<PAGE>






                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

 Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934


                   For the Fiscal Year Ended December 31,1997


                        Commission File Number 000-23777


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


                                  Pennsylvania
         (State or other jurisdiction of incorporation or organization

                                   23-2939222
                     (I.R.S. Employer Identification Number)

               150 North Washington Avenue Scranton, Pennsylvania
                    (Address of principal executive office)

                                   18503-1848
                                   (Zip Code)

                                 (717)346-7741
              (Registrant's telephone number, including area code)

                                       N/A
                  (Former address if changed since last report)

                        Common Stock, Par Value $ .01 per share
                                (Title of Class)

Name of each Exchange on which registered:  N/A

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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

The aggregate market value of the Company's voting stock held by  non-affiliates
on March 13,  1998,  based on the average of the closing bid and asked prices of
such stock on that date: Approximately $74,106,000


Common Stock  $0.01 Par Value                  Outstanding at March 13, 1998
-----------------------------                  -----------------------------
          (class)                                        2,148,000




<PAGE>


                       Documents Incorporated by Reference

Portions of the  Corporation's  1997 Annual Report to  Shareholders  included as
Exhibit  13are  incorporated  by  reference  in Parts  II and III to the  extent
provided in Items 6, 7, 8, 7A and 13 hereof.

Portions of the  Corporation's  definitive proxy statement  relating to the 1998
annual meeting of stockholders  are incorporated by reference in Part III to the
extent provided in Items 10, 11 and 12 hereof.

                                     PART I

ITEM 1. Business

GENERAL

PENSECO  FINANCIAL  SERVICES  CORPORATION,  (the "Company" or "PFNS"),  which is
headquartered   in  Scranton,   Pennsylvania,   was  formed  under  the  general
corporation  laws of the State of  Pennsylvania  in 1997 and is  registered as a
bank  holding  company.  The  Company  became a bank  holding  company  upon the
acquisition  of all of the  outstanding  shares of Penn  Security Bank and Trust
Company (the "Bank"),  a state chartered bank, on December 31, 1997. The Company
is subject to  supervision by the Federal  Reserve  Board.  The Bank, as a state
chartered  financial  institution,  is subject  to  supervision  by the  Federal
Deposit  Insurance  Corporation and the Pennsylvania  Department of Banking.  At
December  31,  1997 the Company  had, on a  consolidated  basis,  Total  Assets,
Deposits and Stockholders'  Equity of approximately $428 million,  $374 million,
and $43 million, respectively.

The Company  operates from eight banking  offices under a state bank charter and
provides full banking  services,  including  trust  services,  to individual and
corporate customers primarily in Northeastern Pennsylvania.  The Company through
its  principal  office  located  at  150  North  Washington  Avenue,   Scranton,
Pennsylvania,  containing trust, marketing, audit, credit card, human resources,
executive,  data processing and central bookkeeping offices and seven additional
offices are located in South Scranton, East Scranton and Green Ridge sections of
Scranton, the Borough of Moscow, the Town of Gouldsboro,  its Abington Office is
located in South Abington Township,  servicing the Clarks  Summit-Abington  area
and its Mount Pocono Office  located in the Borough of Mount  Pocono,  servicing
the Pocono Mountain area, provides a full range of banking and trust services to
the Lackawanna,  Wayne,  Monroe,  Pike and Wyoming County areas. All offices are
owned  directly by the Bank or through a wholly  owned  subsidiary  of the Bank,
Penseco  Realty,  Inc.,  with the  exception of the Mount Pocono Office which is
owned by the Bank but is located on land occupied under a long-term  lease.  The
Bank  is the  largest  independent  bank  and  trust  company  headquartered  in
Lackawanna  County,  holding  approximately  10%  of  the  banking  assets,  and
processes  its data,  as well as some of its  customers'  data,  through its own
processing facility.

Through its banking  subsidiary,  the Company generates interest income from its
outstanding loan receivables and investment portfolio. Other income is generated
primarily  from merchant  transaction  fees,  trust fees and service  charges on
deposit accounts.  The Company's primary costs are interest paid on deposits and
general operating  expenses.  The Bank provides a variety of general  commercial
and retail banking services to business and professional  customers,  as well as
retail customers,  on a personalized  basis. The Bank's primary lending products
are real estate and  consumer  loans.  The Bank also  offers ATM access,  credit
cards, active investment  accounts,  trust department services and other various
lending , depository,  and related  financial  services.  The Company's  primary
deposit  products are savings and demand deposit  accounts and  certificates  of
deposit.

