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  March  31,  1999.
                                    ----------------
                                       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)

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

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.
      ---

                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: 7,535,899 shares of Common
Stock,  $1.00  par  value,  outstanding  on  April  30,  1999.
PAGE 1

HARLEYSVILLE  NATIONAL  CORPORATION


INDEX  TO  FORM  10-Q  REPORT

                                                                            PAGE
                                                                            ----

Part  I.  Financial  Information

        Item  1.  Financial  Statements:


Consolidated Balance Sheets - March 31, 1999 and December 31, 1998             3

Consolidated Statements of Income-Three Months Ended March 31, 1999 and 1998   4

Consolidated Statements of Cash Flows - Three Months Ended
                  March 31, 1999 and 1998                                      5

Notes to Consolidated Financial Statements                                     6

       Item 2.  Management's Discussion and Analysis of Financial Condition and
                    Results of Operations                                      8

       Item 3. Quantitative and Qualitative Disclosures about Market Risk     19

Part II.  Other Information

       Item 1.  Legal Proceedings                                             20

       Item 2.  Change in Securities and Use of Proceeds                      20

       Item 3.  Defaults Upon Senior Securities                               20

       Item 4. Submission of Matters to a Vote of Security Holders            20

       Item 5. Other Information                                              21

       Item 6.  Exhibits and Reports on Form 8-K                              21

Signatures                                                                    23

PAGE 2

                         PART  1.  FINANCIAL  INFORMATION
               HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                          CONSOLIDATED  BALANCE  SHEETS

                                   (Unaudited)

<TABLE>
<CAPTION>

(Dollars in thousands)                                                  March 31, 1999      December 31, 1998
                                                                     --------------------  -------------------
ASSETS
<S>                                                                  <C>                   <C>
Cash and due from banks                                              $            35,381   $           40,204 
Federal Funds sold                                                                13,570               13,426 
                                                                     --------------------  -------------------
    Total cash and cash equivalents                                               48,951               53,630 
                                                                     --------------------  -------------------
Interest-bearing deposits in banks                                                 4,298                3,707 
Investment securities available for sale                                         408,514              390,438 
Investment securities held to maturity
 (market value $18,600 and $42,202, respectively)                                 18,346               41,520 
Loans                                                                            929,086              902,884 
Less: Unearned income                                                             (2,028)              (2,574)
         Allowance for loan losses                                               (14,096)             (13,706)
                                                                     --------------------  -------------------
             Net loans                                                           912,962              886,604 
                                                                     --------------------  -------------------
Bank premises and equipment, net                                                  19,733               19,542 
Accrued income receivable                                                         10,353                9,574 
Other real estate owned                                                            1,063                1,131 
Intangible assets, net                                                             2,066                1,936 
Other assets                                                                       4,925                4,008 
                                                                     --------------------  -------------------
         Total assets                                                $         1,431,211   $        1,412,090 
                                                                     ====================  ===================

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
   Noninterest-bearing                                               $           176,501   $          192,156 
   Interest-bearing:
     Checking accounts                                                           137,822              139,133 
     Money market accounts                                                       222,161              212,156 
     Savings                                                                     145,584              140,797 
     Time, under $100,000                                                        335,589              329,606 
     Time, $100,000 or greater                                                    95,951               90,468 
                                                                     --------------------  -------------------
          Total deposits                                                       1,113,608            1,104,316 
Accrued interest payable                                                          14,853               14,072 
U.S. Treasury demand notes                                                         1,227                1,320 
Federal funds purchased                                                           11,500               11,000 
Federal Home Loan Bank (FHLB) borrowings                                          96,250               93,500 
Securities sold under agreements to repurchase                                    47,468               43,158 
Other liabilities                                                                 14,474               13,771 
                                                                     --------------------  -------------------
          Total liabilities                                                    1,299,380            1,281,137 
                                                                     --------------------  -------------------
Shareholders' Equity:
    Series preferred stock,  par value $1 per share;
       authorized 3,000,000 shares, none issued                                        -                    - 
    Common stock, par value $1 per share; authorized 30,000,000
       shares; issued and outstanding 7,535,899 shares in 1999 and
       7,535,683 shares in 1998                                                    7,536                7,536 
    Additional paid in capital                                                    50,908               50,900 
    Retained Earnings                                                             70,363               67,133 
    Accumulated other comprehensive income                                         3,024                5,384 
                                                                     --------------------  -------------------
          Total shareholders' equity                                             131,831              130,953 
                                                                     --------------------  -------------------
          Total liabilities and shareholders' equity                 $         1,431,211   $        1,412,090 
                                                                     ====================  ===================

See accompanying notes to consolidated financial statements.

PAGE 3

                HARLEYSVILLE NATIONAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                     (Unaudited)

                                                                                     Three months ended
(Dollars in thousands except weighted average number                                      March 31,
                                                                     --------------------                     
 of common shares and per share information)                                        1999                 1998 
                                                                     --------------------  -------------------
INTEREST INCOME:
Loans, including fees                                                $            16,712   $           16,019 
Lease financing                                                                    1,514                1,152 
Investment securities:
   Taxable                                                                         3,763                3,197 
   Exempt from federal taxes                                                       2,355                1,609 
Federal funds sold                                                                   108                  284 
Deposits in banks                                                                     16                   84 
                                                                     --------------------  -------------------
      Total interest income                                                       24,468               22,345 
                                                                     --------------------  -------------------

INTEREST EXPENSE:
Savings deposits                                                                   3,063                3,008 
Time, under $100,000                                                               4,444                4,371 
Time, $100,000 or greater                                                          1,207                1,047 
Borrowed funds                                                                     1,735                  945 
                                                                     --------------------  -------------------
      Total interest expense                                                      10,449                9,371 
                                                                     --------------------  -------------------
      Net interest income                                                         14,019               12,974 
Provision for loan losses                                                            477                  565 
                                                                     --------------------  -------------------
      Net interest income after provision for loan losses                         13,542               12,409 
                                                                     --------------------  -------------------
OTHER OPERATING INCOME:
Service charges                                                                      845                  775 
Security gains, net                                                                  117                  207 
Trust income                                                                         638                  420 
Other Income                                                                         715                  501 
                                                                     --------------------  -------------------
      Total other operating income                                                 2,315                1,903 
                                                                     --------------------  -------------------
      Net interest income after provision for loan losses
         and other operating income                                               15,857               14,312 
                                                                     --------------------  -------------------
OTHER OPERATING EXPENSES:
Salaries, wages and employee benefits                                              4,811                4,587 
Occupancy                                                                            619                  572 
Furniture and equipment                                                              967                  780 
Other expenses                                                                     2,624                2,410 
                                                                     --------------------  -------------------
      Total other operating expenses                                               9,021                8,349 
                                                                     --------------------  -------------------
      Income before income taxes                                                   6,836                5,963 
Income tax expense                                                                 1,647                1,486 
                                                                     --------------------  -------------------
Net income                                                           $             5,189   $            4,477 
                                                                     ====================  ===================

Weighted average number of common shares:
        Basic                                                                  7,535,841            7,519,615 
                                                                     ====================  ===================
        Diluted                                                                7,551,131            7,541,588 
                                                                     ====================  ===================

Net income per share information:
        Basic                                                        $              0.69   $             0.60 
                                                                     ====================  ===================
        Diluted                                                      $              0.69   $             0.59 
                                                                     ====================  ===================

Cash dividends per share                                             $              0.26   $             0.24 
                                                                     ====================  ===================

See accompanying notes to consolidated financial statements.


