UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549

                                    FORM 10-Q

(Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

            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: 0-13599

                           OMEGA FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

             Pennsylvania                                 25-1420888
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)

                    366 Walker Drive, State College, PA 16801
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (814) 231-7680
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes |X| No |_|

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act.

Yes |X| No |_|

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

       The number of shares outstanding of each of the issuer's classes of
                         common stock as of May 2, 2004:
                8,497,183 shares of Common Stock, $5.00 par value


<PAGE>

PART I. Financial Information

Item 1. Financial Statements

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
                                    Unaudited

<TABLE>
<CAPTION>
                                                               March 31,     December 31,
                                                                 2004           2003
                                                              -----------    ------------
<S>                                                           <C>            <C>
Assets
Cash and due from banks                                       $    31,353    $    32,420

Interest bearing deposits with other banks                         15,317         10,682
Federal funds sold                                                 29,100         17,850

Investment securities available for sale                          216,675        240,539

Total loans                                                       787,216        788,144
Less: Allowance for loan losses                                   (10,451)       (10,569)
                                                              -----------    -----------
Net loans                                                         776,765        777,575

Premises and equipment, net                                        14,323         14,348
Bank-owned life insurance                                          37,488         37,134
Other assets                                                       10,849          9,618
                                                              -----------    -----------
TOTAL ASSETS                                                  $ 1,131,870    $ 1,140,166
                                                              ===========    ===========

Liabilities and Shareholders' Equity
Deposits:
  Non-interest bearing                                        $   149,662    $   155,702
  Interest bearing                                                748,825        751,878
                                                              -----------    -----------
Total deposits                                                    898,487        907,580

Short-term borrowings                                              31,516         33,263
Other liabilities                                                   7,464          6,950
ESOP debt                                                           2,441          2,521
Long-term debt                                                     21,305         21,600
Other interest bearing liabilities                                    807            813
                                                              -----------    -----------
TOTAL LIABILITIES                                                 962,020        972,727

Shareholders' Equity
Preferred stock, par value $5.00 per share:
  Authorized - 5,000,000 shares, none issued
Unearned compensation related to ESOP debt                         (1,564)        (1,624)
Common stock, par value $5.00 per share:
  Authorized - 25,000,000 shares;
  Issued -
    10,080,443 shares at March 31, 2004;
    10,048,368 shares at December 31, 2003                         50,402         50,242
  Outstanding -
    8,490,898 shares at March 31, 2004;
    8,458,823 shares at December 31, 2003
Capital surplus                                                    16,481         15,711
Retained earnings                                                 147,501        146,430
Accumulated other comprehensive income                              5,559          5,209
Cost of common stock in treasury:
    1,589,545 shares at March 31, 2004 and December 31, 2003      (48,529)       (48,529)
                                                              -----------    -----------
TOTAL SHAREHOLDERS' EQUITY                                        169,850        167,439
                                                              -----------    -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $ 1,131,870    $ 1,140,166
                                                              ===========    ===========
</TABLE>


<PAGE>

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                        (In thousands, except share data)
                                    Unaudited

                                                         Three Months Ended
                                                              March 31,
                                                        2004            2003
                                                     -----------     -----------
Interest Income:
Interest and fees on loans                           $    11,197     $    12,322
Interest and dividends on investment securities            1,853           2,324
Other interest income                                         56              97
                                                     -----------     -----------
TOTAL INTEREST INCOME                                     13,106          14,743

Interest Expense:
Interest on deposits                                       2,692           3,404
Interest on short-term borrowings                             76             123
Interest on long-term debt and
  other interest bearing liabilities                         248             216
                                                     -----------     -----------
TOTAL INTEREST EXPENSE                                     3,016           3,743
                                                     -----------     -----------
NET INTEREST INCOME                                       10,090          11,000
Provision for loan losses                                     --             100
                                                     -----------     -----------
INCOME FROM CREDIT ACTIVITIES                             10,090          10,900

Other Income:
Service fees on deposit accounts                           1,339           1,404
Service fees on loans                                        281             402
Earnings on bank-owned life insurance                        354             386
Trust fees                                                   915             892
Gain on sale of loans and other assets                        (1)              4
Net gains on investment securities                             8              31
Other                                                        842             777
                                                     -----------     -----------
TOTAL OTHER INCOME                                         3,738           3,896

Other Expense:
Salaries and employee benefits                             4,955           4,939
Net occupancy expense                                        627             630
Equipment expense                                            702             715
Data processing service                                      423             419
Other                                                      2,526           2,673
                                                     -----------     -----------
TOTAL OTHER EXPENSE                                        9,233           9,376
                                                     -----------     -----------
Income before taxes                                        4,595           5,420
Income tax expense                                           991           1,198
                                                     -----------     -----------
NET INCOME                                           $     3,604     $     4,222
                                                     ===========     ===========

