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 June 30, 1999

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

                         Commission file number 0-10958


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

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

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

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



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


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

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



               Class                      Outstanding at June 30, 1999
           Common Stock                         4,697,637 Shares




















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

 ITEM 1.  FINANCIAL STATEMENTS

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

  Consolidated Statements of Income ........................................  5
   Three Months Ended June 30, 1999 and 1998
   Six Months Ended June 30, 1999 and 1998

  Consolidated Statements of Comprehensive Income ..........................  6
   Three Months Ended June 30, 1999 and 1998
   Six Months Ended June 30, 1999 and 1998

  Consolidated Statements of Cash Flows ....................................  7
   Six Months Ended June 30, 1999 and 1998

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

 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS .............................. 12

 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
          MARKET RISK ...................................................... 18

PART II  OTHER INFORMATION

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .............. 19

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       A.  Listing of Exhibits.

        Exhibit 3(i) - Articles of Incorporation ........................... 20

        Exhibit 3(ii)- By-laws ............................................ 25

        Exhibit 4 - Instruments Defining the Rights of Security Holders
         (incorporated by reference to Exhibit B to the Holding Company's
         Registration Statement on Form S-14, No. 2-77871 filed June 29, 1982,
         with the Securities and Exchange Commission)

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

        Exhibit 10(b)  Amended and restated Change of Control Agreement, dated
         November 14, 1995, among the Corporation, the Bank and A. Richard
         Pugh.  (incorporated by reference to the Corporation's 1998 10-K)

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

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



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


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

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

        Exhibit 21 - Subsidiaries of the Registrant ......................... 35


        Exhibit 27 - Financial Data Schedule ................................ 36

      B.  There were no filings on form 8-K for the quarter ended
           June 30, 1999.

 SIGNATURES ................................................................. 19














































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

                                                             JUNE 30,  DEC 31,
ASSETS                                                         1999      1998
Cash and due from banks ..................................  $ 14,676   $ 24,145
Money market investments .................................     2,109        479
Investment securities (fair value $178,278 and $162,556)..   177,829    161,619

Loans (net of unearned income of $3,324 and $3,253) ......   425,749    390,109
Reserve for loan losses ..................................     4,151      3,912
Net loans ................................................   421,598    386,197

Bank premises and equipment ..............................    15,778     15,901
Other assets .............................................    11,482      9,452
TOTAL ASSETS .............................................  $643,472   $597,793

LIABILITIES
Deposits:
Noninterest-bearing ......................................  $ 50,606   $ 55,339
Interest-bearing .........................................   433,023    402,333
Total deposits ...........................................   483,629    457,672
Federal funds purchased and securities sold under
 agreements to repurchase ................................    29,680     23,325
Other borrowings .........................................    74,709     62,830
Other liabilities ........................................     6,805      5,773
TOTAL LIABILITIES ........................................   594,823    549,600

SHAREHOLDERS' EQUITY
Common stock -- no par, 15,000,000 shares authorized;
  issued and outstanding-4,697,637 shares in 1999 and
  4,468,461 shares in 1998 ...............................    38,828     33,772
Retained earnings ........................................    10,753     13,173
Accumulated other comprehensive income ...................      -932      1,248
TOTAL SHAREHOLDERS' EQUITY ...............................    48,649     48,193
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...............  $643,472   $597,793


See notes to consolidated financial statements.


























4 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)          THREE MONTHS          SIX MONTHS
                                              ENDED JUNE 30,     ENDED JUNE 30,
                                              1999     1998      1999      1998
INTEREST INCOME
Interest and fees on loans ................  $8,416   $7,531   $16,529  $14,700
Interest on deposits with banks ...........       5       27        12       32
Interest and dividends on
 investment securities ....................   2,680    2,604     5,208    5,410
Total interest income .....................  11,101   10,162    21,749   20,142
INTEREST EXPENSE
Interest on deposits ......................   4,424    4,308     8,772    8,503
Federal funds purchased and securities
 sold under agreements to repurchase ......     248      425       468      790
Interest on borrowed funds ................     967      694     1,862    1,425
Total interest expense ....................   5,639    5,427    11,102   10,718
Net interest income .......................   5,462    4,735    10,647    9,424
Provision for loan losses .................     488      229       851      468
Net interest income after
 provision for loan losses ................   4,974    4,506     9,796    8,956
OTHER INCOME
Trust income ..............................     336      317       674      588
Service charges on deposit accounts .......     487      417       921      792
Securities gains ..........................       4        9        67      231
Net gains on loan sales ...................     200      337       549      584
Equity in losses of real estate ventures ..     -57      -18      -111      -55
Other .....................................     322      325       624      578
Total other income ........................   1,292    1,387     2,724    2,718
OTHER EXPENSES
Salaries and employee benefits ............   2,146    1,996     4,365    4,013
Occupancy and premises ....................     340      295       644      545
Furniture and equipment ...................     338      300       679      595
Marketing .................................     176      151       350      302
Net (gain) cost of operation
 of other real estate .....................     -23       12       -24       18
Supplies ..................................     100      124       255      243
Other taxes ...............................     108       97       217      193
Other......................................     828      738     1,582    1,501
Total other expenses ......................   4,013    3,713     8,068    7,410
Income before income taxes ................   2,253    2,180     4,452    4,264
Applicable income taxes ...................     377      540       764    1,016
NET INCOME ................................  $1,876   $1,640    $3,688  $ 3,248
PER SHARE DATA
Net income ................................  $ 0.40   $ 0.35   $  0.79  $  0.70
Net income, assuming dilution .............  $ 0.40   $ 0.35   $  0.78  $  0.68
Dividends .................................  $ 0.12   $ 0.11   $  0.23  $  0.21

See notes to consolidated financial statements.

















5 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)                                 THREE MONTHS          SIX MONTHS
                                              ENDED JUNE 30,       ENDED JUNE
30,
                                              1999     1998      1999     1998
Net income ................................ $ 1,876   $1,640   $ 3,688  $3,248
Other comprehensive income:
Unrealized gains (losses) on securities
  Arising during period ...................  -3,012     -223    -3,278       65
Reclassification adjustment for gains
  included in net income ..................      -1       -9       -25     -231
Other comprehensive income (loss) before
  tax .....................................  -3,013     -232    -3,303     -166
Income taxes (benefits) related to other
  comprehensive income ....................  -1,024      -79    -1,123      -56
Other comprehensive income (loss) .........  -1,989     -153    -2,180     -110
COMPREHENSIVE INCOME ...................... $   113   $1,487   $ 1,508   $3,138


See notes to consolidated financial statements.













































6 <PAGE>
Drovers Bancshares Corporation and Subsidiaries
PART I  FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)                                              SIX MONTHS
                                                           ENDED JUNE 30,
                                                          1999       1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..........................................   $ 3,688    $ 3,248
Adjustments to reconcile net income to net cash
  from operating activities:
Depreciation ........................................       741        741
Net amortization of investment security premiums ....       131        169
Provision for loan losses ...........................       851        468
Gain on sale/calls of securities held-to-maturity ...       -42          0
Gain on sale of securities available-for-sale .......       -25       -231
Loans originated for sale ...........................   -37,763    -33,628
Proceeds from sales of loans ........................    38,456     35,041
Gain on sale of loans ...............................      -549       -583
Loss on sale of fixed assets ........................         0          1
Gain on sale of other real estate ...................       -36          0
Net deferred loan fees ..............................      -268       -657
Equity in loss (gain) in real estate ventures .......      -111         55
Increase in interest/dividends receivable ...........      -255        -28
Increase in interest payable ........................       612        717
Increase in other assets.............................      -142       -236
Increase in other liabilities .......................       222      1,957
Net cash provided by operating activities ...........     5,510      7,034
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and maturities of securities
 held-to-maturity ...................................    10,890      3,540
Proceeds from sales and maturities of securities
 available-for-sale .................................    19,394     22,264
Purchases of securities available-for-sale ..........   -49,861    -12,859
Increase in net loans ...............................   -36,573    -41,909
Capital expenditures ................................      -604     -1,265
Proceeds from sale of fixed assets ..................         0          2
Net (purchase) return of investment in real estate
 ventures............................................        24       -847
Proceeds from sale of other real estate .............       233        134
Net cash used in investing activities ...............   -56,497    -30,940
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits and savings
 accounts ...........................................     9,123     16,634
Net increase in certificates of deposit .............    16,832      6,953
Net increase (decrease) in federal funds purchased
 and repurchase agreements ..........................     6,355      7,339
Net increase (decrease) in other borrowings .........    11,902     -3,092
Payments made for capital leases ....................       -22        -19
Dividends paid ......................................    -1,100       -978
Proceeds from issuance of common stock ..............        58        167
Net cash provided by financing activities ...........    43,148     27,004
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS ..    -7,839      3,098
CASH & CASH EQUIVALENTS AT JANUARY 1, ...............    24,624     14,928
CASH & CASH EQUIVALENTS AT JUNE 30, .................   $16,785    $18,026

See notes to consolidated financial statements.