PAGE 4

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

(Dollars  in  thousands)                                        Three Months  Ended  March  31,

</TABLE>
<TABLE>
<CAPTION>

<S>                                                                        <C>        <C>
OPERATING ACTIVITIES:                                                          1999       1998 
                                                                           ---------  ---------
  Net Income                                                               $  5,189   $  4,477 
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Provision for loan losses                                                   477        565 
    Depreciation and amortization                                               545        507 
    Net amortization of investment
      securities discount/premiums                                              127         92 
    Net realized security gain                                                 (117)      (207)
    Increase in accrued income receivable                                      (779)      (715)
    Increase(decrease) in accrued interest payable                              781     (1,186)
    Net increase in other assets                                               (917)      (688)
    Net increase in other liabilities                                         1,973      2,208 
    Decrease in unearned income                                                (547)    (1,766)
    Write-down of other real estate owned                                        15         14 
    (Increase) decrease in intangible assets                                   (130)        60 
                                                                           ---------  ---------
       Net cash provided by operating activities                              6,617      3,361 
                                                                           ---------  ---------
INVESTING ACTIVITIES:
  Proceeds from sales of investment securities available for sale             7,950     17,072 
  Proceeds, maturity or calls of investment securities held to maturity           -      5,733 
  Proceeds, maturity or calls of investment securities available for sale    35,963      5,517 
  Purchases of investment securities available for sale                     (42,456)   (51,773)
  Net increase in interest-bearing deposits in banks                           (591)      (748)
  Net increase in loans                                                     (26,790)   (13,097)
  Net increase in premises and equipment                                       (735)      (758)
  Proceeds from sales of other real estate                                      554        149 
                                                                           ---------  ---------
       Net cash used in investing activities                                (26,105)   (37,905)
                                                                           ---------  ---------
FINANCING ACTIVITIES:
  Net increase in deposits                                                    9,293     32,684 
  Decrease in U.S. Treasury demand notes                                        (93)      (121)
  Increase (decrease) in federal funds purchased                                500    (13,700)
  Increase in FHLB borrowings                                                 2,750     28,000 
  Increase in securities sold under agreement                                 4,310      6,975 
  Cash dividends & fractional shares                                         (1,959)    (1,748)
  Stock options                                                                   8         91 
                                                                           ---------  ---------
    Net cash provided by financing activities                                14,809     52,181 
                                                                           ---------  ---------
Net (decrease) increase in cash and cash equivalents                         (4,679)    17,637 
Cash and cash equivalents at beginning of period                             53,630     52,991 
                                                                           ---------  ---------
Cash and cash equivalents at end of the period                             $ 48,951   $ 70,628 
                                                                           =========  =========
  Cash paid during the period for:
     Interest                                                              $  9,668   $ 10,557 
                                                                           =========  =========
   Supplemental disclosure of noncash investing and financing activities:
       Transfer of assets from loans to other real estate owned            $    501   $    212 
                                                                           =========  =========

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

PAGE 5

               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")  and  HNC Financial Company  - as of
March  31,  1999,  the  results  of its operations for three month periods ended
March  31,  1999  and  1998 and the cash flows for the three month periods ended
March  31,  1999  and  1998.  It  is suggested 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  1998  annual  report.  All  prior period amounts were restated to
reflect  the  acquisition  of  Northern  Lehigh  Bancorp.

The  results  of operations for the three month periods ended March 31, 1998 and
1998  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  -  On January 1, 1998, the Corporation adopted the Financial Accounting
Standards Board issued SFAS No. 130, "Reporting Comprehensive Income."  SFAS No.
130  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  on  investment securities available for sale.  Subsequent to the adoption
date,  all  prior-period  amounts  are required to be restated to conform to the
provision  of  SFAS No. 130.  Comprehensive income for the first three months of
1999  was $2,829,000, compared to $4,970,000 for the first three months of 1998.
The adoption of SFAS No. 130 did not have a material impact on the Corporation's
financial  position  or  results  of  operation.

NOTE  4  -  On January 1, 1998, the Corporation adopted the Financial Accounting
Standards  Board  issued  SFAS  No.  131,  "Disclosures  about  Segments  of  an
Enterprise and Related Information."  SFAS No. 131 requires that public business
enterprises report certain information about operating segments in complete sets
of  financial statements of the enterprise and in condensed financial statements
of  interim  periods  issued  to  shareholders.  It  also  requires  that public
business  enterprises  report  certain  information  about  their  products  and
services,  the geographic areas in which they operate and their major customers.
Management  has  determined  that under current conditions, the Corporation will
report  one  business  segment.

NOTE  5  -  In  June 1998, the Financial Accounting standard Board (FASB) issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 133, "Accounting for
Derivative  Instruments  and  Hedging  Activity."  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative  instruments imbedded in other contracts, and for hedging activities.
It  requires  that  an  entity  recognize  all  derivatives  as either assets or
liabilities in the statement of financial position and measure those instruments
at  fair value.  If certain conditions are met, a derivative may be specifically
designated  as  a  hedge.  The  accounting  for  changes  in  the  fair value of
derivative  (gains and losses) depends on the intended use of the derivative and
resulting  designation.  SFAS  No.  133  is effective for all fiscal quarters of
fiscal  years  beginning  after June 15, 1999.  Earlier application is permitted
only  as  of  the  beginning  of  any  fiscal  quarter.  On January 1, 1999, the
Corporation adopted SFAS No. 133.  Concurrent with the adoption, the Corporation
reclassified  $7,530,000  of  investment  securities  from  the held to maturity
category  to  the available for sale category and recorded $221,000 net of taxes
of  unrealized  holding  gains  in  accumulated  other  comprehensive  income.