Net income per common share:
   Basic                                             $       .43     $       .51
   Diluted                                           $       .42     $       .49
Weighted average shares and equivalents:
   Basic                                               8,470,961       8,100,962
   Diluted                                             8,559,206       8,528,178
Dividends declared per share:
   Common                                            $       .30     $       .29
   Preferred                                                  --     $       .45


<PAGE>

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    Unaudited

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                           March 31,
                                                                     ---------------------
                                                                       2004         2003
                                                                     --------     --------
<S>                                                                  <C>          <C>
Cash flows from operating activities:
  Net income                                                         $  3,604     $  4,222
  Adjustments to reconcile net income to
       net cash provided by operating activities:
    Depreciation and amortization                                       1,027          947
    Provision for loan losses                                              --          100
    Gain on sale of investment securities                                  (8)         (31)
    Gain on sale of fixed assets
       and other property owned                                            (1)          (1)
    Loss (gain) on sale of loans                                            2           (3)
    Decrease (increase) in deferred tax asset                              38         (115)
    Increase in cash surrender value of bank owned life insurance        (354)        (386)
    Increase in interest receivable and other assets                   (1,471)      (1,095)
    Increase (decrease) in interest payable                                 8          (52)
    Increase in taxes payable                                             937          936
    Amortization of deferred net loan fees                                (72)        (153)
    Deferral of net loan fees                                             763          216
    (Decrease) Increase in accounts payable and accrued expenses         (431)       8,079
                                                                     --------     --------
      Total adjustments                                                   438        8,442
                                                                     --------     --------
Net cash provided by operating activities                               4,042       12,664

Cash flows from investing activities:
  Proceeds from the sale or maturity of
    investment  securities available for sale                          29,502       28,229
  Purchase of investment
    securities available for sale                                      (5,559)     (21,348)
  Net change in interest bearing deposits with other banks             (4,635)      (6,884)
    Decrease (increase) in loans                                          119      (14,302)
  Gross proceeds from sale of loans                                        (2)       1,032
  Capital expenditures                                                   (552)        (330)
  Sale of fixed assets and other property owned                            12           --
  Net change in federal funds sold                                    (11,250)      10,400
                                                                     --------     --------
Net cash provided by (used in) investing activities                     7,635       (3,203)

Cash flows from financing activities:
  Decrease in deposits, net                                            (9,093)        (273)
  Net change in short-term borrowings                                  (1,747)      (9,661)
  Issuance of long term debt                                               --        6,500
  Principal payment on long-term debt                                    (295)        (277)
  Net change in other interest bearing liabilities                         (6)          (7)
  Dividends paid                                                       (2,545)      (2,449)
  Tax benefit from preferred stock dividend
     and stock option activity                                             12           13
  Issuance of common stock                                                930          703
  Acquisition of treasury stock                                            --         (269)
                                                                     --------     --------
Net cash used by financing activities                                 (12,744)      (5,720)
                                                                     --------     --------
Net increase (decrease) in cash and due from banks                   $ (1,067)    $  3,741
                                                                     ========     ========

Cash and due from banks at beginning of period                       $ 32,420     $ 36,049
Cash and due from banks at end of period                               31,353       39,790
                                                                     --------     --------
Net increase (decrease) in cash and due from banks                   $ (1,067)    $  3,741
                                                                     ========     ========

Interest paid                                                        $  3,008     $  3,795
Income taxes paid                                                          --          365
</TABLE>


<PAGE>

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

THREE MONTHS ENDED MARCH 31, 2004 AND 2003

A.    Basis of Presentation:

      The accompanying unaudited financial statements have been prepared in
      accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation
      S-X. Accordingly, they do not include all the information and footnotes
      required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, all adjustments,
      including normal recurring accruals, considered necessary for a fair
      presentation have been included. Operating results for the three months
      ended March 31, 2004 are not necessarily indicative of the results that
      may be experienced for the year ending December 31, 2004 or any other
      interim period. For further information, refer to the Consolidated
      Financial Statements and Footnotes included in the Company's Annual Report
      on Form 10-K for the year ended December 31, 2003.

      The accompanying Consolidated Financial Statements include Omega Financial
      Corporation (Omega), a bank holding company, and the combined results of
      its wholly owned banking and non-banking subsidiaries.

B.    Commitments, Contingent Liabilities and Guarantees:

      In the ordinary course of business, Omega makes commitments to extend
      credit to their customers through letters of credit and lines of credit.

      Standby letters of credit are instruments issued by the Corporation that
      guarantee the beneficiary payment by the bank in the event of default by
      the Corporation's customer in the non-performance of an obligation or
      service. Most standby letters of credit are extended for one-year periods.
      The credit risk involved in issuing letters of credit is essentially the
      same as that involved in extending loan facilities to customers. The
      Corporation holds collateral supporting those commitments for which
      collateral is deemed necessary. At March 31, 2004 standby letters of
      credit issued and outstanding amounted to $13,152,000 as compared to
      $13,118,000 on December 31, 2003. The fair market value of the standby
      letters of credit at March 31, 2004 and December 31, 2003 was $88,000 and
      $72,000, respectively. The fair market value of standby letters of credit
      is recorded as a liability in accordance with FIN 45.

