arbitration.  Any
such arbitration shall take place in York, Pennsylvania, in accordance with
the rules of the American Arbitration Association.  Judgment upon the written
award rendered by a majority of the arbitrators may be entered in the Court
having jurisdiction thereof.  The written decision of a majority of the
arbitrators shall be valid, binding, final, and nonappealable.

     16.    MISCELLANEOUS -

            (a)  In the event that a party hereto wrongfully fails to
     perform its obligations hereunder as determined and evidenced by a
     final and nonappealable determination of a board of arbitration or
     court, as the case may be, such party shall thereupon be obligated
     to promptly pay and reimburse the other party hereto for its costs
     and expenses incurred (including attorney, accounting, actuary and
     other professional consultants) in enforcing its or his
     entitlements hereunder.

            (b)  Executive shall be under no obligation to execute a covenant
     against competition as a condition to receive any benefit otherwise
     payable hereunder.

            (c)  Upon request, Executive shall promptly provide Company with
     information regarding his subsequent employment as contemplated herein,
     including that described in Section 3 hereof.

            (d)  This Agreement constitutes the entire agreement between the
     parties with respect to the subject matter hereof, and supersedes and
     replaces all prior agreements between the parties.  No amendment, waiver
     or termination of any of the provisions hereof shall be effective unless
     in writing and signed by the party against whom it is sought to be
     enforced.  Any written amendment, waiver or termination hereof executed
     by Company and Executive shall be binding upon them and upon all other
     persons, without the necessity of securing the consent of any other
     person, and no person shall be deemed to be third-party beneficiary under
     this Agreement.

            (e)  This Agreement shall not limit or infringe upon the right of
     Company to terminate the employment of Executive at any time, nor upon
     the right of Executive to terminate his or her employment with Company,
     each subject however to the specific provisions hereof.

            (f)  "Person" as used in this Agreement means a natural person,
     joint venture, corporation, sole proprietorship, trust, estate,
     partnership, cooperative, association, non-profit organization or any
     other legal, cognizable entity.

            (g)  This Agreement may be executed in one or more counterparts,
     each of which shall be deemed an original, but all of which taken
     together shall constitute one and the same Agreement.


35<PAGE>
            (h)  Except as otherwise expressly set forth herein, no failure on
     the part of any party hereto to exercise and no delay in exercising any
     right, power or remedy hereunder shall operate as a waiver thereof, nor
     shall any single or partial exercise of any right, power or remedy
     hereunder preclude any other or further exercise thereof or the exercise
     of any other right, power or remedy.

            (i)  The headings of the sections of this Agreement have been
     inserted for convenience of reference only and shall in no way restrict
     or modify any of the terms or provisions hereof.

            (j)  This Agreement shall be governed and construed and the
     legal relationships of the parties determined in accordance with the laws
     of the Commonwealth of Pennsylvania applicable to contracts executed and
     to be performed in the Commonwealth of Pennsylvania.

            (k)  The obligation of Company hereunder shall be joint and
     several.

            (l)  In the event that a party hereto wrongfully fails to
     perform its obligations hereunder as determined by a final and
     nonappealable determination of a board of arbitrator or court, such party
     shall thereupon be obligated to promptly pay and reimburse the other
     party hereto for its costs and expenses incurred (including attorney,
     accounting, actuary and other professional consultants) in enforcing its
     or his entitlements hereunder.

ATTEST:                             COMPANY:
                                    DROVERS BANCSHARES CORPORATION


______________________________      By____________________________________

ATTEST:                             THE DROVERS & MECHANICS BANK


______________________________      By____________________________________


WITNESS:                            EXECUTIVE


______________________________      ________________________________(SEAL)
Named Senior Vice President























36<PAGE>
EXHIBIT A


                           BENEFICIARY DESIGNATION FORM



     I hereby designate the person(s) named below as beneficiary (or
beneficiaries) to receive all amounts payable under the Change of Control
Agreement by and between Drovers Bancshares Corporation and Drovers &
Mechanics Bank ("Company"), and Named Senior Vice President, dated _________
___, 1999, which have not been paid at the date of my death.

     Name of Beneficiary:                Address:





     I acknowledge that this Beneficiary Designation shall become effective on
the date actually received by Company and shall render all prior Beneficiary
Designations, if any, void.


WITNESS


__________________________________        _____________________________(SEAL)
                                          Named Senior Vice President




Date received by Company:

__________________________________




COMPANY


__________________________________























37<PAGE>

                                   EXHIBIT 21
                          SUBSIDIARIES OF THE REGISTRANT


The following are the subsidiaries of the Drovers Bancshares Corporation:


        Subsidiary                        State of Incorporation or Organization

The Drovers & Mechanics Bank                            Pennsylvania
30 South George Street
York, PA 17401


Drovers Realty Corporation                              Pennsylvania
30 South George Street
York, PA 17401


Drovers Capital Trust I                                 Delaware
103 Foulk Road, Suite 202
Wilmington, Delaware 19803


The following are the subsidiaries of The Drovers & Mechanics Bank:

        Subsidiary                        State of Incorporation or Organization

96 South George Street, Inc.                            Pennsylvania
96 South George Street
York, PA 17401

Drovers Investment Company                              Delaware
103 Foulk Road, Suite 202
Wilmington, Delaware 19803





























38<PAGE>