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 June 30, 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 August 3, 2004:
                8,443,996 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

                                                      June 30,      December 31,
                                                       2004            2003
                                                    -----------     ------------
Assets
Cash and due from banks                             $    31,494     $    32,420

Interest bearing deposits with other banks               19,650          10,682
Federal funds sold                                       28,200          17,850

Investment securities available for sale                242,976         240,539

Total loans                                             773,829         788,144
Less: Allowance for loan losses                         (10,226)        (10,569)
                                                    -----------     -----------
Net loans                                               763,603         777,575

Premises and equipment, net                              13,934          14,348
Bank-owned life insurance                                37,818          37,134
Other assets                                             12,195           9,618
                                                    -----------     -----------
TOTAL ASSETS                                        $ 1,149,870     $ 1,140,166
                                                    ===========     ===========

Liabilities and Shareholders' Equity
Deposits:
  Non-interest bearing                              $   157,656     $   155,702
  Interest bearing                                      759,002         751,878
                                                    -----------     -----------
Total deposits                                          916,658         907,580

Short-term borrowings                                    27,989          33,263
Other liabilities                                        14,502           6,950
ESOP debt                                                 2,360           2,521
Long-term debt                                           21,005          21,600
Other interest bearing liabilities                          840             813
                                                    -----------     -----------
TOTAL LIABILITIES                                       983,354         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               (1,502)         (1,624)
Common stock, par value $5.00 per share:
  Authorized - 25,000,000 shares;
  Issued -
    10,100,065 shares at June 30, 2004;
    10,048,368 shares at December 31, 2003               50,500          50,242
  Outstanding -
    8,440,520 shares at June 30, 2004;
    8,458,823 shares at December 31, 2003
Capital surplus                                          16,915          15,711
Retained earnings                                       148,956         146,430
Accumulated other comprehensive income                    2,643           5,209
Cost of common stock in treasury:
   1,659,545 shares at June 30, 2004;
   1,589,545 shares at December 31, 2003                (50,996)        (48,529)
                                                    -----------     -----------
TOTAL SHAREHOLDERS' EQUITY                              166,516         167,439
                                                    -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $ 1,149,870     $ 1,140,166
                                                    ===========     ===========


<PAGE>

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

<TABLE>
<CAPTION>
                                                      Three Months Ended           Six Months Ended
                                                           June 30,                    June 30,
                                                      2004          2003          2004          2003
                                                   ----------    ----------    ----------    ----------
<S>                                                <C>           <C>           <C>           <C>
Interest Income:
Interest and fees on loans                         $   10,995    $   12,200    $   22,192    $   24,522
Interest and dividends on investment securities         1,759         2,132         3,612         4,456
Other interest income                                      91           125           147           222
                                                   ----------    ----------    ----------    ----------
TOTAL INTEREST INCOME                                  12,845        14,457        25,951        29,200
Interest Expense:
Interest on deposits                                    2,643         3,235         5,335         6,639
Interest on short-term borrowings                          72            74           148           197
Interest on long-term debt and
  other interest bearing liabilities                      244           279           492           495
                                                   ----------    ----------    ----------    ----------
TOTAL INTEREST EXPENSE                                  2,959         3,588         5,975         7,331
                                                   ----------    ----------    ----------    ----------
NET INTEREST INCOME                                     9,886        10,869        19,976        21,869
Provision for loan losses                                  --           150            --           250
                                                   ----------    ----------    ----------    ----------
INCOME FROM CREDIT ACTIVITIES                           9,886        10,719        19,976        21,619
Other Income:
Service fees on deposit accounts                        1,577         1,462         2,916         2,866
Service fees on loans                                     366           379           647           781
Earnings on bank-owned life insurance                     330           387           684           773
Trust fees                                                884           912         1,799         1,804
Gain on sale of loans and other assets                      2           275             1           279
Net gains on investment securities                        203           699           211           730
Other                                                     922           871         1,764         1,648
                                                   ----------    ----------    ----------    ----------
TOTAL OTHER INCOME                                      4,284         4,985         8,022         8,881
Other Expense:
Salaries and employee benefits                          4,802         5,089         9,757        10,028
Net occupancy expense                                     559           556         1,186         1,186
Equipment expense                                         729           681         1,431         1,396
Data processing service                                   430           421           853           840
Other                                                   2,524         3,285         5,050         5,958
                                                   ----------    ----------    ----------    ----------
TOTAL OTHER EXPENSE                                     9,044        10,032        18,277        19,408
                                                   ----------    ----------    ----------    ----------
Income before taxes                                     5,126         5,672         9,721        11,092
Income tax expense                                      1,195         1,440         2,186         2,638
                                                   ----------    ----------    ----------    ----------
NET INCOME                                         $    3,931    $    4,232    $    7,535    $    8,454
                                                   ==========    ==========    ==========    ==========