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

NOTE A - BASIS OF PRESENTATION

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

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

NOTE B - CALCULATION OF EARNINGS PER SHARE

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

Net income per share and net income per share, assuming dilution, were
calculated as follows:
                                               THREE MONTHS         SIX MONTHS
                                              ENDED JUNE 30,     ENDED JUNE 30,
                                              1999     1998      1999     1998
Net income ..............................    $1,876   $1,640    $3,688   $3,248
Average shares outstanding ..............     4,696    4,670     4,693    4,669
Effect of dilutive securities:
 Stock options ..........................        52       82        54       77
Average shares outstanding,
 assuming dilution ......................     4,748    4,752     4,747    4,746
Net income per share ....................     $0.40    $0.35     $0.79    $0.70
Net income per share, assuming dilution .     $0.40    $0.35     $0.78    $0.68

NOTE C - INVESTMENT SECURITIES

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

                                                     Gross      Gross
                                        Amortized Unrealized Unrealized   Fair
(In thousands)                             Cost      Gains      Losses   Value
US Treasury securities and obligations
 of US government corp and agencies ...   $ 1,488    $ 26       $ 0     $ 1,514
Obligations of states and political
 subdivisions .........................    15,167     353         1      15,519
Mortgage-backed securities and
 collateralized mortgage obligations ..     6,805      85        14       6,876
Total investment securities ...........   $23,460    $464       $15     $23,909






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

NOTE C - INVESTMENT SECURITIES, continued

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

                                                    Gross      Gross
                                       Amortized Unrealized Unrealized    Fair
(In thousands)                            Cost      Gains      Losses     Value
US Treasury securities and obligations
 of US government corp and agencies .. $ 13,494    $    6     $ 193    $ 13,307
Obligations of states and political
 subdivisions ........................   11,941        73       272      11,742
Corporate obligations ................   10,154        57       116      10,095
Mortgage-backed securities and
 collateralized mortgage obligations .  101,022       303     1,851      99,474
Total debt securities ................  136,611       439     2,432     134,618
Equity securities ....................   19,170       673        92      19,751
Total investment securities .......... $155,781    $1,112    $2,524    $154,369


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

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


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

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

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









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

NOTE D - LOANS

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

                                                           JUNE 30,   DEC 31,
(In thousands)                                               1999      1998
Commercial, financial and industrial loans .............   $124,046  $117,997
Real estate mortgage loans:
  Real estate construction-related .....................     16,174    13,523
  Real estate mortgage loans secured by
     1-4 family residential properties .................    133,156   126,542
  Other real estate ....................................    120,532   100,585
Total real estate mortgage loans .......................    269,862   240,650
Consumer loans:
  Monthly payment ......................................     30,769    30,498
  Other revolving credit ...............................        779       791
Total consumer loans ...................................     31,548    31,289
Leasing and other ......................................        293       173
Total loans ............................................   $425,749  $390,109

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

(In thousands)                                               1999       1998
Balance, beginning of year .............................    $3,912     $3,304
Provision for loan losses ..............................       851        468
LESS: Loans charged-off ................................       633        165
Recoveries .............................................        21         58
Balance, June 30 .......................................    $4,151     $3,665

As of June 30, 1999, the total recorded investment in impaired loans was
$2,178,000. Nonaccrual loans at June 30, 1999 were $788,000 compared to
$1,435,000 at December 31, 1998.

Residential mortgage loans with a book value of $3,915,000 were held for sale
at June 30, 1999.  The cumulative fair value exceeded the book value of these
loans.  Loans held for sale are included in total loans.  During the first six
months of 1999, the Corporation capitalized $192,102 in mortgage servicing
rights and amortized $102,530.

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





















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

NOTE E - COMPREHENSIVE INCOME

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


(In thousands)                                 THREE MONTHS         SIX MONTHS
                                              ENDED JUNE 30,     ENDED JUNE 30,
                                              1999     1998      1999      1998
Unrealized gains (losses) on securities
  arising during period ...................  $-1,024   $-76    $-1,114   $  22
Reclassification adjustment for gains
  included in net income ..................        0     -3         -9     -78
Income taxes (benefits) related to other
  comprehensive income ....................  $-1,024   $-79    $-1,123   $ -56

Accumulated other comprehensive income as of June 30, was as follows:
(in thousands)                                                 1999     1998

Balance, January 1, ......................................   $ 1,248   $ 1,593
Current-period change ....................................    -2,180      -110
Balance, June 30, ........................................   $  -932   $ 1,483

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






































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

FINANCIAL CONDITION

The following comparison of actual balances indicates how the Corporation has
generated and employed its funds for the six months ending June 30, 1999:
                                        BALANCE                      BALANCE
                                        JUNE 30,  INCREASE           DEC 31,
(In thousands)                           1999    (DECREASE)     %     1998
FUNDING USES:
Money market investments ............  $  2,109    $ 1,630  340.3%  $    479
Investment securities ...............   177,829     16,210   10.0%   161,619
Loans (net) .........................   421,598     35,401    9.2%   386,197
Total interest-bearing assets .......   601,536     53,241    9.7%   548,295
Noninterest-bearing assets ..........    41,936     -7,562  -15.3%    49,498
TOTAL USES ..........................  $643,472    $45,679    7.6%  $597,793
FUNDING SOURCES:
Interest-bearing demand deposits ....  $ 52,615    $ 1,404    2.7%  $ 51,211
Savings deposits ....................   132,024     10,545    8.7%   121,479
Time deposits .......................   248,384     18,741    8.2%   229,643
Short-term borrowings ...............    29,680      6,355   27.2%    23,325
Long-term borrowings ................    74,709     11,879   18.9%    62,830
Total interest-bearing liabilities ..   537,412     48,924   10.0%   488,488
Noninterest-bearing demand deposits .    50,606     -4,733   -8.6%    55,339
Other liabilities ...................     6,805      1,032   17.9%     5,773
Shareholders' equity ................    48,649        456    0.9%    48,193
TOTAL SOURCES .......................  $643,472    $45,679    7.6%  $597,793

Total assets have increased $45,679,000, or 7.6%, since December 31, 1998.  Net
loans grew $35,401,000 and investment securities grew $16,210,000.  Commercial
loan demand remained strong in the second quarter.  Commercial loans grew
$25,996,000, or 11.9%; $19,947,000, or 76.7%, of this growth is secured by real
estate.  Consumer installment loans, including loans secured by residential
real estate, increased $5,528,000, or 8.3%, as a result of a Home Equity
Lending Program in our branch offices.

During the first six months of 1999, management increased holdings in
investment securities $16,210,000 to leverage the Corporation's capital base.
Total investment purchases were $49,861,000.  The purchases included fixed rate
mortgage-backed and collateralized mortgage obligations, variable rate
corporate obligations, fixed rate municipal bonds and fixed rate agency notes.
The Corporation also sold $5,991,000 of U.S. government corporate and agency
bonds, classified as held-to-maturity.  These bonds were within three months
of a probable call date.  The sales resulted in gains of $26,000.