      At March 31, 2004, the Corporation had $159,893,000 outstanding in loan
      commitments and other unused lines of credit extended to its customers. Of
      this amount, $49,167,000, or 30.7%, are commitments to consumers for
      mortgage and home equity loans and personal lines of credit. The remaining
      amounts of $110,726,000 are commercial commitments.


      Omega's Employee Stock Ownership Plan (ESOP) incurred debt in 1990 of
      $5,000,000, which is collateralized by a mortgage on the Corporation's
      administrative center and the Corporation's guarantee. As of March 31,
      2004, the balance of the ESOP debt was $2,441,000 as compared to
      $2,521,000 at December 31, 2003.


<PAGE>

C.    Comprehensive Income:

      Components of other comprehensive income consist of the following (in
      thousands):

<TABLE>
<CAPTION>
                                                       Three Months Ended March 31, 2004   Three Months Ended March 31, 2003
                                                        Before   Tax Expense                Before   Tax Expense
                                                         Tax         or       Net-of-Tax     Tax         or       Net-of-Tax
                                                        Amount    (Benefit)     Amount      Amount    (Benefit)     Amount
                                                       --------  -----------  ----------   --------  -----------  ----------
<S>                                                    <C>         <C>         <C>         <C>         <C>         <C>
Net income                                             $  4,595    $    991    $  3,604    $  5,420    $  1,198    $  4,222
Other comprehensive income:
  Unrealized gains on available for sale securities:
  Unrealized holding gains (losses)
   arising during the period                                546         191         355        (101)        (35)        (66)
  Less reclassification adjustment for
   gains included in net income                              (8)         (3)         (5)        (31)        (11)        (20)
                                                       --------    --------    --------    --------    --------    --------
Other comprehensive income (loss)                           538         188         350        (132)        (46)        (86)
                                                       --------    --------    --------    --------    --------    --------
Total comprehensive income                             $  5,133    $  1,179    $  3,954    $  5,288    $  1,152    $  4,136
                                                       ========    ========    ========    ========    ========    ========
</TABLE>

D.    Earnings Per Share Data:

      Basic earnings per share are computed by dividing income available to
      common stockholders by the weighted average number of shares outstanding
      for the period. On a diluted basis, both earnings and shares outstanding
      are adjusted to assume the conversion of all potentially dilutive
      securities into common stock.

<TABLE>
<CAPTION>
                                                          (in thousands, except per share data)
                                           Quarter Ended March 31, 2004           Quarter Ended March 31, 2003
                                        ----------------------------------     -----------------------------------
                                         Income       Shares      Per-Share     Income        Shares      Per-Share
                                        Numerator   Denominator    Amount      Numerator    Denominator    Amount
                                        --------    -----------   ---------    --------     -----------   ---------
<S>                                     <C>             <C>       <C>          <C>              <C>       <C>
Net income                              $  3,604                               $  4,222

Less: Preferred stock dividends               --                                    (99)
                                        --------                               --------

Basic EPS
Income available to common
    shareholders                           3,604        8,471     $   0.43        4,123         8,101     $   0.51
                                                                  ========                                ========

Effect of Dilutive Securities
Impact of:
   Assumed conversion of preferred
      to common stock                                      --                                     346
   Assumed exercises of outstanding
      options                                              88                                      81
Preferred stock dividends
    available to common
    shareholders                              --                                     99
Elimination of tax benefit of
    allocated preferred dividends             --                                    (21)
Additional expense required to fund
    ESOP debt, net of tax impact              --                                      1
                                        ---------------------                  ----------------------

Diluted EPS
Income available to common
     shareholders plus assumed
     conversions                        $  3,604        8,559     $   0.42     $  4,202         8,528     $   0.49
                                        ==================================     ===================================
</TABLE>


<PAGE>

E.    Summary of Significant Accounting Policies:

      Stock-based compensation

      Omega accounts for stock-based compensation using the intrinsic value
      method in accordance with Accounting Principles Board (APB) Opinion 25,
      "Accounting for Stock Issued to Employees", and has adopted the disclosure
      provisions of FASB No. 148, "Accounting for Stock-Based Compensation". The
      following proforma information regarding net income and earnings per share
      assumes the adoption of Statement No. 123 for stock options granted
      subsequent to December 31, 1994. The estimated fair value of the options
      is amortized to expense over the vesting period.

      The fair value was estimated at the date of grant using a Black-Scholes
      option-pricing model utilizing various assumptions. Compensation expense,
      net of related tax, amounted to $103,000 and $107,000 in the first quarter
      of 2004 and 2003, respectively and is included in the proforma net income
      reported below (in thousands, except per share data).

