33

                       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, 2002.
                                              ------------------

                                       OR

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

     For the transition period from__________________to____________________.

                         Commission file number 0-15237
                                                -------

                        HARLEYSVILLE NATIONAL CORPORATION
                        ---------------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S>                                                  <C>
Pennsylvania. . . . . . . . . . . . . . . . . . . .           23-2210237
---------------------------------------------------  -------------------
(State or other jurisdiction of . . . . . . . . . .    (I.R.S.  Employer
incorporation or organization . . . . . . . . . . .  Identification No.)

483 Main Street, Harleysville, Pennsylvania . . . .                19438
---------------------------------------------------  -------------------
(Address of principal executive offices . . . . . .           (Zip Code)

Registrant's telephone number, including area code:       (215) 256-8851
</TABLE>


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 such shorter period that the Registrant was
required  to  file  such  reports)  and  (2)  has  been  subject  to such filing
requirements  for  the  past  90  days.    Yes     X.   No.
                                                 ---

Indicate  by  check  mark  whether  the  Registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).    Yes     X.   No.
                                                            ---

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by  check  mark  whether  the  registrant  has filed all documents and
reports  required  to  be  filed  by Sections 12, 13, or 15(d) of the Securities
Exchange  Act  of 1934 subsequent to the distribution of securities under a plan
confirmed  by  a  court.   Yes  ___.  No  ___.

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the latest practicable date: 19,041,602 shares of Common
Stock,  $1.00  par  value,  outstanding  on  November  12,  2002.

PAGE 1
<TABLE>
<CAPTION>

                                         HARLEYSVILLE NATIONAL CORPORATION

                                             INDEX TO FORM 10-Q REPORT
<S>                                                                                                            <C>
                                                                                                               PAGE
                                                                                                               ----

Part I.  Financial Information

     Item 1. Financial Statements:

           Consolidated Balance Sheets - September 30, 2002 and December 31, 2001 . . . . . . . . . . . . . .     3

           Consolidated Statements of Income - Nine Months and Three Months Ended September 30, 2002 and 2001     4

           Consolidated Statements of Shareholders' Equity - Nine Months Ended September 30, 2002 and Twelve.     5
                                          Months Ended December 31, 2001

           Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2002 and 2001. . . . . . .     6

           Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7

     Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . .     9

     Item 3. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . .    23

     Item 4. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    23

Part II.  Other Information

     Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

     Item 2.  Change in Securities and Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

     Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

     Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . . . .    26

     Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

     Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26

Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    28
</TABLE>

PAGE 2

<TABLE>
<CAPTION>

                                         PART  1.  FINANCIAL  INFORMATION
                           HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                                          CONSOLIDATED  BALANCE  SHEETS
    (Dollars in thousands)                      (Unaudited)

                                                                     September 30, 2002    December 31, 2001
                                                                    --------------------  -------------------
<S>                                                                 <C>                   <C>
                                                                    ASSETS
  Cash and due from banks. . . . . . . . . . . . . . . . . . . . .  $            73,428   $           62,974
  Fed funds sold . . . . . . . . . . . . . . . . . . . . . . . . .               19,100               12,500
  Interest-bearing deposits in banks . . . . . . . . . . . . . . .                5,920                7,150
                                                                    --------------------  -------------------
      Total cash and cash equivalents. . . . . . . . . . . . . . .               98,448               82,624
                                                                    --------------------  -------------------

  Investment securities available for sale . . . . . . . . . . . .              926,529              706,371
  Investment securities held to maturity . . . . . . . . . . . . .               22,747               26,099
   (fair value $24,224 and $26,782, respectively)
  Total loans and leases . . . . . . . . . . . . . . . . . . . . .            1,344,199            1,316,609
  Less: Allowance for loan losses. . . . . . . . . . . . . . . . .              (17,139)             (15,558)
                                                                    --------------------  -------------------
               Net loans . . . . . . . . . . . . . . . . . . . . .            1,327,060            1,301,051
                                                                    --------------------  -------------------
  Bank premises and equipment, net . . . . . . . . . . . . . . . .               21,641               21,439
  Accrued income receivable. . . . . . . . . . . . . . . . . . . .               13,496               11,907
  Net assets in foreclosure. . . . . . . . . . . . . . . . . . . .                  473                  609
  Intangible assets, net . . . . . . . . . . . . . . . . . . . . .                1,648                1,360
  Bank-owned life insurance. . . . . . . . . . . . . . . . . . . .               47,842               45,942
  Other assets . . . . . . . . . . . . . . . . . . . . . . . . . .               12,168               11,569
                                                                    --------------------  -------------------
           Total assets. . . . . . . . . . . . . . . . . . . . . .  $         2,472,052   $        2,208,971
                                                                    ====================  ===================
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Deposits:
     Noninterest-bearing . . . . . . . . . . . . . . . . . . . . .  $           267,254   $          254,638
     Interest-bearing:
       Checking accounts . . . . . . . . . . . . . . . . . . . . .              251,571              169,156
       Money market accounts . . . . . . . . . . . . . . . . . . .              427,006              419,890
       Savings . . . . . . . . . . . . . . . . . . . . . . . . . .              197,122              179,284
       Time, under $100,000. . . . . . . . . . . . . . . . . . . .              534,967              489,345
       Time, $100,000 or greater . . . . . . . . . . . . . . . . .              273,279              234,549
                                                                    --------------------  -------------------
            Total deposits . . . . . . . . . . . . . . . . . . . .            1,951,199            1,746,862
  Accrued interest payable . . . . . . . . . . . . . . . . . . . .               22,138               27,114
  U.S. Treasury demand notes . . . . . . . . . . . . . . . . . . .                2,015                2,677
  Federal Home Loan Bank (FHLB) borrowings . . . . . . . . . . . .              162,750              127,750
  Securities sold under agreements to repurchase . . . . . . . . .               85,237               80,393
  Guaranteed preferred beneficial interest in Corporation's
    subordinated debentures. . . . . . . . . . . . . . . . . . . .                5,000                5,000
  Other liabilities. . . . . . . . . . . . . . . . . . . . . . . .               35,047               29,826
                                                                    --------------------  -------------------
            Total liabilities. . . . . . . . . . . . . . . . . . .            2,263,386            2,019,622
                                                                    --------------------  -------------------
  Shareholders' Equity:
      Series preferred stock,  par value $1 per share;
         authorized 8,000,000 shares, none issued. . . . . . . . .                    -                    -
      Common stock, par value $1 per share; authorized 75,000,000
         shares; issued and outstanding 19,580,179 shares in 2002
         and 18,570,971 shares in 2001 . . . . . . . . . . . . . .               19,580               18,571
      Additional paid in capital . . . . . . . . . . . . . . . . .               96,362               71,419
      Retained earnings. . . . . . . . . . . . . . . . . . . . . .               90,353              100,171
      Treasury stock, at cost: 481,507 shares in 2002
         and 287,440 shares in 2001. . . . . . . . . . . . . . . .               (9,463)              (5,346)
      Accumulated other comprehensive income . . . . . . . . . . .               11,834                4,534
                                                                    --------------------  -------------------
            Total shareholders' equity . . . . . . . . . . . . . .              208,666              189,349
                                                                    --------------------  -------------------
            Total liabilities and shareholders' equity . . . . . .  $         2,472,052   $        2,208,971
                                                                    ====================  ===================
<FN>

     See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


 PAGE 3

                       HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                                CONSOLIDATED  STATEMENTS  OF  INCOME
<TABLE>
<CAPTION>

                                        (Unaudited)          Nine  months  ended          Three  months  ended
                                                                September  30,                September  30,
                                                               ---------------               ---------------
(Dollars  in  thousands  except  weighted  average  number
of  common  shares  and  per  share  information)

                                                              2002         2001         2002         2001
                                                           -----------  -----------  -----------  -----------
<S>                                                        <C>          <C>          <C>          <C>
INTEREST INCOME:
Loans, including fees . . . . . . . . . . . . . . . . . .  $    63,793  $    68,008  $    21,012  $    22,821
Lease financing . . . . . . . . . . . . . . . . . . . . .        6,476        7,377        2,188        2,439
Investment securities:
   Taxable. . . . . . . . . . . . . . . . . . . . . . . .       20,827       19,820        6,555        6,893
   Exempt from federal taxes. . . . . . . . . . . . . . .        8,748        8,174        3,266        2,551
Federal funds sold. . . . . . . . . . . . . . . . . . . .          275          449           53          215
Deposits in banks . . . . . . . . . . . . . . . . . . . .          140          227           44           90
                                                           -----------  -----------  -----------  -----------
      Total interest income . . . . . . . . . . . . . . .      100,259      104,055       33,118       35,009
                                                           -----------  -----------  -----------  -----------
INTEREST EXPENSE:
Savings deposits. . . . . . . . . . . . . . . . . . . . .        8,923       13,939        3,081        4,170
Time, under $100,000. . . . . . . . . . . . . . . . . . .       17,905       19,431        5,982        6,715
Time, $100,000 or greater . . . . . . . . . . . . . . . .        5,680        8,447        1,896        2,773
Borrowed funds. . . . . . . . . . . . . . . . . . . . . .        7,014        8,262        2,480        2,585
                                                           -----------  -----------  -----------  -----------
      Total interest expense. . . . . . . . . . . . . . .       39,522       50,079       13,439       16,243
                                                           -----------  -----------  -----------  -----------
      Net interest income . . . . . . . . . . . . . . . .       60,737       53,976       19,679       18,766
Provision for loan losses . . . . . . . . . . . . . . . .        3,401        2,962          956        1,353
                                                           -----------  -----------  -----------  -----------
      Net interest income after provision for loan losses       57,336       51,014       18,723       17,413
                                                           -----------  -----------  -----------  -----------
OTHER OPERATING INCOME:
Service charges . . . . . . . . . . . . . . . . . . . . .        4,993        3,878        1,846        1,403
Security gains, net . . . . . . . . . . . . . . . . . . .        3,193        3,923          719        2,140
Trust income. . . . . . . . . . . . . . . . . . . . . . .        2,322        2,541          726          826
Bank-owned life insurance income. . . . . . . . . . . . .        1,900        1,818          631          535
Other Income. . . . . . . . . . . . . . . . . . . . . . .        4,675        3,409        1,519        1,352
                                                           -----------  -----------  -----------  -----------
      Total other operating income. . . . . . . . . . . .       17,083       15,569        5,441        6,256
                                                           -----------  -----------  -----------  -----------
      Net interest income after provision for loan losses
         and other operating income . . . . . . . . . . .       74,419       66,583       24,164       23,669
                                                           -----------  -----------  -----------  -----------
OTHER OPERATING EXPENSES:
Salaries, wages and employee benefits . . . . . . . . . .       22,631       19,644        7,550        6,739
Occupancy . . . . . . . . . . . . . . . . . . . . . . . .        2,902        2,457          844          792
Furniture and equipment . . . . . . . . . . . . . . . . .        4,034        3,776        1,428        1,310
Other expenses. . . . . . . . . . . . . . . . . . . . . .       13,127       13,572        3,679        4,903
                                                           -----------  -----------  -----------  -----------
      Total other operating expenses. . . . . . . . . . .       42,694       39,449       13,501       13,744
                                                           -----------  -----------  -----------  -----------
      Income before income tax expense. . . . . . . . . .       31,725       27,134       10,663        9,925
Income tax expense. . . . . . . . . . . . . . . . . . . .        7,121        5,859        2,250        2,302
                                                           -----------  -----------  -----------  -----------
Net income. . . . . . . . . . . . . . . . . . . . . . . .  $    24,604  $    21,275  $     8,413  $     7,623
                                                           ===========  ===========  ===========  ===========

Weighted average number of common shares:
        Diluted * . . . . . . . . . . . . . . . . . . . .   19,715,987   19,682,612   19,687,990   19,629,108
                                                           ===========  ===========  ===========  ===========
        Basic * . . . . . . . . . . . . . . . . . . . . .   19,141,516   19,227,650   19,113,519   19,174,146
                                                           ===========  ===========  ===========  ===========
Net income per share information:
        Diluted * . . . . . . . . . . . . . . . . . . . .  $      1.25  $      1.08  $      0.43  $      0.39
                                                           ===========  ===========  ===========  ===========
        Basic * . . . . . . . . . . . . . . . . . . . . .  $      1.29  $      1.11  $      0.44  $      0.40
                                                           ===========  ===========  ===========  ===========
Cash dividends per share *. . . . . . . . . . . . . . . .  $     0.495  $     0.438  $     0.171  $     0.152
                                                           ===========  ===========  ===========  ===========
</TABLE>

*  Adjusted  for  5%  stock dividend effective September 16, 2002 and 100% stock
dividend  effective  August  10,  2001.