Deposits, which grew $25,957,000, or 5.7%, funded most of the asset growth
in the last six months.  Certificates of deposit and other time deposits and
savings deposits contributed most of the growth, increasing $18,741,000 and
$10,545,000, respectively.  The Corporation's Indexed Money Fund, a savings
product that pays a money market interest rate, grew $6,820,000, or 12.9%.
The remaining assets were funded with short-term and long-term borrowings from
the Federal Home Loan Bank of Pittsburgh.  The long-term borrowings included
$12,000,000 with a fixed rate of interest until at least 2004.











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

LIQUIDITY

Liquidity management focuses on the ability to meet the cash flow requirements
of customers wanting to withdraw or borrow funds for their personal or business
needs. Liquidity needs may be met by either reducing assets or increasing
liabilities.  Sources of asset liquidity include short-term investments,
maturing and repaying loans and monthly cash flows from mortgage-backed
securities and collateralized mortgage obligations. The loan portfolio provides
an additional source of liquidity due to the Corporation's participation in the
secondary mortgage market.The Corporation designates a substantial portion of
its investment portfolio as available-for-sale.  At June 30,1999, this segment
totaled $154,369,000, or 86.8%, of the investment portfolio.

On the liability side, liquidity needs may be met by attracting deposits with
competitive rates, using repurchase agreements, buying federal funds or
utilizing the facilities of the Federal Reserve or the Federal Home Loan Bank
of Pittsburgh.  The Corporation maintains a formal arrangement with the Federal
Home Loan Bank, which allows the Corporation to borrow short and intermediate
advances up to approximately 80% of its investment in assets secured by one-to-
four family residential real estate.  The maximum borrowings under this
agreement at June 30, 1999 were $170,025,000, of which $88,568,000, or 52.1%,
was borrowed.  The ability to renew funding sources depends on the financial
institution's strength, asset portfolio, diversity of depositors and types of
deposit instruments offered.

LOAN QUALITY

Impaired loans at June 30, 1999 were $2,178,000 compared to $1,748,000 at
December 31, 1998. Nonaccrual loans at June 30, 1999 were $788,000 compared to
$1,435,000 at December 31, 1998.  Overall loan quality remains very good.

Loan charge-offs were $633,000 for the first half of 1999, of which $500,000
were commercial loans and $133,000 were consumer loans.  Recoveries were
$21,000. Second quarter net charge-offs were $451,000 compared to $75,000 in
1998.

During the second quarter, management fully charged off a commercial loan to
one borrower when it became likely that the remaining balance was
uncollectable. A portion of the credit had been charged-off in the fourth
quarter of 1998 and the first quarter of 1999, as it was becoming apparent that
the balance due may not be repaid according to the original terms.

RESULTS OF OPERATIONS

Drovers Bancshares recorded net income of $3,688,000 and $3,248,000 for the six
months ended June 30, 1999 and 1998, respectively.  The return on equity (ROE)
and return on assets (ROA) for the six months ended June 30, 1999 were 14.90%
and 1.21%, respectively.  This compares to an ROE and ROA for the same period
last year of 14.51% and 1.20%, respectively.

Net income for the quarter was $1,876,000 compared to $1,640,000 for the second
quarter last year and $1,812,000 for the first quarter of 1999.  The ROE and
ROA for the second quarter of 1999 were 14.92% and 1.20%, respectively,
compared to 14.35% and 1.19%, respectively, for the same period in 1998.








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

NET INTEREST INCOME

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

                                      THREE MONTHS                SIX MONTHS
                                     ENDED JUNE 30,              ENDED JUNE 30,
(In thousands)                   1999      1998   99/98    1999     1998   9/98
Interest income ............   $11,101   $10,162   $939  $21,749 $20,142 $1,607
Interest expense ...........     5,639     5,427    212   11,102  10,718    384
Net interest income ........     5,462     4,735    727   10,647   9,424  1,223
Provision for loan losses ..       488       229    259      851     468    383
Net interest income after
 provision for loan losses .   $ 4,974   $ 4,506   $468  $ 9,796 $ 8,956 $  840

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

Net interest income increased $727,000 in the second quarter and $1,223,000
during the first six months of 1999.  Average earning assets increased 12.0%
to $574,935,000 for the first half of 1999 compared to $513,556,000 for the
same period last year and 9.6% compared to $524,729,000 for all of 1998.  The
margin for the first six months was 3.74% compared to 3.70% for the first half
of 1998 and 3.67% for all of last year.  Contributing to the boost in the
margin was a decline in the average yield on time deposits, which decreased
0.37% during the first six months of 1999 from the same period in 1998 and
0.33% from all of 1998.  The decline in the yield on time deposits and the
increase in average earning assets offset a decline in yield on loans.

The margin in the fourth quarter of 1998 was 3.61% compared to 3.73% in the
first quarter of 1999 and 3.74% in the second.  This increase was mainly
related to the decline in the average yield on time deposits.  The yield during
the second quarter of 1999 was 0.31% less than the fourth quarter of 1998.  The
yield declined 0.13% from the first quarter 1999 to the second quarter.

The provision for loan losses was $488,000 for the quarter and $851,000 for the
first half of 1999.  This compares to a second quarter provision last year of
$229,000 and a provision of $468,000 for the first six months.  The increase in
the provision for loan losses is related to the charge-off of the commercial
loans to one borrower and also to the increase in total loans.  The loan loss
provision as a percentage of loans was 0.98% at June 30, 1999 compared to 1.00%
at the end of 1998.
















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

NONINTEREST INCOME
                                           THREE MONTHS           SIX MONTHS
                                          ENDED JUNE 30,        ENDED JUNE 30,
(In thousands)                          1999   1998  99/98  1999   1998  99/98
Trust income ........................ $  336 $  317  $ 19 $  674  $  588  $ 86
Service charges on deposit accounts .    487    417    70    921     792   129
Securities gains ....................      4      9    -5     67     231  -164
Net gains on loan sales .............    200    337  -137    549     584   -35
Equity in losses of real
 estate ventures ....................    -57    -18   -39   -111     -55   -56
Other ...............................    322    325    -3    624     578    46
Total ............................... $1,292 $1,387  $-95 $2,724  $2,718  $  6

Noninterest income declined $95,000 for the second quarter and increased
slightly for the six months ended June 30, 1999. The gain on sale of loans
declined $137,000 for the quarter and $35,000 for the six month period as the
mortgage refinancing boom is ending.  Income from gain on sale of securities
and gain on sale of loans declined in 1999.  The gain on sale of securities
decreased $164,000 for the six month period.  The Corporation sold a portion
of its community bank stock portfolio during the first quarter of 1998.

Offsetting the decline in gains from asset sales was an increase in service
charges on deposit accounts and trust income, which increased $129,000 and
$86,000, respectively, for the six month period and $70,000 and $19,000,
respectively, for the quarter.  An increase in collection of insufficient fund
and return check charges caused most of the growth in service charges on
deposit accounts.

The fair value of investments managed by the Investment Services and Trust
Division was $254,942,000 at June 30, 1999, an increase of $25,335,000, or
11.0%, over the prior year.  The division has experienced growth in employee
benefits, personal trust and investment management accounts.  Overall
increases in the equity markets continued to boost the value of assets managed
and the related fee income.