                                                         Quarter ended March 31,
                                                           2004           2003
                                                         --------       --------
          Net income                     As reported     $ 3,604        $ 4,222
                                         Pro forma         3,501          4,115

          Basic earnings per share       As reported     $  0.43        $  0.51
                                         Pro forma          0.42           0.50

          Diluted earnings per share     As reported     $  0.42        $  0.49
                                         Pro forma          0.41           0.48

      The Black-Scholes option valuation model was developed for use in
      estimating the fair value of traded options, which have no vesting
      restrictions and are fully transferable. In addition, option valuation
      models require the input of highly subjective assumptions including the
      expected stock price volatility. Because Omega's employee stock options
      have characteristics significantly different from those of traded options,
      and because changes in the subjective input assumptions can materially
      affect the fair value estimate, in management's opinion, the existing
      models do not necessarily provide a reliable single measure of the fair
      value of its employee stock options.

F.    Recent Accounting Pronouncements:

      In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
      Variable Interest Entities," (FIN 46). The objective of FIN 46 is to
      provide guidance on how to identify a variable interest entity (VIE) and
      determine when the assets, liabilities, noncontrolling interests, and
      results of operations of a VIE need to be included in a company's
      consolidated financial statements. In December 2003, the FASB reissued FIN
      46 with certain modifications and clarifications. Application of this
      guidance was effective for interest in certain VIEs commonly referred to
      as special-purpose entities as of December 31, 2003. Omega adopted FIN 46
      on March 31, 2004. The Corporation does not expect the application of FIN
      46 to have a material impact on financial condition or results of
      operations.

G.    Subsequent Event:

      On April 20, 2004, Omega and Sun Bancorp, Inc., parent company of SunBank,
      Mid-Penn Insurance Associates, Sun Investment Services, Bank Capital
      Services and Sentry Trust Company, announced that Omega had agreed to
      acquire Sun Bancorp, Inc. Under the terms of the merger agreement, Sun
      Bancorp shareholders will be entitled to receive either 0.664 shares of
      Omega common stock for each share of Sun Bancorp common stock or $23.25 in
      cash for each share held subject to pro rata allocation such that 20% of
      Sun Bancorp common stock shall be paid in cash and 80% will be in the form
      of Omega common stock. The definitive merger agreement has been approved
      unanimously by the Boards of Directors of both companies. The transaction
      is subject to all required regulatory approvals and approvals by Omega
      Financial Corporation and Sun Bancorp shareholders and certain other
      customary conditions. The transaction is anticipated to close late in the
      third quarter or early fourth quarter 2004.


<PAGE>

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES

================================================================================

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

--------------------------------------------------------------------------------
Investment Considerations

      In analyzing whether to make, or to continue to make, an investment in
      Omega, investors should consider, among other factors, certain investment
      considerations more particularly described in "Item 1: Business -
      Investment Considerations" in the Company's Annual Report on Form 10-K for
      the year ended December 31, 2003. A copy of this report can be obtained
      from David N. Thiel, Senior Vice President, Omega Financial Corporation,
      366 Walker Drive, State College, Pennsylvania 16801.

      Forward Looking Statements

      The information in this Report on Form 10-Q contains forward looking
      statements (as such term is defined in the Securities Exchange Act of 1934
      and the regulations thereunder), including without limitation, statements
      as to the future loan and deposit volumes, the allowance and provision for
      possible loan losses, future interest rates and their effect on Omega's
      financial condition or results of operations, the classification of
      Omega's investment portfolio or as to trends or management's beliefs,
      expectations or opinions and other statements other than historical facts.
      Such forward looking statements are subject to risks and uncertainties and
      may be affected by various factors which may cause actual results to
      differ materially from those in the forward looking statements. In
      addition to the factors discussed in this report, certain risks,
      uncertainties and other factors, including without limitation, risks
      arising from economic conditions and related uncertainties, changes in
      interest rates, federal and state regulation, competition and the adequacy
      of the allowance and provision for loan losses, are discussed in the
      Company's 2003 Annual Report to Shareholders or in the Company's Annual
      Report on Form 10-K for the year ended December 31, 2003. Copies of these
      reports may be obtained from Omega upon request and without charge (except
      for the exhibits thereto) as described above.

--------------------------------------------------------------------------------
1.    Comparison of the Three Months Ended March 31, 2004 and 2003

                               Operations Overview

      Three months ended March 31, 2004 and 2003

      The first quarter's income before income taxes in 2004 decreased $825,000,
      or 15.2%, when compared to the same period in 2003. Net interest income
      decreased $910,000, or 8.3% and the loan loss provision decreased by
      $100,000, or 100%. Non-interest income decreased by $158,000 or 4.1% in
      the first quarter of 2004 when compared to the same period in 2003, while
      non-interest expense decreased by $143,000 or 1.5% during the same time
      period.

      After the income tax provision (which decreased by $207,000, or 17.3%
      compared to the same period in 2003) was deducted from earnings, net
      income was $618,000, or 14.6%, lower than the first quarter of 2003. The
      effective tax rate for the first quarter of 2004 was 21.6%, as compared to
      the first quarter of 2003 of 22.1%.