NOTE  6  -  On  January 20, 1999, the Corporation consummated its acquisition of
Northern  Lehigh  Bancorp,  Inc.,  parent  company  of Citizens National Bank of
Slatington.  Accounted  for  as  a  pooling-of-interest, Northern Lehigh Bancorp
shareholders  received  3.57  shares of Harleysville National Corporation common
stock  for  each  share  of  Northern  Lehigh  Bancorp  common  stock.

PAGE 6

               The  acquisition  was  affected  by the merger of Northern Lehigh
Bancorp, Inc. with Harleysville National Corporation North, Inc., a bank holding
company  and  wholly  owned  subsidiary  of  Harleysville  National Corporation.
Citizens  National Bank of Slatington merged with and into The Citizens National
Bank  of Lansford, a national banking association and wholly owned subsidiary of
Harleysville  National Corporation North, Inc., under the name Citizens National
Bank.

PAGE 7

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  and  HNC  Financial  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.

               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 Harleysville
National  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 Harleysville National
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 reported strong earnings performance in the first
quarter  of  1999.  This performance was achieved through an increase in earning
assets  and  a  continuing  emphasis  on  generating  other operating income and
containing  overhead  expenses.

     Consolidated  net income for the first three months of 1999 was $5,189,000,
an  increase  of  $712,000,  or  15.9%,  over the first three months of 1998 net
income  of  $4,477,000.  Basic  earning  per share for the first three months of
1999 of $.69 increased 15.0%, over the first three months of 1998 basic earnings
per  share of $.60.   Diluted earnings per share at $.69 were up 16.9% from $.59
at  March  31,  1998

              The  increase in net income during the first three months of 1999,
compared  to  the same period in 1998, is the result of both higher net interest
income  and  other  operating income, partially offset by higher other operating
expenses.  Net interest income grew $1,045,000, primarily as a result of a 16.6%
rise  in  average  earning assets.  Other operating income rose $412,000, due to
higher  trust  fees,  a rise in service charges on deposit accounts and gains on
the sale of mortgages.  Offsetting these increases was a rise in other operating
expenses,  primarily  related  to  the  overall  growth  in  the  Banks.

     For the three months ended March 31, 1999, the annualized return on average
shareholders' equity and the annualized return on average assets were 15.76% and
1.48%,  respectively.  For  the  same  period  in 1998, the annualized return on
average  shareholders'  equity  was  14.95% and the annualized return on average
assets  was  1.48%.

PAGE 8
               As of March 31, 1999, the Banks have seen an improvement in asset
quality,  compared  to  December  31,  1998  and  March  31, 1998, respectively.
Nonperforming  assets,  including nonaccrual loans, restructured loans and other
real  estate  owned,  were  $4,696,000,  or  .50%  of total loans and net assets
acquired in foreclosure at March 31, 1999, compared to .58% at December 31, 1998
and  .59%  at  March  31,  1998.  The  ratio of the allowance for loan losses to
nonperforming  assets  improved  to  300.2%  at  March  31, 1999, from 262.2% at
December  31,  1998  and  269.4%  at  March  31,  1998.

     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 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  three months of 1999 of $14,019,000
increased  $1,045,000, or 8.1%, over the first three months of 1998 net interest
income of $12,974,000.  As illustrated in the table below, the primary source of
this  increase was a rise in interest income resulting from increases to earning
asset  volumes in the first three months of 1999, compared to the same period in
1998.  The  increase  in  interest  income  was  partially  offset  by a rise in
interest  expense,  primarily  the  result  of  higher  volumes

              The  rate-volume  variance  analysis set forth in the table below,
which  is computed on a tax-equivalent basis (tax rate of 35%), analyzes changes
in  net interest income for the three months ended March 31, 1999 over March 31,
1998  by  their  rate  and  volume  components.

<TABLE>
<CAPTION>

                                                            Three Months Ended
                                                             March 31, 1999
                                                               Over/Under
                                                             March 31, 1998

                                                    Total                 Caused by:
                                                                          -----------
                                                   Variance           Rate       Volume
                                             --------------------  -----------  --------
<S>                                          <C>                   <C>          <C>
Interest Income:
  Securities *                               $             1,714         ($75)  $ 1,789 
  Money market instruments                                  (244)        (117)     (127)
  Loans *                                                  1,015       (1,071)    2,086 
                                             --------------------  -----------  --------
     Total                                                 2,485       (1,263)    3,748 
                                             --------------------  -----------  --------

Interest Expense:
  Savings deposits                                            55         (264)      319 
  Time deposits and certificates of deposit                  233         (171)      404 
  Other borrowings                                           790          (35)      825 
                                             --------------------  -----------  --------
      Total                                                1,078         (470)    1,548 
                                             --------------------  -----------  --------

Net interest income                          $             1,407        ($793)  $ 2,200 
                                             ====================  ===========  ========
    *Tax Equivalent Basis
</TABLE>

     Taxable-equivalent  net interest income was $15,424,000 for the first three
months  of 1999, compared to $14,017,000 for the same period in 1998, a 10.0% or
$1,407,000  increase.  This  rise  in taxable-equivalent net interest income was

PAGE 9
primarily  due  to  a $2,200,000 increase related to volume, which was partially
offset  by  a  reduction  in  interest  income,  related  to  rate.  Total
taxable-equivalent  interest income grew $2,485,000, primarily the result of the
higher  volumes in both the security and loan earning asset categories.  Average
year-to-date  securities  grew  $102,673,000  at March 31, 1999, compared to the
same period in 1998.  This increase included $53,000,000 in securities purchased
as  part  of  a  capital leverage program during the fourth quarter of 1998.  To
more  fully  leverage  its  capital, the Corporation entered into $53,000,000 of
structured  transactions  in  which the Bank borrows funds from the Federal Home
Loan  Bank  (FHLB)  and  invests  these  borrowed funds into securities that are
priced  to  yield  a  spread over the FHLB borrowing rate.  Average year-to-date
earning  loans  increased  $103,186,000,  or 12.8% in the first quarter of 1999,
compared  to  the  first  quarter  of  1998.

            Total interest expense grew $1,078,000 during the first three months
of  1999,  compared to the same period in 1998.  This growth was principally the
result  of  higher  volumes  associated  with  other  borrowings.  The  average
year-to-date  other  borrowings grew $70,436,000 or 90.7%, compared to the first
three months of 1998.  This increase in other borrowings is primarily attributed
to  the  funding  required  for  the  $53,000,000 capital leverage program.  The
volume  of  savings  and  time  deposits grew 11.6% and 7.7%, respectively.  The
increase  in deposit and other borrowing volumes was used to finance the earning
asset  growth.  Other  borrowings  include  federal  funds  purchased,  FHLB
borrowings,  securities  sold  under agreements to repurchase and U. S. Treasury
demand  notes.