NONINTEREST EXPENSE
                                         THREE MONTHS              SIX MONTHS
                                        ENDED JUNE 30,          ENDED JUNE 30,
(In thousands)                     1999    1998   99/98   1999    1998   99/98
Salaries and employee benefits .  $2,146  $1,996   $150  $4,365  $4,013   $352
Occupancy and premises .........     340     295     45     644     545     99
Furniture and equipment ........     338     300     38     679     595     84
Marketing expense ..............     176     151     25     350     302     48
Net cost of operation
 of other real estate ..........     -23      12    -35     -24      18    -42
Supplies .......................     100     124    -24     255     243     12
Other taxes ....................     108      97     11     217     193     24
Other...........................     828     738     90   1,582   1,501     81
Total ..........................  $4,013  $3,713   $300  $8,068  $7,410   $658













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

NONINTEREST EXPENSE, continued

Noninterest expenses increased $300,000 for the second quarter and $658,000 so
far this year. Salaries and benefits are the largest component of noninterest
expense and increased $150,000 for the second quarter and $352,000 for the six
month period.  Staffing at the new Hellam office, which opened in January 1999,
contributed to the increase.  Average full-time equivalent staffing levels were
218 during the second quarter compared to 215 for the same period last year.
Accrued incentive compensation increased $66,000 for the second quarter and
$94,000 for the first half of 1999.

Occupancy and premises expense increased $45,000 for the second quarter and
$99,000 for the six month period ended June 30, 1999.  The opening of the
Hellam office contributed to this increase.  Furniture and equipment expense
increased $38,000 for the quarter and $84,000 so far this year due to
increases in equipment depreciation and maintenance contracts.

Other expenses increased by $90,000 and $81,000 for the second quarter and six
month period, respectively.  Affecting this increase were increases in data
processing, legal, loan servicing rights amortization and over and short
charges. The increase in expenses for the six month period were partially
offset by a decrease in consulting services, which were paid in the first
quarter of 1998.

TAXATION

The Corporation recognized a provision for income taxes of $764,000 for the
six months ending June 30, 1999.  The average tax rate, applicable income
taxes divided by income before taxes, was 17.2%.  This compares to an average
tax rate of 16.6% for all of 1998.  The Corporation manages its tax rate
through the purchase of tax-exempt investment securities and investments in
low-income housing partnerships that provide historic and low-income tax
credits.

FUTURE OUTLOOK

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

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

YEAR 2000 ISSUE

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



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

YEAR 2000 ISSUE, continued

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

Corporation's State of Readiness

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

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

Costs of Year 2000

The costs to remediate the Corporation's IT and Non-IT systems have been minor
and are expected to total less than $100,000.  As of December 31, 1998, $65,000
has been expended on Year 2000 costs.  An additional $13,000 was expensed in
the first six months of 1999.  The Corporation does not expect the amounts
required to be expensed over the next 9 months to have a material effect on the
financial position or results of operations.  However, if compliance is not
achieved in a timely manner by the Corporation or any of its significant
related third parties, be it a supplier of services or a customer, the Y2K
issue could possibly have a material effect on the Corporation's operations and
financial position.

Risks of Year 2000

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

Contingency Plans

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

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



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

REGULATORY CAPITAL

The following table shows the Corporation exceeds all minimum capital
adequacy standards:
                                                   BALANCE   BALANCE
                                                   JUNE 30,  DEC 31,
(in thousands)                                       1999        1998
Tier 1 capital .................................    $49,519     $46,891
Tier 2 capital .................................      4,412       4,315
  Total risk-based capital .....................    $53,931     $51,206

Risk-adjusted on-balance sheet assets ..........   $445,895    $400,895
Risk-adjusted off-balance sheet exposure .......     13,660      14,180
  Total risk-adjusted assets ...................   $459,555    $415,075

Ratios:
  Tier 1 risk-based capital ratio ..............       10.8%       11.3%
  Minimum required .............................        4.0%        4.0%

  Total risk-based capital ratio ...............       11.7%       12.3%
  Minimum required .............................        8.0%        8.0%

  Tier 1 leverage ratio ........................        7.7%        7.8%
  Minimum required .............................        4.0%        4.0%

Comparing June 30, 1999 to December 31, 1998, the Corporation's Tier 1 capital
ratio declined due to the increase in risk-weighted assets of $44,480,000
offset by an increase in Tier 1 capital of $2,628,000.  The leverage ratio
declined due to an increase in total assets of $45,679,000 and the increase in
Tier 1 capital.

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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













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

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Shareholders voted on three proposals at this year's Annual Meeting held
May 27, 1999. The summary of the proposals and voting results were as follows:

Proposal 1: The election of four directors to serve a four-year term expiring
2003.
                                              For     Against/Withheld
D. John Sparler (Director) .......        3,249,390            17,024
David C. McIntosh (Director) .....        3,244,776            21,638
Gary A. Stewart (Director) .......        3,249,118            17,296
George W. Hodges (Director).......        3,249,996            16,418

Proposal 2: The amendment of Article Fifth of the Company's Articles of
Incorporation to eliminate par value for the Company's common stock.  The
voting results were 3,170,715 for and 95,699 against/abstain.

Proposal 3: The approval of the Company's 1999 Non-Employee Directors Stock
Option Plan. The voting results were 2,948,005 for and 318,409 against/abstain.

SIGNATURES

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

                                   DROVERS BANCSHARES CORPORATION




                                   ___/S/ A. Richard Pugh______________
                                   A. Richard Pugh, Chairman, President
                                   and Chief Executive Officer




                                   ___/S/ Debra A. Goodling ___________
                                   Debra A. Goodling, Executive Vice President
                                     and Treasurer
                                   Principal Financial Officer




                                   ___/S/ John D. Blecher  ____________
                                   John D. Blecher, Senior Vice President and
                                     Secretary
                                   Principal Accounting Officer


                                   Date:  July 28, 1999











19 <PAGE>

Exhibit 3(i)

At a meeting of the Board of Directors on February 24, 1999, the following
resolution was offered:

          RESOLVED:  That Article FIFTH of the Corporation's Articles of
Incorporation be amended to eliminate the concept of par value as it relates to
the Corporation's common stock and that Article FIFTH as amended shall read
in its entirety as follows:

               The total number of shares of stock that the Corporation shall
have the authority to issue shall be fifteen million (15,000,000) shares,
without par value, all of one class called common shares.

     I hereby certify that, at a meeting of the Directors of Drovers Bancshares
Corporation duly convened on the 24th day of February, 1999 the preceding
amendment to the Articles of Incorporation was unanimously adopted.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of Drovers
Bancshares Corporation this 24th day of February, 1999.

                                       __/S/_John D. Blecher__
                                       Secretary










































20 <PAGE>
Updated through June 30, 1999

                        ARTICLES OF INCORPORATION
                                    OF
                      DROVERS BANCSHARES CORPORATION

In compliance with the requirements of Section 204 of the Business Corporation
Law, Act of May 5, 1933 (P.L. 364)  (15 P.S. s1204) the undersigned, desiring to
be incorporated as a business corporation, hereby certify that:

     FIRST:  The name of the Corporation is Drovers Bancshares Corporation.

     SECOND:  The location and post office address of the initial registered
office of the Corporation in this Commonwealth is 30 South George Street, York,
Pennsylvania, 17401.

     THIRD:  The Corporation is incorporated under the Business Corporation Law
of Pennsylvania and shall have unlimited power to engage in and do any lawful
act concerning any or all lawful business for which corporations may be
incorporated under such law.

     FOURTH:  The Corporation shall have perpetual existence.

     FIFTH: The total number of shares of stock that the Corporation shall
have the authority to issue shall be fifteen million (15,000,000) shares,
without par value, all of one class called common shares.

     SIXTH:  The names and post office addresses of each incorporator and the
number and class of shares subscribed by such incorporators are:

                   Name                        Address            No. and Class
                                                                     of Shares

               Richard M. Linder          1185 Woodland Drive       1 Common
                                          Farquhar Estates
                                          York, PA  17403

               W. K. Malehorn             4 Circle Drive            1 Common
                                          North View
                                          York, PA  17402

               Frank Motter               272 Edgehill Drive        1 Common
                                          York, PA  17402

               J. Samuel Gregory          33 West Locust Lane       1 Common
                                          York, PA  17402

               L. Doyle Ankrum            2060 North Brook Circle   1 Common
                                          York, PA  17403
SEVENTH:  The names and residence addresses of the first Board of
Directors of the Corporation are:

               Richard M. Linder          1185 Woodland Drive
                                          Farquhar Estates
                                          York, PA  17403
               L. Doyle Ankrum            2060 North Brook Circle
                                          York, PA  17403

         J. Samuel Gregory          33 West Locust Lane
                                          York, PA  17402

               Frank Motter               272 Edgehill Road
                                          York, PA  17403

               W. K. Malehorn             4 Circle Drive
                                          Northview
21<PAGE>                                 York, PA  17402

     EIGHTH:  The members of the first Board of Directors, named above, shall
serve only until the first annual meeting of shareholders for the election of
directors after the filing of these Articles.  Thereafter, the number,
qualifications, classification, nomination and election of members of the Board
of Directors shall be in accordance with Article Ninth herein and with the
provision of the Corporation's By-laws.

