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,  2000.
                                    ---------------

                                       OR

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

For  the  transition  period  from__________________to____________________.

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

                        HARLEYSVILLE NATIONAL CORPORATION
                        ---------------------------------
             (Exact name of registrant as specified in its charter)

Pennsylvania                                                    23-2210237
------------                                                    ----------
(State  or  other  jurisdiction  of                         (I.R.S.  Employer
incorporation  or  organization)                           Identification  No.)

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

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

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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest practicable date: 8,839,275 shares of Common
Stock,  $1.00  par  value,  outstanding  on  July  31,  2000.

PAGE 1

<TABLE>
<CAPTION>

                       HARLEYSVILLE  NATIONAL  CORPORATION


                          INDEX  TO  FORM  10-Q  REPORT


<S>                                                                              <C>
                                                                                 PAGE
                                                                                 ----

Part I.  Financial Information

        Item 1. Financial Statements:

Consolidated Balance Sheets - June 30, 2000 and December 31, 1999 . . . . . . .     3

Consolidated Statements of Income - Six Months and Three Months Ended
  June 30, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . .     4

Consolidated Statements of Cash Flows - Six Months Ended June 30, 2000 and 1999     5

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . .     6

       Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations
                                                                                    8
       Item 3. Quantitative and Qualitative Disclosures about Market Risk . . .    21

Part II.  Other Information

       Item 1.  Legal Proceedings
                                                                                   22
       Item 2.  Change in Securities and Use of Proceeds
                                                                                   22
       Item 3.  Defaults Upon Senior Securities
                                                                                   22
       Item 4. Submission of Matters to a Vote of Security Holders
                                                                                   22
       Item 5. Other Information
                                                                                   22
       Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . .    22

Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
</TABLE>

PAGE 2

<TABLE>
<CAPTION>

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

(Dollars in thousands)         (Unaudited)                      June 30, 2000    December 31, 1999
                                                               ---------------  -------------------
<S>                                                            <C>              <C>
ASSETS
Cash and due from banks . . . . . . . . . . . . . . . . . . .  $       60,025   $           49,654
Federal Funds sold. . . . . . . . . . . . . . . . . . . . . .               -                6,600
                                                               ---------------  -------------------
 Total cash and cash equivalents. . . . . . . . . . . . . . .          60,025               56,254
                                                               ---------------  -------------------
Interest-bearing deposits in banks. . . . . . . . . . . . . .           4,213                7,237
Investment securities available for sale. . . . . . . . . . .         510,292              505,360
Investment securities held to maturity
 (market value $38,160 and $25,084, respectively) . . . . . .          38,624               25,535
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1,173,417            1,118,244
Less: Unearned income . . . . . . . . . . . . . . . . . . . .           1,930                  572
Allowance for loan losses . . . . . . . . . . . . . . . . . .         (15,248)             (14,887)
                                                               ---------------  -------------------
 Net loans. . . . . . . . . . . . . . . . . . . . . . . . . .       1,160,099            1,103,929
                                                               ---------------  -------------------
Bank premises and equipment, net. . . . . . . . . . . . . . .          22,165               21,856
Accrued income receivable . . . . . . . . . . . . . . . . . .          11,331               11,044
Other real estate owned . . . . . . . . . . . . . . . . . . .           1,017                1,436
Intangible assets, net. . . . . . . . . . . . . . . . . . . .           1,826                2,006
Bank-owned life insurance . . . . . . . . . . . . . . . . . .          36,254               25,527
Other assets. . . . . . . . . . . . . . . . . . . . . . . . .           7,184                7,483
                                                               ---------------  -------------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . .  $    1,853,030   $        1,767,667
                                                               ===============  ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . .  $      221,407   $          214,393
Interest-bearing:
Checking accounts . . . . . . . . . . . . . . . . . . . . . .         156,636              162,191
Money market accounts . . . . . . . . . . . . . . . . . . . .         301,338              259,015
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . .         172,335              163,010
Time, under $100,000. . . . . . . . . . . . . . . . . . . . .         425,589              407,858
Time, $100,000 or greater . . . . . . . . . . . . . . . . . .         165,829              134,979
                                                               ---------------  -------------------
 Total deposits . . . . . . . . . . . . . . . . . . . . . . .       1,443,134            1,341,446
Accrued interest payable. . . . . . . . . . . . . . . . . . .          18,684               17,544
U.S. Treasury demand notes. . . . . . . . . . . . . . . . . .           2,310                3,232
Federal funds purchased . . . . . . . . . . . . . . . . . . .          31,000                9,500
Federal Home Loan Bank (FHLB) borrowings. . . . . . . . . . .         129,250              130,250
Securities sold under agreements to repurchase. . . . . . . .          65,726              108,615
Other liabilities . . . . . . . . . . . . . . . . . . . . . .          10,881               10,417
                                                               ---------------  -------------------
 Total liabilities. . . . . . . . . . . . . . . . . . . . . .       1,700,985            1,621,004
                                                               ---------------  -------------------
Shareholders' Equity:
 Series preferred stock,par value $1 per share;
 authorized 3,000,000 shares, none issued . . . . . . . . . .               -                    -
 Common stock, par value $1 per share; authorized 30,000,000
 shares; issued and outstanding 8,839,275 shares in 2000 and
 8,835,012 shares in 1999 . . . . . . . . . . . . . . . . . .           8,839                8,835
 Additional paid in capital . . . . . . . . . . . . . . . . .          63,641               68,260
 Retained Earnings. . . . . . . . . . . . . . . . . . . . . .          92,477               80,376
 Accumulated other comprehensive income . . . . . . . . . . .         (12,912)             (10,808)
                                                               ---------------  -------------------
 Total shareholders' equity . . . . . . . . . . . . . . . . .         152,045              146,663
                                                               ---------------  -------------------
 Total liabilities and shareholders' equity . . . . . . . . .  $    1,853,030   $        1,767,667
                                                               ===============  ===================
<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>