      Following are selected key ratios for the period:

      --------------------------------------------------------------------------
                                                             Three Months Ended
                                                                  March 31
                                                            --------------------
                                                              2004        2003
                                                            --------    --------
      Return on average assets (annualized).............      1.28%       1.48%
      Return on average equity (annualized).............      8.48       10.25
      Dividend payout ratio (common)....................     70.63       55.74
      Average equity to average assets..................     15.09       14.48
      --------------------------------------------------------------------------


<PAGE>

                               Net Interest Income

      Three months ended March 31, 2004 and 2003

      The net interest margin, at 3.89% for the first quarter of 2004, was 31
      basis points lower than the first quarter of 2003, with a $14,247,000 or
      1.4% decrease in average earning assets in the first quarter of 2004 from
      the first quarter of 2003. Changes in volumes, net of differences caused
      by number of days in the period, resulted in a $74,000 increase in net
      interest income. Yield on earning assets in the first quarter of 2004
      decreased by 58 basis points when compared to 2003's first quarter, while
      cost of funding decreased by 27 basis points; these changes in rates
      resulted in a decrease in net interest income of $984,000. In order to
      maximize net income, Omega invests in certain loans and securities whose
      earnings are exempt from federal income taxation and therefore have rates
      that are generally lower than rates on taxable instruments. During the
      first quarter of 2004, average tax-free assets owned were $8,197,000 more
      than in the first quarter of 2003, with average rates of 67 basis points
      less. When the net interest margin is adjusted for the tax benefit
      received from owning these instruments, it is referred to as the net
      interest margin on a fully tax-equivalent basis. Taking effect of the
      increased balances and decreased rates on tax-free assets in the first
      quarter of 2004, the net interest margin on a fully tax-equivalent basis
      was 4.12% compared to 4.46% in the first quarter of 2003.

      Following are key net interest margin ratios (annualized):

          ----------------------------------------------------------------
                                                       Three Months Ended
                                                            March 31,
                                                     ---------------------
                                                       2004         2003
                                                     ---------------------
          Yield on average earning assets.........     5.06%        5.64%
          ----------------------------------------------------------------
          Cost to fund earning assets.............     1.17         1.44
          ----------------------------------------------------------------
          Net interest margin.....................     3.89         4.20
          ----------------------------------------------------------------
          Net interest margin - tax equivalent....     4.12         4.46
          ----------------------------------------------------------------

      At March 31, 2004, Omega had $472,997,000 of earning assets scheduled to
      reprice over the next twelve months as compared to $474,511,000 in
      interest-sensitive liabilities, resulting in a negative gap of $1,514,000,
      or 0.1% of assets. In order to predict net interest income at risk over
      the next twelve months based on hypothetical rate movements, a rate shock
      simulation was performed on the balance sheet, assuming that interest
      rates would increase and decrease by 100 and 200 basis points. These
      simulations assume no volume or mix changes in the balance sheet. As the
      table below indicates, Omega is exposed to a loss of income over the next
      twelve months if interest rates fall. There have been no material changes
      in reported interest rate risk since December 31, 2003. For example, net
      interest income at risk for an immediate 100 basis point decrease in rates
      as of March 31, 2004 was $1,620,000, or 4.2%, of net interest income,
      compared to $1,541,000, or 3.9%, of net interest income at risk on
      December 31, 2003. Conversely, the results suggest that an immediate 100
      basis point increase in interest rates would increase net interest income
      by approximately $1,608,000, or 4.2%, over a 12-month period.

               Effect of Interest Rate Risk on Net Interest Income
                                (in $ thousands)

<TABLE>
<CAPTION>
           March 31, 2004                             December 31, 2003
--------------------------------------   ---------------------------------------

  Change in     Change in Net              Change in     Change in Net
Interest Rates    Interest     Percent   Interest Rates    Interest      Percent
(Basis Points)     Income      Change    (Basis Points)     Income       Change
--------------------------------------   ---------------------------------------
<S>                <C>           <C>          <C>           <C>           <C>
     200            3,261         8.5%         200           2,936         7.5%

     100            1,629         4.3%         100           1,465         3.7%

       0               --                        0              --

    (100)          (1,667)        4.4%        (100)         (1,541)        3.9%

    (200)          (4,161)       10.9%        (200)         (4,045)       10.3%
</TABLE>


<PAGE>

                               Loan Loss Provision

      In the first quarter of 2004, no loan loss provision was recorded, as
      compared to the $100,000 loan loss provision that was recorded in the
      first quarter of 2003. The change in the loan loss provision is reflective
      of the movement in non-performing loans from the previous quarter and an
      analysis of the adequacy of the allowance for loan loss reserve. In the
      first quarter of 2004, non-performing loans decreased by $131,000, or
      3.8%, from $3,418,000 on December 31, 2003 to $3,287,000 on March 31,
      2004.