See  accompanying  notes  to  consolidated  financial  statements.

PAGE 4

                     CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
                   HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES

<TABLE>
<CAPTION>


NINE  MONTHS  ENDED  SEPTEMBER  30,  2002
                                                                                                          Accumulated

                                        Common Stock                                                           Other
                                       --------------
(Dollars in thousands)                   Number of            Par            Additional       Retained    Comprehensive
<S>                                    <C>             <C>                <C>                <C>         <C>
                                             Shares          Value         Paid in Capital    Earnings    Income
                                       --------------  -----------------  -----------------  ----------  ---------------
Balance, January 1, 2002. . . . . . .         18,571   $         18,571   $         71,419   $ 100,171   $        4,534
Stock options . . . . . . . . . . . .             77                 77                944           -                -
Stock dividends . . . . . . . . . . .            932                932             23,993     (24,942)               -
Stock awards. . . . . . . . . . . . .              -                  -                  6           -                -
Net income. . . . . . . . . . . . . .              -                  -                  -      24,604                -
Other comprehensive income,
  net of reclassifications and tax. .              -                  -                  -           -            7,300
Purchases of Treasury stock . . . . .         (4,117)            (4,117)
Cash dividends. . . . . . . . . . . .              -                  -                  -      (9,480)               -
                                       --------------  -----------------  -----------------  ----------  ---------------
Comprehensive income. . . . . . . . .
Balance, September 30, 2002 . . . . .         19,580   $         19,580   $         96,362   $  90,353   $       11,834
                                       ==============  =================  =================  ==========  ===============



FOR THE YEAR ENDED DECEMBER 31, 2001
                                                                                                           Accumulated
                                        Common Stock                                                          Other
-------------------------------------
(Dollars in thousands). . . . . . . .     Number of           Par              Additional      Retained   Comprehensive
                                           Shares            Value           Paid in Capital   Earnings        Income
-------------------------------------  --------------  -----------------  -----------------  ----------  ---------------
Balance, January 1, 2001. . . . . . .          9,254   $          9,254   $         79,869   $  83,244   $        1,422
Stock options . . . . . . . . . . . .             44                 44                812           -                -
Stock dividends . . . . . . . . . . .          9,273              9,273             (9,273)          -
Stock awards. . . . . . . . . . . . .                                                   11
Net income. . . . . . . . . . . . . .              -                  -                  -      28,820                -
Other comprehensive income,
  net of reclassifications and tax. .              -                  -                  -           -            3,112
Purchases of Treasury stock . . . . .
Cash dividends. . . . . . . . . . . .              -                  -                  -     (11,893)               -
                                       --------------  -----------------  -----------------  ----------  ---------------
Comprehensive income. . . . . . . . .
Balance, December 31, 2001. . . . . .         18,571   $         18,571   $         71,419   $ 100,171   $        4,534
                                       ==============  =================  =================  ==========  ===============



(Dollars in thousands)                  Treasury                    Comprehensive
<S>                                    <C>         <C>              <C>
                                         Stock          Total          Income
                                       ----------  ---------------  -------
Balance, January 1, 2002. . . . . . .  $  (5,346)  $      189,349
Stock options . . . . . . . . . . . .          -            1,021
Stock dividends                                               (17)
Stock awards. . . . . . . . . . . . .          -                6
Net income. . . . . . . . . . . . . .          -           24,604   $24,604
Other comprehensive income,
  net of reclassifications and tax. .          -            7,300     7,300
Purchases of Treasury stock               (4,117)          (4,117)
Cash dividends. . . . . . . . . . . .          -           (9,480)
                                       ----------  ---------------
Comprehensive income                                               $ 31,904
                                                              ==============

Balance, September 30, 2002 . . . . .  $  (9,463)  $      208,666
                                       ==========  ===============



FOR THE YEAR ENDED DECEMBER 31, 2001
          Accumulated
    Common Stock
-------------------------------------
(Dollars in thousands). . . . . . . .  Treasury                  Comprehensive
  Shares. . . . . . . . . . . . . . .    Stock           Total       Income
-------------------------------------  ----------  ---------------
Balance, January 1, 2001. . . . . . .  $    (253)  $      173,536
Stock options . . . . . . . . . . . .          -              856
Stock dividends
Stock awards                                                   11
Net income. . . . . . . . . . . . . .          -           28,820   $28,820
Other comprehensive income,
  net of reclassifications and tax. .          -            3,112     3,112
Purchases of Treasury stock               (5,093)          (5,093)
Cash dividends. . . . . . . . . . . .          -          (11,893)
                                       ----------  ---------------
Comprehensive income                                               $ 31,932
                                                                   ========

Balance, December 31, 2001. . . . . .  $  (5,346)  $      189,349
                                       ==========  ===============
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.

PAGE 5

<TABLE>
<CAPTION>

                 HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                      CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                    (Unaudited)

<S>                                                                          <C>
                              (Dollars in thousands)                     Nine Months Ended Sept.30,
  OPERATING ACTIVITIES: . . . . . . . . . . . . . . . . . . . . . . . . . .            2002
                                                                          -----------------------
    Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $               24,604
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Provision for loan losses . . . . . . . . . . . . . . . . . . . . . .                   3,401
      Depreciation and amortization . . . . . . . . . . . . . . . . . . . .                   1,961
      Net amortization of investment
        securities discount/premiums. . . . . . . . . . . . . . . . . . . .                   2,045
      Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . .                  (2,642)
      Net realized security gains . . . . . . . . . . . . . . . . . . . . .                  (3,193)
      Increase in accrued income receivable . . . . . . . . . . . . . . . .                  (1,589)
      (Decrease) increase in accrued interest payable . . . . . . . . . . .                  (4,976)
      (Increase) decrease in other assets . . . . . . . . . . . . . . . . .                    (599)
      Net increase in other liabilities . . . . . . . . . . . . . . . . . .                   3,877
      Decrease (increase) in deferred cost, net . . . . . . . . . . . . . .                     906
      Write-down of other real estate owned . . . . . . . . . . . . . . . .                      68
      (Increase) decrease in intangible assets. . . . . . . . . . . . . . .                    (288)
                                                                             -----------------------
         Net cash provided by operating activities. . . . . . . . . . . . .  $               23,575
                                                                             -----------------------
  INVESTING ACTIVITIES:
    Proceeds from sales of investment securities available for sale . . . .  $              568,561
    Proceeds, maturity or calls of investment securities held to maturity .                   3,408
    Proceeds, maturity or calls of investment securities available for sale                 184,988
    Purchases of investment securities available for sale . . . . . . . . .                (961,328)
    Net increase in loans . . . . . . . . . . . . . . . . . . . . . . . . .                 (31,106)
    Net increase in premises and equipment. . . . . . . . . . . . . . . . .                  (2,163)
    Net increase in bank-owned life insurance . . . . . . . . . . . . . . .                  (1,900)
    Proceeds from sales of other real estate. . . . . . . . . . . . . . . .                     857
                                                                             -----------------------
         Net cash used in investing activities. . . . . . . . . . . . . . .  $             (238,683)
                                                                             -----------------------
  FINANCING ACTIVITIES:
    Net increase in deposits. . . . . . . . . . . . . . . . . . . . . . . .  $              204,337
    (Decrease) increase in U.S. Treasury demand notes . . . . . . . . . . .                    (662)
    Decrease in federal funds purchased . . . . . . . . . . . . . . . . . .                       -
    Increase in FHLB borrowings . . . . . . . . . . . . . . . . . . . . . .                  35,000
    Increase in securities sold under agreement . . . . . . . . . . . . . .                   4,844
    Proceeds from issuance of guaranteed preferred beneficial interest
      in Corporation's subordinated debentures. . . . . . . . . . . . . . .                       -
    Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  (9,480)
    Repurchase of common stock. . . . . . . . . . . . . . . . . . . . . . .                  (4,117)
    Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   1,021
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (11)
                                                                             -----------------------
      Net cash provided by financing activities . . . . . . . . . . . . . .  $              230,932
                                                                             -----------------------
  Net increase in cash and cash equivalents . . . . . . . . . . . . . . . .  $               15,824
  Cash and cash equivalents at beginning of period. . . . . . . . . . . . .                  82,624
                                                                             -----------------------
  Cash and cash equivalents at end of the period. . . . . . . . . . . . . .  $               98,448
                                                                             =======================

    Cash paid during the period for:
       Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $               44,498
                                                                             =======================
       Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                9,000
                                                                             =======================
     Supplemental disclosure of noncash investing and financing activities:
         Transfer of assets from loans to other real estate owned . . . . .  $                  789
                                                                             =======================


<S>                                                                          <C>
                                                                             Nine Months Ended Sept.30,
  OPERATING ACTIVITIES: . . . . . . . . . . . . . . . . . . . . . . . . . .              2001
                                                                             ----------------------------
    Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                    21,275
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Provision for loan losses . . . . . . . . . . . . . . . . . . . . . .                        2,962
      Depreciation and amortization . . . . . . . . . . . . . . . . . . . .                        2,033
      Net amortization of investment
        securities discount/premiums. . . . . . . . . . . . . . . . . . . .                          692
      Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . .                        2,091
      Net realized security gains . . . . . . . . . . . . . . . . . . . . .                       (3,923)
      Increase in accrued income receivable . . . . . . . . . . . . . . . .                         (997)
      (Decrease) increase in accrued interest payable . . . . . . . . . . .                        3,935
      (Increase) decrease in other assets . . . . . . . . . . . . . . . . .                          113
      Net increase in other liabilities . . . . . . . . . . . . . . . . . .                        4,113
      Decrease (increase) in deferred cost, net . . . . . . . . . . . . . .                         (624)
      Write-down of other real estate owned . . . . . . . . . . . . . . . .                           17
      (Increase) decrease in intangible assets. . . . . . . . . . . . . . .                          122
                                                                             ----------------------------
         Net cash provided by operating activities. . . . . . . . . . . . .  $                    31,809
                                                                             ----------------------------
  INVESTING ACTIVITIES:
    Proceeds from sales of investment securities available for sale . . . .  $                   282,085
    Proceeds, maturity or calls of investment securities held to maturity .                        4,051
    Proceeds, maturity or calls of investment securities available for sale                       88,014
    Purchases of investment securities available for sale . . . . . . . . .                     (473,824)
    Net increase in loans . . . . . . . . . . . . . . . . . . . . . . . . .                      (97,243)
    Net increase in premises and equipment. . . . . . . . . . . . . . . . .                       (1,385)
    Net increase in bank-owned life insurance . . . . . . . . . . . . . . .                       (1,818)
    Proceeds from sales of other real estate. . . . . . . . . . . . . . . .                          963
                                                                             ----------------------------
         Net cash used in investing activities. . . . . . . . . . . . . . .  $                  (199,157)
                                                                             ----------------------------
  FINANCING ACTIVITIES:
    Net increase in deposits. . . . . . . . . . . . . . . . . . . . . . . .  $                   218,658
    (Decrease) increase in U.S. Treasury demand notes . . . . . . . . . . .                          429
    Decrease in federal funds purchased . . . . . . . . . . . . . . . . . .                      (44,500)
    Increase in FHLB borrowings . . . . . . . . . . . . . . . . . . . . . .                       17,000
    Increase in securities sold under agreement . . . . . . . . . . . . . .                       11,556
    Proceeds from issuance of guaranteed preferred beneficial interest
      in Corporation's subordinated debentures. . . . . . . . . . . . . . .                        5,000
    Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (8,423)
    Repurchase of common stock. . . . . . . . . . . . . . . . . . . . . . .                       (5,049)
    Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          625
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           11
                                                                             ----------------------------
      Net cash provided by financing activities . . . . . . . . . . . . . .  $                   195,307
                                                                             ----------------------------
  Net increase in cash and cash equivalents . . . . . . . . . . . . . . . .  $                    27,959
  Cash and cash equivalents at beginning of period. . . . . . . . . . . . .                       55,525
                                                                             ----------------------------
  Cash and cash equivalents at end of the period. . . . . . . . . . . . . .  $                    83,484
                                                                             ============================