PAGE 3

<TABLE>
<CAPTION>

                HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                         CONSOLIDATED  STATEMENTS  OF  INCOME
                                    (Unaudited)
                                                         Six  months  ended      Three  months  ended
(Dollars  in  thousands  except  weighted                    June  30,             June  30,
average number of common shares and per share
information)                                                 ---------             ---------
                                                          2000         1999        2000         1999
                                                      -----------  ----------  -----------  ----------
<S>                                                   <C>          <C>         <C>          <C>
INTEREST INCOME:
Loans, including fees. . . . . . . . . . . . . . . .  $   42,221   $   36,329  $   21,431   $   18,475
Lease financing. . . . . . . . . . . . . . . . . . .       4,232        3,219       2,205        1,705
Investment securities:
Taxable. . . . . . . . . . . . . . . . . . . . . . .      11,692        8,932       5,974        4,653
Exempt from federal taxes. . . . . . . . . . . . . .       5,249        5,293       2,590        2,646
Federal funds sold . . . . . . . . . . . . . . . . .         164          395          39          237
Deposits in banks. . . . . . . . . . . . . . . . . .         208          105         104           66
                                                      -----------  ----------  -----------  ----------
Total interest income. . . . . . . . . . . . . . . .      63,766       54,273      32,343       27,782
                                                      -----------  ----------  -----------  ----------
INTEREST EXPENSE:
Savings deposits . . . . . . . . . . . . . . . . . .       8,331        6,785       4,245        3,476
Time, under $100,000 . . . . . . . . . . . . . . . .      11,211       10,113       5,840        5,088
Time, $100,000 or greater. . . . . . . . . . . . . .       5,151        2,766       2,668        1,461
Borrowed funds . . . . . . . . . . . . . . . . . . .       6,014        3,550       2,874        1,796
                                                      -----------  ----------  -----------  ----------
Total interest expense . . . . . . . . . . . . . . .      30,707       23,214      15,627       11,821
                                                      -----------  ----------  -----------  ----------
Net interest income. . . . . . . . . . . . . . . . .      33,059       31,059      16,716       15,961
Provision for loan losses. . . . . . . . . . . . . .       1,055          980         549          490
                                                      -----------  ----------  -----------  ----------
Net interest income after provision for loan losses.      32,004       30,079      16,167       15,471
                                                      -----------  ----------  -----------  ----------
OTHER OPERATING INCOME:
Service charges. . . . . . . . . . . . . . . . . . .       1,870        1,803         950          907
Security (losses)gains, net. . . . . . . . . . . . .        (192)         493         (80)         345
Trust income . . . . . . . . . . . . . . . . . . . .       1,462        1,308         770          658
Bank-owned life insurance. . . . . . . . . . . . . .         727            -         381            -
Other Income . . . . . . . . . . . . . . . . . . . .       1,644        1,501         836          743
                                                      -----------  ----------  -----------  ----------
Total other operating income . . . . . . . . . . . .       5,511        5,105       2,857        2,653
                                                      -----------  ----------  -----------  ----------
Net interest income after provision for loan losses
and other operating income . . . . . . . . . . . . .      37,515       35,184      19,024       18,124
                                                      -----------  ----------  -----------  ----------
OTHER OPERATING EXPENSES:
Salaries, wages and employee benefits. . . . . . . .      11,583       10,638       5,829        5,425
Occupancy. . . . . . . . . . . . . . . . . . . . . .       1,475        1,330         698          649
Furniture and equipment. . . . . . . . . . . . . . .       2,397        2,101       1,219        1,065
Other expenses . . . . . . . . . . . . . . . . . . .       7,121        5,746       3,901        2,863
                                                      -----------  ----------  -----------  ----------
Total other operating expenses . . . . . . . . . . .      22,576       19,815      11,647       10,002
                                                      -----------  ----------  -----------  ----------
Income before income taxes . . . . . . . . . . . . .      14,939       15,369       7,377        8,122
Income tax expense . . . . . . . . . . . . . . . . .       2,587        3,721       1,070        2,024
                                                      -----------  ----------  -----------  ----------
Net income . . . . . . . . . . . . . . . . . . . . .  $   12,352   $   11,648  $    6,307   $    6,098
                                                      ===========  ==========  ===========  ==========

Weighted average number of common shares:
Basic. . . . . . . . . . . . . . . . . . . . . . . .   8,835,873    8,831,877   8,836,268    8,832,237
                                                      ===========  ==========  ===========  ==========
Diluted. . . . . . . . . . . . . . . . . . . . . . .   8,846,046    8,843,721   8,846,441    8,844,081
                                                      ===========  ==========  ===========  ==========
Net income per share information:
Basic. . . . . . . . . . . . . . . . . . . . . . . .  $     1.40   $     1.32  $     0.71   $     0.69
                                                      ===========  ==========  ===========  ==========
Diluted. . . . . . . . . . . . . . . . . . . . . . .  $     1.40   $     1.32  $     0.71   $     0.69
                                                      ===========  ==========  ===========  ==========
Cash dividends per share . . . . . . . . . . . . . .  $     0.56   $     0.49  $     0.28   $     0.25
                                                      ===========  ==========  ===========  ==========
<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>

PAGE 4

<TABLE>
<CAPTION>

                     HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                           CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                        (Unaudited)
(Dollars  in  thousands)                                          Six  Months  Ended  June  30,

OPERATING ACTIVITIES:                                                       2000        1999
                                                                          ---------  ----------
<S>                                                                       <C>        <C>
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 12,352   $  11,648
Adjustments to reconcile net income to
 net cash provided by operating activities:
Provision for loan losses. . . . . . . . . . . . . . . . . . . . . . . .     1,055         980
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . .     1,377       1,256
Net amortization of investment
Securities discount/premiums . . . . . . . . . . . . . . . . . . . . . .       294         357
Net realized security loss (gain). . . . . . . . . . . . . . . . . . . .       192        (493)
Increase in accrued income receivable. . . . . . . . . . . . . . . . . .      (287)       (888)
Increase in accrued interest payable . . . . . . . . . . . . . . . . . .     1,140       1,698
(Decrease) increase in other assets. . . . . . . . . . . . . . . . . . .       299      (2,512)
Net increase in other liabilities. . . . . . . . . . . . . . . . . . . .     1,621       2,435
Decrease in unearned income. . . . . . . . . . . . . . . . . . . . . . .    (1,358)     (1,564)
Write-down of other real estate owned. . . . . . . . . . . . . . . . . .        81          66
Decrease (increase) in intangible assets . . . . . . . . . . . . . . . .       180        (218)
                                                                          ---------  ----------
 Net cash provided by operating activities . . . . . . . . . . . . . . .    16,946      12,765
                                                                          ---------  ----------
INVESTING ACTIVITIES:
Proceeds from sales of investment securities available for sale. . . . .    46,196      34,612
Proceeds, maturity or calls of investment securities held to maturity. .     3,527       5,858
Proceeds, maturity or calls of investment securities available for sale.    13,762      51,588
Purchases of investment securities held to maturity. . . . . . . . . . .   (16,656)          -
Purchases of investment securities available for sale. . . . . . . . . .   (68,597)   (130,139)
Decrease (increase) in interest-bearing deposits in banks. . . . . . . .     3,024      (5,761)
Net increase in loans. . . . . . . . . . . . . . . . . . . . . . . . . .   (56,513)    (74,956)
Net increase in premises and equipment . . . . . . . . . . . . . . . . .    (1,685)     (2,485)
Purchase of bank-owned life insurance. . . . . . . . . . . . . . . . . .   (10,727)          -
Proceeds from sales of other real estate . . . . . . . . . . . . . . . .       984       1,266
                                                                          ---------  ----------
 Net cash used in investing activities . . . . . . . . . . . . . . . . .   (86,685)   (120,017)
                                                                          ---------  ----------
FINANCING ACTIVITIES:
Net increase in deposits . . . . . . . . . . . . . . . . . . . . . . . .   101,688      72,493
(Decrease) increase in U.S. Treasury demand notes. . . . . . . . . . . .      (922)      1,873
Increase in federal funds purchased. . . . . . . . . . . . . . . . . . .    21,500      12,000
(Decrease) increase in FHLB borrowings . . . . . . . . . . . . . . . . .    (1,000)      2,750
(Decrease) increase in securities sold under agreement . . . . . . . . .   (42,889)     13,470
Cash dividends & fractional shares . . . . . . . . . . . . . . . . . . .    (4,913)     (4,546)
Stock options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        46          39
                                                                          ---------  ----------
Net cash provided by financing activities. . . . . . . . . . . . . . . .    73,510      98,079
                                                                          ---------  ----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . .     3,771      (9,173)
Cash and cash equivalents at beginning of period . . . . . . . . . . . .    56,254      61,710
                                                                          ---------  ----------
Cash and cash equivalents at end of the period . . . . . . . . . . . . .  $ 60,025   $  52,537
                                                                          =========  ==========

Cash paid during the period for:
 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 29,566   $  21,515
                                                                          =========  ==========
 Supplemental disclosure of noncash investing and financing activities:
 Transfer of assets from loans to other real estate owned. . . . . . . .  $    646   $     614
                                                                          =========  ==========
<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>

PAGE 5

             HARLEYSVILLE  NATIONAL  CORPORATION  AND  SUBSIDIARIES
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE  1  - In the opinion of management, the accompanying unaudited consolidated
financial  statements  contain  all  adjustments,  consisting  only  of  normal
recurring  adjustments,  necessary  to present fairly the consolidated financial
position of Harleysville National Corporation (the "Corporation") and its wholly
owned  subsidiaries  -  Harleysville  National  Bank  and  Trust  Company
("Harleysville"),  Citizens  National  Bank ("Citizens"), Security National Bank
("Security")  (collectively,  the "Banks") and HNC Financial Company- as of June
30,  2000,  the  results of its operations for six and three month periods ended
June  30,  2000 and 1999 and the cash flows for the six month periods ended June
30,  2000  and 1999.This quarterly report refers to the corporation's subsidiary
banks,  collectively  as  "the banks."We recommend that you read these unaudited
consolidated  financial  statements  in  conjunction  with the audited
consolidated  financial  statements of the Corporation and the notes thereto set
forth  in  the  corporation's  1999  annual report.All prior period amounts were
restated  to  reflect  the  acquisition  of  Citizens  Bank  and  Trust Company.