     NINTH:  The number of Directors which shall constitute the whole Board of
Directors shall be determined from time to time, in accordance with the
Corporation's By-laws.  The Directors shall be classified according to the time
for which they shall severally hold office.

     At the first annual meeting of the shareholders after the filing of these
Articles, Directors shall be elected in four classes, each of which shall be as
nearly equal in size as possible.  The term of one such class shall be one
year, the term of one such class shall be two years, the term of one such class
shall be three years, and the term of one such class shall be four years; and
in each case until their respective successors shall have been elected and
qualified.

     At the second annual meeting of the shareholders after the filing of these
Articles, and at each subsequent annual meeting, Directors shall be elected to
fill the vacancies created by the class whose term then expires.  The term of
all Directors so elected shall be for four years and until their respective
successors shall have been elected and qualified.

     Shareholders shall not be entitled to cumulative voting in the election of
Directors.

     TENTH:  (A)  The affirmative vote of the holders of at least eighty-five
(85%) percent of all of the securities of the Corporation entitled to vote
shall, except as provided in paragraph (B) of this Article Tenth, be required
in order for any of the following actions or transactions to be effected by the
Corporation, or approved by the Corporation as stockholders of any subsidiary
of the Corporation.

     (i)  Any merger or consolidation of the Corporation or any of its
          subsidiaries with or into a Related Person (as hereinafter defined),
          or any affiliate or associate (as each of said terms is defined in
          the Securities Exchange Act of 1934 and the rules and regulations
          promulgated thereunder) of a Related Person, or

     (ii)  Any sale, lease, exchange or other disposition of all or any
           substantial part (as determined with respect to any transaction by
           the Continuing Directors as hereinafter defined) of the assets of
           the Corporation or any of its subsidiaries to or with a Related
           Person or any affiliate or associate of a Related Person, or

(iii)  Any issuance or delivery by the Corporation of any voting securities
            (or any securities or other instruments convertible into voting
            securities) of the Corporation or any of its subsidiaries (other
            than securities issued or delivered by the Corporation pursuant to
            (a) any present or future stock option plan or other stock plan
            created for the benefit of the officers and employees of the
            Corporation or any of its subsidiaries; (b) any dividend
            reinvestment plan; or (c) any underwritten public offering) to a
            Related Person or any affiliate or associate of a Related Person in
            exchange for cash, other assets or securities, or any combination
            thereof, or
(iv)  Any dissolution of the Corporation.







22 <PAGE>
(B)  The vote of the securityholders specified in paragraph (A) of this Article
     Tenth shall not be required for any action or transaction specified in
     such paragraph if:

     (i)  Such action or transaction is approved in advance by a majority of
          the Continuing Directors (said term to mean all directors of the
          Corporation then in office who were duly elected prior to the time
          the person, corporation or entity involved in such action or
          transaction (either directly or with or through any affiliates or
          associates) became a Related Person); or

     (ii) Such action or transaction involves solely the Corporation and one or
          more subsidiaries of the Corporation, or involves solely two or more
          subsidiaries of the Corporation (provided that none of the stock of
          any such subsidiary involved is directly or indirectly beneficially
          owned by a Related Person (other than such ownership arising solely
          because of ownership interests in the Corporation)), and, in the
          case of a merger, the Corporation is a surviving corporation or a
          subsidiary of the Corporation is a surviving corporation and
          following such merger the certificate or articles of incorporation
          of such subsidiary contain provisions substantially the same as those
          in Articles Ninth, Tenth, Eleventh and Twelfth of these Articles of
          Incorporation.

(C)  The term Related Person as used in these Articles of Incorporation shall
     mean any individual, corporation, partnership or other person or entity
     which, together with its affiliates and associates and any other person or
     entity with which it or its affiliates or associates has any agreement,
     arrangement or understanding, directly or indirectly, for the purpose of
     acquiring, holding, voting or disposing of voting securities of the
     Corporation, directly or indirectly beneficially owns or controls ten
     (10%) percent or more in the aggregate of the outstanding voting
     securities of the Corporation.  A majority of the Continuing Directors
     then in office shall have the power and the duty to determine for
     purposes of these Articles of Incorporation, on the basis of information
     then known to them, who shall constitute a Related Person and its
     affiliates and associates.  Any such determination by the Continuing
     Directors shall be conclusive and binding for all purposes.

     ELEVENTH:  (A)  The Board of Directors or the Continuing Directors may, in
deciding whether to approve, recommend or oppose a tender or other offer for
the Corporation's securities, or any transaction of the type enumerated in (i),
(ii), or (iii) of Paragraph (A) of Article Tenth of these Articles, or any
other transaction having a similar major effect on the properties, operations,
or control of the Corporation, whether or not such offer or transaction
involves Related Persons, consider any pertinent issue, including buy not
limited to the following:

     (i)  The character, integrity, business philosophy and financial
          status of the other party or parties to the offer or transaction;

     (ii)  The consideration to be received by the Corporation or its
           securityholders in connection with such offer or transaction, as
           compared to:

          (a)  The current market price or value of the Corporation's
               properties or securities;

          (b)  The value of the Corporation, its properties or securities in a
               freely negotiated transaction;

          (c)  The estimated future value of the Corporation, its
               properties or securities;

          (d)  Such other measures of the value of the Corporation, its
               properties or securities as the Directors may deem appropriate;

23 <PAGE>
     (iii)  The projected social, legal and economic effects of the proposed
            offer, action or transaction upon employees, suppliers, and
            customers of the Corporation and its subsidiaries and the
            communities where the Corporation and its subsidiaries do business;

     (iv)  The general desirability of the Corporation's continuing as an
           independent entity; and

     (v)  Such other factors as they may deem relevant, including but not
          limited to anti-trust or other legal or regulatory issues that are
          raised by the offer or transaction.

(B)  If the Board of Directors determines that such an offer or transaction
     should, in light of all relevant factors, be approved, recommended, or
     rejected, it may take any lawful action to accomplish its purpose
     including, but not limited to, any or all of the following:  advising
     shareholders to accept or to reject the offer or transaction; acquiring
     the Corporation's securities; selling or otherwise issuing authorized but
     unissued securities or treasury stock or granting options with respect to
     any of its stock or securities; selling or granting options with respect
     to any of its property; acquiring other property or entities; soliciting
     or rejecting offers from other individuals or entities; and such other
     actions as may be appropriate, including but not limited to initiation of
     litigation and regulatory proceedings.

     TWELFTH:  No amendment or repeal of Items Ninth, Tenth, Eleventh or
Twelfth of these Articles shall be made unless and until such amendment or
repeal shall have been approved by:  (i) a majority of the members of the Board
of Directors; and (ii) the affirmative vote of at least eighty-five (85%)
percent of the votes which all shareholders are entitled to cast.





































24 <PAGE>
Exhibit 3(ii)

At a meeting of the Board of Directors on February 24, 1999, the following
resolutions were offered:

          RESOLVED:  That Section 1.09 of the By-Laws of the Corporation be
amended to increase the time frame for establishment of a record date from 50
to 90 days prior to the meeting of shareholders and that Section 1.09, as
amended, shall read in its entirety as follows:

               Section 1.09 Record Date. The Board of Directors may fix a date
for the determination of the shareholders entitled to receive notice of and to
vote at any meeting or to receive any dividend, distribution or allotment of
rights or a date for any change, conversion or exchange of shares by fixing a
record date not more than 90 days prior thereto.