Net income per common share:
  Basic                                            $     0.46    $     0.51    $     0.89    $     1.02
  Diluted                                          $     0.46    $     0.49    $     0.88    $     0.99
Weighted average shares and equivalents:
  Basic                                             8,469,327     8,103,453     8,470,144     8,102,215
  Diluted                                           8,532,528     8,541,569     8,545,729     8,531,939
Dividends declared per share:
   Common                                          $     0.30    $     0.29    $     0.60    $     0.58
   Preferred                                               --    $     0.45            --    $     0.90
</TABLE>


<PAGE>

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

<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                June 30,
                                                                         ---------------------
                                                                           2004         2003
                                                                         --------     --------
<S>                                                                      <C>          <C>
Cash flows from operating activities:
  Net income                                                             $  7,535     $  8,454
  Adjustments to reconcile net income to
       net cash provided by operating activities:
    Depreciation and amortization                                           2,076        2,739
    Provision for loan losses                                                              250
    Gain on sale of investment securities                                    (211)        (730)
    Non-monetary gift                                                          --           48
    Gain on sale of fixed assets
       and other property owned                                                (1)          (4)
    Loss (Gain) on sale of loans                                                2         (275)
    Decrease (Increase) in deferred tax asset                                  66         (359)
    Increase in cash surrender value of bank owned life insurance            (684)        (773)
    Increase in interest receivable and other assets                       (1,278)         (65)
    Decrease in interest payable                                              (20)        (119)
    Increase in taxes payable                                                 197           43
    Amortization of deferred net loan costs                                  (185)        (390)
    Deferral of net loan fees                                                 148          413
    Increase in accounts payable
       and accrued expenses                                                  (658)      (1,860)
                                                                         --------     --------
      Total adjustments                                                      (548)      (1,082)
                                                                         --------     --------
Net cash provided by operating activities                                   6,987        7,372

Cash flows from investing activities:
  Proceeds from the sale or maturity of
    investment  securities available for sale                              69,996       52,290
  Purchase of:
    Investment securities available for sale                              (69,092)     (55,783)
  Net change in interest bearing deposits with other banks                 (8,968)     (11,162)
  Decrease (increase)  in loans                                            14,009      (16,886)
  Gross proceeds from sale of loans                                            (2)      12,008
  Capital expenditures                                                       (740)        (900)
  Sale of fixed assets and other property owned                                12           10
  Net change in federal funds sold                                        (10,350)      20,350
                                                                         --------     --------
Net cash used in investing activities                                      (5,135)         (73)

Cash flows from financing activities:
  Increase in deposits, net                                                 9,078        7,105
  Net change in short-term borrowings                                      (5,274)     (15,301)
  Issuance of long term debt                                                   --       11,500
  Principal payment on long-term debt                                        (595)        (560)
  Net change in other interest bearing liabilities                             27           22
  Dividends paid                                                           (5,077)      (4,903)
  Tax benefit from preferred stock dividend and stock option activity          68           65
  Issuance of common stock                                                  1,462        1,358
  Acquisition of treasury stock                                            (2,467)      (1,855)
                                                                         --------     --------
Net cash used in financing activities                                      (2,778)      (2,569)
                                                                         --------     --------
Net (decrease) increase in cash and due from banks                       $   (926)    $  4,730
                                                                         ========     ========

Cash and due from banks at beginning of period                           $ 32,420     $ 36,049
Cash and due from banks at end of period                                   31,494       40,779
                                                                         --------     --------
Net (decrease) increase in cash and due from banks                       $   (926)    $  4,730
                                                                         ========     ========

Interest paid                                                            $  5,975     $  7,450
Income taxes paid                                                           1,916        3,555
</TABLE>


<PAGE>

                  OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

SIX AND THREE MONTHS ENDED JUNE 30, 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 six months and
      three months ended June 30, 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 its customers through letters of credit and lines of credit.

      Standby letters of credit are instruments issued by the Corporation's bank
      subsidiary that guarantee the beneficiary payment by the bank in the event
      of default by the bank'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 bank holds collateral supporting those commitments for
      which collateral is deemed necessary. At June 30, 2004 standby letters of
      credit issued and outstanding amounted to $12,870,000 as compared to
      $13,118,000 on December 31, 2003. The fair market value of the standby
      letters of credit at June 30, 2004 and December 31, 2003 was $97,000 and
      $72,000, respectively. The fair market value of standby letters of credit
      is recorded as a liability in accordance with FIN 45.