The  results  of  operations  for the six and three month periods ended June 30,
2000  and  1999 are not necessarily indicative of the results to be expected for
the  full  year.

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

NOTE  3  - The Corporation accounts for comprehensive income under the Financial
Accounting  Standards  Board  issued  SFAS  No.  130,  "Reporting  Comprehensive
Income."SFAS  No.  130  establishes standards to provide prominent disclosure of
comprehensive  income  items.Comprehensive  income  is the change in equity of a
business  enterprise  during  a  period  from  transactions and other events and
circumstances  from non-owner sources.Other comprehensive income consists of net
unrealized  gains  on investment securities available for sale.Subsequent to the
adoption  date,  all prior-period amounts are required to be restated to conform
to  the  provision of SFAS No. 130.Comprehensive income for the first six months
of  2000  was  $10,248,000,  compared  to $1,967,000 for the first six months of
1999.The  adoption  of  SFAS  No.  130  did  not  have  a material impact on the
Corporation's  financial  position  or  results  of  operation.

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

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

PAGE 6

NOTE  6-  On  April  28,  2000,  the  Corporation consummated its acquisition of
Citizens  Bank and Trust Company.Under the terms of the merger, accounted for as
a  pooling-of-interest,  Citizens Bank and Trust Company's shareholders received
166  shares  of Harleysville National Corporation common stock for each share of
Citizens  Bank  and  Trust Company stock.Upon the completion of the acquisition,
Citizens  Bank  and  Trust  Company's  banking  operations  merged into those of
Citizens  National  Bank,  a  wholly  owned  subsidiary of Harleysville National
Corporation.

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

The  enclosed  financial  information  for  the  periods  presented  include the
consolidated  accounts  of  Northern  Lehigh Bancorp, Inc. and Citizens Bank and
Trust  Company

PAGE 7
ITEM  2.

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

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

The following is management's discussion and analysis of the significant changes
in  the  results of operations, capital resources and liquidity presented in its
accompanying  consolidated  financial  statements for the corporation, the banks
and HNC Financial Company.The corporation's consolidated financial condition and
results  of operations consist almost entirely of the banks' financial condition
and results of operations.Current performance does not guarantee, and may not be
indicative  of  similar  performance  in  the  future.

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

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

-     operating,  legal  and  regulatory  risks;
-     economic,  political  and  competitive  forces  affecting  our  banking,
securities,  asset  management  and  credit  services  businesses;  and
-     the  risk  that  our analyses of these risks and forces could be incorrect
and/or  that  the  strategies  developed  to address them could be unsuccessful.

OVERVIEW
--------

The  Corporation  recorded  improved  quarter and year-to-date earnings during a
period  when  it successfully completed the acquisition of Citizens Bank & Trust
Co.,  a  $130  million  asset community bank.An increase in other income and the
continued  strength  in  loan  quality  contributed  to  the  positive  results.

     Consolidated  net  income for the first six months of 2000 was $12,352,000,
an  increase  of $704,000, or 6.0%, over the first six months of 1999 net income
of  $11,648,000.Basic  and diluted earning per share for the first six months of
2000  of  $1.40  increased  6.1%,  over  the  first six months of 1999 basic and
diluted  earnings  per  share  of  $1.32.Consolidated  net income for the second
quarter  of  2000  was  $6,307,000,  an  increase of $209,000, or 3.4%, over the
second  quarter  of 1999 net income of $6,098,000.For the quarter ended June 30,
2000, basic and diluted earnings per share at $.71 were up 2.9% from $.69 in the
comparable  period  last  year.

The  increase in net income during the first six months of 2000, compared to the
same  period in 1999, is the result of both higher net interest income and other
operating  income. Net interest income grew $2,000,000, primarily as a result of
a 13.6% rise in average earning assets.Other operating income rose $406,000, due
primarily  to  higher  trust  fees  and bank-owned life insurance, offset by net
losses  on the sale of securities.Offsetting these increases was a rise in other
operating  expenses,  primarily  related  to the overall growth in the banks and
acquisition  related  expenses.

     For  the  six  months ended June 30, 2000, the annualized return on average
shareholders' equity and the annualized return on average assets were 16.65% and
1.37%,  respectively.For  the  same  period  in  1999,  the annualized return on
average  shareholders'  equity  was  15.60% and the annualized return on average

PAGE 8

assets was 1.49%.For the three months ended June 30, 2000, the annualized return
on average shareholders' equity and the annualized return on average assets were
16.93%  and  1.39%,  respectively.For the second quarter in 1999, the annualized
return  on  average shareholders' equity was 16.35% and the annualized return on
average  assets  was  1.53%.

     The  banks  continue  to  focus  on  the  quality  of  their  loan
portfolios.Nonperforming  assets, including nonaccrual loans, restructured loans
and  other  real  estate  owned  were  .32% of total assets at June 30, 2000 and
December  31,  1999,  compared  to  .33%  at  June  30,  1999.

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

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

     Net  interest  income  for  the  first  six  months  of 2000 of $33,059,000
increased  $2,000,000,  or  6.4%, over the same period in 1999 of which produced
net  interest  income  of  $31,059,000.As  illustrated  in  the table below, the
primary  source  of  this  increase was a rise in interest income resulting from
increases  to  earning  asset volumes in the first half of 2000, compared to the
same  period  in  1999.The increase in interest income was partially offset by a
rise  in  interest  expense,  primarily  the result of higher volumes.The second
quarter  of 2000 net interest income increased 4.7%, compared to the same period
in  1999.This  rise  was  primarily due to an increase in earning asset volumes,
partially  offset  by higher interest expense related to higher deposit volumes.

The  rate-volume  variance  analysis  set  forth  in  the  table below, which is
computed  on  a  tax-equivalent basis (tax rate of 35%), analyzes changes in net
interest  income  for the six months and three month periods ended June 30, 2000
over  June  30,  1999  by  their  rate  and  volume  components.

<TABLE>
<CAPTION>

                                              Six  Months  Ended                 Three Months Ended
                                               June  30,  2000                    June  30,  2000
                                                 Over/Under                        Over/Under
                                               June  30,  1999                    June  30,  1999


<S>                                          <C>         <C>          <C>       <C>           <C>      <C>
                                             Total       Caused by:              Total           Caused by:
                                                         ------------                            ------------
                                             Variance    Rate          Volume    Variance      Rate     Volume
                                             ----------  ------------  --------  ------------  -------  --------
Interest Income:
  Securities *. . . . . . . . . . . . . . .  $   2,692   $       587   $ 2,105   $     1,235   $  339   $   896
  Money market instruments. . . . . . . . .       (128)          384      (512)         (160)     206      (366)
  Loans * . . . . . . . . . . . . . . . . .      6,980           422     6,558         3,485      238     3,246
                                             ----------  ------------  --------  ------------  -------  --------
     Total. . . . . . . . . . . . . . . . .      9,544         1,393     8,151         4,560      783     3,776
                                             ----------  ------------  --------  ------------  -------  --------

Interest Expense:
  Savings deposits. . . . . . . . . . . . .      1,546           740       806           769      373       396
  Time deposits and certificates of deposit      3,483           657     2,826         1,959      544     1,415
  Other borrowings. . . . . . . . . . . . .      2,464           705     1,759         1,078      411       668
                                             ----------  ------------  --------  ------------  -------  --------
      Total . . . . . . . . . . . . . . . .      7,493         2,102     5,391         3,806    1,328     2,479
                                             ----------  ------------  --------  ------------  -------  --------

Net interest income . . . . . . . . . . . .  $   2,051         ($709)  $ 2,760   $       754    ($545)  $ 1,297
                                             ==========  ============  ========  ============  =======  ========
    *Tax Equivalent Basis
</TABLE>

PAGE 9

     Taxable-equivalent  net  interest  income was $36,367,000 for the first six
months  of  2000, compared to $34,316,000 for the same period in 1999, a 6.0% or
$2,051,000  increase.This  rise  in  taxable-equivalent  net interest income was
primarily  due  to  a $2,760,000 increase related to volume, which was partially
offset  by  a  reduction  in  net  interest  income,  related  to  rate.Total
taxable-equivalent interest income grew $9,544,000, the result of higher volumes
and rates of loans and securities.Average year-to-date loans and securities grew
$159,598,000  and  $58,196,000,  respectively  at June 30, 2000, compared to the
same  period  in  1999.The  increase  in  securities  included  $25,000,000  in
securities  purchased  as  part  of  a capital leverage program during the third
quarter of 1999.To more fully leverage its capital, the Corporation entered into
$25,000,000  of structured transactions in which the banks borrow funds from the
Federal  Home  Loan Bank (FHLB) and invests these borrowed funds into securities
that  are  priced  to  yield  a  spread  over  the  FHLB  borrowing  rate.