    Cash paid during the period for:
       Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                    46,144
                                                                             ============================
       Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                     4,300
                                                                             ============================
     Supplemental disclosure of noncash investing and financing activities:
         Transfer of assets from loans to other real estate owned . . . . .  $                     1,095
                                                                             ============================
<FN>
     See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>

PAGE 6
               HARLEYSVILLE NATIONAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  - In the opinion of management, the accompanying unaudited consolidated
financial  statements  contain  all  adjustments,  consisting  only  of  normal
recurring  adjustments,  necessary  to present fairly the consolidated financial
position of Harleysville National Corporation (the "Corporation") and its wholly
owned  subsidiaries  -  Harleysville  National  Bank  and  Trust  Company
("Harleysville"),  Citizens  National  Bank ("Citizens"), Security National Bank
("Security")  (collectively,  the  "Banks"),  HNC  Financial  Company  and  HNC
Reinsurance  Company  -  as of September 30, 2002, the results of its operations
for  nine  and three month periods ended September 30, 2002 and 2001and the cash
flows  for  the  nine  month  periods  ended  September 30, 2002 and 2001.  This
quarterly  report  refers to the corporation's subsidiary banks, collectively as
"the  banks."  We suggest that these unaudited consolidated financial statements
be read in conjunction with the audited consolidated financial statements of the
corporation  and  the  notes  thereto set forth in the corporation's 2001 annual
report.

The  results  of operations for the nine and three month periods ended September
30,  2002  and 2001 are not necessarily indicative of the results to be expected
for  the  full  year.

NOTE  2  -  Income  tax  expense  is  less  than the amount calculated using the
statutory  tax rate, primarily the result of tax exempt income earned from state
and  municipal  securities  and  loans.

NOTE  3  -  The  Corporation  has adopted SFAS No. 130, "Reporting Comprehensive
Income"  which  establishes  standards  to  provide  prominent  disclosure  of
comprehensive  income  items.  Comprehensive income is the change in equity of a
business  enterprise  during  a  period  from  transactions and other events and
circumstances  from  non-owner  sources.  Other comprehensive income consists of
net  unrealized  gains (losses) on investment securities available for sale. The
adoption  of  SFAS  No.  130 did not have a material impact on the Corporation's
financial  position  or  results  of  operation.

      The  components  of  other  comprehensive  income  are  as  follows:
<TABLE>
<CAPTION>

Comprehensive  Income
---------------------


<S>                                 <C>          <C>           <C>
(Dollars in thousands) . . . . . .  BEFORE TAX      TAX        NET OF TAX
September 30, 2002 . . . . . . . .    AMOUNT       EXPENSE       AMOUNT
----------------------------------  -----------  ------------  -----------
Unrealized gains on securities:
   Unrealized holding gains
       arising during period . . .  $    14,424  $    (5,048)  $     9,376
   Less reclassification
       adjustment for gains
       realized in net income. . .        3,193       (1,117)        2,076
                                    -----------  ------------  -----------
  Other comprehensive income, net.  $    11,231  $    (3,931)  $     7,300
                                    ===========  ============  ===========

                                    BEFORE TAX       TAX       NET OF TAX
September 30, 2001 . . . . . . . .    AMOUNT       EXPENSE       AMOUNT
----------------------------------  -----------  ------------  -----------
Unrealized gains on securities:
   Unrealized holding gains
       arising during period . . .  $    14,351  $    (5,024)  $     9,327
   Less reclassification
       adjustment for gains
       realized in net income. . .        3,923       (1,373)        2,550
                                    -----------  ------------  -----------
  Other comprehensive income, net.  $    10,428  $    (3,651)  $     6,777
                                    ===========  ============  ===========
</TABLE>

PAGE 7

NOTE  4  -  On  June  29,  2001, the Financial Accounting Standards Board (FASB)
issued  Statement  of  Financial  Accounting  Standards (SFAS) No. 141, Business
Combinations,  and  SFAS  No.  142, Goodwill and Intangible Assets. SFAS No. 141
requires  that  all  business combinations initiated after June 30, 2001 must be
accounted  for under the purchase method of accounting. A plan of combination is
considered  to  be initiated on the earlier of the date that a combining company
(a)  announces  publicly  or  formally makes known to its shareholders the major
terms  of the plan, or (b) notifies its shareholders, in writing, of an exchange
offer.  SFAS  No.  141  was  adopted  upon  issuance.  SFAS  No.  142 prescribes
accounting for all purchased goodwill and intangible assets. The SFAS supersedes
APB  Opinion  17,  Intangible  Assets,  but  carries  over  guidance  related to
internally  developed  intangible  assets.  SFAS  No.  142  states that acquired
goodwill  is  not  amortized, but is tested for impairment at the reporting unit
level annually and whenever an impairment indicator arises.  A reporting unit is
at the same level or one level below an operating segment as defined by SFAS No.
131,  Disclosures About Segments of an Enterprise and Related Information.  SFAS
No.  142  is effective for fiscal years beginning after December 15, 2001. Until
the  adoption  of  SFAS No. 142, existing goodwill continues to be amortized and
tested  for impairment under previously existing standards. The adoption of SFAS
No.  141  and  SFAS  No. 142 did not have a material impact on the Corporation's
financial  position,  or  results  of  operations.

NOTE  5  -  On July 6, 2001, the Securities and Exchange Commission (SEC) issued
Staff  Accounting  Bulletin  (SAB)  No.  102,  Selected  Loan  Loss  Allowance
Methodology  and  Documentation  Issues.  SAB  No.  102 provides guidance on the
development,  documentation,  and  application  of  a systematic methodology for
determining  allowances  for  loans  and  leases in accordance with US GAAP. The
adoption  of  SAB  No.  102  did not have a material impact on the Corporation's
financial  position,  or  results  of  operations.

NOTE  6- On January 1, 2002, the Corporation adopted Statement of Position (SOP)
01-6,  Accounting  by Certain Entities That Lend to or Finance the Activities of
Others, which reconciles and conforms existing differences in the accounting and
financial reporting guidance in the AICPA Audit and Accounting Guides, Banks and
Savings  Institutions, Audits of Credit Unions, and Audits of Finance Companies.
It also carries forward accounting guidance for practices deemed to be unique to
certain  financial  institutions.  The adoption of this SOP had no impact on the
Corporation's  financial  position  or  results  of  operations.

NOTE 7 - On February 22, 2001, the Corporation issued $5,000,000 of 10.2% junior
subordinate  deferrable  interest  debentures  (the  debentures) to Harleysville
Statutory  Trust  1  (the  Trust),  a  Connecticut  business trust, in which the
Corporation owns all of the common equity.  The debentures are the sole asset of
the  Trust.  The  Trust  issued $5,000,000 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  must  be  redeemed  upon  maturity  of the subordinate debentures on
February  22,  2031.

NOTE  8  -  The  Corporation incorporated HNC Reinsurance Company in March 2001.
HNC Reinsurance Company is a reinsurer of consumer loan credit life and accident
and  health risks.  Through the reinsurance company, the Corporation will assume
a  portion  of  the  credit  insurance  risk in return for income from insurance
premiums.

NOTE  9 - On September 16, 2002, the Corporation paid a 5% stock dividend on its
common  stock  to  shareholders  of  record  as  of  September  3,  2002.
               On  August  10,  2001,  the  Corporation paid a two-for-one stock
split  on  its common stock in the form of a 100% stock dividend to shareholders
of  record  July  27,  2001.
               All  prior  period  amounts  were restated to reflect these stock
dividends.

PAGE 8

ITEM  2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS  OF  OPERATIONS
-----------------------

       The  following is management's discussion and analysis of the significant
changes  in the results of operations, capital resources and liquidity presented
in  its  accompanying consolidated financial statements for the corporation, the
Banks,  HNC  Financial  Company  and HNC Reinsurance Company.  The corporation's
consolidated  financial  condition  and  results  of  operations  consist almost
entirely  of  the Banks' financial condition and results of operations.  Current
performance does not guarantee, and may not be indicative of similar performance
in  the  future.  These  are  unaudited  financial  statements and, as such, are
subject  to  year-end  audit  review.

       In  addition  to  historical  information,  this  Form  10-Q  contains
forward-looking  statements.  We  have  made  forward-looking statements in this
document, and in documents that we incorporate by reference, that are subject to
risks  and  uncertainties.  Forward-looking  statements  include the information
concerning  possible  or assumed future results of operations of the Corporation
and  its  subsidiaries.  When  we  use  words  such  as  "believes,"  "expects,"
"anticipates," or similar expressions, we are making forward-looking statements.

       Shareholders  should  note that many factors, some of which are discussed
elsewhere  in  this  document  and  in  the  documents  that  we  incorporate by
reference,  could affect the future financial results of the Corporation and its
subsidiaries  and  could  cause  those  results  to differ materially from those
expressed  in  our  forward-looking  statements  contained  or  incorporated  by
reference  in  this  document.  These  factors  include  the  following:

   * Operating, legal and regulatory risks;

   * Economic, political and competitive forces affecting our banking,
     securities, asset management and credit services businesses; and

   * The risk that our analyses of these risks and forces could be incorrect
     and/or that the strategies developed to address them could be unsuccessful.


OVERVIEW
--------

       The  Corporation  experienced  record  third  quarter  and  year-to-date
September  30,  2002  earnings.  The  increases  in  third  quarter  2002  and
year-to-date  2002  net  income  over  comparable periods in 2001 were 10.4% and
15.6%,  respectively.  The  improved third quarter earnings were the result of a
rise  in  earning assets, a reduction in the provision for loan losses and lower
other  expenses.  The rise in the year-to-date earnings were also related to the
increase  in  earnings  assets,  and improved other income. The Corporation also
experienced an improvement in loan quality during the first nine months of 2002.

       Third  quarter  2002  diluted earnings per share of $.43, increased 10.3%
over  the  third quarter 2001 diluted earnings per share of $.39.  Third quarter
basic  earnings  per  share  in 2002 of $.44 exceed the third quarter 2001 basic
earnings  per  share  of  $.40  by  10.0%.  Third  quarter  2002  net  income of
$8,413,000 increased 10.4% over the third quarter 2001 net income of $7,623,000.
Net  income  for the first nine months of 2002 was $24,604,000, a 15.6% increase
over  the  $21,275,000  for the comparable period in 2001.  Diluted earnings per
share  of  $1.25 were up 15.7% from the $1.08 in 2001.  Basic earnings per share
of $1.29 for the first nine months of 2002 were 16.2% higher than the $1.11 year
to  date  September  30, 2001.  The Corporation's consolidated total assets were
$2,472,052,000  at  September 30, 2002, 13.8% above the September 30, 2001 level
of  $2,172,516,000.

      The  rise  in  net  income  during  2002,  compared  to  2001 is primarily
attributed  to  higher net interest income levels.  This increase was the result

PAGE 9

of  an  11.1% rise in average earning asset levels and a rise in other income of
9.7%.  The  growth in other income was the result of both higher service charges
and  other miscellaneous fees.  Partially offsetting these increases were higher
provision  for  loan  losses  and  other  operating  expenses.