      At June 30, 2004, the bank had $165,913,000 outstanding in loan
      commitments and other unused lines of credit extended to its customers. Of
      this amount, $113,663,000, or 68.5%, were commercial commitments. The
      remaining amounts of $52,250,000 were commitments to consumers for
      mortgage and home equity loans and personal lines of credit

      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 June 30,
      2004, the balance of the ESOP debt was $2,360,000 as compared to
      $2,521,000 at December 31, 2003.

C.    Investment Securities:

      In accordance with the disclosure requirements of EITF 03-01, the
      following table shows gross unrealized losses and fair value, aggregated
      by category and length of time that individual investment securities have
      been in a continuous unrealized loss position, at June 30, 2004 (in
      thousands):


<PAGE>

<TABLE>
<CAPTION>
                                                              Less Than 12 Months         12 Months or Longer
                                                           ------------------------    ------------------------
                                                              Fair       Unrealized       Fair       Unrealized
                                                              Value        Losses         Value        Losses
                                                           ----------    ----------    ----------    ----------
<S>                                                        <C>           <C>           <C>           <C>
Description of Securities
U.S. Treasury securities and obligations of other
   U.S. Government agencies and corporations ..........    $   78,017    $      943    $   16,168    $      696
Obligations of state and political subdivisions .......        25,569           342         2,310            61
Corporate and other securities ........................         1,081            18           882            18
Mortgage-backed securities ............................        15,637           165            --            --
                                                           ----------    ----------    ----------    ----------
Subtotal, debt securities .............................       120,304         1,468        19,360           775
                                                           ==========    ==========    ==========    ==========
Common stock...........................................           226             4            --            --
                                                           ----------    ----------    ----------    ----------
Total temporarily impaired securities .................    $  120,530    $    1,472    $   19,360    $      775
                                                           ==========    ==========    ==========    ==========
</TABLE>

      The unrealized losses noted above are considered to be temporary
      impairments, as the majority of the investments are debt securities whose
      decline in value is due only to interest rate fluctuations. As a result,
      the payment of contractual cash flows, including principal repayment, is
      not at risk. Management has the intent and ability to hold these
      investments until market recovery or maturity. Debt securities with
      unrealized losses for a period of less than 12 months includes 46
      investments in US Government agency debt securities, 9 investments in
      mortgage-backed securities, 7 investments in corporate securities and 60
      investments in obligations of state and municipal subdivisions. Debt
      securities with unrealized losses for a period of 12 months or longer
      includes 9 investments in US Government agency debt securities, 6
      investments in corporate securities and 5 investments in obligations of
      state and municipal subdivisions. Debt securities included in the above
      table have maturity or pre-refund dates ranging from October 2004 to
      December 2017. The unrealized loss position for each security ranges from
      .01% to 5.20% of the securities' amortized cost as of June 30, 2004.
      Unrealized losses for a period of less than 12 months on common stock
      include investment in 2 equity issues.

D.    Income Taxes:

      The effective tax rate for the six months ended June 30, 2004 was 22.5%,
      compared to the same period in 2003 when the effective tax rate was 23.8%.
      For the second quarter of 2004, the effective tax rate was 23.3% compared
      to 25.4% in the second quarter of 2003. These decreases in effective tax
      rates from 2003 to 2004 are the effect of the Corporation receiving
      increased tax deductions for dividends it paid on company stock held by
      the Employee Stock Ownership Plan.


<PAGE>

E.    Comprehensive Income:

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

<TABLE>
<CAPTION>
                                                 Three Months June 30, 2004                Three Months June 30, 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                                  $    5,126     $    1,195     $    3,931     $    5,672     $    1,440     $    4,232
Other comprehensive income:
Unrealized gains on available for sale
   securities:
   Unrealized holding losses arising
      during the period                         (4,283)        (1,499)        (2,784)             3              1              2
   Less reclassification adjustment for
      gains included in net income                (203)           (71)          (132)          (699)          (245)          (454)
                                            ----------     ----------     ----------     ----------     ----------     ----------
Other comprehensive income (loss)               (4,486)        (1,570)        (2,916)          (696)          (244)          (452)
                                            ----------     ----------     ----------     ----------     ----------     ----------
Total comprehensive income                  $      640     $     (375)    $    1,015     $    4,976     $    1,196     $    3,780
                                            ==========     ==========     ==========     ==========     ==========     ==========