Total  interest  expense  grew  $7,493,000  during the first six months of 2000,
compared  to  the  same period in 1999.This growth was principally the result of
higher  volumes  in  all  deposit  categories  and  other borrowings.The average
year-to-date  growth in time deposits and savings deposits were $102,738,000 and
$58,986,000,  respectively.The  growth  in  time  deposits  was primarily due to
greater  than  $100,000 time deposits related to municipalities and one business
customer. As a result of our continued efforts to acquire municipality deposits,
municipal  time  deposits  over  $100,000  should  continue to grow.The deposits
associated with the one business customer should decrease towards the end of the
year.The  average  year-to-date 2000 other borrowings grew $63,074,000 or 41.3%,
compared  to  the  first  six  months  of  1999.Included  in the growth in other
borrowings  was  the  funding  required  for  the  $25,000,000  capital leverage
program.The  remaining  increase in deposit and other borrowing volumes was used
to  finance  the  earning  asset  growth.Other  borrowings include federal funds
purchased,  FHLB  borrowings, securities sold under agreements to repurchase and
U.  S.  Treasury  demand  notes.

Taxable-equivalent  net  interest  income  of  $18,344,000  was $754,000 or 4.3%
higher  in  the  second  quarter  of  2000, compared to $17,590,000 for the same
period  in 1999.Interest income grew $4,560,000 during the period, primarily due
to  a  15.7%  rise in loan volumes.The increase in interest income was partially
offset  by  a  $3,806,000  rise  in  interest  expense.Increases  in all deposit
categories  rates  and  volumes  contributed to this rise.Non-accruing loans are
included  in the average balance yield calculation, but the average non-accruing
loans  had  no  material  effect  on  the  results.

INTEREST  RATE  SENSITIVITY  ANALYSIS

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

The  banks  use  two  principal  reports  to  measure  interest  rate  risk:
asset/liability  simulation reports; and net interest margin reports. Management
also simulates possible economic conditions and interest rate scenarios in order
to  quantify the impact on net interest income.The effect that changing interest
rates  have  on  the  Banks'  net interest income is simulated by increasing and
decreasing  interest  rates.This simulation is known as rate shocks.The June 30,
2000  report  below forecasts changes in the Banks' market value of equity under
alternative  interest rate environments.The market value of equity is defined as
the  net  present  value  of  the  Banks'  existing  assets  and  liabilities.

PAGE 10

<TABLE>
<CAPTION>

(Dollars  in  thousands)

                                CHANGE IN ASSET/LIABILITY
<S>                <C>           <C>               <C>          <C>
                   MARKET VALUE  MARKET VALUE      PERCENTAGE   APPROVED
                   OF EQUITY     OF EQUITY         CHANGE       PERCENT CHANGE
                   ------------  ----------------  -----------  ---------------
+200 Basis Points       343,403          (27,006)       -7.29%          +/- 30%
+100 Basis Points       369,847             (562)       -0.15%          +/- 30%
Flat Rate . . . .       370,409                -         0.00%          +/- 30%
-100 Basis Points       342,163          (28,246)       -7.63%          +/- 30%
-200 Basis Points       309,395          (61,014)      -16.47%          +/- 30%
</TABLE>

 In  the  event the Banks should experience an excessive decline in their market
value  of equity resulting from changes in interest rates, they have a number of
options  which  it  they could utilize to remedy such a mismatch.The Banks could
restructure  their  investment  portfolio through sale or purchase of securities
with more favorable repricing attributes.They could also emphasize loan products
with  appropriate  maturities  or  repricing  attributes, or attract deposits or
obtain  borrowings  with  desired  maturities.

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

     The  net  interest  margin of 4.28% for the six-month period ended June 30,
2000,  decreased  from the 4.59% net interest margin for the first six months of
1999.The decrease in the net interest margin is due to both the capital leverage
program  and  the funding of the bank-owned life insurance (BOLI) with deposits,
and  the  high cost of attracting new deposits.The bank purchased $25,000,000 of
BOLI  during the third quarter of 1999 and $10,000,000 during the second quarter
of 2000.Since the current competitive interest rate environment will continue to
place downward pressure on the net interest margin, the Banks expect to increase
net  interest  income  through the continued growth in market share of loans and
deposits.The  yield  on  earning  assets of 7.90% during the first six months of
2000  was  higher  than the 7.70% earned during the first six months of 1999.The
increase  in  the  yield  is primarily due to the impact of the rise in interest
rates  during  this period. The first half of 2000 average interest rate paid on
interest-bearing  deposits  and  other  borrowings  of 4.32% was higher than the
first six months of 1999 rate of 3.88%.The increase in the average interest rate
paid  is  the result of funding the capital leverage program with higher costing
FHLB borrowings, higher interest rates and the overall higher cost of attracting
new  deposits. The second quarter of 2000 net interest margin of 4.28% was lower
than  the  second  quarter  1999  net  interest  margin  of  4.61%.

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

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

 For  the first six months of 2000 the provision for loan losses was $1,055,000,
compared  to  $980,000 for the same period in 1999.The higher provision for loan
losses  during the first quarter of 2000, compared to the same period in 1999 is
attributed  to  the  growth  in  loans during this period and an increase in net

PAGE 11

loans  charged  off.Net  loans charged off was $694,000 for the six months ended
June  30,  2000, compared to $344,000 for the six months ended June 30, 1999.The
increase  in  loans  charged off was primarily due to consumer related loans.The
ratio  of nonperforming assets to total assets for June 30, 2000 of .32% did not
change  from  December  31, 1999, and was lower than the June 30, 1999 ratios of
 .33%.

<TABLE>
<CAPTION>

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

<S>                                                  <C>              <C>
                                                             2000          1999
                                                          ---------      ---------
Balance, Beginning of Year                            $   14,887,000   $14,246,000
   Provision charged to operating expenses                 1,055,000       980,000
   Loans charged off                                        (992,000)     (436,000)
   Recoveries                                                298,000        92,000
                                                         ------------   -----------
Balance, June 30                                          15,248,000    14,882,000
                                                     ===============  ============

Ratios: . . . . . . . . . . . . . . . . . . . .    .  June 30, 2000  Dec. 31, 1999  June 30, 1999
-------------------------------------------------  -------------  -------------  ---------------
Allowance for loan losses to nonperforming assets         257.7%        266.3%         273.8%
Nonperforming assets to total loans & net assets
acquired in foreclosure                                    0.50%         0.50%          0.53%
Nonperforming assets to total total assets                 0.32%         0.32%          0.33%
Allowance for loan losses to total loans                   1.30%         1.33%          1.44%

</TABLE>

The following table sets forth an allocation of the allowance for loan losses by
loan  category:
<TABLE>
<CAPTION>
                               June 30, 2000
                               -------------
                                       Percent
<S>                            <C>       <C>
                             Amount    of Loans
                            --------  ---------
Commercial and industrial    $  6,894        26%
Consumer loans. . . . . .       4,800        35%
Real estate . . . . .   . .     2,494        30%
Lease financing . . . .   .     1,060         9%
                             --------  ---------
  Total . . . . . . .   . .    15,248       100%
                             ========  =========
</TABLE>

     Nonperforming  assets  (nonaccruing  loans,  net  assets in foreclosure and
troubled  debt  restructured  loans)  were  0.50%  of total loans and net assets
acquired in foreclosure at June 30, 2000, compared to 0.50% at December 31, 1999
and  0.53%  at June 30, 1999.The ratio of the allowance for loan losses to loans
at June 30, 2000 of 1.30% decreased from the December 31, 1999 and June 30, 1999
ratios  of  1.33%  and  1.44%,  respectively.