The Company is not dependent upon a single  customer,  or a few  customers,  the
loss of one or  more of  which  would  have a  material  adverse  effect  on its
operations.  The operations and earnings of the  Corporation  are not materially
affected by seasonal changes or by Federal,  state or a local environmental laws
or regulations.

The  accounting   policies  of  the  Company  conform  with  generally  accepted
accounting principles and with general practices within the banking industry.

COMPETITION

The Bank operates in a competitive environment in which it must share its market
with  many  local   independent  banks  as  well  as  several  banks  which  are
subsidiaries  of very large  regional  holding  companies.  The Bank  encounters
competition from diversified financial institutions,  ranging in size from small
banks to the nationwide banks operating in this region,  and include  commercial
banks,   savings  and  loan  associations,   credit  unions  and  other  lending
institutions.

The principal competitive factors among the Company's competitors can be grouped
into two categories:  pricing and services.  In the Bank's primary service area,
interest rates on deposits,  especially  time  deposits,  and interest rates and
fees  charged  to  customers  on loans  are  very  competitive.  From a  service
perspective,  the Bank competes in other areas such as  convenience of location,
types of services, service costs and banking hours.


<PAGE>


ITEM 1. Business (continued)

EMPLOYEES

As of March 13, 1998, the Company employed 202 full-time  equivalent  employees.
The employees of the Company are not  represented by any  collective  bargaining
group.  Management of the Company  considers  relations with its employees to be
satisfactory.

YEAR 2000 COMPLIANCE

The "Year  2000" issue is the result of computer  programs  having been  written
using a  two-digit  field as  opposed  to a  four-digit  field,  to  define  the
applicable  year.  Programs  that are time  sensitive may recognize a date using
"00" as the year 1900  rather  than the year 2000.  Computer  system  failure or
significant miscalculations could result from this problem, if not corrected.

The Company  licenses a minor  portion of its software,  used in conducting  its
business,  from  third  party  software  vendors,  while  most of the  Company's
software  has  been   internally   developed.   The  Company  has   developed  a
comprehensive  list  of  all  software  and  all  hardware  in  use  within  the
organization. Every vendor has been contacted regarding the Year 2000 issue, and
the Company is closely  tracking the progress each vendor is making in resolving
the  problems  associated  with the issue.  Software  is upgraded as the vendors
resolve Year 2000 problems.

Internally developed software is undergoing  modifications and many systems have
already been modified. Testing procedures are being formulated for comprehensive
testing of this software  beginning in July, 1998, with completion of testing by
the end of 1998.  Additionally,  the Company has begun the process of contacting
its  borrowers to determine  the level of progress  they have made in addressing
the impact that the Year 2000 issue will have on their respective businesses.

The Company does not anticipate any significant additional costs, over and above
normal  operating  costs,  as the  work  will  be  largely  accomplished  by the
Company's computer systems and programming staff.


SUPERVISION AND REGULATION

OVERVIEW

The Company is  registered  as a bank  holding  company  under the Bank  Holding
Company Act of 1956,  as amended,  and, as such, is subject to  supervision  and
regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board" or "FRB").  The Company is required to file quarterly  reports of
its operations with the FRB.

The Bank, as a Pennsylvania state-chartered non-member financial institution, is
subject primarily to supervision, regulation and examination by the Commonwealth
of  Pennsylvania  Department  of Banking  and by the Federal  Deposit  Insurance
Corporation  (the  "FDIC"),  which  insures  the Bank's  deposits to the maximum
extent permitted by law.

BANK HOLDING COMPANY REGULATIONS

 As a bank holding company, the Company can engage in banking-related activities
as  permitted by the Federal  Reserve  Board,  directly or through  newly-formed
subsidiaries or by acquiring  companies  already  established in such activities
subject to the FRB regulations relating to those activities. However, except for
activities  related to its  operation  as the holding  company of the Bank,  the
Company does not anticipate  engaging in any other  banking-related  activity in
the foreseeable future.

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991

Regulations  implementing the prompt  corrective action provision of the Federal
Deposit  Insurance  Corporation   Improvement  Act  of  1991  ("FDICIA")  became
effective on December  19, 1992.  FDICIA  required  the  regulators  to stratify
institutions  into five  quality  tiers  based  upon  their  respective  capital
strengths and to increase progressively the degree of regulation over the weaker
ones, limited the pass-through  deposit insurance  treatment of certain types of
accounts,  adopted a "Truth in  Savings"  program,  called for the  adoption  of
risk-based  premiums on deposit  insurance and required banks to observe insider
credit  underwriting  procedures no less strict than those applied to comparable
non-insider transactions.