<CAPTION>
                                                   Six Months June 30, 2004                     Six Months June 30, 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                                  $    9,721     $    2,186     $    7,535     $   11,092     $    2,638     $    8,454
Other comprehensive income:
Unrealized gains on available for sale
   securities:
   Unrealized holding losses arising
      during the period                         (3,737)        (1,308)        (2,429)           (98)           (34)           (64)
   Less reclassification adjustment for
      gains included in net income                (211)           (74)          (137)          (730)          (256)          (474)
                                            ----------     ----------     ----------     ----------     ----------     ----------
Other comprehensive income (loss)               (3,948)        (1,382)        (2,566)          (828)          (290)          (538)
                                            ----------     ----------     ----------     ----------     ----------     ----------
Total comprehensive income                  $    5,773     $      804     $    4,969     $   10,264     $    2,348     $    7,916
                                            ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>

F.    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.


<PAGE>

                       Computations of Earnings per Share
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                         Three Months Ended June 30, 2004       Three Months Ended June 30, 2003
                                        ----------------------------------     -----------------------------------
                                         Income       Shares     Per-Share      Income       Shares      Per-Share
                                        Numerator   Denominator    Amount      Numerator   Denominator     Amount
                                        ----------------------------------     -----------------------------------
<S>                                     <C>             <C>       <C>          <C>              <C>       <C>
Net income                              $  3,931                               $  4,232
Less: Preferred stock dividends               --                                    (99)
                                        --------                               --------
Basic EPS
Income available to common
    shareholders                           3,931        8,469     $   0.46        4,133         8,103     $   0.51
                                                                  ========                                ========
Effect of Dilutive Securities
Impact of:
   Assumed conversion of preferred
      to common stock                                      --                                     346
   Assumed exercises of outstanding
      options                                              63                                      92
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                        $  3,931        8,532     $   0.46     $  4,212         8,541     $   0.49
                                        ==================================     ===================================

<CAPTION>
                                          Six Months Ended June 30, 2004         Six Months Ended June 30, 2003
                                        ----------------------------------     -----------------------------------
                                         Income       Shares     Per-Share      Income       Shares      Per-Share
                                        Numerator   Denominator    Amount      Numerator   Denominator     Amount
                                        ----------------------------------     -----------------------------------
<S>                                     <C>             <C>       <C>          <C>              <C>       <C>
Net income                              $  7,535                               $  8,454
Less: Preferred stock dividends               --                                   (198)
                                        --------                               --------
Basic EPS
Income available to common
    shareholders                           7,535        8,470     $   0.89        8,256         8,102     $   1.02
                                                                  ========                                ========
Effect of Dilutive Securities
Impact of :
   Assumed conversion of preferred
      to common stock                                      --                                     346
   Assumed exercises of outstanding
      options                                              76                                      84
Preferred stock dividends
    available to common
    shareholders                              --                                    198
Elimination of tax benefit of
    allocated preferred dividends             --                                    (43)
Additional expense required to fund
    ESOP debt, net of tax impact              --                                      2
                                        ---------------------                  ----------------------
Diluted EPS
Income available to common
     shareholders plus assumed
     conversions                        $  7,535        8,546     $   0.88     $  8,413         8,532     $   0.99
                                        ==================================     ===================================
</TABLE>


<PAGE>

G.    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 pro forma 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, is included in the pro forma net income reported below
      (in thousands, except per share data).

<TABLE>
<CAPTION>
                                               Quarter ended June 30          Year To Date
                                                 2004         2003         2004         2003
                                               --------     --------     --------     --------
<S>                                            <C>          <C>          <C>          <C>
Net income                     As reported     $  3,931     $  4,232     $  7,535     $  8,454
                               Pro forma          3,827        4,125        7,328        8,239
Compensation expense, net of tax                    104          107          207          215

Basic earnings per share       As reported     $   0.46     $   0.51     $   0.89     $   1.02
                               Pro forma           0.45         0.50         0.87         0.99

Diluted earnings per share     As reported     $   0.46     $   0.49     $   0.88     $   0.99
                               Pro forma           0.45         0.48         0.86         0.96
</TABLE>

      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.

H.    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 application of FIN 46 did not have a material
      impact on its financial condition or results of operations.

I.    Pending Acquisition:

      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 will 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. Special meetings for shareholders will be held on
      September 9, 2004 to vote on the transaction. The transaction is
      anticipated to close late in the third quarter or early fourth quarter
      2004.


<PAGE>

      The acquisition will be accounted for as a purchase. Purchase accounting
      requires the Corporation to allocate the total purchase price of the
      acquisition to the assets acquired and liabilities assumed, based on their
      respective fair values at the acquisition date, with any remaining
      acquisition cost being recorded as goodwill. Resulting goodwill balances
      are then subject to an impairment review on at least an annual basis. The
      results of Sun Bancorp's operations will be included in the Corporation's
      financial statements prospectively from the date of the acquisition.