     Nonaccruing  loans  at  June 30, 2000 of $4,450,000,000, increased $760,000
from  the  December 31, 1999 level of $3,690,000, and decreased $91,000 from the
June 30, 1999 level of $4,541,000. The increase in nonaccruing loans at June 30,
2000,  compared  to December 31, 1999 was primarily the result of an increase in
commercial  nonaccruing  loans.

Net  assets in foreclosure totaled $1,017,000 as of June 30, 2000, a decrease of
$419,000  from  the December 31, 1999 balance of $1,436,000.During the first six
months  of  2000,  transfers  from loans to assets in foreclosure were $646,000,
payments  on foreclosed properties totaled $984,000 and write-downs of assets in
foreclosure  equaled  $81,000.The  loans  transferred  to  assets in foreclosure
included  commercial  loans  of  $121,000,  mortgages  of  $52,000 and leases of
$473,000.The  balance  of  net  assets  in  foreclosure  at  June  30,  1999 was

PAGE 12

$413,000.Efforts  to  liquidate assets acquired in foreclosure are proceeding as
quickly  as  potential  buyers  can  be  located  and  legal  constraints
permit.Generally  accepted accounting principles require foreclosed assets to be
carried at the lower of cost (lesser of carrying value of asset or fair value at
date  of  acquisition)  or  estimated  fair  value.

     As  of June 30, 2000, there were two unrelated borrowers with troubled debt
restructured loans totaling $449,000, compared with two unrelated borrowers with
a  balance of$465,000 as of December 31, 1999 and $481,000 at June 30, 1999. The
two  customers  were  complying with the restructured terms as of June 30, 2000.

     Loans  past  due 90 days or more and still accruing interest are loans that
are  generally  well  secured and expected to be restored to a current status in
the  near  future.As  of June 30, 2000, loans past due 90 days or more and still
accruing  interest were $1,172,000, compared to $565,000 as of December 31, 1999
and $970,000 as of June 30, 1999. The increase in loans past due 90 days at June
30, 1999,compared to December 31,1999 was primarily the result of an increase in
real  estate  loans  past  due  90  days.

<TABLE>
<CAPTION>

The following information concerns impaired loans:
<S>                                                 <C>             <C>             <C>
Impaired Loans:. . . . . . . . . . . . . . . . . .  June 30, 2000   Dec. 31, 1999   June 30, 1999
                                                    --------------  --------------  --------------
 Restructured Loans. . . . . . . . . . . . . . . .  $      449,000  $      465,000  $      481,000
 Nonaccrual Loans. . . . . . . . . . . . . . . . .  $    2,691,000  $    2,117,000  $    2,766,000
                                                    --------------  --------------  --------------
Total Impaired Loans . . . . . . . . . . . . . . .  $    3,140,000  $    2,582,000  $    3,247,000
                                                    ==============  ==============  ==============

Average year-to-date impaired loans: . . . . . . .  $    2,605,000  $    3,046,000  $    2,612,000
                                                    ==============  ==============  ==============

Impaired loans with specific loss allowances:. . .  $    3,140,000  $    2,582,000  $    3,247,000
                                                    ==============  ==============  ==============

Loss allowances reserved on impaired loans:. . . .  $      347,000  $      262,000  $      433,000
                                                    ==============  ==============  ==============

 Year-to-date income recognized on impaired loans.  $       37,000  $      132,000  $       23,000
                                                    ==============  ==============  ==============
</TABLE>

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

<TABLE>
<CAPTION>

OTHER  OPERATING  INCOME
------------------------
                                    Six  Months Ended    Three Months Ended
                                        June 30,               June 30,
                                    -----------------   ---------------------
                                       2000    1999     2000    1999
                                      -----    ----     ----    ----
(Dollars in thousands)
<S>                                    <C>     <C>     <C>    <C>
Service charges . . . . . . . . .       1,870   1,803    950     907
Securities (losses) gains, net. .        (192)    493    (80)    345
Trust income. . . . . . . . . . .       1,462   1,308    770     658
Bank-owned life insurance income.         727       -    381       -
Other income. . . . . . . . . . .       1,644   1,501    836     743
Total other operating income. . .       5,511   5,105  2,857   2,653
                                        =====   =====  ======  =====
</TABLE>

PAGE 13

     Other operating income for the first six months of 2000 increased $406,000,
or  8.0%,  from $5,105,000 at June 30, 1999 to $5,511,000 at June 30, 2000. This
rise  in  other  operating  income  is the result of a $67,000 growth in service
charges,  a  $154,000  rise  in  trust  income  and a $143,000 increase in other
income.Bank-ownedlife  insurance  (BOLI)  income  contributed  $727,000 to other
operating  income  during the first half of 2000.A $685,000 decrease in security
gains  partially  offset  these increases.The rise in other operating income was
23.7%,  not inclusive of the securities gains and losses.The second quarter 2000
other  income  was 7.7% higher than the second quarter of 1999.This increase was
primarily  due  to  the  BOLI  income  earned during the second quarter of 2000.

     Service  charges  grew $67,000, or 3.7% in the six months of 2000, compared
to the same period in 1999. This growth was primarily the result of the increase
in  average  deposit  transaction accounts, from the first six months of 1999 to
the  first  six  months in 2000.The 2000 second quarter service charge income of
$950,000,  increased  $43,000,  or  4.7%  over  the  second  quarter  of  1999.

The  Corporation  recorded  net  security  losses  on  the sale of securities of
$192,000  in  the  first six months of 2000 and $80,000 in the second quarter of
2000.The  Corporation  recorded  net security gains on the sale of securities of
$493,000  in  the first six months of 1999 and $345,000 in the second quarter of
1999.  From  time to time, the Corporation sells investment securities available
for  sale  to  fund the purchase of other securities in an effort to enhance the
overall  return  of  the  portfolio.

     Income from the Investment Management and Trust Services Division increased
$154,000, or 11.8% in the first six months of 2000 and $112,000, or 17.0% in the
second quarter of 2000, compared to the same periods in 1999. These increase was
the  result  of  both  an  increase  in  the  book  value  of trust assets under
management  of  22.3% from June 30, 1999 to June 30, 2000, and the Corporation's
continuing  emphasis  on  marketing the Investment Management and Trust Services
Division's  products  and  services.

During  the  third  quarter  of 1999, the corporation entered into a $25,000,000
investment  of  bank-owned life insurance (BOLI).The corporation entered into an
additional  $10,000,000  investment  of  BOLI during the second quarter of 2000.
BOLI  involves the corporation purchasing of life insurance on a chosen group of
employees.The corporation is the owner and beneficiary of the policies.This pool
of  insurance,  due  to  tax  advantages  to  the  Banks,  is  profitable to the
corporation.This  profit offsets a portion of future benefit cost increases.Bank
deposits fund BOLI and the earnings from BOLI are recognized as other income.The
corporation  recognized  $727,000  of BOLI income during the first six months of
2000  and  $381,000  during  the  second  quarter  of  2000.

Other  income  for  the  first  six  months of 2000 increased $143,000, or 9.5%,
compared  to  the same period in 1999.The second quarter of 2000 other income of
$836,000  grew  $93,000, or 12.5%, over the second quarter of 1999. Contributing
to  this rise were increases related to loan servicing fees, loan insurance fees
and  ATM/Debit  card fees.These increases were partially offset by a decrease in
gains  on  the  sale  of residential mortgages, resulting from a decrease in new
mortgage volumes experienced during the first half of 2000, compared to the same
period  in  1999.