Under the  guidelines of FDICIA,  a financial  institution  is considered  "well
capitalized" if it has a total risk-based  capital ratio of at least 10%, a Tier
1  risk-based  capital  ratio  of at least  6%,  and a  leverage  ratio of 5% or
greater, and it is not subject to any written agreement, order or directive.


<PAGE>


ITEM 1. Business (continued)

CAPITAL ADEQUACY & REGULATORY MATTERS

The Company and the Bank are subject to various regulatory capital  requirements
administered  by the Federal banking  agencies.  Failure to meet minimum capital
requirements   can  initiate  certain   mandatory  -  and  possibly   additional
discretionary - actions by regulators  that, if undertaken,  could have a direct
material effect on the Company and the Bank's consolidated financial statements.
Under  capital  adequacy  guidelines  and the  regulatory  framework  for prompt
corrective  action,  the  Company  and  the  Bank  must  meet  specific  capital
guidelines that involve quantitative measures of their assets, liabilities,  and
certain  off-balance  sheet  items as  calculated  under  regulatory  accounting
practices.  The Company's and the Bank's capital amounts and  classification are
also subject to qualitative judgements by the regulators about components,  risk
weightings and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Company  and the Bank to  maintain  minimum  amounts and ratios (set
forth in the  Capital  Adequacy  table  below)  of Tier 1 and Total  Capital  to
risk-weighted  assets and of Tier 1 Capital to average assets (Leverage  ratio).
The table also presents the Company's  actual  capital  amounts and ratios.  The
Bank's  actual  capital  amounts and ratios are  substantially  identical to the
Company's.  Management  believes,  as of December 31, 1997, that the Company and
the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 1997, the most recent  notification  from the Federal Deposit
Insurance  Corporation  categorized the Company as "well  capitalized" under the
regulatory  framework for prompt  corrective  action. To be categorized as "well
capitalized",  the Company must maintain  minimum Tier 1 Capital,  Total Capital
and Leverage  ratios as set forth in the Capital  Adequacy  table.  There are no
conditions  or events since that  notification  that  management  believes  have
changed the Company's categorization by the FDIC.

               Actual                              Regulatory Requirements
------------------------------------------    ----------------------------------

                                              For Capital        To Be "Well
                                              Adequacy Purposes  Capitalized"

As of December 31, 1997    Amount    Ratio    Amount    Ratio   Amount    Ratio
                           ------    -----    ------    -----   ------    -----
--------------------------------------------  ----------------------------------

Total Capital
(to Risk Weighted Assets)  $44,888   23.55%   >$15,251  >8.0%   >$19,064  >10.0%
                                              -         -       -         -

Tier 1 Capital
(to Risk Weighted Assets)  $42,502   22.29%   >$ 7,626  >4.0%   >$11,438  > 6.0%
                                              -         -       -         -

Tier 1 Capital
(to Average Assets)        $42,502   10.25%   >$ *      > *     >$20,727  > 5.0%
                                              -         -       -         -

*3.0% ($12,436),  4.0% ($16,581) or 5.0% (20,727) depending on the bank's CAMEL
Rating and other regulatory risk factors.



As of December 31, 1996    Amount    Ratio    Amount    Ratio   Amount     Ratio
                           ------    -----    ------    -----   ------     -----
--------------------------------------------------------------------------------

Total Capital
(to Risk Weighted Assets)  $42,333   22.43%   >$15,099  >8.0%   $18,873   >10.0%
                                              -         -                 -

Tier 1 Capital
(to Risk Weighted Assets)  $40,033   21.21%   >$ 7,549  >4.0%   $11,324   > 6.0%
                                                        -                 -

Tier 1 Capital
(to Average Assets)        $40,033   10.18%   >$ *      > *     >$19,668  > 5.0%
                                                        -       -         -

*3.0% ($11,801),  4.0% ($15,734) or 5.0% (19,668)  depending on the bank's CAMEL
Rating and other regulatory risk factors.
--------------------------------------------------------------------------------

                             STATISTICAL INFORMATION

              The following tables present statistical  information  required by
Guide 3 for Bank  Holding  Companies  relating  to  Penseco  Financial  Services
Corporation and its subsidiaries on a consolidated basis.