            The  Banks 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  Banks'  Boards  of  Directors,  is
responsible  for  managing  the  rate  sensitivity  position.  The  Banks manage
interest rate sensitivity by changing mix and repricing characteristics of their
assets and liabilities through their investment securities portfolio, borrowings
from  the  FHLB and their offering of loan and deposit terms.  The nature of the
Banks  current  operations  is  such  that  is  not  subject to foreign currency
exchange  or commodity price risk.  The Banks do not own trading assets and they
do  not have any hedging transactions in place such as interest rate swaps, caps
or  floors.  The  Banks utilize three principal reports to measure interest rate
risk:  asset/liability simulation reports, gap analysis reports and net interest
margin  reports.

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

     The net interest margin of 4.58% for the three-month period ended March 31,
1999, decreased from the 4.86% net interest margin for the first three months of
1998.  The  decrease  in  the  net  interest  margin  is  primarily  due  to the
institution  of  the capital leverage program during the fourth quarter of 1998.
The actual leverage program yield spread earned during the first quarter of 1999
was  1.63%.  Since  the  current  competitive  interest  rate  environment  will
continue to place downward pressure on the net interest margin, the Banks expect
to  increase net interest income through the continued growth in market share of
loans and deposits.  The yield on earning assets of 7.69% during the first three
months  of 1999 was lower than the 8.11% earned during the first three months of
1998.  This  drop  in yield is primarily due to the capital leverage program and
lower rates experienced throughout the earning asset portfolio in 1999, compared
to 1998.   The first quarter 1999 average interest rate paid on interest-bearing
deposits  and other borrowings of 3.90% was lower than the first three months of
1998  rate  of  4.08%.  Lower  savings rates were primarily responsible for this
decrease.

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

     The  provision  is  based  on  management's analysis of the adequacy of the
allowance  for  loan  losses.  In its evaluation, management considers past loan
experience,  overall  characteristics  of  the  loan portfolio, current economic
conditions  and  other relevant factors.  Based on the latest monthly evaluation
of potential loan losses, the allowance is adequate to absorb known and inherent
losses  in  the  loan  portfolio.  Ultimately,  however,  the  adequacy  of  the
allowance  is  largely  dependent  upon  the  economy,  a  factor  beyond  the
Corporation's  control.  With  this in mind, additions to the allowance for loan
losses  may  be required in future periods, especially if economic trends worsen
or  certain  borrowers'  ability  to  repay  declines.

PAGE 10
         For  the  first  three months of 1999 the provision for loan losses was
$477,000, compared to $565,000 for the same period in 1998.  The lower provision
for loan losses during the first quarter of 1999, compared to the same period in
1998  is  attributed  to  the  continued  improvement in the quality of the loan
portfolio.   Net  loans charged off was $87,000 for the three months ended March
31,  1999,  compared to $104,000 for the three months ended March 31, 1998.  The
ratio  of  the  allowance  for loan losses to nonperforming assets for March 31,
1999  of  300.2%  was  higher  than the December 31, 1998 and the March 31, 1998
ratios  of  262.2%  and  269.4%,  respectively.

Allowance  for  Loan  Losses
----------------------------
  Transaction  in  the  allowance  for  loan  losses  are  as  follows:


<TABLE>
<CAPTION>

                                                1999          1998
                                            ------------  ------------
<S>                                         <C>           <C>
Balance, Beginning of Year                  $13,706,000   $12,592,000 
   Provision charged to operating expenses      477,000       565,000 
   Loans charged off                           (141,000)     (188,000)
   Recoveries                                    54,000        84,000 
                                            ------------  ------------
Balance, March 31                            14,096,000    13,053,000 
                                            ============  ============
</TABLE>

<TABLE>
<CAPTION>

Ratios:                                            March  31, 1999   Dec. 31, 1998   March  31, 1998
-------------------------------------------------  ----------------  --------------  ----------------
<S>                                                <C>               <C>             <C>
Allowance for loan losses to nonperforming assets            300.2%          262.2%            269.4%
Nonperforming assets to total loans & net assets
acquired in foreclosure                                       0.50%           0.58%             0.59%
Allowance for loan losses to total loans                      1.52%           1.52%             1.61%

The  following  table  sets  forth  an  allocation of the allowance for loan losses by loan category:

</TABLE>

<TABLE>
<CAPTION>

                                  March 31, 1999
                                  ---------------
                                             Percent
                               Amount       of Loans
                           ---------------  ---------
<S>                        <C>              <C>
Commercial and industrial  $     3,201,000        28%
Consumer loans                   1,694,000        30%
Real estate                      1,551,000        34%
Lease financing                    232,000         8%
Unallocated                      7,418,000  N/A
                           ---------------  ---------
  Total                    $    14,096,000       100%
                           ===============  =========
</TABLE>

     Nonperforming  assets  (nonaccruing  loans,  net  assets in foreclosure and
troubled  debt  restructured  loans)  were  0.50%  of total loans and net assets
acquired  in  foreclosure  at  March 31, 1999, compared to 0.58% at December 31,
1998 and 0.60% at March 31, 1998.  The ratio of the allowance for loan losses to
loans at March 31, 1999 of 1.52% did not change from the December 31, 1998 ratio
and  was  lower  than  the  March  31,  1998  ratio  of  1.61%.
     Nonaccruing  loans  at March 31, 1999 of $3,144,000,000, decreased $307,000
from  the December 31, 1998 level of $3,514,000, and increased $194,000 from the
March  31,  1998  level  of  $2,950,000.

              Net assets in foreclosure totaled $1,063,000 as of March 31, 1999,
a  decrease of $68,000 from the December 31, 1998 balance of $1,131,000.  During
the  first  three  months of 1999, transfers from loans to assets in foreclosure
were  $501,000,  payments  on  foreclosed  properties  totaled  $554,000  and
write-downs  of assets in foreclosure equaled $15,000.  The loans transferred to
assets  in  foreclosure  included  mortgages of $260,000 and leases of $241,000.
The  balance  of  net  assets  in  foreclosure at March 31, 1998 was $1,062,000.
Efforts to liquidate assets acquired in foreclosure are proceeding as quickly as
potential  buyers  can  be  located  and  legal  constraints  permit.  Generally

PAGE 11
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.

     As of March 31, 1999, there were two unrelated borrowers with troubled debt
restructured  loans  totaling  $489,000, compared with three unrelated borrowers
with  a  balance  of  $583,000 as of December 31, 1998 and $834,000 at March 31,
1998.  The  two customers were complying with the restructured terms as of March
31,  1999.

     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 March 31, 1999, loans past due 90 days or more and still
accruing  interest were $564,000, compared to $1,350,000 as of December 31, 1998
and $1,544,000 as of March 31, 1998.   The decrease in loans past due 90 days at
March  31,  1999, compared to December 31, 1998 and March 31, 1998 was primarily
the  result  of  a  decrease  in  real  estate  loans  past  due  90  days.