<TABLE>
<CAPTION>

OTHER  OPERATING  EXPENSES
--------------------------
                                   Six Months Ended    Three Months Ended
                                      June 30,              June 30,
                                   ----------------    ------------------

                                       2000    1999    2000    1999
                                     ------  ------  ------  ------
(Dollars in thousands)
<S>                                   <C>      <C>     <C>     <C>
Salaries. . . . . . . . . . . .        8,765   7,940   4,452   4,119
Employee benefits . . . . . . .        2,818   2,698   1,377   1,306
Net occupancy expense . . . . .        1,475   1,330     698     649
Equipment expense . . . . . . .        2,397   2,101   1,219   1,065
Other Expenses. . . . . . . . .        7,121   5,746   3,901   2,863
Total other operating expenses.       22,576  19,815  11,647  10,002
                                     =======  ======  ======  ======
</TABLE>

PAGE 14

     Other  operating  expenses  for the first six months of 2000 of $22,576,000
increased $2,761,000, or 13.9%, from $19,815,000 for the same period in 1999.The
rise  in  operating  expenses  was  the  result  of  costs related to technology
enhancements  to  be  used  to  improve both the Banks productivity and products
offered  to  customers,  cost  related  to the merger of Citizens Bank and Trust
Company and other expenses related to the overall growth of the banks.The second
quarter  other  operating  expenses  increased  36.3% over the second quarter of
1999.

    Employee salaries increased $825,000, or 10.4% from $7,940,000 for the first
six  months  of 1999 to $8,765,000 for the same period in 2000.Employee benefits
of  $2,818,000  expensed in the first six months of 2000, were $120,000, or 4.4%
higher  than the $2,698,000 of employee benefits expensed during the same period
in 1999.The second quarter 2000 salary and employee benefits exceeded the second
quarter  of  1999 levels by 8.1% and 5.4%, respectively.The increase in salaries
and  employee  benefits  reflects  cost of living increases, merit increases and
additional  staff  necessitated  by  the  growth  of  the  Banks.

     Net  occupancy expense increased $145,000, or 10.9%, from $1,330,000 in the
first  six  months  of  1999  to  $1,475,000 in the first six months of 2000.Net
occupancy  expenses  grew  7.6%  in  the second quarter of 2000, compared to the
second  quarter  of  1999.Contributing to this increase was the opening of a new
branch,  higher  than  normal  snow removal expenses, and repair and maintenance
expenses.Equipment  expense  increased$296,000,  or  14.1%, during the first six
months of 2000, compared to the same period in 1999.The second quarter equipment
expenses grew $154,000, or 14.5% over the second quarter of 1999.These increases
are  due  to both equipment depreciation and maintenance associated with planned
increased  technology  capabilities used to manage the growth of the Corporation
and  to  enhanced  the  products  offered  to  customers.

Other  expenses increased $1,375,000, or 23.9%, from $5,746,000 in the first six
months  of  1999,  compared  to $7,121,000 in other expenses recorded during the
same  period in 2000.Second quarter 2000 other expenses of $3,901,000 were 36.3%
higher  than  the  second  quarter  of  1999  other  expenses of $2,863,000.This
increase  is the result of higher expenses associated with the overall growth of
the  Banks,  and  the  merger  of  Citizens  Bank  and  Trust  Company.

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

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

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

Total assets grew $85,363,000, or 4.8%, from $1,767,667,000 at December 31, 1999
to  $1,853,030,000  at  June 30, 2000.This growth was the primarily result of an
increases  in  earning  assets  and  BOLI  of  $63,570,000  and  $10,727,000,
respectively.During  the  first  six  months of 2000, loans grew $55,173,000 and
securities  rose  $18,021,000.These  earning  asset  increases  were  offset  by
decreases  to  federal  funds  sold  and  interest-bearing  deposits in banks of
$6,600,000  and  $3,024,000,  respectively.

The  balance  of  securities available for sale at June 30, 2000 of $510,292,000
increased  $4,932,000  compared  to  the  December  31,  1999  balance  of
$505,360,000.During the first six months of 2000, $46,196,000 of securities were
sold  which  generated  a  pretax  loss  of  $192,000.In comparison, $34,612,000
securities  available  for  sale  were  sold  during  the  first half of 1999 to
generate  a  pretax  gain  of  $493,000.From time to time, the corporation sells
investment  securities  available  for  sale  to  fund  the  purchase  of  other
securities  in  an  effort  to  enhance  the overall return of the portfolio.The
balance  of  investment  securities held to maturity grew $13,089,000 during the
first  half  of  2000.

PAGE 15

Total  loans  grew  $55,173,000  or  4.9%  during  the  first  six  months  of
2000.Contributing  to  this increase were consumer loans, leasing and commercial
loans  which  grew  $32,471,000,  $13,710,000  and  $9,347,000, respectively.The
growth  in  consumer loans was primarily in financing indirect automobile dealer
loans.Real  estate  loans  decreased  $355,000 during this period reflecting the
slow  down  in  the  residential  mortgage  market.

     Total  deposits  increased  $101,688,000,  or  7.6%  from $1,341,446,000 at
December 31, 1999 to $1,443,134,000 at June 30, 2000.This increase was primarily
due  to  the  growth  in  money  market  accounts  and time deposits during this
period.Money  market  accounts  grew  $42,323,000  as  a result of the growth in
municipal  and trust deposits.Time deposits under $100,000 increased $17,731,000
and  time  deposits greater than $100,000 grew $30,850,000.The primary source of
the  rise  in  the  greater  than  $100,000  time  deposits  came from municipal
customers.Savings  accounts  and noninterest-bearing checking accounts increased
by  $9,325,000  and $7,014,000, respectively.Interest bearing deposits decreased
$5,555,000.Other  borrowings  experienced  a  decrease of $23,311,000 during the
first  six  months  of  2000.A  decrease  in securities sold under agreements to
repurchase  of  $42,889,000,  was partially offset by increases in federal funds
purchased  of  $21,500,000.The  decrease  in securities sold under agreements to
repurchase was primarily the result of a business customer withdrawing funds and
transferring  funds to greater than $100,000 time deposits during the first half
of  2000.U.  S.  treasury  demand  notes  and  Federal Home Loan Bank borrowings
decreased  $922,000  and  $1,000,000,  respectively  during  this  period.

CAPITAL
-------

Capital  formation  is  important  to  the  Corporation's  well being and future
growth.Capital for the period ending June 30, 2000 was $152,045,000, an increase
of$5,382,000 over the end of 1999.The increase is the result of the retention of
the  Corporation's  earnings,  partially  offset  by  the adjustment for the net
unrealized losses on the investment securities available for sale.Net unrealized
gains  and  losses  on  available for sale investment securities are recorded as
accumulated  other  comprehensive  income  (loss)  in  the equity section of the
balance  sheet.The accumulated other comprehensive income at June 30, 2000 was a
loss  of  $12,912,000,  compared  to  a  loss  of  $10,808,000  at  December 31,
1999.Management  believes  that  the Corporation's current capital and liquidity
positions  are adequate to support its operations.Management is not aware of any
recommendations  by  any  regulatory  authority,  which,  if  it  were  to  be
implemented,  would  have  a  material  effect  on  the  Corporation's  capital.
<TABLE>
<CAPTION>

(Dollars  in  thousands)
<S>                                        <C>      <C>
      As of June 30, 2000                  Actual   Actual
      -------------------                  Amount   Ratio
                                           -------  -------
Total Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  179,100   13.22%
Harleysville National Bank. . . . . . . .  100,367   10.19%
Citizens National Bank. . . . . . . . . .   37,409   14.55%
Security National Bank. . . . . . . . . .   13,081   13.10%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  163,976   12.10%
Harleysville National Bank. . . . . . . .   89,697    9.11%
Citizens National Bank. . . . . . . . . .   34,194   13.30%
Security National Bank. . . . . . . . . .   12,018   12.04%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .  163,976    9.06%
Harleysville National Bank. . . . . . . .   89,697    7.06%
Citizens National Bank. . . . . . . . . .   34,194    8.62%
Security National Bank. . . . . . . . . .   12,018    8.96%
</TABLE>