          RESOLVED:  That Article 2, Section 2.03 of the By-Laws of the
Corporation be amended to eliminate the reference to par value and to replace
the $1,000 ownership requirement with a requirement that each director shall
own a minimum of 200 shares of common stock of the Corporation and that
Article 2, Section 2.03, as amended, shall read in its entirety as follows:

              Section 2.03.  Qualifications.  Each Director (other than
directors named in the Articles to serve until the First Annual Meeting of
Shareholders) during their full term of office shall own a minimum of
200 shares of the Common Stock of the Corporation.  A Director shall retire
from the Board on their 72nd birthday unless the Director initiates a written
request to remain on the said Board an additional year and the request is
accepted by the Nominating Committee and the appropriate Board of Directors.
This process may be repeated each year until the Director attains age 75, at
which time the Director shall retire.  The written request should be
sent to the Directors' Nominating Committee, c/o Secretary of The
Drovers & Mechanics Bank and/or Drovers Bancshares Corporation, sixty (60)
days prior to their 72nd, 73rd or 74th birthday, whichever is
applicable.  The request shall be considered by the Nominating Committee
and forwarded to the appropriate Board for final action.


     I hereby certify that, at a meeting of the Directors of Drovers Bancshares
Corporation duly convened on the 24th day of February, 1999 the preceding
amendments to the By-Laws were unanimously adopted.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of Drovers
Bancshares Corporation this 24th day of February, 1999.

                                       __/S/John D. Blecher__
                                       Secretary




















25 <PAGE>

Updated through June 30, 1999

                                BY-LAWS

                                   OF

                      DROVERS BANCSHARES CORPORATION

ARTICLE 1.  MEETINGS OF SHAREHOLDERS

     Section 1.01.  Place of Meeting.  Meetings of shareholders of the
Corporation shall be held at such place, within the Commonwealth of
Pennsylvania or elsewhere, as may be fixed by the Board of Directors.
If no place is so fixed, they shall be held at the office of the
Corporation at 30 South George Street, York, Pennsylvania.

     Section 1.02.  Annual Meeting.  The annual meeting of shareholders
for the election of directors whose terms are expiring and the
transaction of any other business which may be brought properly before
the meeting shall be held on such date and at such time as the Board of
Directors shall determine from time to time.  If for any reason such
meeting is not held at the time fixed therefore, such election may be
held at a subsequent meeting called for that purpose.

     Section 1.03.  Special Meetings.  Special meetings of the
shareholders may be called at any time by the Chairman of the Board, the
President, by the Board of Directors, or by any other person or persons
authorized by statute.  Such meetings shall be held on such date and
time as may be fixed by the Board of Directors or the Secretary or, in
the absence of such designation, as fixed by the person or persons
calling the meeting.

     Section 1.04.  Notice of Meetings.  Notice of all annual meetings
of shareholders shall be given by the Secretary.  Written  notice of the
date, place and time of all meetings of shareholders, and of the general
nature of the business to be transacted at special meetings, shall be
mailed by first class mail to each shareholder of record entitled to
vote at the meeting at least 20 days prior to the day named for the
meeting, unless a greater period of notice is by law required in a
particular case.

     Section 1.05.  Organization.  At every meeting of the shareholders,
the Chairman of the Board or, if there is no such Chairman of the Board
or if he is absent, the senior present Vice Chairman, or if there is no
such Vice Chairman or if he is absent, the President or, in his absence,
the senior present Vice President or, in his absence, a chairman chosen
by the shareholders, shall act as chairman; and the Secretary or, in his
absence, a person appointed by the Chairman, shall act as Secretary.

     Section 1.06.  Quorum; Action by Shareholders.  The presence, in
person or by proxy, of the shareholders entitled to cast a majority of
the votes which all shareholders are entitled to cast on a particular
matter shall constitute a quorum for the purpose of considering such
matter.  Unless otherwise required herein, or in the Articles of
Incorporation or by law, all matters shall be decided by the action of
the shareholders present, in person or by proxy, entitled to cast at
least a majority of the votes which all shareholders present are
entitled to cast, although such action be by the holders of less than a
majority of the votes which all the shareholders entitled to vote
thereon would be entitled to cast.






26 <PAGE>
     Section 1.07.  Record of Meeting.  A record shall be made of the
shareholders present and of those represented by proxy.  The tabulation
of votes cast in person and by proxy for each candidate for Director,
and the final tabulation of votes on each resolution presented, shall be
certified by the judges of election to the Secretary, shall be made a
part of the minutes of the meeting and shall be entered in the minute
book of the Corporation.

     Section 1.08.  Procedure for Nomination of Candidates for Director.
Nominations for election to the Board of  Directors may be made by the
Board of Directors and by any holder of any outstanding shares of the
Corporation entitled to vote for the election of Directors.
Nominations, other than those made by the Board of Directors, shall be
made in writing and shall be delivered or mailed to the Corporation at
its principal office not less than 14 days prior to any meeting of
shareholders called for the election of directors whose terms expire at
such meeting and shall contain the same information about each candidate
as is required to be contained in the corporation's proxy statement
about management's candidates, including by way of illustration and not
limitation the following:

     a)  the name and address of each proposed nominee;
     b)  the age of each proposed nominee;
     c)  the principal occupation of each proposed nominee;
     d)  the number of shares of the Corporation beneficially owned by
         each proposed nominee;
     e)  the name and address of the notifying shareholder;
     f)  the number of shares of the Corporation owned by the notifying
         shareholder.

     If more than 20 days notice of the meeting is given to
shareholders, such notice of nomination shall be mailed or delivered to
the Corporation not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed.
Nominations not made in accordance with this Section may, in his
discretion, be disregarded by the chairman of the meeting, and upon his
instructions, the vote tellers may disregard all votes cast for each
such nominee.

      Section 1.09.  Record Date. The Board of Directors may fix a date for
the determination of the shareholders entitled to receive notice of and to
vote at any meeting or to receive any dividend, distribution or allotment
of rights or a date for any change, conversion or exchange of shares by
fixing a record date not more than 90 days prior thereto.

      Section 1.10.  Financial Statements.  Financial statements shall
be sent to shareholders annually as prescribed by law, but unless
required by law need not be examined by a certified public accountant or
by a firm thereof.

ARTICLE 2.  DIRECTORS

     Section 2.01.  Number.  The Board of Directors of this Corporation
shall consist of such number of its shareholders, not less than five (5)
nor more than twenty-five (25) as shall be determined from time to time,
by resolution of the Board of Directors as then constituted.

     In the event of any increase or decrease in the authorized number
of Directors, (i) each Director then serving as such shall nevertheless
continue as a Director of the class of which he is a member until the
expiration of his current term and (ii) the newly created or eliminated






27 <PAGE>
Directorships resulting from such increase or decrease shall be
apportioned by the Board of Directors among the four classes of
Directors so as to maintain such classes as nearly equal in number as
possible.  Except as provided in Section 405 (B) and 405 (C) of the
Pennsylvania Business Corporation Law, any director may be removed with
or without cause only upon the affirmative vote of the holders of at
least 85% of all of the securities of the Corporation entitled to vote
for the election of Directors.

     Section 2.02.  Classification of Directors.  Directors shall be
classified according to the time for which they shall severally hold
office as provided in the Articles of Incorporation.

     Section 2.03.  Qualifications.  Each Director (other than Directors
named in the Articles to serve until the First Annual Meeting of
Shareholders) during their full term of office shall own a minimum of
200 shares of the Common Stock of the Corporation.  A Director shall retire
from the Board on their 72nd birthday unless the Director initiates a written
request to remain on the said Board an additional year and the request is
accepted by the Nominating Committee and the appropriate Board of Directors.
This process may be repeated each year until the Director attains age 75, at
which time the Director shall retire.  The written request should be
sent to the Directors' Nominating Committee, c/o Secretary of The
Drovers & Mechanics Bank and/or Drovers Bancshares Corporation, sixty (60)
days prior to their 72nd, 73rd or 74th birthday, whichever is
applicable.  The request shall be considered by the Nominating Committee
and forwarded to the appropriate Board for final action.