The  following  information  concerns  impaired  loans:
<TABLE>
<CAPTION>

Impaired Loans:                                       March 31, 1999   Dec. 31, 1998   March 31, 1998
                                                      ---------------  --------------  ---------------
<S>                                                   <C>              <C>             <C>
          Restructured Loans                          $       489,000  $      583,000  $       834,000
          Nonaccrual Loans                            $     2,090,000  $    1,513,000  $     1,558,000
                                                      ---------------  --------------  ---------------
                       Total Impaired Loans           $     2,579,000  $    2,096,000  $     2,392,000
                                                      ===============  ==============  ===============

     Average year-to-date impaired loans:             $     2,576,000  $    2,263,000  $     2,430,000
                                                      ===============  ==============  ===============

     Impaired loans with specific loss allowances:    $     2,579,000  $    2,096,000  $     2,392,000
                                                      ===============  ==============  ===============

     Loss allowances reserved on impaired loans:      $       372,000  $      302,000  $       333,000
                                                      ===============  ==============  ===============

    Year-to-date income recognized on impaired loans  $        11,000  $      103,000  $        21,000
                                                      ===============  ==============  ===============
</TABLE>

    The  Banks'  policy  for interest income recognition on impaired loans is to
recognize  income  on  restructured  loans  under the accrual method.  The Banks
recognize  income  on  nonaccrual  loans 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.


OTHER  OPERATING  INCOME
------------------------
<TABLE>
<CAPTION>

                                     Three Months        Ended March 31,
                                -----------------------  ----------------
                                         1999                  1998
                                -----------------------  ----------------
                                         (Dollars in thousands)
<S>                             <C>                      <C>
Service charges                 $                   845  $            775
Securities gains (losses), net                      117               207
Trust income                                        638               420
Other income                                        715               501
                                -----------------------  ----------------
Total other operating income    $                 2,315  $          1,903
                                =======================  ================
</TABLE>
PAGE 12
     Other  operating  income  for  the  first  three  months  of 1999 increased
$412,000, or 21.7%, from $1,903,000 at March 31, 1998 to $2,315,000 at March 31,
1999.   This rise in other operating income is the result of a $70,000 growth in
service  charges,  a  $218,000  rise  in trust income and a $214,000 increase in
other  income,  primarily  due to gains on the sale of residential mortgages.  A
$90,000  decrease  in  security  gains  partially  offset  these  increases.

     The $70,000, or 9.0% increase in service charges is primarily the result of
a  rise  in  fees  charged  on  transaction  deposit accounts.   This growth was
primarily  the  result  of  the  15.2%  increase  in average deposit transaction
accounts, from the first three months of 1998 to the first three months in 1999.
The  Corporation  recorded  a  net  security gain of $117,000 in the first three
months  of  1999,  compared to a $207,000 gain in the same period in 1998.  From
time  to time, 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.

     Income from the Investment Management and Trust Services Division increased
$218,000,  or  51.9%  in  the  first  three months of 1999, compared to the same
period  in  1998.   This increase was the result of both an increase in the book
value of trust assets under management of 12.8% from March 31, 1998 to March 31,
1999,  and  the  Corporation's  continuing  emphasis on marketing the Investment
Management and Trust Services Division's products and services. Other income for
the  first  three  months  of 1999 increased $214,000, or 42.7%, compared to the
same  period  in  1998.  This increase was primarily due to gains on the sale of
both  residential  mortgages and off lease vehicles.  The Banks recognized gains
on  the  sale of residential mortgages of $142,000 in the first quarter of 1999,
compared  to  $14,000  in  the  first quarter of 1998.  Gains on the sale of off
lease  vehicles  was  $78,000  in  the  first  three months of 1999, compared to
$18,000  in  the  same  period  of  1998.


OTHER  OPERATING  EXPENSES
--------------------------
<TABLE>
<CAPTION>

                                     Three Months        Ended March 31,
                                -----------------------  ----------------
                                         1999                  1998
                                -----------------------  ----------------
                                          (Dollars in thousands)
<S>                             <C>                      <C>
Salaries                        $                 3,521  $          3,405
Employee benefits                                 1,290             1,182
Net occupancy expense                               619               572
Equipment expense                                   967               780
Other expenses                                    2,624             2,410
                                -----------------------  ----------------
Total other operating expenses  $                 9,021  $          8,349
                                =======================  ================
</TABLE>

     Other  operating  expenses for the first three months of 1999 of $9,021,000
increased  $672,000,  or 8.0%, from $8,349,000 for the same period in 1998.  The
rise  in  operating  expenses  was  the  result  of  costs related to technology
enhancements  to  be  used  to  improve both the Banks productivity and products
offered  to  customers,  and other expenses related to the overall growth of the
Banks.

     Employee  salaries  increased  $116,000,  or  3.4%  from $3,405,000 for the
first  three months of 1998 to $3,521,000 for the same period in 1999.  Employee
benefits  of  $1,290,000  expensed  in  the  first  three  months  of 1999, were
$108,000,  or  9.1%  higher  than  the  $1,182,000 of employee benefits expensed
during  the same period in 1998.  The increase in salaries and employee benefits
reflects  cost  of  living  increases,  merit  increases  and  additional  staff
necessitated  by  the  growth  of  the  Banks.

     Net  occupancy  expense  increased  $47,000,  or 8.2%, from $572,000 in the
first  three  months of 1998 to $619,000 in the first three months of 1999.  Two

PAGE 13

new branches opened after April 1998 were primarily responsible for the increase
in  occupancy  expense.  Equipment expense increased  $187,000, or 24.0%, during
the  first  three  months  of  1999,  compared to the same period in 1998.  This
increase  is  due to both equipment depreciation and maintenance associated with
planned  increased  technology  capabilities  used  to manage the rise in volume
related to the growth of the Corporation and to enhanced the products offered to
customers.

              Other expenses increased $214,000, or 8.9%, from $2,410,000 in the
first  three  months  of 1998, compared to $2,624,000 in other expenses recorded
during  the same period in 1999.  This increase is the result of higher expenses
associated  with  the  overall  growth  of  the  Banks.

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 grew $19,121,000, or 1.4%, from $1,412,090,000 at December 31,
1998  to $1,431,211,000 at March 31, 1999.  This growth was the result of a rise
in  earning  assets, which grew $22,385,000 to $1,371,786,000 at March 31, 1999,
from  $1,349,401,000  at  December  31,  1998.  During the first three months of
1999,  federal  funds  sold,  interest-bearing  deposits in banks and loans grew
$144,000, $591,000, $26,748,000, respectively.  Offsetting these increases was a
$5,098,000  decrease  in investment securities.  Total assets grew $184,503,000,
or  14.8%  at  March 31, 1999, compared to March 31, 1998.  Loans and investment
securities  were  the  primary  contributors  to  this  increase  by  growing
$114,206,000  and  $90,891,000,  respectively  during  this  period.