PAGE 16

<TABLE>
<CAPTION>
                                                            To Be Well Capitalized
                                          For Capital       Under Prompt Corrective
       As of June 30, 2000             Adequacy Purposes        Action Provision
       -------------------
                                           Amount   Ratio   Amount  Ratio
                                           -------  ------  ------  ------
<S>                                        <C>      <C>     <C>     <C>
Total Capital (to risk weighted assets):
Corporation . . . . . . . . . . . . . . .  108,410   8.00%       -      -
Harleysville National Bank. . . . . . . .   78,769   8.00%  98,461  10.00%
Citizens National Bank. . . . . . . . . .   20,567   8.00%  25,709  10.00%
Security National Bank. . . . . . . . . .    7,988   8.00%   9,985  10.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .   54,205   4.00%       -      -
Harleysville National Bank. . . . . . . .   39,384   4.00%  59,077   6.00%
Citizens National Bank. . . . . . . . . .   10,284   4.00%  15,425   6.00%
Security National Bank. . . . . . . . . .    3,994   4.00%   5,991   6.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .   72,384   4.00%       -      -
Harleysville National Bank. . . . . . . .   50,807   4.00%  63,508   5.00%
Citizens National Bank. . . . . . . . . .   15,866   4.00%  19,832   5.00%
Security National Bank. . . . . . . . . .    5,363   4.00%   6,704   5.00%
</TABLE>

<TABLE>
<CAPTION>

(Dollars in thousands)
<S>                                         <C>      <C>
As of December 31, 1999. . . . . . . . . .  Actual   Actual
                                            Amount   Ratio
                                            -------  -------
Total Capital (to risk weighted assets):
------------------------------------------
Corporation. . . . . . . . . . . . . . . .  171,548   13.48%
Harleysville National Bank . . . . . . . .   93,993   10.23%
Citizens National Bank . . . . . . . . . .   40,305   16.27%
Security National Bank . . . . . . . . . .    9,593   10.57%
Tier 1 Capital (to risk weighted assets):
------------------------------------------
Corporation. . . . . . . . . . . . . . . .  156,326   12.29%
Harleysville National Bank . . . . . . . .   83,222    9.06%
Citizens National Bank . . . . . . . . . .   37,208   15.02%
Security National Bank . . . . . . . . . .    8,532    9.40%
Tier 1 Capital (to average assets):
------------------------------------------
Corporation. . . . . . . . . . . . . . . .  156,326    8.92%
Harleysville National Bank . . . . . . . .   83,222    6.76%
Citizens National Bank . . . . . . . . . .   37,208    9.35%
Security National Bank . . . . . . . . . .    8,532    7.05%
</TABLE>

PAGE 17

<TABLE>
<CAPTION>

                                                          To Be Well Capitalized
                                       For Capital        Under Prompt Corrective
     As of December 31, 1999         Adequacy Purposes      Action Provision

                                           Amount   Ratio   Amount  Ratio
                                           -------  ------  ------  ------
<S>                                        <C>      <C>     <C>     <C>
Total Capital (to risk weighted assets):
Corporation . . . . . . . . . . . . . . .  101,772   8.00%       -      -
Harleysville National Bank. . . . . . . .   73,484   8.00%  91,855  10.00%
Citizens National Bank. . . . . . . . . .   19,822   8.00%  24,777  10.00%
Security National Bank. . . . . . . . . .    7,259   8.00%   9,074  10.00%
Tier 1 Capital (to risk weighted assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .   50,886   4.00%       -      -
Harleysville National Bank. . . . . . . .   36,742   4.00%  55,113   6.00%
Citizens National Bank. . . . . . . . . .    9,911   4.00%  14,866   6.00%
Security National Bank. . . . . . . . . .    3,629   4.00%   5,444   6.00%
Tier 1 Capital (to average assets):
-----------------------------------------
Corporation . . . . . . . . . . . . . . .   70,081   4.00%       -      -
Harleysville National Bank. . . . . . . .   49,228   4.00%  61,536   5.00%
Citizens National Bank. . . . . . . . . .   15,918   4.00%  19,898   5.00%
Security National Bank. . . . . . . . . .    4,844   4.00%   6,055   5.00%
</TABLE>

     The  Corporation's  capital  ratios exceed regulatory requirements.Existing
minimum  regulatory  capital ratio requirements are 5.0% for primary capital and
6.0% for total capital.The Corporation's primary capital ratio was 9.60% at June
30,  2000, compared with 9.66% at December 31, 1999.Since the Corporation's only
capital is primary capital, the total capital ratios are the same as the primary
capital  ratios.

     Pursuant to the federal regulators' risk-based capital adequacy guidelines,
the  components  of  capital  are  called  Tier  1  and  Tier  2 capital.For the
Corporation,  Tier  1  capital  is  the shareholders' equity, and Tier 2 capital
includes the allowance for loan losses.The minimum for the Tier 1 ratio is 4.0%,
and  the  total  capital  ratio  (Tier  2) minimum is 8.0%.At June 30, 2000, the
Corporation's  Tier  1  risk-adjusted  capital  ratio  was 12.10%, and the total
risk-adjusted  capital  ratio  was  13.22%,  both  well  above  the  regulatory
requirements.The  risk-based  capital  ratios  of  each  of  the  Corporation's
commercial  banks  also  exceeded  regulatory  requirements  at  June  30, 2000.

     The  leverage ratio consists of Tier 1 capital divided by quarterly average
total  assets, excluding intangible assets.Banking organizations are expected to
have ratios of at least 4% and 5%, depending upon their particular condition and
growth  plans.Higher  leverage  ratios  could  be  required  by  the  particular
circumstances  or risk profile of a given banking organization.The Corporation's
leverage  ratios  were  9.06%  at  June 30, 2000 and 8.92% at December 31, 1999.

     The  year-to-date  June  30, 2000 cash dividend per share of $.56 was 14.3%
higher  than  the cash dividend for the same period in 1999 of $.49.The dividend
payout  ratio  for the first three months of 2000 was 37.98%, compared to 40.34%

PAGE 18

for  the  twelve  month  period  ended  December  31,  1999.Activity in both the
Corporation's dividend reinvestment and stock purchase plan and the stock option
plan  did  not  have a material impact on capital during the first six months of
2000.

LIQUIDITY
---------

     Liquidity  is a measure of the ability of the Banks to meet their needs and
obligations  on  a timely basis.For a bank, liquidity provides the means to meet
the  day-to-day  demands  of  deposit  customers  and  the  needs  of  borrowing
customers.Generally,  the  Banks  arrange  their  mix  of  cash,  money  market
investments,  investment  securities and loans in order to match the volatility,
seasonality, interest sensitivity and growth trends of its deposit funds.Federal
Funds sold averaged$5,839,000 during the first six months of 2000 and securities
available  for  sale  averaged $510,083,000 during the first six months of 2000,
more  than  sufficient  to  meet  normal  fluctuations in loan demand or deposit
funding.Federal  fund  lines  of  credit  established  with  correspondent banks
provide  backup  sources  of  liquidity. Additional liquidity could be generated
through borrowings from the Federal Reserve Bank of Philadelphia and the FHLB of
Pittsburgh, of which the Banks are members.Unused lines of credit at the FHLB of
Pittsburgh  were  $70,551,000,  as  of  June  30,  2000.

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

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

On  November  12, 1999, President Clinton signed into law the Gramm-Leach-Bliley
Act  of  1999,  the  Financial Services Modernization Act.The Financial Services
Modernization  Act  repeals the two affiliation provisions of the Glass-Steagall
Act:

    *Section  20,  which  restricted  the  affiliation of Federal Reserve Member
Banks  with  firms "engaged principally" in specified securities activities; and

    *Section  32,  which  restricts  officer,  director  or  employee interlocks
between a member bank and any company or person "primarily engaged" in specified
securities  activities.