                            Other Income and Expense

      Three months ended March 31, 2004 and 2003

      Other income decreased $158,000, or 4.1%, in the first quarter of 2004 as
      compared to the same period in 2003. Service fee income on deposit
      accounts decreased by $65,000, or 4.6%. This has occurred primarily as a
      result of the Free Checking product introduced in the latter part of 2002.
      The product continues to gain popularity among Omega's customers, reducing
      traditional service fee income on deposits. Service fees on loans
      decreased by $121,000, or 30.1% due to reduced activity in loan rate
      modifications and refinancings. The lower rate environment has also caused
      a reduction in the rate earned on bank owned life insurance, causing a
      $32,000 decline in earnings on BOLI when comparing the first quarter
      results of 2004 and 2003. Trust fees increased in the first quarter of
      2004 by $23,000, or 2.6% when compared to the same time period in 2003.
      Other non-interest income increased by a total of $65,000, due primarily
      to two factors. Fee income from commissions received from investment
      services and insurance sales increased by $105,000, or 100% in the first
      quarter of 2004. These are services offered by Omega Financial
      Corporation, beginning in December 2002. Omega representatives function as
      agents and registered representatives in placing business with a
      broker-dealer and insurance brokers. This increase in other non-interest
      income was offset by a reduction of $69,000 in premium earnings from
      Omega's reinsurance subsidiary. Gains on the sale of investment
      securities, loans and other assets were $28,000 lower in the first quarter
      of 2004 than in the first quarter of 2003.

      As a percentage of average assets, annualized other income net of gains on
      securities, loans and other assets was 1.33 % for the first quarter of
      2004 as compared to 1.36 % for the same period in 2003.

      Other expenses decreased $143,000, or 1.5%, in the first quarter of 2004
      as compared to the same period in 2003. Salaries and employee benefits
      increased $16,000, or 0.3%, in 2004 as compared to the same period in
      2003. Occupancy and equipment expense in total decreased by $16,000, or
      1.2%. Other non-interest expenses decreased by $147,000 or 5.5%, compared
      to the same period in 2003 as a result of cost saving initiatives by
      management.

      As a percentage of average assets, annualized expenses for the quarter
      ended March 31, 2004 were 3.28% and were 3.30% for the same period in
      2003.

                               Federal Income Tax

      The effective tax rate for the three months ended March 31, 2004 was 21.6%
      compared to the same period in 2003 when the effective tax rate was 22.1%.
      This improvement was due primarily to the Corporation receiving increased
      tax deductions for dividends it paid on company stock held by the Employee
      Stock Ownership Plan.


<PAGE>

2.    Investment Securities

      Management of the investment portfolio entails evaluation and realignment
      of the size and mix of the portfolio in order to balance various
      characteristics of the balance sheet, including asset quality, liquidity,
      yield relationships, maturity and tax planning. The following schedule
      details characteristics of the investment portfolio as of March 31, 2004
      and December 31, 2003 (in thousands).

<TABLE>
<CAPTION>
                                               Securities Classified as Available for Sale
                                                          Gross          Gross        Estimated
                                          Amortized     Unrealized     Unrealized       Market
March 31, 2004                               Cost         Gains          Losses         Value
                                          -----------------------------------------------------
<S>                                       <C>           <C>            <C>            <C>
U.S. Treasury securities and
    obligations of other U.S. Govern-
    ment agencies and corporations        $ 104,141     $     886      ($    167)     $ 104,860
Obligations of state and
    political subdivisions                   88,072         1,959            (12)        90,019
Corporate securities                          2,793            28             (4)         2,817
Mortgage backed securities                    1,123            29             --          1,152
Equity securities                            11,993         5,834             --         17,827
                                          -----------------------------------------------------
Total                                     $ 208,122     $   8,736      ($    183)     $ 216,675
                                          =====================================================

<CAPTION>
                                               Securities Classified as Available for Sale
                                                          Gross          Gross        Estimated
                                          Amortized     Unrealized     Unrealized       Market
December 31, 2003                            Cost         Gains          Losses         Value
                                          -----------------------------------------------------
<S>                                       <C>           <C>            <C>            <C>
U.S. Treasury securities and
    obligations of other U.S. Govern-
    ment agencies and corporations        $ 117,928     $     985      ($    583)     $ 118,330
Obligations of state and
    political subdivisions                   99,002         1,965           (139)       100,828
Corporate securities                          2,901            23            (13)         2,911
Mortgage backed securities                    1,298            34             --          1,332
Equity securities                            11,397         5,741             --         17,138
                                          -----------------------------------------------------
Total                                     $ 232,526     $   8,748      ($    735)     $ 240,539
                                          =====================================================
</TABLE>

      Total investment securities as a percentage of total assets at March 31,
      2004 and December 31, 2003 were 19.1% and 21.1%, respectively. Amortized
      cost of securities maturing or repricing in one year or less comprised
      39.6% of the total amortized cost of investment securities of $208,122,000
      as of March 31, 2004, as compared to 43.6% of total investment securities
      of $232,526,000 as of December 31, 2003. There was $210,000 in investments
      in instruments of foreign countries on March 31, 2004.