     Total deposits rose $9,292,000, or .84% from $1,104,316,000 at December 31,
1998  to  $1,113,608,000  at March 31, 1999.  This modest increase is related to
the  increase  in non-interest bearing deposit balances experienced at year-end.
This  growth  was  due  to  a  $11,466,000  rise in time deposits, a $10,005,000
increase  in money market accounts, and a $4,787,000 growth in savings accounts.
Non-interest  bearing  deposits  decreased  $15,655,000  and  interest-bearing
checking  accounts  decreased $1,311,000.  Other borrowings increased $7,467,000
during  the  first  three months of 1999, primarily the result of an increase in
Federal  Home  Loan  Bank  borrowings  and  securities  sold  under agreement to
repurchase.  Other  borrowings and deposits are used to fund loan and investment
growth.  Total  deposits  grew $98,395,000, or 9.7% from March 31, 1998 to March
31,  1999.  Other  borrowings  grew  $71,153,000  during  this  period.

CAPITAL
-------

               Capital  formation  is  important to the Corporation's well being
and  future  growth.  Capital  for  the  period  ending  March  31,  1999  was
$131,831,000,  an  increase  of  $878,000 over the end of 1998.  The increase is
primarily the result of the retention of the Corporation's earnings and from the
adjustment  for  the  net unrealized gains (losses) on the investment securities
available  for sale.  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.

PAGE 14

(Dollars  in  thousands)
<TABLE>
<CAPTION>
                                                              Capital Level required to be           Capital Level required to be
As of March 31, 1999                         Actual               Adequacy Capitalized                     Well Capitalized
------------------------------------------                                                                         
                                             Amount   Ratio              Amount              Ratio              Amount
                                            --------  ------  -----------------------------  ------  -----------------------------
Total Capital (to risk weighted assets):
------------------------------------------                                                                         
<S>                                         <C>       <C>     <C>                            <C>     <C>
Corporation                                 $140,881  13.74%  $                      82,025   8.00%  $                     102,531
Harleysville National Bank                    73,626   9.76%                         60,355   8.00%                         75,444
Citizens National Bank                        32,548  18.16%                         14,335   8.00%                         17,919
Security National Bank                         7,820  10.54%                          5,935   8.00%                          7,419
Tier 1 Capital (to risk weighted assets):
------------------------------------------                                                                                        
Corporation                                  127,437  12.43%                         41,012   4.00%                         61,519
Harleysville National Bank                    64,178   8.51%                         30,178   4.00%                         45,266
Citizens National Bank                        30,308  16.91%                          7,167   4.00%                         10,751
Security National Bank                         6,892   9.29%                          2,968   4.00%                          4,452
Tier 1 Capital (to average assets):
------------------------------------------                                                                                        
Corporation                                  127,437   9.10%                         56,008   4.00%                         70,010
Harleysville National Bank                    64,178   6.26%                         41,026   4.00%                         51,283
Citizens National Bank                        30,308  12.00%                         10,103   4.00%                         12,629
Security National Bank                         6,892   6.95%                          3,968   4.00%                          4,961

(Dollars in thousands)
                                                              Capital Level required to              Capital Level required to
As of December 31, 1998                     Actual            be Adequacy Purposes                   be Action Provision
------------------------------------------                                                                                        
                                            Amount    Ratio   Amount                         Ratio   Amount
                                            --------  ------  -----------------------------  ------  -----------------------------
Total Capital (to risk weighted assets):
------------------------------------------                                                                                        
Corporation                                 $137,371  13.77%  $                      79,823   8.00%  $                      99,778
Harleysville National Bank                    70,733   9.70%                         58,316   8.00%                         72,895
Citizens National Bank                        32,040  17.90%                         14,321   8.00%                         17,901
Security National Bank                         7,629  10.74%                          5,680   8.00%                          7,101
Tier 1 Capital (to risk weighted assets):
------------------------------------------                                                                                        
Corporation                                  124,039  12.43%                         39,911   4.00%                         59,867
Harleysville National Bank                    61,603   8.45%                         29,158   4.00%                         43,737
Citizens National Bank                        29,868  16.69%                          7,160   4.00%                         10,740
Security National Bank                         6,741   9.49%                          2,840   4.00%                          4,260
Tier 1 Capital (to average assets):
------------------------------------------                                                                                        
Corporation                                  124,039   9.05%                         54,817   4.00%                         68,521
Harleysville National Bank                    61,603   6.11%                         40,191   4.00%                         50,238
Citizens National Bank                        29,868  11.64%                         10,263   4.00%                         12,828
Security National Bank                         6,741   7.10%                          3,799   4.00%                          4,749


As of March 31, 1999
------------------------------------------     
                                            Ratio
                                            ------
Total Capital (to risk weighted assets):
------------------------------------------     
<S>                                         <C>
Corporation                                 10.00%
Harleysville National Bank                  10.00%
Citizens National Bank                      10.00%
Security National Bank                      10.00%
Tier 1 Capital (to risk weighted assets):
------------------------------------------        
Corporation                                  6.00%
Harleysville National Bank                   6.00%
Citizens National Bank                       6.00%
Security National Bank                       6.00%
Tier 1 Capital (to average assets):
------------------------------------------        
Corporation                                  5.00%
Harleysville National Bank                   5.00%
Citizens National Bank                       5.00%
Security National Bank                       5.00%

(Dollars in thousands)

As of December 31, 1998
------------------------------------------        
                                            Ratio
                                            ------
Total Capital (to risk weighted assets):
------------------------------------------        
Corporation                                 10.00%
Harleysville National Bank                  10.00%
Citizens National Bank                      10.00%
Security National Bank                      10.00%
Tier 1 Capital (to risk weighted assets):
------------------------------------------        
Corporation                                  6.00%
Harleysville National Bank                   6.00%
Citizens National Bank                       6.00%
Security National Bank                       6.00%
Tier 1 Capital (to average assets):
------------------------------------------        
Corporation                                  5.00%
Harleysville National Bank                   5.00%
Citizens National Bank                       5.00%
Security National Bank                       5.00%
</TABLE>

     The  Corporation's capital ratios exceed regulatory requirements.  Existing
minimum  regulatory  capital ratio requirements are 5.0% for primary capital and
6.0%  for  total  capital.  The Corporation's primary capital ratio was 9.90% at
March  31,  1999,  compared  with  9.80%  at  December  31,  1998.  Since  the
Corporation's  only capital is primary capital, the total capital ratios are the
same  as  the  primary  capital  ratios.