In  addition,  the Financial Services Modernization Act also contains provisions
that  expressly preempt any state law insurance.The general effect of the law is
to  establish  a comprehensive framework to permit affiliations among commercial
banks,  insurance  companies,  securities  firms  and  other  financial  service
providers  by  revising  and expanding the Bank Holding Company Act framework to
permit  a  holding  company  system  to  engage  in  a  full  range of financial
activities  through  a new entity known as Financial Holding Company. "Financial
activities"  is  broadly  defined  to  include  not  only banking, insurance and
securities  activities, but also merchant banking and additional activities that
the  Federal Reserve, in consultation with the Secretary of Treasury, determines
to  be  financial  in  nature,  incidental  to  such  financial  activities,  or
complementary  activities  that do not pose a substantial risk to the safety and
soundness  of  depository  institutions  or  the  financial  system  generally.

     Generally,  the  Financial  Services  Modernization  Act:

     *Repeals  historical restrictions on, and eliminates many federal and state
law  barriers  to,  affiliations  among  banks,  securities  firms,  insurance
companies,  and  other  financial  service  providers
     *Provides  a  uniform  framework  for  the  functional  regulation  of  the
activities  of  banks,  savings  institutions  and  their  holding  companies;
     *Broadens  the activities  that may be conducted by national banks, banking
subsidiaries  of  bank  holding  companies,  and  their  financial subsidiaries;
     *Provides  an enhanced framework  for  protecting  the privacy of consumer
information;
     *Adopts  a number of provisions related to the capitalization, membership,
corporate  governance  and  the other measures designed to modernize the Federal
Home  Loan  Bank  system;
     *Modifies  the  laws  governing  the  implementation  of  the  Community
Reinvestment  Act;  and
     *Addresses  a variety of  other legal and regulatory issues affecting both
day-to-day  operations  and  long-term  activities  of  financial  institutions.

PAGE 19

In  order for the Corporation to take advantage of the ability to affiliate with
other  financial  service  providers,  the  Corporation must become a "Financial
Holding  Company"  as  permitted  under an amendment to the Bank Holding Company
Act.To  become  a  Financial  Holding  Company,  the  Corporation  would  file a
declaration  with  the  Federal  Reserve,  electing  to  engage  in  activities
permissible  for  Financial Holding Companies and certifying that it is eligible
to  do  so  because  all  of its insured depository institution subsidiaries are
well-capitalized  and  well-managed.In  addition,  the  Federal  Reserve  must
determine that each insured depository institution subsidiary of the Corporation
has  at  least  a  satisfactory  CRA  rating.The Corporation currently meets the
requirements  to  make  an  election  to  become a Financial Holding Company.The
Corporation's management has not determined at this time whether it will seek an
election  to become a Financial Holding Company.The Corporation is examining its
strategic  business  plan  to determine whether, based on market conditions, the
relative  financial  conditions  of  the  Corporation  and  its  subsidiaries,
regulatory  requirements,  general  economic  conditions, and other factors, the
Corporation  desires  to  utilize  any  of  its  expanded powers provided in the
Financial  Service  Modernization  Act.

The  Financial  Services Modernization Act also permits national banks to engage
in  expanded  activities  through  the  formation  of  financial  subsidiaries.A
national  bank  may  have  a  subsidiary  engaged in any activity authorized for
national  banks  directly  or  any  financial  activity,  except  for  insurance
underwriting,  insurance  investments, real estate investment or development, or
merchant  banking,  which  may  only  be  conducted  through  a  subsidiary of a
Financial  Holding Company.Financial activities include all activities permitted
under  new  sections of the Bank Holding Company Act or permitted by regulation.

A  national  bank  seeking  to  have  a  financial  subsidiary,  and each of its
depository  institution  affiliates,  must  be  "well-capitalized"  and
"well-managed."The total assets of all financial subsidiaries may not exceed the
lesser  of  45%  of  a  bank's  total assets or $50 billion.A national bank must
exclude  from  its  assets and equity all equity investments, including retained
earnings,  in  a  financial  subsidiary.The  assets of the subsidiary may not be
consolidated  with  risk  and  protect  the  bank  from such risks and potential
liabilities.

 The  Corporation  and  the  Banks  do  not  believe that the Financial Services
Modernization  Act  will have a material adverse effect on our operations in the
near-term.However,  to  the  extent that it permits banks, securities firms, and
insurance companies to affiliate, the financial services industry may experience
further  consolidation.The  Financial  Services Modernization Act is intended to
grant  to  community  banks  certain  powers  as  a  matter of right that larger
institutions have accumulated on an ad hoc basis.Nevertheless, this act may have
the result of increasing the amount of competition that the company and the bank
face  from  larger  institutions and other types of companies offering financial
products, many of which may have substantially more financial resources than the
company  bank.

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

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

PAGE 20

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

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

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

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

The  Banks  are  members of the Federal Reserve and, therefore, the policies and
regulations  of  the  Federal Reserve have a significant effect on its deposits,
loans  and  investment  growth, as well as the rate of interest earned and paid,
and  are  expected  to  affect the Banks' operations in the future.The effect of
such  policies  and  regulations  upon  the  future business and earnings of the
Corporation  and  the  Banks  cannot  be  predicted.

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

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

 From  time  to  time,  various types of federal and state legislation have been
proposed  that could result in additional regulation of, and restriction on, the
business  of  the Banks.It cannot be predicted whether any such legislation will
be adopted or, if adopted, how such legislation would affect the business of the
Banks.As  a  consequence  of  the  extensive  regulation  of  commercial banking
activities in the United States, the Banks' business is particularly susceptible
to  being  affected by federal legislation and regulations that may increase the
costs  of  doing  business.

 BRANCHING
 ---------

 The  Corporation's  subsidiaries  currently  plan  to  open  at  least  two new
branches.During  the  third  quarter of 2000, Citizens National Bank will open a
branch  in  Allentown.Harleysville  National  Bank  is  pursuing  a  location in
Souderton.These  new branch sites are contiguous to our current service area and
were  chosen  to  expand  the  Banks'  market area and market share of loans and
deposits.

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

 On April 28, 2000, the Corporation consummated its acquisition of Citizens Bank
and  Trust  Company.Under  the  terms  of  the  merger,  accounted  for  as  a
pooling-of-interest, Citizens Bank and Trust Company's shareholders received 166
shares  of  Harleysville  National  Corporation  common  stock for each share of
Citizens  Bank  and  Trust Company stock.Upon the completion of the acquisition,
Citizens  Bank  and  Trust  Company's  banking  operations  merged into those of
Citizens  National  Bank,  a  wholly  owned  subsidiary of Harleysville National
Corporation.

PAGE 21

ITEM  3  -  Qualitative  and  Quantitative  Disclosures  About  Market  Risk

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

No material changes in market risk strategy occurred during the current period.A
detailed  discussion  of  market  risk  is provided in the SEC Form 10-K for the
period  ended  December  31,  1999.

PAGE 22
                            PART II.OTHER INFORMATION

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

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

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

     Not  applicable.

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

     Not  applicable.

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

None.

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

     None.

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

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

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

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

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

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

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

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

PAGE 23

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

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

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

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

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

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

(27)  Financial  Data  Schedule.


     (b)Reports  on  Form  8-K:

Current  Report  on Form 8-K, dated April 28, 2000, filed with the Commission on
May  2, 2000,  reporting,  at  Item 5, the Registrant's completion of Citizens
Bank and Trust  Company.

Current  Report  on  Form 8-K, dated July 13, 2000, filed with the Commission on
July 19,2000, reporting the Registrant's second quarter 2000 press release.

PAGE 24
                                   SIGNATURES


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




                       HARLEYSVILLE  NATIONAL  CORPORATION



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


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


Date: August  14,  2000

PAGE 25

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


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

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

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

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

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

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

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

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

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

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

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

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

(27)  Financial  Data  Schedule.

PAGE 26