3.    Loans

      Net loans in the first three months of 2004 decreased by $810,000, or 0.1%
      from the balance at December 31, 2003, bringing the total to $776,765,000
      at March 31, 2004. From December 31, 2003 to March 31, 2004, commercial
      loans increased by $6,464,000. Offsetting this increase was the decline in
      consumer mortgage and home equity loan outstanding balances of $6,594,000
      during the same time period. Other consumer loan balances declined by
      $799,000 from December 31, 2003 to March 31, 2004.


<PAGE>

      Changes in the allowance for loan losses for the three months ended March
      31, 2004 and 2003 were as follows (in thousands):

--------------------------------------------------------------------------------
                                                          2004           2003
                                                        --------       --------
Balance at January 1 .............................      $ 10,569       $ 11,052

Charge-offs ......................................          (143)          (160)
Recoveries .......................................            25             42
                                                        --------       --------
    Net charge-offs ..............................          (118)          (118)

Provision for loan losses ........................            --            100
                                                        --------       --------

Balance at March 31 ..............................      $ 10,451       $ 11,034
                                                        ========       ========
--------------------------------------------------------------------------------

      Management performs a quantitative analysis to support the adequacy of the
      allowance for loan losses. This analysis includes review of historical
      charge-off rates for loan categories, fluctuations and trends in the
      amount of classified loans and economic factors. Significant to this
      analysis is any change in observable trends that may be occurring relative
      to loans, to assess potential credit weaknesses. Current economic factors
      and trends in risk ratings are considered in the determination and
      allocation of the allowance for loan losses. The allowance for loan losses
      at March 31, 2004 and 2003 represented 1.33% and 1.39%, respectively, of
      the total loans outstanding, net of unearned interest.

      Set forth below is an analysis of Omega's non-performing loans as of March
      31, 2004 as compared to December 31, 2003.

--------------------------------------------------------------------------------
                              Non-performing Loans
                                 (In thousands)

                                                         March 31,  December 31,
                                                           2004        2003
                                                         --------   ------------
Non-accrual loans ...................................    $  2,623     $  2,588
Accruing loans past due 90 days or more .............         444          607
Restructured loans ..................................         220          223
                                                         --------     --------
Total non-performing loans ..........................    $  3,287     $  3,418
                                                         ========     ========

Non-performing loans as percent of allowance ........        31.5%        32.3%
--------------------------------------------------------------------------------

      The decrease in non-performing loans from December 31, 2003 to March 31,
      2004 is primarily due to the decrease in loans delinquent by 90 days or
      more.

4.    Deposits and Other Sources of Funds

      Deposits provide the primary source of funding for loans and investment
      securities. At March 31, 2004, total deposits decreased by $9,093,000 as
      compared to December 31, 2003. As of March 31, 2004, interest bearing
      deposits decreased by $3,053,000, or 0.4% and non-interest bearing
      accounts decreased by $6,040,000 or 3.9%, when compared to December 31,
      2003.

      Borrowed funds are used as an additional source of funding for loans and
      investment securities as well as to fund the Corporation's Stock
      Repurchase Program. As of March 31, 2004, Omega had short-term borrowings
      (maturities within one year) in the amount of $31,516,000 and long-term
      debt in the amount of $21,305,000. At December 31, 2003, short-term
      borrowings were $33,263,000 and long-term debt was $21,600,000. This
      represents an overall decrease in outstanding debt of $2,042,000, with
      long-term debt decreasing by $295,000 and short-term borrowings decreasing
      by $1,747,000.


<PAGE>

5.    Regulatory Capital Compliance

      Bank regulatory authorities in the United States issue risk-based capital
      standards. These capital standards relate a banking company's capital to
      the risk profile of its assets and provide the basis by which all banking
      companies and banks are evaluated in terms of capital adequacy. The
      risk-based capital standards require all banks to have Tier 1 capital of
      at least 4% and total capital, including Tier 1 capital, of at least 8% of
      risk-adjusted assets. Tier 1 capital includes common stockholders' equity
      and qualifying perpetual preferred stock together with related surpluses
      and retained earnings. Total capital is comprised of Tier 1 capital,
      limited life preferred stock, qualifying debt instruments, and the
      reserves for possible loan losses. Banking regulators have also issued
      leverage ratio requirements. The leverage ratio requirement is measured as
      the ratio of Tier 1 capital to adjusted average assets.

      At March 31, 2004, Omega and each of its banking subsidiaries met the
      regulatory definition of a "well capitalized" financial institution, i.e.,
      a leverage ratio exceeding 5%, Tier 1 capital exceeding 6% and total
      capital exceeding 10%.