     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  March  31,  1999,  the  Corporation's  Tier  1
risk-adjusted  capital  ratio  was  12.43%,  and the total risk-adjusted capital
ratio  was  13.74%, both well above the regulatory requirements.  The risk-based
capital  ratios  of  each  of  the  Corporation's commercial banks also exceeded
regulatory  requirements  at  March  31,  1999.

             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

PAGE 15

Corporation's leverage ratios were 9.10% at March 31, 1999 and 9.05% at December
31,  1998.

     The  year-to-date  March  31, 1999 cash dividend per share of $.26 was 8.3%
higher than the cash dividend for the same period in 1998 of $.24.  The dividend
payout  ratio  for the first three months of 1999 was 37.68%, compared to 38.91%
for  the  twelve  month  period  ended  December 31, 1998.  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
1999.
 .

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.
Federal  Funds  sold  averaged  $9,449,000 during the first three months of 1999
and  securities  available for sale averaged $399,476,000 during the first three
months  of 1999, more than sufficient to meet normal fluctuations in loan demand
or  deposit  funding.  Backup  sources of liquidity are provided by federal fund
lines  of  credit  established  with correspondent banks.   Additional liquidity
could  be  generated  through  borrowings  from  the  Federal  Reserve  Bank  of
Philadelphia and the FHLB of Pittsburgh, of which the Banks are members.  Unused
lines  of  credit  at  the FHLB of Pittsburgh were $115,534,000, as of March 31,
1999.

OTHER  ITEMS
------------

LEGISLATIVE  &  REGULATORY
--------------------------

              From  time to time, various types of federal and state legislation
have  been  proposed  that  could  result  in  additional  regulation  of,  and
restrictions  on,  the  business  of  the  Corporation and the Banks.  We cannot
predict  whether  the  legislation  will  be  enacted  or,  if  enacted, how the
legislation  would  affect  the business of the Corporation and the Banks.  As a
consequence  of the extensive regulation of commercial banking activities in the
United  States,  the  Corporation's  and  the  Banks'  business  is particularly
susceptible  to  being  affected by federal legislation and regulations that may
increase  the costs of doing business.  Except as specifically described herein,
management  believes  that  the  effect  of the provisions of the aforementioned
legislation  on  liquidity,  capital  resources and results of operations of the
Corporation  will  be  immaterial.

             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.

                Further, the business of the Corporation is also affected by the
state  of  the financial services industry in general.  As a result of legal and
industry  changes,  management  predicts  that  the  industry  will  continue to
experience  an  increase in consolidations and mergers as the financial services
industry  strives  for  greater  cost efficiencies and market share.  Management
also  expects  increased  diversification  of  financial  products  and services
offered  by  the  Banks  and  its  competitors.   Management  believes that such
consolidations  and  mergers,  and  diversification of products and services may
enhance  the  Banks'  competitive  position.

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

           There  are numerous proposals before Congress to modify the financial
services  industry and the way commercial banks and other financial institutions
operate.   Some of these proposals include changes to the ownership of financial
companies  and  the  types  of  products  and  services  that  may be offered by

PAGE 16

financial institutions.  However, it is difficult to determine at this time what
effect  such  provisions  may  have until they are enacted into law.  Management
believes  that the effect of the provisions of the aforementioned legislation on
the  liquidity,  capital resources, and results of operations of the Corporation
will  be  immaterial.  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.

YEAR  2000

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

          Many existing computer programs use only two digits to identify a year
in  the  date  field.  These  programs  were  designed  and  developed  without
considering  the  impact of the upcoming century date change.  If not corrected,
many  computer  applications could fail or create erroneous results by or at the
Year  2000  (Y2K).  The  Year  2000  issue  affects  virtually all companies and
organizations.

          CORPORATION'S  STATE  OF  READINESS

          The  Corporation  began  addressing  the  Y2K  issue  in  August 1997.
Management has initiated an enterprise-wide program to prepare the Corporation's
computer  systems and applications for the Year 2000.  The Corporation developed
a  Y2K plan to include assessing the impact of the Y2K issue on the Corporation,
renovating  systems  to  alleviate  Y2K problems, validating the new systems and
implementing  them.  The  Corporation  focused  on  information  technology  and
non-information  technology  systems.  A  non-information  system  could be, for
example, a microcontroller in an elevator, which may be subject to Y2K problems.
The  Corporation  also  reviewed  Y2K  issues related to material third parties.

         The  assessment  phase  of  the  Y2K  plan  included  assigning
accountabilities  throughout  the  Corporation.  An  inventory  was completed of
mainframe  and  PC  based  applications,  third-party  relationships  and
non-information  technology systems.  The final step in the assessment phase was
to  identify  non-compliant  Y2K systems.  The assessment phase was completed in
November  1997.

         The  Corporation  began the renovation phase of the Y2K plan in January
1998.  The  renovation  phase  included  developing  action  plans  to  correct
non-compliant  Y2K  systems.  The  action  plans  included  either enhancing the
current system to resolve the Y2K problem or purchasing a new system that is Y2K
compliant.  The  renovation  phase  was  completed in May 1998.  The Corporation
developed  a  remediation  plan  for the non-compliant systems.  As of March 31,
1999,  95%  of  the  remediation  phase  has  been  completed.

          The  next  phase of the plan was to validate the Y2K compliance of all
of  the  systems.  This  phase  includes  developing  written  test  plans  and
completing the testing of the systems  The validation phase was completed during
the  first  quarter  of  1999.

          The  Corporation has reviewed the Y2K issues related to material third
parties  and  completed  an  analysis  on the loan portfolio.  The Corporation's
third  parties include its vendors and commercial customers.  Our material third
party relationships are primarily our commercial borrowers.  These borrowers may
pose  a  credit  risk to the Corporation if they are not Y2K compliant.  We have
contacted  the material commercial customers and their responses were evaluated.
We  have also performed an analysis on the impact of Y2K issues on the remaining
loan  portfolio.  The  Corporation  has allocated a portion of the allowance for
loan  losses  as  a  result  of  the  Y2K  issues.

          Because  most  computer  systems  are,  by  their  very  nature,
interdependent,  it  is  possible  that noncompliant third-party computers could
impact  the  Corporation's computer systems.  The Corporation could be adversely
affected  by  the  Y2K  problem  if it or unrelated parties fail to successfully
address  the  problem.  The  Corporation has taken steps to communicate with the

PAGE 17

unrelated  parties  with  whom  it  deals  to  coordinate  Year 2000 compliance.
Additionally,  we  are  dependent  on external suppliers, such as, wire transfer
systems,  telephone systems, electric companies, and other utility companies for
continuation  of  service.