      The total purchase price is estimated to be approximately $189 million,
      which includes the value of the Corporation's stock to be issued, Sun
      Bancorp options to be converted and certain acquisition costs. Acquisition
      costs currently deferred, and included in other assets as of June 30, 2004
      was $721,000. The estimated fair value of the net assets of Sun Bancorp as
      of June 30, 2004 were $44 million, and accordingly, the purchase price
      exceeds the estimated fair value of the net assets by approximately$145
      million as of this date. The total purchase price will be allocated to the
      net assets acquired as of the merger effective date, based on fair market
      values at that date. The Corporation expects to record a core deposit
      intangible asset and goodwill as a result of the purchase accounting.


<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 Six and Three Months Ended June 30, 2004 and 2003

                               Operations Overview

      A.    Six months ended June 30, 2004 and 2003

      For the first six months of 2004, income before income taxes decreased by
      $1,371,000, or 12.4%, compared to the same period in 2003. Income from
      credit activities decreased $1,643,000, or 7.6%. Non-interest income
      decreased $859,000 or 9.7% while non-interest expense decreased
      $1,131,000, or 5.8%.

      The tax provision for the first six months of 2004 decreased by $452,000,
      or 17.1% when compared to the first six months of 2003. The effective tax
      rate for this period decreased from 23.8% in 2003 to 22.5% for the
      corresponding period in 2004. Net income decreased by $919,000, or 10.9%,
      in the first six months of 2004 as compared to the same period in 2003.

      B.    Three months ended June 30, 2004 and 2003

      The second quarter's income before income taxes decreased $546,000 when
      compared to the same period in 2003. Income from credit activities
      decreased by $833,000, from $10,719,000 in the second quarter of 2003 to
      $9,886,000 in the second quarter of 2004. Non-interest income decreased
      $701,000, or 14.1% and non-interest expense decreased by $988,000, or
      9.8%.


<PAGE>

      After the income tax provision (which decreased by $245,000, or 17.0%
      compared to the same period in 2003) was deducted from earnings, net
      income was $301,000, or 7.1%, lower than the second quarter of 2003. The
      effective tax rate for the second quarter of 2004 was 23.3%, as compared
      to the second quarter of 2003 of 25.4%.

      Following are selected key ratios for the period:

<TABLE>
<CAPTION>
                                                Three Months Ended        Six Months Ended
                                                     June 30                  June 30
                                              ----------------------    --------------------
                                                2004         2003         2004         2003
                                              --------     --------     --------     --------
<S>                                             <C>          <C>          <C>          <C>
Return on average assets (annualized) .....      1.38%        1.47%        1.33%        1.48%
Return on average equity (annualized) .....      9.19        10.18         8.84        10.22
Dividend payout ratio (common) ............     64.40        55.53        67.38        55.64
Average equity to average assets ..........     15.00        14.47        15.05        14.48
</TABLE>

                               Net Interest Income

      A.    Six months ended June 30, 2004 and 2003

      The net interest margin, at 3.84% for the first six months of 2004, was 30
      basis points lower than the first six months of 2003, with a $13,238,000
      or 1.3% decrease in average earning assets in the first six months of 2004
      as compared to the first six months of 2003. Yield on earning assets in
      the first six months of 2004 decreased by 55 basis points when compared to
      2003's first six months, while cost of funding decreased by 25 basis
      points; these changes in rates resulted in a decrease in net interest
      income of $1,954,000. Changes in volumes, net of differences caused by
      number of days in the period, resulted in a $61,000 increase in net
      interest income. 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 half of 2004, average tax-free
      assets owned were $2,493,000 less than in the first half of 2003, with
      average rates of 45 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 decreased balances and decreased rates on tax-free
      assets in the first half of 2004, the net interest margin on a fully
      tax-equivalent basis was 4.06% compared to 4.39% in the first half of
      2003.

      B.    Three months ended June 30, 2004 and 2003

      The net interest margin, at 3.76% for the second quarter of 2004, was 34
      basis points lower than the second quarter of 2003, with a $12,170,000 or
      1.1% decrease in average earning assets resulting in a 9.0% decrease in
      net interest income. Yield on earning assets in the second quarter of 2004
      declined by 56 basis points when compared to 2003's second quarter, while
      cost of funding decreased by 22 basis points.