     Section 2.04.  Vacancies.  Vacancies on the Board of Directors,
regardless of how created, shall be filled by election of a majority of
the remaining Directors in office, though less than a quorum.  Each
person elected by the remaining Directors to fill a vacancy shall hold
office for the full remaining term of the vacancy being filled,
according to its classification, and until his successor is elected and
shall have qualified.

     Section 2.05.  Resignations.  Any Director may resign at any time
by giving written notice to the Board of Directors, the President or the
Secretary.  Any such resignation shall take effect at the time of the
receipt of such notice or at any later time specified therein.  Unless
otherwise specified therein, the acceptance of a resignation shall not
be necessary to make it effective.

     Section 2.06.  Organizational Meeting.  On a business day following
the Annual Meeting of the Shareholders but prior to the next regularly
scheduled meeting of the Board of Directors, the Board of Directors
shall meet for the purpose of organization, election of officers and the
transaction of other business at the place where such election of
directors was held.  Notice of such meeting need not be given.  In the
absence of a quorum at said meeting, the same may be held at any other
time and place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors.

     Section 2.07.  Regular Meetings.  Regular meetings of the Board of
Directors shall be held at such time and place as shall be designated
from time to time by resolution of the Board.  Notice of such meetings
need not be given.










28 <PAGE>

     Section 2.08.  Special Meetings.  Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, if
any, a Vice Chairman of the Board, if any, the President or one-third or
more of the Directors in office.  Notice of the date, time, place and
general nature of the business to be transacted at each special meeting
shall be given by telephone, telegram, letter or in person, unless such
notice is waived, by or at the direction of the person or persons
authorized to call such meeting, to each director, at least forty-eight
hours in advance of the meeting.

     Section 2.09.  Conduct of Meetings.  Every meeting of the Board of
Directors shall be presided over by the Chairman of the Board, or if
there is no such Chairman or if he is absent, the senior present Vice
Chairman of the Board or, if there is no such Vice Chairman or if he is
absent, the President or, in his absence, a Chairman chosen by a
majority of the Directors present.  The Secretary, or in his absence, a
person appointed by the Chairman, shall act as Secretary.

     Section 2.10.  Quorum; Action by Board.  Except to the extent that
a greater number is required by law, the Articles of Incorporation or
these By-laws: (i) a majority of all of the Directors in office shall
constitute a quorum for the transaction of business at any meeting; and
(ii) the acts of a majority of the Directors present at a meeting at
which a quorum is present shall be the acts of the Board of Directors.

     Section 2.11.  Participation in Meetings.  One or more Directors
shall be deemed present and may participate and vote in a meeting of the
Board of Directors or a committee of the Board of Directors by means of
conference telephone or similar communications equipment by which all
persons participating in the  meeting can hear each other.

     Section 2.12.  Compensation.  Fees and expenses payable for
services as a director or member of a committee of the Board of
Directors shall be in such amounts as shall be determined by the Board
of Directors.

     Section 2.13.  Committees.  The Board of Directors may , at any
time and from time to time, appoint such standing or special committees
to perform such duties and make such investigations and reports as the
Board of Directors shall by resolution determine.  Such committees shall
determine their own organization and times and places of meeting, unless
otherwise directed by such resolution.

     Section 2.14.  Directors and Emergency Officers Succession.  In the
event of an emergency resulting from warlike damage or an attack on the
United States or any nuclear disaster of sufficient severity to prevent
the conduct and management of the affairs and business of the
Corporation under the direction of its directors and officers as
contemplated by these By-laws, the officers and employees of the
Corporation shall continue to conduct the affairs of the Corporation
under such guidance from the Directors as may be available, subject to
conformance with any governmental directives during the emergency.

     The officers shall have authority to execute and carry into effect
any and all of the actions, duties and powers which may be authorized by
governmental directives for operations during emergencies, including the
power to curtail, limit, suspend or resume any operation of the
Corporation and change the location of any office of the Corporation.








29 <PAGE>

     The officers at the time of such emergency shall have the broadest
powers to perform any and all acts which may be necessary for the
purposes set forth in the preceding paragraphs, including power to
employ additional officers and employees, to purchase and acquire or
contract for the use of any services, real estate, equipment and other
supplies, materials and resources as they may deem necessary or
appropriate for the continued conduct of the operations of the
Corporation on such terms and conditions as to them shall seem
desirable, and to obligate the Corporation to pay the expenses thereof.

     In order to provide for automatic succession of authority among the
officer personnel of the Corporation  in such an emergency, the
priorities of seniority and succession of authority may be established
and delegated to and among the officers of the Corporation by resolution
of the Board of Directors.  The officer in authority under the terms of
the resolution shall have the power to assign and reassign functions and
duties among any of the other officers of the Corporation.

     Any authority granted to such officers herein shall be subject to
the authority otherwise vested in the Board of Directors, but shall not
be deemed to be restricted in any way by the inability on the part of
the Board of  Directors to act.

ARTICLE 3.  OFFICERS

     Section 3.01.  Officers.  The officers of the Corporation shall be
a President, a Secretary, a Treasurer, and may include a Chairman of the
Board, one or more Vice Chairmen of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or  more Assistant
Treasurers, and such other officers as the Board of Directors may from
time to time determine.

     Section 3.02.  Qualifications.  The officers shall be natural
persons of full age.

     Section 3.03.  Election and Term of Office.  The officers of the
Corporation shall be elected by the Board of Directors and shall serve
at the pleasure of the Board of Directors.

     Section 3.04.  Resignations.  Any officer may resign at any time by
giving written notice to the Board of Directors, the President or the
Secretary.  Any such resignation shall take effect at the time of the
receipt of such notice or at any later time specified therein.  Unless
otherwise specified therein, the acceptance of a resignation shall not
be necessary to make it effective.

     Section 3.05.  Chairman of the Board.  The Board of Directors may
elect one of its members to be Chairman of the Board.  He shall preside
at all meetings of the Board of Directors.  He shall also have such
other powers and duties as may be conferred upon or assigned to him by
the Board of Directors, as well as any other powers specifically
conferred upon him by these By-laws.

     Section 3.06.  Vice Chairman of the Board.  The Board of Directors
may elect one or more of its members to be a Vice Chairman of the Board.
In the absence of the Chairman, the senior present Vice Chairman shall
preside at meetings of the shareholders and of the Board of Directors.
Each Vice Chairman shall have such other powers and duties as may be
conferred or assigned to him by the Board of Directors.







30 <PAGE>

     Section 3.07.  President.  The President shall, in the absence of
the Chairman and Vice Chairman, or if no Chairman or Vice Chairman has
been elected, preside at any meeting of the shareholders and of the
Board of Directors.  The President shall have and may exercise any and
all other powers and duties pertaining by law, regulation or practice to
the office of President, or imposed by these By-laws.  He, or such
persons as shall be designated by him, shall sign, execute, acknowledge,
verify, deliver and accept, in the name of the Corporation, deeds,
mortgages, bonds, contracts and other instruments authorized by the
Board of Directors, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation.  In general, he shall be the
chief executive officer and shall have general executive powers and
supervision over the business and operations of the Corporation,
subject, however, to the control of the Board of Directors, as well as
such other powers and duties as may be conferred upon or assigned to him
by the Board of Directors.

     Section 3.08.  Vice Presidents.  The Board of Directors may appoint
one or more Vice Presidents.  Each such person shall have such powers
and duties as may be conferred upon or assigned to him by the Board of
Directors or the President.