      For  the  nine  months  ended September 30, 2002, the annualized return on
average  shareholder's  equity  and the annualized return on average assets were
16.78%  and  1.46%,  respectively.  For  the same period in 2001, the annualized
return  on  average shareholder's equity was 15.83% and the annualized return on
average  assets  was  1.40%. Excluding unrealized gains and losses on securities
available  for  sale,  the  annualized  return on average realized shareholder's
equity  for  the  first  nine  months  of  2002 and 2001 were 17.15% and 16.17%,
respectively.
For  the  three  months  ended  June  30, 2002, the annualized return on average
shareholders' equity and the annualized return on average assets were 16.71% and
1.44%,  respectively.  For  the  same  period  in 2001, the annualized return on
average  realized  shareholders'  equity was 16.58% and the annualized return on
average  assets  was  1.45%. Excluding unrealized gains and losses on securities
available  for  sale,  the  annualized  return on average realized shareholder's
equity  for  the  third  quarter  of  2002  and  2001  were  17.29%  and 17.05%,
respectively.

       Strong third quarter results were also reflected in the corporations loan
quality.  Nonperforming  assets  (nonaccruing  loans,  loans past due 90 days or
more  and  still  accruing  interest and net assets in foreclosure) were .30% of
total  assets  at  September 30, 2002, compared to .40% at December 31, 2001 and
..30%  at  September  30,  2001.

       Net  income  is  affected by five major elements: net interest income, or
the  difference  between  interest  income  earned  on loans and investments and
interest  expense  paid  on  deposits and borrowed funds; the provision for loan
losses, or the amount added to the allowance for loan losses to provide reserves
for  future  losses on loans; other operating income, which is made up primarily
of  certain  fees,  trust  income and gains and losses from sales of securities;
other operating expenses, which consist primarily of salaries, employee benefits
and  other  operating  expenses; and income taxes.  Each of these major elements
will  be  reviewed  in  more  detail  in  the  following  discussion.

 NET  INTEREST  INCOME  AND  RELATED  ASSETS  AND  LIABILITIES
 -------------------------------------------------------------

       Net  interest income for the first nine months of 2002 of $60,737,000 was
$6,761,000,  or 12.5% higher than the same period in 2001 net interest income of
$53,976,000.  As  illustrated  in  the  table  below,  this rise in net interest
income  was  primarily  the  result  of  higher earning asset volumes.  Interest
income was actually lower in 2002 compared to 2001, as a result of the impact of
lower  interest  rates.  The  lower  interest  income related to lower rates was
partially  offset  by  the increase in interest income related to higher earning
asset  volumes.  The  lower  interest  income  was more than offset by the lower
interest  expense related to the lower interest rates paid on deposits and other
borrowings  during  2002.  The  third  quarter  of  2002  net interest income of
$19,679,000  increased  $913,000,  or  4.9%,  over  the  third  quarter of 2001.

       The  rate-volume  variance analysis in the table below, which is computed
on  a  tax-equivalent  basis (tax rate of 35%), analyzes changes in net interest

PAGE 10

income  for the nine month and three month periods ended September 30, 2002 over
September  30,  2001  by  their  rate  and  volume  components.

<TABLE>
<CAPTION>
                                                        Nine Months Ended                            Three Months Ended
                                                        September 30, 2002                           September 30, 2002
                                                            Over/Under                                  Over/Under
                                                        September 30, 2001                           September 30, 2001

                                                    Total               Caused by:                 Total        Caused by:
                                                                   --------------------           ------------
<S>                                          <C>                   <C>                   <C>      <C>           <C>       <C>
                                                   Variance              Rate             Volume   Variance      Rate      Volume
                                             --------------------  --------------------  -------  ------------  --------  --------
Interest Income:
  Securities *. . . . . . . . . . . . . . .  $             1,450   $            (4,213)  $ 5,663  $       597   $(1,821)  $ 2,418
  Money market instruments. . . . . . . . .                 (261)                 (361)      100         (207)     (132)      (75)
  Loans * . . . . . . . . . . . . . . . . .               (5,114)               (9,427)    4,313       (2,058)   (3,010)      952
                                             --------------------  --------------------  -------  ------------  --------  --------
     Total. . . . . . . . . . . . . . . . .               (3,925)              (14,001)   10,076       (1,668)   (4,963)    3,295
                                             --------------------  --------------------  -------  ------------  --------  --------

Interest Expense:
  Savings deposits. . . . . . . . . . . . .               (5,016)               (6,117)    1,101       (1,088)   (1,499)      411

  Time deposits and certificates of deposit               (4,294)               (6,689)    2,395       (1,611)   (2,343)      732
  Other borrowings. . . . . . . . . . . . .               (1,248)               (1,699)      451         (105)     (284)      179
                                             --------------------  --------------------  -------   -----------  --------  -------
      Total . . . . . . . . . . . . . . . .              (10,558)              (14,505)    3,947       (2,804)   (4,126)    1,322
                                             --------------------  --------------------  -------  ------------  --------  --------

Net Interest Income . . . . . . . . . . . .  $             6,633   $               504   $ 6,129  $     1,136   $  (837)  $ 1,973
                                             ====================  ====================  =======  ============  ========  ========
    *Tax Equivalent Basis
</TABLE>

          Taxable-equivalent  net  interest income was $65,847,000 for the first
nine  months  of  2002,  compared  to $59,214,000 for the same period in 2001, a
11.2%  or  $6,633,000  increase.  This  rise  in taxable-equivalent net interest
income  was  primarily due to a $10,558,000 reduction in interest expense, which
was  partially  offset  by  a  decrease in interest income, primarily related to
rate.  Total taxable-equivalent interest income decreased $3,925,000, the result
of  lower earning asset yields, in part offset by the higher volumes of earnings
assets.  Average  year-to-date  securities,  loans  and  money market instrument
volumes  grew  $127,686,000,  $80,785,000  and  $6,431,000,  respectively,  at
September  30,  2002,  compared to the same period in 2001.  The yield earned on
earning assets decreased 102 basis points from 7.64% in the first nine months of
2001  to  6.62%  during  the  same  period  in  2002.

          The  $10,558,000  reduction  in  interest  expense  is the result of a
$14,505,000  decrease  related  to  lower  rates, partially offset by $3,947,000
related to higher deposit and other borrowing volumes.  The average rate paid on
interest  bearing  deposits  and other borrowings of 2.99% during the first nine
months  of  2002  was 125 basis points lower than the 4.24% rate paid during the
same period in 2001.  The average balance of interest bearing deposits and other
borrowings grew $187,154,000 or 11.9% in the first nine months of 2002, compared
to  the  first  nine  months  of  2001.  The average year-to-date growth in time
deposits  and  other  borrowings were $74,217,000 and $15,563,000, respectively.
The  lower  rate  savings  deposits,  which  include  interest  bearing checking
accounts,  savings accounts and money market accounts, were $97,374,000 or 14.1%
higher  than  in  the  first nine months of 2002, compared to the same period in
2001.  Other  borrowings  include  federal  funds  purchased,  FHLB  borrowings,
securities  sold under agreements to repurchase, U. S. Treasury demand notes and
junior  subordinate  deferrable  interest  debentures.

         The  taxable-equivalent net interest income during the third quarter of
2002 of $21,571,000 was $1,136,000 or 5.6% higher than the third quarter of 2001
net  interest income.   The $1,668,000 decrease in interest income was more than
offset  by  a  $2,804,000  reduction  in  interest expense.  The yield earned on
average  earning  assets during the third quarter of 2002 of 6.33% was 104 basis
points  lower  than  the 7.37% earned during the third quarter of 2001.  Average
earning  assets  in  the third quarter of 2002 were $222,030,000 or 11.1% higher
than  the  third  quarter  of  2001.  Securities  grew  $181,499,000  and  loans
increased  $54,261,000  during  this period.   Money market instruments declined
$13,730,000.  The  rate  paid  on  average  interest  bearing deposits and other
borrowings  of 2.92% during the third quarter of 2002 was 103 basis points lower

PAGE 11

than  the  3.95%  rate  paid  during the third quarter of 2001. Average interest
bearing  deposits  and  other  borrowings grew $198,709,000 or 12.1% during this
period.  The  largest gains were a $108,379,000 increase in savings deposits and
a  $72,022,000  rise  in  time  deposits.

NET  INTEREST  MARGIN
---------------------

           The  net  interest margin for the nine-month periods ending September
30,  2002  and September 30, 2001 were both 4.14%.  During the first nine months
of  2002  the  rate  paid  on  interest-bearing  deposits  and  other borrowings
decreased  125  basis points, compared to a 102 basis point drop in the yield on
earning  assets.  The  rate  paid  on  deposits  was 2.99% during the first nine
months  of  2002, compared to 4.24% during the same period in 2001. The yield on
earning  assets  of  6.62% earned during the first nine months of 2002 was lower
than  the 7.64% earned during the first nine months of 2001. The decrease in the
yield  earned  and  rate  paid  are  due  to the lower interest rate environment
experienced during the first nine months of 2002, compared to the same period in
2001.   The  third  quarter  of  2002  net interest margin of 3.90% was 20 basis
points  lower than the third quarter of 2001 net interest margin of 4.10%.  This
reduction  is  the result of the banks investment strategy of investing in short
term  lower  yielding earning assets during the current interest rate cycle, the
impact  on  the yield of mortgage backed securities related to the high level of
residential  mortgage  refinancing during the third quarter of 2002 and a slower
pace  of  growth  in  the  loan  portfolio.

INTEREST  RATE  SENSITIVITY  ANALYSIS
-------------------------------------

 The  Corporation actively manages its interest rate sensitivity positions.  The
objectives  of  interest  rate  risk  management  are to control exposure of net
interest  income to risks associated with interest rate movements and to achieve
consistent  growth in net interest income.  The Asset/Liability Committee, using
policies  and  procedures  approved by the Corporation's Boards of Directors, is
responsible  for managing the rate sensitivity position. The Corporation manages
interest  rate  sensitivity by changing mix and repricing characteristics of its
assets  and  liabilities  through  their  investment  securities portfolios, its
offering  of  loan and deposit terms and borrowings from the FHLB. The nature of
the  Corporation's  current operations is such that it is not subject to foreign
currency exchange or commodity price risk.  The Corporation does not own trading
assets  and  does  not  have any hedging transactions in place, such as interest
rate  swaps,  caps  or  floors.

 The  Corporation  uses  three  principal reports to measure interest rate risk:
asset/liability  simulation  reports;  gap  analysis  reports;  and net interest
margin  reports.  Management  also  simulates  possible  economic conditions and
interest  rate scenarios in order to quantify the impact on net interest income.
The  effect  that changing interest rates have on the Corporation's net interest
income  is  simulated  by  increasing  and  decreasing  interest  rates.  This
simulation  is  known  as  rate  shocks.  The  September  30,  2002 report below
forecasts  changes in the Corporation's market value of equity under alternative
interest  rate  environments.  The  market value of equity is defined as the net
present  value  of  the  Corporation's  existing  assets  and  liabilities.

<TABLE>
<CAPTION>

(Dollars  in  thousands)

                                    CHANGE IN                  ASSET/LIABILITY
                   MARKET VALUE    MARKET VALUE    PERCENTAGE      APPROVED
<S>                <C>           <C>               <C>          <C>
                     OF EQUITY      OF EQUITY       CHANGE     PERCENT CHANGE
                   ------------  ----------------  -----------  ---------------
+300 Basis Points       347,568           42,154        13.80%          +/- 45%
+200 Basis Points       353,288           47,874        15.68%          +/- 30%
+100 Basis Points       339,510           34,096        11.16%          +/- 15%
Flat Rate . . . .       305,414                -         0.00%
-100 Basis Points       257,868          (47,546)      -15.57%          +/- 15%
-200 Basis Points       219,292          (86,122)      -28.20%          +/- 30%
-300 Basis Points       185,954         (119,460)      -39.11%          +/- 45%
</TABLE>


In  the  event  the  Corporation should experience an excessive decline in their
market value of equity resulting from changes in interest rates, it has a number
of  options  that it could use to remedy such a mismatch.  The Corporation could

PAGE 12

restructure  its  investment  portfolios  through sale or purchase of securities
with more favorable repricing attributes.  It could also emphasize loan products
with  appropriate  maturities  or  repricing  attributes, or attract deposits or
obtain  borrowings  with  desired  maturities.