I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY / INTEREST RATES
   AND INTEREST DIFFERENTIAL

<PAGE>


ITEM 1. Business (continued)

The table below presents  average  balances,  interest income on a fully taxable
equivalent basis and interest expense,  as well as average rates earned and paid
on the Company's  major asset and liability  items for the years 1997,  1996 and
1995.

-------------------------------------------------------------------
                                   1997       1997        1997
ASSETS                            Average    Revenue/    Yield/
                                  Balance    Expense      Rate
-------------------------------------------------------------------
Investment Securities
     U.S. Treasury securities      $113,559    $ 7,092      6.25%
     Other                               20          1      5.00%
     U.S. Agency obligations         11,342        712      6.28%
Loans, net of unearned income:
     Real estate mortgages          181,812     13,967      7.68%
     Commercial                      22,199      1,915      8.63%
     Consumer and other              56,364      6,002     10.65%
Federal funds sold                    7,535        410      5.44%
-------------------------------------------------------------------
Total Earning Assets/
     Total Interest Income          392,831    $30,099      7.66%
-------------------------------------------------------------------
Cash and due from banks               9,629
Bank premises and equipment           7,950
Accrued interest receivable           3,573
Other assets                          2,988
Less:  Allowance for loan losses      2,439
-------------------------------------------------------------------
Total Assets                       $414,532
-------------------------------------------------------------------

LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits:
     Demand-Interest bearing       $ 23,057    $   349      1.51%
     Savings                         72,815      1,447      1.99%
     Money markets                   68,437      2,039      2.98%
     Time - Over $100                30,697      1,616      5.26%
     Time - Other                   121,201      6,729      5.55%
Federal funds purchased                 278         14      5.04%
Repurchase agreements                 3,971        161      4.05%

Short-term borrowings                   558         30      5.38%
-------------------------------------------------------------------
Total Interest Bearing
Liabilities/
     Total Interest Expense         321,014    $12,385      3.86%
-------------------------------------------------------------------
Demand - Non-interest bearing        48,241
All other liabilities                 3,154
Stockholders' equity                 42,123
-------------------------------------------------------------------
Total Liabilities and
     Stockholders' Equity          $414,532
-------------------------------------------------------------------
Interest Spread                                             3.80%
-------------------------------------------------------------------
Net Interest Income                            $17,714
-------------------------------------------------------------------

FINANCIAL RATIOS
     Net interest margin                                    4.51%
     Return on average assets                               1.14%
     Return on average equity                              11.22%
     Average equity to average                             10.16%
     assets
     Dividend payout ratio                                 47.73%

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

-------------------------------------------------------------------
                                   1996        1996        1996
ASSETS                            Average    Revenue/     Yield/
                                  Balance     Expense      Rate
-------------------------------------------------------------------
Investment Securities
     U.S. Treasury securities      $125,114    $  7,880      6.30%
     Other                               20           1      5.00%
     U.S. Agency obligations          8,401         548      6.52%
Loans, net of unearned income:
     Real estate mortgages          161,699      12,531      7.75%
     Commercial                      19,252       1,743      9.05%
     Consumer and other              50,320       4,886      9.71%
Federal funds sold                    5,191         304      5.86%
-------------------------------------------------------------------
Total Earning Assets/
     Total Interest Income          369,997    $ 27,893      7.54%
-------------------------------------------------------------------
Cash and due from banks               7,985
Bank premises and equipment           6,275
Accrued interest receivable           3,603
Other assets                          7,728
Less:  Allowance for loan losses      2,230
-------------------------------------------------------------------
Total Assets                       $393,358
-------------------------------------------------------------------

LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits:
     Demand-Interest bearing       $ 22,312    $    366      1.64%
     Savings                         76,898       1,724      2.24%
     Money markets                   73,626       2,347      3.19%
     Time - Over $100                19,695         975      4.95%
     Time - Other                   107,019       5,736      5.36%
Federal funds purchased                 559          23      4.11%
Repurchase agreements                   100           4      4.00%

Short-term borrowings                   497          26      5.23%
-------------------------------------------------------------------
Total Interest Bearing
Liabilities/
     Total Interest Expense         300,706    $ 11,201      3.72%
-------------------------------------------------------------------
Demand - Non-interest bearing        46,885
All other liabilities                 5,882
Stockholders' equity                 39,885
-------------------------------------------------------------------
Total Liabilities and
     Stockholders' Equity          $393,358
-------------------------------------------------------------------
Interest Spread                                              3.82%
-------------------------------------------------------------------
Net Interest Income                            $ 16,692
-------------------------------------------------------------------