6.    Share Repurchase Program

      In March of 2004, the Board approved a new share repurchase program to
      begin immediately, authorizing management to buy back up to 10% of Omega's
      outstanding common stock. At that time, there were 8,483,950 common shares
      outstanding with 848,395 shares eligible to be repurchased. This program
      will remain in effect through December 31, 2004, or until the 10% limit is
      reached; however, it may be discontinued at any time. As of March 31,
      2004, no shares have been repurchased in conjunction with this program.

7.    Recent Development

      On April 20, 2004, Omega and Sun Bancorp, Inc., parent company of SunBank,
      Mid-Penn Insurance Associates, Sun Investment Services, Bank Capital
      Services and Sentry Trust Company, announced that Omega had agreed to
      acquire Sun Bancorp, Inc. Under the terms of the merger agreement, Sun
      Bancorp shareholders will be entitled to receive either 0.664 shares of
      Omega common stock for each share of Sun Bancorp common stock or $23.25 in
      cash for each share held subject to pro rata allocation such that 20% of
      Sun Bancorp common stock shall be paid in cash and 80% will be in the form
      of Omega common stock. The definitive merger agreement has been approved
      unanimously by the Boards of Directors of both companies. The transaction
      is subject to all required regulatory approvals and approvals by Omega
      Financial Corporation and Sun Bancorp shareholders and certain other
      customary conditions. The transaction is anticipated to close late in the
      third quarter or early fourth quarter 2004.


<PAGE>

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Omega is impacted by market risks, and has procedures in place to evaluate
      and mitigate these risks. These market risks and Omega's procedures are
      described in the Management's Discussion and Analysis section of the 2003
      Annual Report to Shareholders. To the knowledge of Omega, there have been
      no material changes in the market risks that impact Omega or its
      procedures relative to these risks, since December 31, 2003.

Item 4. CONTROLS AND PROCEDURES

      Quarterly evaluation of the Company's Disclosure Controls and Internal
      Controls. The Company's management, with the participation of its chief
      executive officer and chief financial officer, conducted an evaluation of
      the effectiveness of our disclosure controls and procedures, as defined in
      Exchange Act Rule 13a-15(e), as of March 31, 2004. Based on that
      evaluation, the Company's chief executive officer and chief financial
      officer concluded that the Company's disclosure controls and procedures
      were effective in reaching a reasonable level of assurance that management
      is timely alerted to material information relating to the Company during
      the period when the Company's periodic reports are being prepared.

      During the quarter ended March 31, 2004, there has not occurred any change
      in the Company's internal control over financial reporting, as defined in
      Exchange Act Rule 13a-15(f), that has materially affected, or is
      reasonably likely to materially affect, the Company's internal control
      over financial reporting.

      A control system, no matter how well conceived and operated, can provide
      only reasonable, not absolute, assurance that the objectives of the
      control system are met. Further, the design of a control system must
      reflect the fact that there are resource constraints, and the benefits of
      controls must be considered relative to their costs. Because of the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if any, within the Company have been detected. Because of the inherent
      limitations in a cost-effective control system, misstatements due to error
      or fraud may occur and not be detected.


<PAGE>

PART II. Other Information

Item 1. Legal Proceedings

      None of a material nature.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities

      In March of 2004, Omega's Board approved a new share repurchase program to
      begin immediately, authorizing management to buy back up to 10% of Omega's
      outstanding common stock. At that time, there were 8,483,950 common shares
      outstanding with 848,395 shares eligible to be repurchased. This program
      will remain in effect through December 31, 2004, or until the 10% limit is
      reached; however, it may be discontinued at any time. As of March 31,
      2004, no shares have been repurchased in conjunction with this program.

Item 3. Defaults upon Senior Securities

      None

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

      The Company filed a Form 8-K (Items 9 and 12) on January 26, 2004
regarding its financial earnings press release.

      The Company filed a Form 8-K (Items 9 and 12) on March 24, 2004 regarding
a press release announcing a share repurchase program approved by the Board of
Directors.

      Exhibits:

      --------------------------------------------------------------------------
      Exhibit
      Number      Description
      --------------------------------------------------------------------------

       31.1       Chief Executive Officer's Rule 13a-14/15d-14(a) (Section 302)
                  Certification

       31.2       Chief Financial Officer's Rule 13a-14/15d-14(a) (Section 302)
                  Certification

       32.1       Section 1350 (Section 906) Certification by Chief Executive
                  Officer

       32.2       Section 1350 (Section 906) Certification by Chief Financial
                  Officer


<PAGE>

                                   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.


                                              OMEGA FINANCIAL CORPORATION
                                          -----------------------------------
                                                     (Registrant)


       May 5, 2004                    By: /s/ David B. Lee
-------------------------                 -----------------------------------
           Date                           David B. Lee
                                          Chairman and
                                          Chief Executive Officer


       May 5, 2004                        /s/ Daniel L. Warfel
-------------------------                 -----------------------------------
           Date                           Daniel L. Warfel
                                          Executive Vice President and
                                          Chief Financial Officer