PROVISION  FOR  LOAN  LOSSES
----------------------------

 The  Bank  uses the reserve method of accounting for credit losses. The balance
in  the  allowance for loan and lease losses is determined based on management's
review and evaluation of the loan portfolio in relation to past loss experience,
the  size  and  composition  of  the  portfolio,  current  economic  events  and
conditions,  and  other pertinent factors, including management's assumptions as
to  future  delinquencies, recoveries and losses. Increases to the allowance for
loan  and  lease  losses are made by charges to the provision for credit losses.
Credit  exposures  deemed  to be uncollectible are charged against the allowance
for  credit losses. Recoveries of previously charged-off amounts are credited to
the  allowance  for  credit  losses.

 While  management  considers  the  allowance  for  loan  and lease losses to be
adequate  based  on  information  currently  available,  future additions to the
allowance may be necessary due to changes in economic conditions or management's
assumptions  as  to future delinquencies, recoveries and losses and management's
intent  with regard to the disposition of loans and leases. In addition, the OCC
as an integral part of their examination process, periodically review the Bank's
allowance  for  loan losses. The OCC may require the Bank to recognize additions
to  the  allowance for credit losses based on their judgements about information
available  to  them  at  the  time  of  their  examination.

 The  Bank's  allowance for loan and lease losses is the accumulation of various
components  that  are calculated based on various independent methodologies. All
components  of  the  allowance  for  credit losses are an estimation. Management
bases  its  recognition  and  estimation  of each allowance component on certain
observable data that it believes is the most reflective of the underlying credit
losses  being  estimated.  The  observable  data  and  accompanying  analysis is
directionally consistent, based upon trends, with the resulting component amount
for  the  allowance for loan and lease losses. The Bank's allowance for loan and
lease  losses  components  include  the following: historical loss estimation by
loan  product  type  and  by risk rating within each product type, payment (past
due)  status,  industry  concentrations, internal and external variables such as
economic  conditions,  credit policy and underwriting changes, competence of the
loan  review  process  and  other  historical loss model imprecision. The Bank's
historical loss component is the most significant component of the allowance for
loan  and  lease  losses,  and  all  other allowance components are based on the
inherent  loss  attributes  that  management  believes  exist  within  the total
portfolio  that  are  not  captured  in  the  historical  loss  component.

 The  historical  loss  components  of  the  allowance represents the results of
analyses  of  historical  charge-offs and recoveries within pools of homogeneous
loans,  within  each  risk rating and broken down further by segment, within the
portfolio.

 The  historical  loss components of the allowance for commercial loans is based
principally  on  current  risk  ratings,  historical  loss  rates  adjusted,  by
adjusting  the risk window, to reflect current events and conditions, as well as
analyses  of other factors that may have affected the collectibility of loans in
the  commercial portfolio. The Bank analyzes all commercial loans that are being
monitored  as  potential credit problems, via Watchlist Memorandum, to determine
whether  such  loans  are  individually  impaired,  with  impairment measured by
reference  to  the  collateral  coverage  and  /  or  debt service coverage. The
historical  loss  component  of  the  allowance  for  consumer  loans  is  based
principally  on  loan  payment status, retail classification and historical loss
rates  adjusted,  by  adjusting  the  risk window, to reflect current events and
conditions.

  The industry concentration component is recognized as a possible factor in the
estimation  of  credit losses. Two industries represent possible concentrations:
commercial  real  estate  and  automobile  dealers.  No  specific  loss-related
observable  data  is  recognized  by management currently, therefore no specific
factor  is  calculated  in  the  reserve  solely  for  the  impact  of  these
concentrations,  although  management  continues  to carefully consider relevant
data  for  possible  future  sources  of  observable  data.

PAGE 13

   The  historic  loss model imprecision component (soft factors and unallocated
portion)  reflects management's belief that there are additional inherent credit
losses  based  on  loss  attributes not adequately captured in the statistical /
historical  loss  component  and  is  an assessment of information delay and its
impact  on  the  timeliness of the risk rating process and loss recognition. The
principal  observable  data  utilized  by  management  as the driver of the loss
recognition  and measurement of this component is an internal management measure
of  the age of financial information used in the borrower debt service analysis.
This  is  also  a  key  judgmental component, as experiential data confirms that
measurable  losses  lag  the  empirical model as a downward credit cycle begins.

   For  the  first  nine  months  of  2002  the  provision  for  loan losses was
$3,401,000,  compared  to  $2,962,000  for  the  same  period in 2001. Net loans
charged  off  was  $1,820,000  for  the  nine  months  ended September 30, 2002,
compared  to  $2,824,000  for  the  nine  months  ended September 30, 2001.  The
decrease  in  net  charged  off  loans  is  attributed  to  the  increase in the
recoveries  of charged off indirect consumer loans and a reduction in commercial
loan  and  lease  charge  offs.  The  ratio  of the allowance for loan losses to
nonperforming  loans and leases for September 30, 2002 of 248.2% was higher than
the  December  31,  2001 and the September 30, 2001 ratios of 187.9% and 249.2%,
respectively.

ALLOWANCE  FOR  LOAN  LOSSES

   A  summary  of  the  allowance  for  loan  losses  is  as  follows:
<TABLE>
<CAPTION>
(Dollars  in  thousands)                    SEPTEMBER  30,
                                            --------------
                                           2002         2001
                                        -----------  -----------
Average loans                           $1,331,766   $1,250,981
                                        -----------  -----------
<S>                                     <C>          <C>
Allowance, beginning of period . . . .  $   15,558   $   15,210
                                        -----------  -----------
Loans charged off:
       Commercial and industrial . . .          91          417
       Consumer. . . . . . . . . . . .       1,985        2,037
       Real estate . . . . . . . . . .         323          398
       Lease financing . . . . . . . .         396          794
                                        -----------  -----------
             Total loans charged off .       2,795        3,646
                                        -----------  -----------
Recoveries:
       Commercial and industrial . . .         105           20
       Consumer. . . . . . . . . . . .         642          440
       Real estate . . . . . . . . . .         157          278
       Lease financing . . . . . . . .          71           84
                                        -----------  -----------
             Total recoveries. . . . .         975          822
                                        -----------  -----------
Net loans charged off. . . . . . . . .       1,820        2,824
                                        -----------  -----------
Provision for loan losses. . . . . . .       3,401        2,962
                                        -----------  -----------
Allowance, end of period . . . . . . .  $   17,139   $   15,348
                                        ===========  ===========
Ratio of net charge offs to average
    loans outstanding (annualized)            0.18%        0.30%
                                        ===========  ===========
</TABLE>
PAGE 14
<TABLE>
<CAPTION>

ANALYSIS OF CREDIT RISK                   SEPTEMBER 30,    DECEMBER 31,    SEPTEMBER 30,
---------------------------------------
<S>                                      <C>              <C>             <C>
                                              2002            2001             2001
                                         ---------------  --------------  ---------------
Non-accrual loan and leases . . . . . .  $    5,325,000   $   6,354,000   $    5,446,000
Loans and leases 90 days past due . . .       1,580,000       1,926,000          714,000
                                         ---------------  --------------  ---------------
   Total nonperforming loans and leases       6,905,000       8,280,000        6,160,000
Other real estate owned . . . . . . . .         473,000         609,000          404,000
                                         ---------------  --------------  ---------------
   Total nonperforming assets . . . . .  $    7,378,000   $   8,889,000   $    6,564,000
                                         ---------------  --------------  ---------------
Allowance for loan and lease losses to
   nonperforming loans and leases . . .           248.2%          187.9%           249.2%
Nonperforming loans and leases to total
   net loans and leases . . . . .                  0.51%           0.63%            0.47%
Allowance for loan and lease losses
   to total loans and leases. . . . . .            1.28%           1.18%            1.18%
Nonperforming assets
   to total assets. . . . . . . . . . .            0.30%           0.40%            0.30%
</TABLE>


The following table sets forth an allocation of the allowance for loan losses by
loan  category:
<TABLE>
<CAPTION>
                           September 30, 2002
                           ------------------

                                      Percent
                            Amount   of Loans
                           --------  ---------
<S>                        <C>       <C>
Commercial and industrial  $  4,376        26%
Consumer loans. . . . . .     5,727        33%
Real estate . . . . . . .     5,837        34%
Lease financing . . . . .     1,199         7%
                           --------  ---------
  Total . . . . . . . . .  $ 17,139       100%
                           ========  =========
</TABLE>

 Nonperforming  assets (nonaccruing loans, loans 90 days past due and net assets
in  foreclosure)  were  0.30% of total assets at September 30, 2002, compared to
0.40%  at  December  31, 2001 and 0.30% at September 30, 2001.  The ratio of the
allowance  for  loan  losses  to loans at September 30, 2002 of 1.28% was higher
than  the  1.18%  ratio  at  both  December  31, 2001 and  September  30,  2001.

Nonaccruing loans at September 30, 2002 of $5,325,000, decreased $1,029,000 from
the  December  31,  2001  level  of  $6,354,000, and decreased $121,000 from the
September  30,  2001  level of $5,446,000.  The decrease in nonaccruing loans at
September  30,  2002,  compared to both December 31, 2001 and September 30, 2001
was  primarily  the  result  of a decrease in commercial real estate nonaccruing
loans.

 Net assets in foreclosure were $473,000 as of September 30, 2002, a decrease of
$136,000  from the December 31, 2001 balance of $609,000.  During the first nine
months  of  2002,  transfers  from loans to assets in foreclosure were $789,000,
payments on foreclosed properties were $857,000 and the write-downs of assets in
foreclosure were $68,000 during this period.  The loans transferred to assets in
foreclosure included vehicle leases of $387,000, equipment leases of $231,000, a
$15,000 commercial loan and $156,000 of mortgages.  The balance of net assets in
foreclosure  at  September  30,  2001 was $404,000.  Efforts to liquidate assets
acquired  in  foreclosure  are  proceeding as quickly as potential buyers can be
located  and legal constraints permit.  Generally accepted accounting principles
require foreclosed assets to be carried at the lower of cost (lesser of carrying
value  of  asset  or fair value at date of acquisition) or estimated fair value.

PAGE 15

 Loans  past  due 90 days or more and still accruing interest are loans that are
generally  well  secured  and expected to be restored to a current status in the
near future.  As of September 30, 2002, loans past due 90 days or more and still
accruing interest were $1,580,000 compared to $1,926,000 as of December 31, 2001
and $714,000 as of September 30, 2001. The decrease in loans past due 90 days at
June 30, 2002, compared to December 31, 2001 was primarily the result of a
decrease in commercial  real  estate loans past due 90 days.  The increase in
loans past due 90 days or more at September 30, 2002, compared to September 30,
2001 is the result  of  a  rise  in  commercial  real  estate  loans.