      Following are key net interest margin ratios (annualized):

<TABLE>
<CAPTION>
                                               Three Months Ended          Six Months Ended
                                                     June 30                   June 30
                                              ---------------------     ---------------------
                                                2004         2003         2004         2003
                                              --------     --------     --------     --------
<S>                                             <C>          <C>          <C>          <C>
Yield on average earning assets ...........     4.89%        5.45%        4.99%        5.54%
Cost to fund earning assets ...............     1.13         1.35         1.15         1.40
Net interest margin .......................     3.76         4.10         3.84         4.14
Net interest margin - tax equivalent ......     3.98         4.35         4.06         4.39
</TABLE>

      At June 30, 2004, Omega had $435,855,000 of earning assets scheduled to
      reprice over the next twelve months as compared to $502,664,000 in
      interest-sensitive liabilities, resulting in a negative gap of
      $66,809,000, or 5.8% 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


<PAGE>

      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 June 30, 2004 was $1,456,000, or 3.8%, 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 $1,443,000, or 3.8%, over a 12-month period.

          Possible Effect of Interest Rate Risk on Net Interest Income
                      Based on Interest Rate Shock Analysis
                                (in $ thousands)

           June 30, 2004                             December 31, 2003
------------------------------------      -------------------------------------
Change in                                 Change in
Interest       Change                     Interest         Change
  Rates        in Net                       Rates          in Net
 (Basis       Interest       Percent       (Basis         Interest       Percent
 Points)       Income        Change        Points)         Income        Change
------------------------------------      -------------------------------------
   200          2,898         7.6%           200            2,936          7.5%
   100          1,443         3.8%           100            1,465          3.7%
    0              --                          0               --
  (100)        (1,456)        3.8%          (100)          (1,541)         3.9%
  (200)        (3,166)        8.3%          (200)          (4,045)        10.3%


                               Loan Loss Provision

      During the first six months of 2004, no loan loss provision was recorded,
      as compared to the $150,000 and $100,000 that was recorded in the second
      quarter and first quarter of 2003, respectively. The change in the loan
      loss provision is reflective of the change in credit quality, including
      movement in non-performing loans in each quarter, as compared to 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. During the second quarter of 2004, non-performing loans
      decreased by $190,000 or 5.8%, from March 31, 2004 to $3,097,000.

                            Other Income and Expense

      A.    Six months ended June 30, 2004 and 2003

      Other income decreased $859,000, or 9.7%, in the first six months of 2004
      as compared to the same period in 2003. Service fee income on deposit
      accounts increased by $50,000, or 1.7%. Service fees on loans decreased by
      $134,000, or 17.2%, 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 ("BOLI"), causing an $89,000,
      or 11.6%, decline in earnings on BOLI when comparing the first six months
      results of 2004 and 2003. Trust fees decreased in the first six months of
      2004 by $5,000, or 0.3% when compared to the same time period in 2003.
      Other non-interest income increased by a total of $116,000, due primarily
      to two factors. Fee income from commissions received from investment
      services and insurance sales increased by $211,000, or 74.8% in the first
      six months of 2004 versus the same time period in 2003. 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 $138,000 in
      premium earnings from Omega's reinsurance subsidiary. Gains on the sale of
      investment securities, loans and other assets were $797,000 lower in the
      first six months of 2004 than in the first six months of 2003.

      As a percentage of average assets, annualized other income net of gains on
      securities, loans and other assets was 1.38 % for the first six months of
      2004 and 2003.

      Other expenses decreased $1,131,000, or 5.8%, in the first six months of
      2004 as compared to the same period in 2003. Salaries and employee
      benefits decreased $271,000, or 2.7%, in the first six months of


<PAGE>

      2004 as compared to the same period in 2003. Occupancy and equipment
      expense in total increased by $35,000, or 1.4%. Other non-interest
      expenses decreased by $895,000 or 13.2%, compared to the same period in
      2003. The bulk of this decrease was related to accelerated amortization of
      $802,000 recorded on investments in limited partnership low-income housing
      projects in June of 2003, due to declines in estimated residual values.
      The remaining $93,000 in decreased expenses is the result of cost saving
      initiatives by management.

      As a percentage of average assets, annualized expenses for the
      year-to-date through June 30, 2004 were 3.22% and were 3.40% for the same
      period in 2003.

      B.    Three months ended June 30, 2004 and 2003

      Other income decreased $701,000, or 14.1%, in the second quarter of 2004
      as compared to the same period in 2003. Service fee income on deposit
      accounts increased by $115,000, or 7.9%. Service fees on loans decreased
      by $13,000, or 3.4% due to reduced activity in loan rate modifications and
      refinancings. The lower rate environment has also caused a reduction in
      the rate earned on BOLI, causing a $57,000 decline in earnings on BOLI
      when comparing the second quarter results of 2004 and 2003. Trust fees
      decreased in the second quarter of 2004 by $28,000, or 3.1% when compared
      to the same time period in 2003. Other non-interest income increased by a
      total of $51,000, due primarily to two factors. Fee income from
      commissions received from investment services and insurance sales
      increased by $106,000, or 61% in the second quarter of 2004. This increase
      in other non-interest income was offset by a reduction of $70,000 in
      premium earnings from Omega's reinsurance subsidiary. Gains on the sale of
      investment securities, loans and other assets were $769,000 lower in the
      second quarter of 2004 than in the second quarter of 2003.