FINANCIAL RATIOS
     Net interest margin                                     4.51%
     Return on average assets                                1.17%
     Return on average equity                               11.54%
     Average equity to average                              10.14%
     assets
     Dividend payout ratio                                  46.67%

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

-----------------------------------------------------------------
                                   1995       1995       1995
ASSETS                            Average    Revenue/    Yield/
                                  Balance     Expense     Rate
-----------------------------------------------------------------
Investment Securities
     U.S. Treasury securities      $121,029    $  7,894     6.52%
     Other                               20           -         -
     U.S. Agency obligations         32,744       2,061     6.29%
Loans, net of unearned income:
     Real estate mortgages          137,788      11,447     8.31%
     Commercial                      14,836       1,491    10.05%
     Consumer and other              39,001       4,051    10.39%
Federal funds sold                   10,579         530     5.01%
-----------------------------------------------------------------
Total Earning Assets/
     Total Interest Income          355,997    $ 27,474     7.72%
-----------------------------------------------------------------
Cash and due from banks               7,644
Bank premises and equipment           6,420
Accrued interest receivable           3,560
Other assets                          3,824
Less:  Allowance for loan losses      2,088
-----------------------------------------------------------------
Total Assets                       $375,357
-----------------------------------------------------------------

LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits:
     Demand-Interest bearing       $ 21,676    $    424     1.96%
     Savings                         77,131       1,952     2.53%
     Money markets                   77,577       2,786     3.59%
     Time - Over $100                13,825         687     4.97%
     Time - Other                    98,035       5,339     5.45%
Federal funds purchased                  16           1     5.65%
Repurchase agreements
                                          -           -         -
Short-term borrowings                   546          29     5.31%
-----------------------------------------------------------------
Total Interest Bearing
Liabilities/
     Total Interest Expense         288,806    $ 11,218     3.88%
-----------------------------------------------------------------
Demand - Non-interest bearing        44,358
All other liabilities                 4,604
Stockholders' equity                 37,589
-----------------------------------------------------------------
Total Liabilities and
     Stockholders' Equity          $375,357
-----------------------------------------------------------------
Interest Spread                                             3.84%
-----------------------------------------------------------------
Net Interest Income                            $ 16,256
-----------------------------------------------------------------

FINANCIAL RATIOS
     Net interest margin                                    4.57%
     Return on average assets                               1.19%
     Return on average equity                              11.86%
     Average equity to average                             10.01%
     assets
     Dividend payout ratio                                 45.18%

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

The following  table presents the dollar amount of change in interest income and
expense  and the  corresponding  amounts  attributable  to  changes  in rate and
changes in volume:

<PAGE>


ITEM 1. Business (continued)

DOLLAR AMOUNT OF CHANGE IN
INTEREST INCOME AND INTEREST EXPENSE
                                            Dollar                       Change
                                            Amount    Change    Change   in
                                            of        in        in       Rate-
            1997 compared to 1996           Change    Volume    Rate     Volume
            --------------------------------------------------------------------
EARNING     Investment Securities:
ASSETS          U.S. Treasury securities    $  (788)  $  (728)  $    (75)$   15
                Other                             -         -          -       -
                U.S. Agency obligations         164       192        (20)    (8)

            Loans, net of unearned income:    1,436     1,559       (113)   (10)
                Real estate mortgages
                Commercial                      172       267        (81)   (14)
                Consumer and other            1,116       587        473     56
            Federal funds sold                  106       137        (22)    (9)
            --------------------------------------------------------------------
            Total Interest Income           $ 2,206   $ 2,014   $    162 $   30
            --------------------------------------------------------------------
INTEREST    Deposits:
BEARING         Demand-Interest bearing     $   (17)  $    12   $    (29)$    -
LIABILITIES     Savings                        (277)      (91)      (192)     6
                Money markets                  (308)     (166)      (155)    13
                Time - Over $100                641       545         63     33
                Time - Other                    993       760        203     30
            Federal funds purchased              (9)      (12)         5     (2)
            Repurchase agreements               157       160          -     (3)
            Short-term borrowings                 4         4          -      -
            --------------------------------------------------------------------
            Total Interest Expense          $ 1,184   $ 1,212   $  (105) $   77
            --------------------------------------------------------------------
            Net Interest Income             $ 1,022    $  802   $    267 $  (47)
            --------------------------------------------------------------------