The  following  information  concerns  impaired  loans:
<TABLE>
<CAPTION>
<S>                                                <C>              <C>             <C>
                                                   Sept. 30, 2002   Dec. 31, 2001   Sept. 30, 2001
                                                   ---------------  --------------  ---------------
 Impaired Loans . . . . . . . . . . . . . . . . .  $     3,015,000  $    3,721,000  $     3,468,000
                                                   ===============  ==============  ===============

 Average year-to-date impaired loans. . . . . . .  $     2,909,000  $    3,505,000  $     3,322,000
                                                   ===============  ==============  ===============

 Impaired loans with specific loss allowances . .  $     3,015,000  $    3,721,000  $     3,468,000
                                                   ===============  ==============  ===============

 Loss allowances reserved on impaired loans . . .  $       298,000  $      429,000  $       369,000
                                                   ===============  ==============  ===============

 Year-to-date income recognized on impaired loans  $        93,000  $       78,000  $        69,000
                                                   ===============  ==============  ===============
</TABLE>

 The  banks'  policy  for  interest income recognition on nonaccrual loans is to
recognize  income  under  the cash basis when the loans are both current and the
collateral  on the loan is sufficient to cover the outstanding obligation to the
banks.  The  banks  will  not  recognize  income  if these factors do not exist.
<TABLE>
<CAPTION>

OTHER  OPERATING  INCOME
------------------------
                                        Nine  Months Ended     Three Months Ended
                                           September 30,           September 30,
                                        --------------------   ------------------
                                              2002      2001     2002    2001
                                     ---------------  -------  ------  ------
                                     (Dollars in thousands)   (Dollars in thousands)
<S>                                  <C>              <C>      <C>     <C>
Service charges . . . . . . . . . .  $         4,993  $ 3,878  $1,846  $1,403
Security gains, net . . . . . . . .            3,193    3,923     719   2,140
Trust income. . . . . . . . . . . .            2,322    2,541     726     826
Bank-owned life insurance income. .            1,900    1,818     631     535
Other income. . . . . . . . . . . .            4,675    3,409   1,519   1,352
                                     ---------------  -------  ------  ------
      Total other operating income.  $        17,083  $15,569  $5,441  $6,256
                                     ===============  =======  ======  ======
</TABLE>

  The  nine  month  ending  September  30, 2002 other operating income increased
$1,514,000,  or 9.7%, from $15,569,000 for the same period in 2001. This rise in
other operating income is the result of increases in service charges, bank-owned
life  insurance  and  other  income  of  $1,115,000,  $82,000  and  $1,266,000,
respectively.  Offsetting  these  gains  were  reductions  in security gains and
trust  income.  The  rise  in other operating income was 19.3%, not inclusive of
the securities gains.  The third quarter other operating income decreased 13.0%,
compared to the third quarter 2001.  Net of security gains, the third quarter of
2002  grew  14.7%,  compared  to  the  third  quarter  of  2001.

 Service  charges  grew  $1,115,000  or  28.8% in the first nine months of 2002,
compared  to the same period in 2001.  This rise is the result of an increase in
fees  charged  on  transaction  deposit  accounts, attributed to the increase in
average deposit transaction accounts and through the Corporation's strategies to
enhance  fee  income.  The  driving force behind the increase in service charges
was  the  introduction  of a new overdraft product in March 2001.  The growth in
overdraft  fees  during  the first nine months of 2002 was $820,000, compared to
the  same  period  in  2001.  The remaining increase is related to the growth in
average  transaction  deposits  and  enhanced fee structures.  The third quarter

PAGE 16

2002 service charges grew $443,000 or 31.6% compared to the same period in 2001.
This  growth  was  primarily  the  result of higher overdraft fees and ATM fees.

 The Corporation recorded net security gains on the sale of securities available
for  sale of $3,193,000 in the first nine months of 2002, compared to $3,923,000
during  the  same  period in 2001.  Third quarter 2002 net security gains on the
sale of securities were $719,000, compared to $2,140,000 in the third quarter of
2001.  The Corporation sold the investment securities available for sale to fund
the  purchase  of other securities in an effort to enhance the overall return of
the  portfolio  and  to  reduce  the  risk  within  different  interest  rate
environments.

 Income  from  the  Investment  Management and Trust Services Division decreased
$219,000  or  8.6% in the first nine months of 2002 and $100,000 or 12.1% in the
third  quarter,  compared  to the same periods in 2001. These decreases were the
result  of  lower  estate  fees  earned  during  this  period and the lower fees
associated  with  the  decrease  in  the  market  value  of  trust  assets.

 The  Corporation's bank owned life insurance (BOLI) income increased $82,000 or
4.5%  during the first nine months of 2002, compared to the same period in 2001.
This  higher  income  level  was  related  to the higher volume of BOLI balances
partially  offset  by  lower  rates  experienced during 2002.  BOLI involves the
purchasing  of life insurance by the Corporation on a chosen group of employees.
The  corporation  is  the  owner  and beneficiary of the policies.  This pool of
insurance, due to tax advantages to the Banks, is profitable to the Corporation.
This  profitability  is used to offset a portion of future employee benefit cost
increases.  Bank deposits fund BOLI and the earnings from BOLI are recognized as
other income. The third quarter 2002 BOLI income was 17.9% higher than the third
quarter  of  2001.

 Other  income  for the first nine months of 2002 increased $1,266,000 or 37.1%,
compared  to  the  same  period  in  2001.  The  third quarter other income grew
$167,000  or  12.4%  over  the  third  quarter  of  2001.  Contributing to these
increases were higher fees earned on the sale of alternative investment products
including  mutual funds and annuities, gains on the sale of residential mortgage
loans,  loan  servicing  fees  and  fees generated from HNC Reinsurance Company.
<TABLE>
<CAPTION>

OTHER  OPERATING  EXPENSES
--------------------------
                                        Nine  Months Ended         Three Months Ended
                                           September 30,               September 30,
                                        --------------------       ------------------
                                              2002        2001     2002     2001
                                        ---------------  -------  ------  ------
                                      (Dollars in thousands)    (Dollars in thousands)

<S>                                    <C>              <C>      <C>      <C>
Salaries. . . . . . . . . . . . . . .  $        18,050  $16,350  $ 6,206  $ 5,637
Employee benefits . . . . . . . . . .            4,581    3,294    1,344    1,102
Occupancy . . . . . . . . . . . . . .            2,902    2,457      844      792
Furniture and equipment . . . . . . .            4,034    3,776    1,428    1,310
Other expenses. . . . . . . . . . . .           13,127   13,572    3,679    4,903
                                           -----------  -------   ------   ------
      Total other operating expenses.  $        42,694  $39,449  $13,501  $13,744
                                          ============  =======  =======  =======
</TABLE>

 The first nine months of 2002 other operating expenses of $42,694,000 increased
$3,245,000  or 8.2% from $39,449,000 for the same period in 2001.  This rise was
the  result  of  salary  and  benefit increases and a one-time occupancy expense
related  to  a  closed  branch.  The third quarter 2002 other operating expenses
decreased $243,000 or 1.8% compared to the third quarter of 2001.  This decrease
was  due  to  the  result  of  lower off-lease vehicle residual reserve expenses
recorded  in  the  third quarter of 2002, compared to the third quarter of 2001.

 Employee  salaries increased $1,700,000 or 10.4% from $16,350,000 for the first
nine  months  of  2001  to  $18,050,000  for  the same period in 2002.  Employee
salaries  increased $569,000 or 10.1% during the third quarter of 2002, compared
to the third quarter of 2001.  These increases reflect cost of living increases,
merit  increases,  salaries  related  to  the  rise  in  the sale of alternative
investment  products  and  additional  staff  necessitated  by the growth of the
Banks.  Employee  benefits  of  $4,581,000  expensed in the first nine months of
2002,  were  $1,287,000 or 39.1% higher than the $3,294,000 of employee benefits

PAGE 17

expensed  during  the same period in 2001.  Third quarter 2002 employee benefits
of  $1,344,000  were  22.0%  higher  than  the  third  quarter  2001  expense of
$1,102,000.  The  increase  in employee benefits is the result of higher pension
expenses and employee medical insurance coverage.  The higher pension expense is
related to the addition of new employees to the plan and the overall performance
of  the  plan.

 Net  occupancy  expense  increased  $445,000,  or 18.1%, from $2,457,000 in the
first  nine months of 2001 to $2,902,000 in the first nine months of 2002.  This
increase  was  primarily  due  to a $365,000 expense related to a branch closure
during  the  first quarter of 2002.  Net occupancy expenses grew $52,000 or 6.6%
during  the  third  quarter  of  2002,  compared  to  the third quarter of 2001.
Furniture  and  equipment  expense increased  $258,000 or 6.8%, during the first
nine  months  of 2002, compared to the same period in 2001.  The increase in the
third quarter of 2002 was 9.0% over the third quarter of 2001.   These increases
are  due  to  higher equipment maintenance and expenses related to new sales and
application  systems  for  the  bank branches to use to enhance loan and deposit
volumes  and  processing.

 Other  expenses decreased $445,000, or 3.3%, from $13,572,000 in the first nine
months  of  2001,  compared to $13,127,000 in other expenses recorded during the
same period in 2002.   The decrease during the third quarter of 2002 compared to
the  third quarter in 2001 was $1,224,000 or 25.0%.  This decrease was primarily
due  to  lower marketing expense, off-lease vehicle residual reserve expense and
goodwill  amortization.  The  banks  also  experienced higher deferred loan cost
that  offset  expenses related to higher volumes of commercial loans.  Partially
offsetting  these  lower  other expenses were higher advertising costs, expenses
associated  with  the  addition  of  employees  to  the  supplemental  executive
retirement plan and higher mortgage service rights amortization. The Corporation
reviews  the off-lease vehicles residual reserve on a quarterly basis. The total
2002  projected  residual  reserve expense of $2,800,000 is lower than the total
2001 actual  residual  reserve  expense  of  $3,705,000.

INCOME  TAXES
-------------

 Income  tax  expense is less than the amount calculated using the statutory tax
rate  primarily as a result of tax exempt income earned from state and municipal
securities  and  loans.

BALANCE  SHEET  ANALYSIS
------------------------

 Total  assets increased $263,081,000, or 11.9%, from $2,208,971,000 at December
31, 2001 to $2,472,052,000 at September 30, 2002.  Contributing to this increase
were  higher investment securities available for sale, loans and fed funds sold.
Total  assets  at September 30, 2002 grew 13.8%, compared to September 30, 2001.
This gain was primarily due to increases in both investment securities available
for  sale  and  loans.

 The  balance  of  securities  available  for  sale  at  September  30,  2002 of
$926,529,000 increased $220,158,000 compared to the December 31, 2001 balance of
$706,371,000.  During  the  first  three  quarters  of  2002,  $568,561,000  of
securities  available  for  sale  were  sold  which  generated  a pretax gain of
$3,193,000.  In comparison, $282,085,000 securities available for sale were sold
during the first three quarters of 2001 to generate a pretax gain of $3,923,000.
The  Corporation  sells  investment  securities  available  for sale to fund the
purchase  of  other securities in an effort to enhance the overall return of the
portfolio,  and  to  reduce  the  risk associated within different interest rate
environments.  The  balance  of investment securities held to maturity decreased
$3,352,000  during  the first nine months of 2002.  Total loans grew $27,590,000
or  2.1% through September 30, 2002.  This growth was primarily due to increases
in  both  commercial  loans  and  home  equity  loans, partially offset by lower
indirect  auto financing and vehicle leases.  Total loans grew 2.9% at September
30,  2002,  compared  to  September  30,  2001.

 Total  deposits grew $204,337,000, or 11.7% from $1,746,862,000 at December 31,
2001  to  $1,951,199,000  at  September 30, 2002.  This growth was due to higher
balances  in  all  deposit  categories.  Lower  rate  core  deposits
(noninterest-bearing  checking, interest-bearing checking, money market accounts
and  savings  accounts)  grew $119,985,000, or 11.7% during this period.  Higher
costing  time deposits grew $84,352,000 or 11.7% during the first nine months of

PAGE 18

2002.  Time  deposits  under  $100,000  grew  $45,622,000 and time deposits over
$100,000  rose  $38,730,000.  The  September 30, 2002 total deposit balance grew
14.3%,  compared  to  the  September  30,  2001  total  deposits.

 Other  borrowings experienced an increase of $39,182,000 during the nine months
of  2002.  A  $35,000,000  increase in Federal Home Loan Bank Borrowings was the
primarily  contributor  to  this  increase.  Securities sold under agreements to
repurchase  increased  by $4,844,000 and U.S. Treasury demand notes decreased by
$662,000.