      As a percentage of average assets, annualized other income net of gains on
      securities, loans and other assets was 1.43 % for the second quarter of
      2004 as compared to 1.40 % for the same period in 2003.

      Other expenses decreased $988,000, or 9.8%, in the second quarter of 2004
      as compared to the same period in 2003. Salaries and employee benefits
      decreased $287,000, or 5.6%, in 2004 as compared to the same period in
      2003. Occupancy and equipment expense in total increased by $51,000, or
      4.1%. Other non-interest expenses decreased by $752,000 or 20.3%, compared
      to the same period in 2003. In June of 2003, there was accelerated
      amortization of $802,000 recorded on investments in limited partnership
      low-income housing projects, due to declines in estimated residual values.
      This was partially offset by increases in costs associated with complying
      with SEC rules as prescribed by the Sarbanes-Oxley Act of 2002.

      As a percentage of average assets, annualized expenses for the quarter
      ended June 30, 2004 were 3.17% and were 3.49% for the same period in 2003.

                               Federal Income Tax

      The effective tax rate for the six months ended June 30, 2004 was 22.5%,
      compared to the same period in 2003 when the effective tax rate was 23.8%.
      For the second quarter of 2004, the effective tax rate was 23.3% compared
      to 25.4% in the second quarter of 2003. These decreases in effective tax
      rates from 2003 to 2004 are the effect of 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 June 30, 2004
      and December 31, 2003 (in thousands).

<TABLE>
<CAPTION>
                                              Securities Classified as Available for Sale

                                                          Gross          Gross         Estimated
                                          Amortized     Unrealized     Unrealized       Market
                                            Cost          Gains          Losses         Value
                                         ------------------------------------------------------
<S>                                       <C>           <C>            <C>            <C>
June 30, 2004
U.S. Treasury securities and
    obligations of other U.S. Govern-
    ment agencies and corporations        $ 116,732     $     101      ($  1,639)     $ 115,194
Obligations of state and
    political subdivisions                   88,006         1,107           (403)        88,710
Corporate securities                          2,749            12            (36)         2,725
Mortgage backed securities                   19,509            18           (165)        19,362
Equity securities                            11,913         5,076             (4)        16,985
                                         ------------------------------------------------------
Total                                     $ 238,909     $   6,314      ($  2,247)     $ 242,976
                                         ======================================================

<CAPTION>
                                              Securities Classified as Available for Sale

                                                          Gross          Gross         Estimated
                                          Amortized     Unrealized     Unrealized        Market
                                            Cost          Gains          Losses          Value
                                         ------------------------------------------------------
<S>                                       <C>           <C>            <C>            <C>
December 31, 2003
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 June 30,
      2004 and December 31, 2003 were 21.1% and 21.1%, respectively. Amortized
      cost of securities maturing or repricing in one year or less comprised
      25.6% of the total amortized cost of investment securities of $238,909,000
      as of June 30, 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 June 30, 2004.

3.    Loans

      Net loans in the first six months of 2004 decreased by $13,972,000, or
      1.8% from the balance at December 31, 2003, bringing the total to
      $763,603,000 at June 30, 2004. From December 31, 2003 to June 30, 2004,
      consumer mortgage and home equity loan outstanding balances decreased by
      $10,939,000. Other consumer loan balances declined by $3,538,000 during
      the same time period. Commercial loans increased by $162,000 from December
      31, 2003 to June 30, 2004.

      Changes in the allowance for loan losses for the six months ended June 30,
      2004 and 2003 were as follows (in thousands):

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

Charge-offs ........................................         (409)         (396)
Recoveries .........................................           66            74
                                                         --------      --------
    Net charge-offs ................................         (343)         (322)

Provision for loan losses ..........................           --           250
                                                         --------      --------
Balance at June 30 .................................     $ 10,226      $ 10,980
                                                         ========      ========


<PAGE>

      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 June 30, 2004 and 2003 represented 1.32% and 1.40%, respectively, of
      the total loans outstanding, net of unearned interest.

      Set forth below is an analysis of Omega's non-performing loans as of June
      30, 2004 as compared to December 31, 2003.