     Section 3.09.  Secretary.  The Secretary shall attend to the giving
of all notices required by these By-laws to be given.  He shall keep
accurate minutes of meetings of the Board of Directors and shall serve
as Secretary at all shareholders' meetings.  He shall be custodian of
the corporate seal, records, documents and papers of the Corporation
including election returns and proceedings of shareholders' meetings.
He shall provide for the keeping of proper records of all transactions
of the Corporation assigned to him, from time to time, by the Board of
Directors or the President and he shall have all other powers and duties
pertaining by law, regulation or practice, to the office of Secretary,
or imposed by these By-laws, or as may from time to time be conferred
upon or assigned to him by the Board of Directors or the President.

     Section 3.10.  The Treasurer.  The Treasurer shall have charge of
all receipts and disbursements of the Corporation and shall have or
provide for the custody of its funds and securities; he shall have full
authority to receive and give receipts for all money due and payable to
the Corporation, to endorse checks, drafts and warrants in its name and
on its behalf and to give full discharge for the same; he shall deposit
all funds of the Corporation, except such as may be required for current
use, in such banks or other places of deposit as the Board of Directors
may from time to time designate; and, in general, he shall perform all
duties incident to the office of Treasurer and such other duties as may
from time to time be conferred upon or assigned to him by the  Board of
Directors or the President.

     Section 3.11.  Assistant Officers.  Each assistant officer shall
assist in the performance of the duties of the officer to whom he is
assistant and shall perform such duties in the absence of the officer.
He shall perform such additional duties as the Board of Directors, the
President, or the officer to whom he is assistant may from time to time
assign him.

     Section 3.12.  Compensation of Officers and Others.  The
compensation of all officers shall be fixed from time to time by the
Board of Directors, or any committee or officer authorized by the Board
of Directors so to do.






31 <PAGE>

ARTICLE 4.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section 4.01.  Indemnification.  To the full extent permitted by
the laws of the Commonwealth of Pennsylvania, as they exist on the date
hereof or as they may hereafter be amended, the Corporation shall
indemnify any person (an Indemnitee) who was or is involved in any
manner (including, without limitation, as a party or witness) in any
threatened, pending or completed investigation, claim, action, suit or
proceeding, (whether civil, criminal, administrative, arbitrative,
legislative or investigative (including, without limitation, any action,
suit or proceeding by or in the right of the Corporation to procure a
judgment in its favor) (a Proceeding), or who is threatened with being
so involved, by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or, while serving as a director,
officer or employee of the Corporation, is or was at the request of the
Corporation also serving as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against all expenses (including attorney's fees), judgments,
fines, penalties, excise taxes and amounts paid in settlement actually
and reasonably incurred by the Indemnitee in connection with such
Proceeding, provided that there shall be no indemnification hereunder
with respect to any settlement or other non-adjudicated disposition of
any threatened or pending Proceeding unless the Corporation has given
its prior consent to such settlement or disposition.  The right of
indemnification created by this Article shall be a contract right
enforceable by an Indemnitee against the Corporation, and it shall not
be exclusive of any other rights to which an Indemnitee may otherwise be
entitled.  The provisions of this Article shall inure to the benefit of
the heirs and legal representatives of an Indemnitee and shall be
applicable to Proceedings commenced or continued after the adoption of
this Article, whether arising from acts or omission occurring before or
after such adoption.  No amendment, alternation, change, addition or
repeal of or to these By-laws shall deprive any Indemnitee of any rights
under this Article with respect to any act or omission of such Indenture
occurring prior to such amendment, alteration, change, addition or
repeal.

     Section 4.02. Payment of Expenses.  Expenses incurred by an
Indemnitee in defending a Proceeding may be paid by the Corporation in
advance of the final disposition of such Proceeding upon receipt of an
undertaking by or on behalf of such Indemnitee to repay such amount if
it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation.

     Section 4.03.  When Indemnification is Not to be Made.
Indemnification pursuant to Section 4.01 shall not be made in any case
where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful
misconduct or recklessness.

ARTICLE 5.  SHARE CERTIFICATES; TRANSFER

     Section 5.01.  Share Certificates.  Share certificates shall be
signed by the manual, facsimile, printed or engraved signatures of the
President or a Vice President and the Secretary or Treasurer, or an
Assistant Secretary or Assistant Treasurer.  One of such signatures
shall be a manual signature unless the certificates are signed by a
transfer agent or a registrar, and shall be sealed with the corporate
seal, which may be a facsimile, engraved or printed seal.







32 <PAGE>

     Section 5.02.  Transfer of Shares.  Transfer of shares of the
Corporation shall be made only on the books of the Corporation by the
owner thereof or by his attorney thereunto authorized, upon surrender of
the share certificates to the Secretary or a transfer agent of the
Corporation accompanied by a duly executed power of attorney.

     Section 5.03.  Transfer Agent and Registrar; Regulations.  The
Corporation may, if and whenever the Board of Directors so determines,
maintain one or more transfer offices or designate one or more transfer
agents, where or by which the shares of the Corporation shall be
transferable, and also maintain one or more registry offices or
designate one or more registrars where or by which the shares shall be
registered; and no certificates for shares of the Corporation in respect
of which a registrar shall have been designated shall be valid unless
countersigned and registered by such registrar.  The Board of Directors
may also make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of share
certificates.

     Section 5.04  Lost, Destroyed and Mutilated Certificates.  The
Board of Directors, by standing resolution or by resolutions with
respect to particular cases, may authorize the issue of new share
certificates in lieu of share certificates lost, destroyed or mutilated,
upon such terms and conditions, including the posting of an open-penalty
bond, as the Board of Directors may direct.

ARTICLE 6.  LIMITATION OF THE LIABILITY OF DIRECTORS

     Section 6.01.  Limitation of Director Liability.  To the full
extent permitted by the Corporate Directors' Liability Act as enacted in
the Commonwealth of Pennsylvania (Act of November 28, 1986, P.L. 1458,
No. 145) as the same exists or may hereafter be amended, a director of
this Corporation shall  not be personally liable for monetary damages
for any action taken or any failure to take any action unless such
action or inaction constitutes both:

  a)  A breach of or failure to perform his duties in compliance with
      the standards of fiduciary care prescribed in the Directors'
      Liability Act; and
  b)  Self-dealing, willful misconduct or recklessness.

     Section 6.02.  Exceptions.  The aforementioned limitation of
liability will not apply to:

  a)  The responsibility or liability of a director pursuant to any
      criminal statute; or
  b)  The liability of a director for the payment of taxes pursuant to
      local, State or Federal law.

ARTICLE 7.  MISCELLANEOUS PROVISIONS

     Section 7.01.  Notice of Meetings.  Any notice required to be given
by the corporation to any shareholder, director or committee member may
be (i) delivered personally, (ii) mailed by first class United States
mail, postage prepaid, addressed to the shareholders', directors', or
committee members' address appearing on the books of the Corporation, or
supplied by him to the Corporation for the purpose of notice or (iii)
telegraphed or transmitted by a similar mode of communication to the
address identified in clause (ii) above.  Notice of any shareholders',
directors', or committee meeting shall be deemed to have been given to






33 <PAGE>

the person entitled thereto when deposited in the United States mail or
when deposited with a telegraph or other transmitting office for
transmission to such person.  Any shareholder, director or committee
member may waive notice of any meeting before or after the meeting, and
his attendance at a meeting shall constitute a waiver of notice of such
meeting, unless he announces at the commencement of the meeting that he
is attending solely for the purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened.

     Section 7.02.  Amendments.  By-laws may be adopted, amended or
repealed by the Board of Directors in the manner provided in Section
2.10 or by the shareholders in the manner provided in Section 1.06;
provided; however, that Sections 2.01, 2.02 and 2.04 and this Section of
these By-laws may be amended only by affirmative vote of at least
eighty-five (85%) percent of all of the securities of the Corporation
entitled to vote.












































34 <PAGE>

                                   EXHIBIT 21
                          SUBSIDIARIES OF THE REGISTRANT


The following are the subsidiaries of the Drovers Bancshares Corporation:


        Subsidiary                      State of Incorporation or Organization

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


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


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

        Subsidiary                       State of Incorporation or Organization

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

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































35 <PAGE>