CAPITAL
-------

 Capital  formation  is  important  to  the  Corporation's well being and future
growth.  Capital  for  the period ending September 30, 2002 was $208,666,000, an
increase  of  $19,317,000  over  the end of 2001.  The increase is the result of
the  retention  of  the  Corporation's  earnings  and the adjustment for the net
unrealized  gains  on the investment securities available for sale and offset by
the  purchase  of  treasury  stock  during  the  first  nine months of 2002. Net
unrealized  gains  and  losses  on  available for sale investment securities are
recorded  as accumulated other comprehensive income in the equity section of the
balance sheet.  The accumulated other comprehensive income at September 30, 2002
was  a  gain  of  $11,834,000,  compared to a gain of $4,534,000 at December 31,
2001.  The  corporation  purchased $4,117,000 of treasury stock during the first
nine months of 2002.  Management believes that the Corporation's current capital
and  liquidity  positions are adequate to support its operations.  Management is
not  aware of any recommendations by any regulatory authority, which, if it were
to  be  implemented,  would have a material effect on the Corporation's capital.
<TABLE>
<CAPTION>

(Dollars  in  thousands)

                                                                               For Capital
As of September 30, 2002                       Actual                       Adequacy Purposes
-----------------------------------------
<S>                                        <C>           <C>                 <C>       <C>
                                               Amount           Ratio         Amount    Ratio
                                           ------------  ------------------  --------  ------
Total Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    219,652              13.39%  $131,210   8.00%
Harleysville National Bank. . . . . . . .       130,754              10.99%    95,139   8.00%
Citizens National Bank. . . . . . . . . .        36,698              12.20%    24,067   8.00%
Security National Bank. . . . . . . . . .        16,633              12.53%    10,623   8.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    201,548              12.29%  $ 65,605   4.00%
Harleysville National Bank. . . . . . . .       119,731              10.07%    47,570   4.00%
Citizens National Bank. . . . . . . . . .        32,933              10.95%    12,033   4.00%
Security National Bank. . . . . . . . . .        14,969              11.27%     5,312   4.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    201,548               8.61%  $ 93,678   4.00%
Harleysville National Bank. . . . . . . .       119,731               7.20%    66,534   4.00%
Citizens National Bank. . . . . . . . . .        32,933               7.00%    18,819   4.00%
Security National Bank. . . . . . . . . .        14,969               8.03%     7,458   4.00%
</TABLE>

PAGE 19
<TABLE>
<CAPTION>
                                               To Be Well Capitalized
                                               Under Prompt Corrective
                                                   Action Provision
                                                    Amount           Ratio
                                           ------------------------  ------
Total Capital (to risk weighted assets):
-----------------------------------------
<S>                                        <C>                       <C>
Corporation . . . . . . . . . . . . . . .  $                      -      -
Harleysville National Bank. . . . . . . .                   118,924  10.00%
Citizens National Bank. . . . . . . . . .                    30,084  10.00%
Security National Bank. . . . . . . . . .                    13,279  10.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $                      -      -
Harleysville National Bank. . . . . . . .                    71,354   6.00%
Citizens National Bank. . . . . . . . . .                    18,050   6.00%
Security National Bank. . . . . . . . . .                     7,967   6.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $                      -      -
Harleysville National Bank. . . . . . . .                    83,168   5.00%
Citizens National Bank. . . . . . . . . .                    23,524   5.00%
Security National Bank. . . . . . . . . .                     9,322   5.00%
</TABLE>

<TABLE>
<CAPTION>

(Dollars  in  thousands)

                                                                              For Capital
As of December 31, 2001                        Actual                      Adequacy Purposes
-----------------------------------------
<S>                                        <C>           <C>                 <C>       <C>
                                                Amount        Ratio           Amount    Ratio
                                           ------------  ------------------  --------  ------
Total Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    205,743              13.23%  $124,445   8.00%
Harleysville National Bank. . . . . . . .       118,782              10.46%    90,862   8.00%
Citizens National Bank. . . . . . . . . .        39,888              13.91%    22,936   8.00%
Security National Bank. . . . . . . . . .        15,132              12.53%     9,661   8.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    189,423              12.18%  $ 62,222   4.00%
Harleysville National Bank. . . . . . . .       108,939               9.59%    45,431   4.00%
Citizens National Bank. . . . . . . . . .        36,297              12.66%    11,468   4.00%
Security National Bank. . . . . . . . . .        13,622              11.28%     4,830   4.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $    189,423               8.71%  $ 87,040   4.00%
Harleysville National Bank. . . . . . . .       108,939               6.91%    63,024   4.00%
Citizens National Bank. . . . . . . . . .        36,297               8.45%    17,182   4.00%
Security National Bank. . . . . . . . . .        13,622               8.44%     6,455   4.00%
</TABLE>
PAGE 20
<TABLE>
<CAPTION>
                                       To Be Well Capitalized
                                       Under Prompt Corrective
                                          Action Provision

                                            Amount   Ratio
                                           --------  ------
Total Capital (to risk weighted assets):
-----------------------------------------
<S>                                        <C>       <C>
Corporation . . . . . . . . . . . . . . .  $      -      -
Harleysville National Bank. . . . . . . .   113,578  10.00%
Citizens National Bank. . . . . . . . . .    28,669  10.00%
Security National Bank. . . . . . . . . .    12,076  10.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $      -      -
Harleysville National Bank. . . . . . . .    68,147   6.00%
Citizens National Bank. . . . . . . . . .    17,202   6.00%
Security National Bank. . . . . . . . . .     7,246   6.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  $      -      -
Harleysville National Bank. . . . . . . .    78,780   5.00%
Citizens National Bank. . . . . . . . . .    21,477   5.00%
Security National Bank. . . . . . . . . .     8,069   5.00%
</TABLE>


 Pursuant to the federal regulators' risk-based capital adequacy guidelines, the
components  of  capital  are  called  Tier  1  and  Tier  2  capital.  For  the
Corporation,  Tier  1 capital is the shareholders' equity, and Tier 2 capital is
the allowance for loan losses.  The minimum for the Tier 1 ratio is 4.0% and the
total capital ratio (Tier 1 plus Tier 2 capital divided by risk-adjusted assets)
minimum  is 8.0%.  At September 30, 2002, the Corporation's Tier 1 risk-adjusted
capital  ratio was 12.29%, and the total risk-adjusted capital ratio was 13.39%,
both  well  above the regulatory requirements.  The risk-based capital ratios of
each of the Corporation's commercial banks also exceeded regulatory requirements
at  September  30,  2002.

 The  leverage  ratio  consists  of  Tier 1 capital divided by quarterly average
total  assets,  excluding intangible assets.  Banking organizations are expected
to  have ratios of at least 4% and 5%, depending upon their particular condition
and  growth  plans.  Higher  leverage ratios could be required by the particular
circumstances  or  risk  profile  of  a  given  banking  organization.  The
Corporation's  leverage  ratios  were  8.61%  at September 30, 2002 and 8.71% at
December  31,  2001.

 The  year-to-date September 30, 2002 cash dividend per share of $.495 was 13.0%
higher  than  the  cash  dividend  for  the  same  period in 2001 of $.438.  The
dividend  payout  ratio for the first nine months of 2002 was 38.5%, compared to
41.3% for the twelve month period ended December 31, 2001.  Activity in both the
Corporation's dividend reinvestment and stock purchase plan and the stock option
plan  did not have a material impact on capital during the first three months of
2002.

LIQUIDITY
---------

 Liquidity  is  a  measure  of  the ability of the Banks to meet their needs and
obligations on a timely basis.  For a bank, liquidity provides the means to meet
the  day-to-day  demands  of  deposit  customers  and  the  needs  of  borrowing
customers.  Generally,  the  Banks  arrange  their  mix  of  cash,  money market
investments,  investment  securities and loans in order to match the volatility,
seasonality,  interest  sensitivity and growth trends of its deposit funds.  The
liquidity  measurement  is  based  on  the asset/liability model's projection of
potential  sources  and  use  of  funds  for  the next 120 days.  The resulting
projections  as  of  September  30,  2002  show  the  potential sources of funds
exceeding  the potential uses of funds.  The Corporation has external sources of
funds,  which  can be drawn upon when funds are required.  The primary source of

PAGE 21

external  liquidity  is an available line of credit with the FHLB of Pittsburgh.
Unused  lines  of  credit  at  the  FHLB  of Pittsburgh were $128,679,000, as of
September 30, 2002.  The Banks also have unused federal funds lines of credit of
$50,000,000  and  non-pledged  investment  securities  available  for  sale  of
$353,437,000  as  of  September  30,  2002.

OTHER  INFORMATION
------------------

Legislative  &  Regulatory
--------------------------

 In  November  1999,  the Gramm-Leach-Bliley Financial Modernization Act of 1999
(Modernization  Act)  became  law.  The  Modernization  Act  allows bank holding
companies  meeting  management, capital and Community Reinvestment Act standards
to  engage  in  a  substantially broader range of nonbanking activities than was
permissible  before  enactment,  including  underwriting  insurance  and  making
merchant  banking  investments in commercial and financial companies.  It allows
insurers  and  other  financial  services  companies  to  acquire banks; removes
various  restrictions  that  currently apply to bank holing company ownership of
securities firms and mutual fund advisory companies; and establishes the overall
regulatory  structure  applicable  to bank holding companies that also engage in
insurance  and  securities  operations.  The  Corporation  currently believes it
meets  the  requirements  for  the  broader  range  of  activities  that will be
permitted  by  the  Modernization  Act.

  The  Modernization  Act also modifies current law related to financial privacy
and  community reinvestment.  The new privacy provisions will generally prohibit
financial  institutions,  including  the  Corporation, from disclosing nonpublic
financial  information  to nonaffiliated third parties unless customers have the
opportunity  to  "opt  out"  of  the  disclosure.


Pending  Legislation
--------------------

 Management  is  not  aware  of  any  other  current specific recommendations by
regulatory  authorities or proposed legislation which, if they were implemented,
would  have  a material adverse effect upon the liquidity, capital resources, or
results of operations, although the general cost of compliance with numerous and
multiple federal and state laws and regulations does have, and in the future may
have,  a  negative  impact  on  the  Corporation's  results  of  operations.

Effects  of  Inflation
----------------------

 Inflation  has  some  impact on the Corporation and the Banks' operating costs.
Unlike  many  industrial  companies,  however,  substantially  all of the Banks'
assets and liabilities are monetary in nature.  As a result, interest rates have
a  more  significant impact on the Corporation's and the Banks' performance than
the  general level of inflation.  Over short periods of time, interest rates may
not necessarily move in the same direction or in the same magnitude as prices of
goods  and  services.

Effect  of  Government  Monetary  Policies
------------------------------------------

 The  earnings  of the Corporation are and will be affected by domestic economic
conditions  and the monetary and fiscal policies of the United States government
and  its  agencies.  An important function of the Federal Reserve is to regulate
the  money  supply  and interest rates.  Among the instruments used to implement
those  objectives  are  open  market  operations  in  United  States  government
securities  and  changes  in  reserve requirements against member bank deposits.
These  instruments  are used in varying combinations to influence overall growth
and distribution of bank loans, investments and deposits, and their use may also
affect  rates  charged  on  loans  or  paid  for  deposits.

 The  Banks  are members of the Federal Reserve and, therefore, the policies and
regulations  of  the  Federal Reserve have a significant effect on its deposits,
loans  and  investment  growth, as well as the rate of interest earned and paid,


PAGE 22

and  are  expected to affect the Banks' operations in the future.  The effect of
such  policies  and  regulations  upon  the  future business and earnings of the
Corporation  and  the  Banks  cannot  be  predicted.

Environmental  Regulations
--------------------------

 There  are  several  federal and state statutes, which regulate the obligations
and  liabilities  of  financial institutions pertaining to environmental issues.
In  addition to the potential for attachment of liability resulting from its own
actions,  a  bank may be held liable under certain circumstances for the actions
of  its  borrowers,  or third parties, when such actions result in environmental
problems  on properties that collateralize loans held by the bank.  Further, the
liability  has  the potential to far exceed the original amount of a loan issued
by  the  bank.  Currently,  neither the Corporation nor the Banks are a party to
any  pending legal proceeding pursuant to any environmental statute, nor are the
Corporation  and  the  Banks  aware  of  any circumstances that may give rise to
liability  under  any  such  statute.

Branching
---------

 The  Corporation's subsidiaries currently plan to open at least one new branch.
During  the  fourth  quarter  of  2002,  Security  National Bank plans to open a
location  in  Douglassville, Pennsylvania. This new branch site is contiguous to
our  current  service  area  and was chosen to expand the Banks' market area and
market  share  of  loans  and  deposits.