          COST  OF  YEAR  2000

          The  Committee  has  prepared  a  Y2K  budget and has tracked expenses
related  to  the  Y2K issue.  As of March 31, 1999, the Corporation has expensed
$130,000  and  capitalized  fixed  assets of  $105,000 related to the Y2K issue.
The  Corporation  has  estimated the future Y2K expenditures to be $50,000.  The
Y2K  project  is  being  funded  through  operating  cash  flows.

         The cost of the projects and the date on which the Corporation plans to
complete  both  Year  2000  modifications  and  systems conversions are based on
management's  best  estimates, which were derived utilizing numerous assumptions
of  future  events  including  the  continued availability of certain resources,
third-party  modification  plans  and  other  factors.  However, there can be no
guarantee  that these estimates will be achieved and actual results could differ
materially  from  those  plans.  Specific factors that might cause such material
differences  include,  but  are  not  limited  to,  the availability and cost of
personnel  trained  in this area, the ability to locate and correct all relevant
computer  codes,  and  similar  uncertainties.

          RISK  OF  YEAR  2000

         At  present,  management  believes  its  progress  in  remedying  the
proprietary  programs  and  installing  the  Y2K  compliant  upgrades  to  the
third-party vendor mainframe and PC based computer applications is on plan.  The
Y2K  computer  problem creates risk for the Corporation from unforeseen problems
in  its  own  computer  systems  and  from  third-party  vendors who provide the
majority  of  mainframe  and  PC  based  computer  applications.  Failure  of
third-party  systems  relative  to the Y2K issue could have a material impact on
the  Corporation's ability to conduct business and on its financial position and
results  of  operation.

         CONTINGENCY  PLANS

        A  contingency  plan  is  being  developed to handle the most reasonably
likely  Y2K  worst-case  scenario  should  it  occur.  The contingency plan will
involve  obtaining  back-up  service providers, working up contingency plans and
assessing  the potential adverse risks to the Corporation.  The contingency plan
was  completed during the first quarter of 1999.  The testing of the contingency
plan  is  scheduled  to be completed by June 30, 1999.  The Corporation has also
utilized an independent consulting firm to verify and validate the Corporation's
Y2K  plans.

 BRANCHING
 ---------

           The  Corporation's  subsidiaries  currently plan to open at least two
new  branches.  Harleysville  National  Bank  will open a location in Royersford
during  the  second  quarter  of  1999  and is pursuing a location in Souderton.
These  new  branch  sites  are  contiguous  to our current service area and were
chosen  to expand the Banks' market area and market share of loans and deposits.

ACQUISITION
-----------

          On  January  20,  1999, the Corporation consummated its acquisition of
Northern  Lehigh  Bancorp,  Inc.,  parent  company  of Citizens National Bank of
Slatington.  Accounted  for  as  a  pooling-of-interest, Northern Lehigh Bancorp
shareholders  received  3.57  shares of Harleysville National Corporation common
stock  for  each  share  of  Northern  Lehigh  Bancorp  common  stock.
               The  acquisition  was  affected  by the merger of Northern Lehigh
Bancorp, Inc. with Harleysville National Corporation North, Inc., a bank holding
company  and  wholly  owned  subsidiary  of  Harleysville  National Corporation.
Citizens  National Bank of Slatington merged with and into The Citizens National
Bank  of Lansford, a national banking association and wholly owned subsidiary of
Harleysville  National Corporation North, Inc., under the name Citizens National
Bank.

PAGE 18

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 in the SEC
Form  10-K  for  the  period  ended  December  31,  1998.

PAGE 19

                          PART II.    OTHER INFORMATION

Item  1.     Legal  Proceedings.
--------     -------------------

     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  and HNC Financial
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.

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

                     Not applicable.

Item 3.  Defaults Upon Senior Securities.
-------  -------------------------------

                     Not applicable.

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

                     (a)  The  1999  Annual Meeting  of  Shareholders  was held
at 9:30 a.m., on Tuesday, April 13, 1999, at Presidential Caterers, 2910  DeKalb
Pike,  Norristown,  Pennsylvania  19401.

                     (b),  (c)  Three matters were voted upon as follows:

                      1.  Three  directors  were  elected, as below:

                            Elected                           Term  Expires
                            -------                           -------------
                            Harold  A.  Herr                       2003
                            Henry  M.  Pollak                      2003
                            Walter  F.  Vilsmeier                  2003

                            The  results  of  the  voting  for  the directors
                            are  as  follows:

                            Harold  A.  Herr:
                                    For      6,134,602
                                    Against     51,948
                                    Abstain          0

                            Henry  M.  Pollak:
                                    For      6,160,112
                                    Against     26,438
                                    Abstain          0

                            Walter  F.  Vilsmeier:
                                    For      6,124,973
                                    Against     61,577
                                    Abstain          0
PAGE 20
                            Directors  whose  term continued after the meeting:

                                                           Term  Expires
                                                           -------------
                              Palmer  E.  (Pete)  Retzlaff       2000
                              LeeAnn  Bergey                     2000
                              William  M.  Yocum                 2001
                              Walter  E.  Daller  Jr.            2002
                              Martin  E.  Fossler                2002
                              Thomas  S.  McCready               2002

                     2.  The Harleysville National Corporation 1998
                            Stock Incentive Plan was approved and adopted.

                         The results of the voting for the 1998 Stock
                         Incentive Plan is as follows:
                              For                5,213,000
                              Against            374,701
                              Abstain              29,709

                     3.  The Harleysville National Corporation 1998
                           Independent Directors Stock Option Plan was
                           approved and adopted.

                         The results of the voting for the 1998 Independent
                         Directors Stock Option  Plan is as follows:
                              For                5,222,966
                              Against            343,478
                              Abstain              50,965

Item 5.  Other Information
--------------------------

         None.

Item 6.  Exhibits and Reports on Form 8-K.
-----------------------------------------
         (a) Exhibits:
             The following exhibit is being filed as part of this Report:

Exhibit No.   Description of Exhibits
-----------   -----------------------

(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.)

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

(27)       Financial  Data  Schedule.


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

PAGE 22
                                 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., President
                             and Chief Executive Officer
                             (Principal executive officer)




                         ___________________________________
                         /s/ Vernon L. Hunsberger, Treasurer
                         (Principal financial and accounting officer)



Date:  May  14,  1999

PAGE 23

                               EXHIBIT  INDEX
                               --------------


Exhibit  No.    Description  of  Exhibits
-----------     -------------------------

(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.)

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

(27)     Financial  Data  Schedule.

PAGE 24