                              Non-performing Loans
                                 (In thousands)
                                                       June 30,     December 31,
                                                         2004           2003
                                                      ----------    -----------
Non-accrual loans ................................    $    2,443    $    2,588
Accruing loans past due 90 days or more ..........           430           607
Restructured loans ...............................           224           223
                                                      ----------    ----------
Total non-performing loans .......................    $    3,097    $    3,418
                                                      ==========    ==========

Non-performing loans as percent of allowance .....          30.3%         32.3%

      The decrease of $321,000 in non-performing loans from December 31, 2003 to
      June 30, 2004 was due to the reductions in loans delinquent by 90 days or
      more and non-accrual loans.

4.    Deposits and Other Sources of Funds

      Deposits provide the primary source of funding for loans and investment
      securities. As of June 30, 2004, total deposits increased by $9,078,000 as
      compared to December 31, 2003. As of June 30, 2004, interest bearing
      deposits increased by $7,124,000, or 1.0% and non-interest bearing
      accounts increased by $1,954,000 or 1.3%, 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 June 30, 2004, Omega had short-term borrowings
      (maturities within one year) in the amount of $27,989,000 and long-term
      debt in the amount of $21,005,000. 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 $5,869,000, with
      long-term debt decreasing by $595,000 and short-term borrowings decreasing
      by $5,274,000.


<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 June 30, 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 of Directors 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 by the
      Board of Directors. As of June 30, 2004, 70,000 shares have been
      repurchased in conjunction with this program, at an average cost of $35.25
      per share.

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 of 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 June 30, 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 June 30, 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 by the Board of
      Directors. As of June 30, 2004, 70,000 shares have been repurchased in
      conjunction with this program.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                                          (d) Maximum Number
                                                                                            (or Approximate
                                                                    (c) Total Number of    Dollar Value) of
                                                                     Shares (or Units)     Shares (or Units)
                        (a) Total Number of   (b) Average Price    Purchased as Part of     that May Yet Be
                         Shares (or Units)    Paid per Share (or    Publicly Announced    Purchased Under the
         Period              Purchased              Unit)            Plans or Programs     Plans or Programs
-------------------------------------------------------------------------------------------------------------
<S>                            <C>                  <C>                    <C>                   <C>
April 1, 2004 to
April 30, 2004                     --                    --                    --                848,395
-------------------------------------------------------------------------------------------------------------
May 1, 2004 to
May 31, 2004                   70,000               $ 35.25                70,000                778,395
-------------------------------------------------------------------------------------------------------------
June 1, 2004 to
June 30, 2004                      --                    --                    --                778,395
-------------------------------------------------------------------------------------------------------------
Total                          70,000               $ 35.25                70,000                778,395
-------------------------------------------------------------------------------------------------------------
</TABLE>

Item 3. Defaults upon Senior Securities

      None

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

      The Annual Meeting of Shareholders of Omega was held on April 26, 2004. At
      the Annual Meeting, the shareholders elected a class of directors for a
      term of three years, as described below.

-----------------------------------------------------------------
       Name                       For          Withhold Authority
-----------------------------------------------------------------
Robert N. Oliver                5,590,332            214,757
-----------------------------------------------------------------
Stanton R. Sheetz               5,728,962             76,126
-----------------------------------------------------------------
Robert A. Szeyller              5,593,912            211,177
-----------------------------------------------------------------

      The terms of the following directors continued after the annual meeting:
      Raymond A. Agostinelli, David B. Lee, Philip E. Gingerich, D. Stephen
      Martz and James W. Powers, Sr.

      The shareholders approved a proposal to adopt the 2004 Stock Option Plan
      for Non-Employee Directors, with 3,389,809 shares voted for approval,
      695,556 voting against the proposal, 57,455 shares abstained and 1,662,268
      shares were broker non-votes.

Item 5. Other Information

      None


<PAGE>

Item 6. Exhibits and Reports on Form 8-K

      The Company filed a Form 8-K, (Items 5, 7 and 9) on April 21, 2004
regarding a press release announcing a definitive agreement with Sun Bancorp,
Inc. relating to a merger transaction.

      The Company filed a Form 8-K (Items 7, 9 and 12) on April 26, 2004
regarding its financial earnings press release.

      Exhibits:

     Exhibit
     Number       Description

       2.1        Agreement and Plan of Merger between Omega Financial
                  Corporation and Sun Bancorp, Inc. dated as of April 20, 2004
                  (Incorporated by reference to Exhibit 2.1 of the Omega
                  Financial Corporation Form 8-K, filed on April 21, 2004).

      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)


      August 9, 2004                   By: /s/ David B. Lee
-----------------------------              -------------------------------------
           Date                            David B. Lee
                                           Chairman and
                                           Chief Executive Officer


      August 9, 2004                       /s/ Daniel L. Warfel
-----------------------------              -------------------------------------
           Date                            Daniel L. Warfel
                                           Executive Vice President and
                                           Chief Financial Officer