ITEM  3  -  Qualitative  and  Quantitative  Disclosures  About  Market  Risk

 In  the  normal  course  of  conducting business activities, the Corporation is
exposed to market risk, principally interest risk, through the operations of its
banking subsidiaries.  Interest rate risk arises from market driven fluctuations
in  interest  rates  that  affect  cash  flows,  income,  expense  and values of
financial  instruments.  The  Asset/Liability  Committee,  using  policies  and
procedures  approved  by  the  Banks'  Boards  of  Directors, is responsible for
managing  the  rate  sensitivity  position.

 No material changes in market risk strategy occurred during the current period.
A  detailed  discussion  of market risk is provided on page 12 of this Form 10-Q
and  in  SEC  Form  10-K  for  the  period  ended  December  31,  2001.

ITEM  4  -  Controls  and  Procedures

We  maintain  a system of controls and procedures designed to provide reasonable
assurance  as  to  the  reliability  of  the  financial  statements  and  other
disclosures  included  in  this  report,  as  well  as  to safeguard assets from
unauthorized  use  or  disposition. We evaluated the effectiveness of the design
and  operation  of  our disclosure controls and procedures under the supervision
and  with the participation of management, including our Chief Executive Officer
and  Chief  Financial  Officer,  within 90 days prior to the filing date of this
report.  Based  upon  that  evaluation,  our  Chief  Executive Officer and Chief
Financial  Officer  concluded  that  our  disclosure controls and procedures are
effective  in  timely  alerting  them  to  material  information  required to be
included  in  our  periodic  Securities  and  Exchange  Commission  filings.  No
significant  changes  were  made  to our internal controls or other factors that
could  significantly  affect  these  controls  subsequent  to  the date of their
evaluation.

                                  CERTIFICATION


I,  Walter  E.  Daller,  Jr.,  Chairman,  President and Chief Executive Officer,
certify,  that:

       1.  I  have  reviewed  this quarterly report on Form 10-Q of Harleysville
National  Corporation.

       2.  Based  on  my  knowledge,  the  quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made, in light of the circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly  report.

PAGE 23
       3.  Based  on my knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report.

       4.  The  registrant's  other certifying officer and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

       (a)  designed  such  disclosure  controls  and  procedures to ensure that
material  information  relating  to  the  registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  quarterly  report  is  being  prepared;

       (b)  evaluated  the effectiveness of the registrant's disclosure controls
and  procedures  as  of  a  date within 90 days prior to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and

       (c)  presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date.

       5.  The registrant's other certifying officer and I have disclosed, based
on  our  most  recent  evaluation,  to  the  registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

       (a)  all  significant  deficiencies  in  the  design  or operation of the
internal  controls  which  could  adversely  affect  the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

       (b)  any  fraud,  whether  or  not  material, that involves management or
other  employees  who  have  a  significant  role  in  the registrant's internal
controls.

       6.  The  registrant's  other  certifying  officer and I have indicated in
this  quarterly report whether or not there were significant changes in internal
controls  or  in  other  factors  that  could  significantly affect the internal
controls  subsequent  to  the  date of our most recent evaluation, including any
corrective  actions  with  regard  to  significant  deficiencies  and  material
weaknesses.


Date:  November  12,  2002
                                   By:  /s/  Walter  E.  Daller,  Jr.
                                      -----------------------------
                                        Chairman,  President  and  Chief
                                        Executive  Officer
                                        Harleysville  National  Corporation


                                  CERTIFICATION


I,  Gregg  J.  Wagner,  Executive  Vice  President  and  Chief Financial Officer
certify,  that:

       1.  I  have  reviewed  this quarterly report on Form 10-Q of Harleysville
National  Corporation.

       2.  Based  on  my  knowledge,  the  quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made, in light of the circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly  report.

PAGE 24

       3.  Based  on my knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report.

       4.  The  registrant's  other certifying officer and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

       (a)  designed  such  disclosure  controls  and  procedures to ensure that
material  information  relating  to  the  registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  quarterly  report  is  being  prepared;

       (b)  evaluated  the effectiveness of the registrant's disclosure controls
and  procedures  as  of  a  date within 90 days prior to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and

       (c)  presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date.

       5.  The registrant's other certifying officer and I have disclosed, based
on  our  most  recent  evaluation,  to  the  registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

       (a)  all  significant  deficiencies  in  the  design  or operation of the
internal  controls  which  could  adversely  affect  the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

       (b)  any  fraud,  whether  or  not  material, that involves management or
other  employees  who  have  a  significant  role  in  the registrant's internal
controls.

       6.  The  registrant's  other  certifying  officer and I have indicated in
this  quarterly report whether or not there were significant changes in internal
controls  or  in  other  factors  that  could  significantly affect the internal
controls  subsequent  to  the  date of our most recent evaluation, including any
corrective  actions  with  regard  to  significant  deficiencies  and  material
weaknesses.


Date:  November  12,  2002
                                      By:  /s/  Gregg  J.  Wagner
                                                -----------------
                                           Executive  Vice  President  and
                                           Chief  Financial  Officer
                                           Harleysville  National  Corporation

PAGE 25
                           PART II. OTHER INFORMATION
<TABLE>
<CAPTION>
<S>      <C>

Item 1.  Legal Proceedings
-------  -----------------
</TABLE>

 Management, based upon discussions with the Corporation's legal counsel, is not
aware  of  any  litigation  that  would  have  a  material adverse effect on the
consolidated  financial  position  of the Corporation.  There are no proceedings
pending  other  than the ordinary routine litigation incident to the business of
the  Corporation  and  its  subsidiaries  - Harleysville National Bank and Trust
Company,  Citizens  National Bank, Security National Bank, HNC Financial Company
and  HNC  Reinsurance Company.  In addition, no material proceedings are pending
or  are  known  to be threatened or contemplated against the Corporation and its
subsidiaries  by  government  authorities.
<TABLE>
<CAPTION>
<S>                                                    <C>

Item 2. Change in Securities and Use of Proceeds
------------------------------------------------
  Not applicable

Item 3. Defaults Upon Senior Securities
---------------------------------------
  Not applicable

  Submission of Matters to a Vote of Security Holders
-----------------------------------------------------
Item 4. None

</TABLE>
<TABLE>
<CAPTION>
<S>      <C>

Item 5.  Other Information
-------  --------------------------------
  None

Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------
</TABLE>
<TABLE>
<CAPTION>

     (a)  Exhibits:
     --------------
     The  following  exhibits  are  being  filed  as  part  of  this  Report:


Exhibit No.   Description of Exhibits
------------  ------------------------------------------------------------------------------------------------------
<C>           <S>

       (3.1)    Harleysville National Corporation Articles of Incorporation, as amended. (Incorporated by reference
              to Exhibit 3(a) to the Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on
              December 14, 1995.)

       (3.2)    Harleysville National Corporation By-laws. (Incorporated by reference to Exhibit 3(b) to the
              Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on December 14, 1995.)

      (10.1)    Harleysville National Corporation 1993 Stock Incentive Plan. (Incorporated by Reference to Exhibit
              4.3 of Registrant's Registration Statement No. 33-57790 on Form S-8, filed with the Commission on
              October 1, 1993.)

      (10.2)    Harleysville National Corporation Stock Bonus Plan.  (Incorporated by Reference to Exhibit 99A of
              Registrant's Registration Statement No. 33-17813 on Form S-8, filed with the Commission on
              December 13, 1996.)

      (10.3)    Supplemental Executive Retirement Plan.  (Incorporated by Reference to Exhibit 10.3 of
              Registrant's Annual Report in Form 10-K for the year ended December 31, 1997, filed with the
              Commission on March 27, 1998.)

      (10.4)    Walter E. Daller, Jr., Chairman, President and Chief Executive Officer's employment agreement.
              (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
              Commission on March 25, 1999.)

PAGE 26

      (10.5)    Demetra M. Takes, President and Chief Operating Officer of Harleysville employment agreement.
              (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
              Commission on March 25, 1999.)

      (10.6)    Vernon L. Hunsberger, Senior Vice President/CFO and Cashier's employment agreement.
              (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
              Commission on March 25, 1999.)

      (10.7)    Harleysville National Corporation 1998 Stock Incentive Plan. (Incorporated by Reference to
              Registrant's Registration Statement No. 333-79971 on Form S-8 filed with the Commission on June
              4, 1999.)

      (10.8)    Harleysville National Corporation 1998 Independent Directors Stock Option Plan.  (Incorporated by
              Reference to Registrant's Registration Statement No. 333-79973 on Form S-8 filed with the
              Commission on June 4, 1999.)

        (11)    Computation of Earnings per Common Share.  The information for this Exhibit is incorporated by
              reference to page 4 of this Form 10-Q.

</TABLE>

  (b)  Reports  on  Form  8-K

Current Report on Form 8-K, dated January 10, 2002, filed with the Commission on
February 15, 2002, reporting the Registrant's fourth quarter 2001 press release.

Current  Report  on  Form 8-K, dated April 9, 2002, filed with the Commission on
April  17,  2002,  reporting  the Registrant's first quarter 2002 press release.

Current  Report  on  Form  8-K, dated May 30, 2002, filed with the Commission on
June  11,  2002,  reporting  the  Registrant's appointment of two new directors.

Current  Report  on  Form 8-K, dated July 10, 2002, filed with the Commission on
July  26,  2002,  reporting  the Registrant's second quarter 2002 press release.

PAGE 27
                                   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.



     HARLEYSVILLE  NATIONAL  CORPORATION





   /s/  Walter E. Daller, Jr.
-------------------------------------------------------------------------
  Walter E. Daller, Jr., Chairman, President and Chief Executive Officer
  (Principal executive officer)



   /s/  Gregg J. Wagner
-------------------------------------------------------------------------
  Gregg J. Wagner, Executive Vice President and Chief Financial Officer
  (Principal financial and accounting officer)





Date:  November  12,  2002

PAGE 28
                                  EXHIBIT INDEX
<TABLE>
<CAPTION>

Exhibit  No.     Description  of  Exhibits
-----------      -------------------------
<C>        <S>

    (3.1)    Harleysville National Corporation Articles of Incorporation, as amended. (Incorporated by reference
           to Exhibit 3(a) to the Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on
           December 14, 1995.)

    (3.2)    Harleysville National Corporation By-laws. (Incorporated by reference to Exhibit 3(b) to the
           Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on December 14, 1995.)

   (10.1)    Harleysville National Corporation 1993 Stock Incentive Plan. (Incorporated by Reference to Exhibit
           4.3 of Registrant's Registration Statement No. 33-57790 on Form S-8, filed with the Commission on
           October 1, 1993.)

   (10.2)    Harleysville National Corporation Stock Bonus Plan.  (Incorporated by Reference to Exhibit 99A of
           Registrant's Registration Statement No. 33-17813 on Form S-8, filed with the Commission on
           December 13, 1996.)

   (10.3)    Supplemental Executive Retirement Plan.  (Incorporated by Reference to Exhibit 10.3 of
           Registrant's Annual Report in Form 10-K for the year ended December 31, 1997, filed with the
           Commission on March 27, 1998.)

   (10.4)    Walter E. Daller, Jr., Chairman, President and Chief Executive Officer's employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.5)    Demetra M. Takes, President and Chief Operating Officer of Harleysville employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.6)    Vernon L. Hunsberger, Senior Vice President/CFO and Cashier's employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.7)    Harleysville National Corporation 1998 Stock Incentive Plan. (Incorporated by Reference to
           Registrant's Registration Statement No. 333-79971 on Form S-8 filed with the Commission on June
           4, 1999.)

   (10.8)    Harleysville National Corporation 1998 Independent Directors Stock Option Plan.  (Incorporated by
           Reference to Registrant's Registration Statement No. 333-79973 on Form S-8 filed with the
           Commission on June 4, 1999.)

     (11)    Computation of Earnings per Common Share. The information for this Exhibit is incorporated by
           Reference to page 4 of this Form 10-Q.

</TABLE>
PAGE 29