                                            Dollar                       Change
                                            Amount    Change    Change   in
                                            of        in        in       Rate-
            1997 compared to 1996           Change    Volume    Rate     Volume
            -------------------------------------------------------------------
EARNING     Investment Securities:
ASSETS          U.S. Treasury securities    $   (13)  $   (94)  $     85 $   (4)
                Other                             -         -          -      -
                U.S. Agency obligations      (1,513)   (1,519)        26    (20)
            Loans, net of unearned income:
                Real estate mortgages         1,084     2,622     (1,254)  (284)
                Commercial                      252       516       (196)   (68)
                Consumer and other              835     1,499       (484)   180)
            Federal funds sold                 (226)     (234)        16     (8)
            --------------------------------------------------------------------
            Total Interest Income           $   419   $ 2,790   $ (1,807)$ (564)
            --------------------------------------------------------------------
INTEREST    Deposits:
BEARING         Demand-Interest bearing     $   (58)  $    20   $    (76)$   (2)
LIABILITIES     Savings                        (228)      (32)      (201)     5
                Money markets                  (439)     (156)      (302)    19
                Time - Over $100                288       439        (93)   (58)
                Time - Other                    397       727       (296)   (34)
            Federal funds purchased              22        26          -     (4)
            Repurchase agreements                 4         -          -      4
            Short-term borrowings                (3)       (2)        (1)     -
            --------------------------------------------------------------------
            Total Interest Expense          $   (17)  $ 1,022   $   (969)$  (70)
            --------------------------------------------------------------------
            Net Interest Income             $   436   $ 1,768   $   (838)$  494)
            --------------------------------------------------------------------


<PAGE>


ITEM 1. Business (continued)

II. INVESTMENT PORTFOLIO

The Company maintains a portfolio of investment securities to provide income and
serve as a source of liquidity for its ongoing operations.

The following  table  presents the book value by security type for the Company's
investment portfolio.

December 31,                        1997             1996            1995
-------------------------------------------------------------------------------
U.S. Treasury securities            $  114,922       $ 112,904       $ 137,271
Other securities                            20              20              20
U.S. Agency obligations
                                        10,106          12,339           8,955
-------------------------------------------------------------------------------
     Total Investment Securities    $  125,048       $ 125,263       $ 146,246
-------------------------------------------------------------------------------

See General Note 3 to the Financial Statements for a breakdown by classification
as to available for sale and held to maturity.

The  amortized  cost and fair value of debt  securities  at December 31, 1997 by
contractual  maturity  are shown  below.  Expected  maturities  will differ from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

                                    Available-for-Sale       Held-to-Maturity
--------------------------------------------------------------------------------
                                  Amortized      Fair      Amortized     Fair
                                    Cost        Value        Cost        Value
--------------------------------------------------------------------------------
Due in one year or less:
     U.S. Treasury securities     $   55,910    $56,057    $        -    $     -
After one year through five years:
     U.S. Treasury securities         58,373     58,865             -          -
--------------------------------------------------------------------------------
     Subtotal                        114,283    114,922             -          -
Mortgage-backed securities                 -          -        10,106     10,102
--------------------------------------------------------------------------------
     Total Debt Securities        $  114,283    $14,922    $   10,106    $10,102
--------------------------------------------------------------------------------

III. LOAN PORTFOLIO


LOAN              Details regarding the Company's loan portfolio for the past
PORTFOLIO         five years are as follows:

As of December 31,                1997       1996       1995
------------------------------------------------------------------
Real estate - construction
     and land development         $  3,731   $  3,770   $  4,042
Real estate mortgages
Commercial                         190,658    167,291    146,600
Credit card and related plans       26,841     19,966     16,246
Installment                          2,293      2,298      2,404
Obligations of states               39,613     37,463     30,804
     and political subdivisions      8,910      9,427      9,712
------------------------------------------------------------------

Loans, net of unearned income      272,046    240,215    209,808
Less:  Allowance for loan losses     2,600      2,300      2,100
------------------------------------------------------------------
Loans, net                        $269,446   $237,915   $207,708
------------------------------------------------------------------



As of December 31,               1994       1993
----------------------------------------------------
Real estate - construction
     and land development        $  4,174   $  3,219
Real estate mortgages
Commercial                        128,467    133,470
Credit card and related plans      12,643     15,344
Installment                         2,520      2,840
Obligations of states              24,769     21,465
     and political subdivisions     8,132      9,147
----------------------------------------------------

Loans, net of unearned income     180,705    185,485
Less:  Allowance for loan losses    2,100      2,100
----------------------------------------------------
Loans, net                       $178,605   $183,385
----------------------------------------------------

Nonperforming Assets

Loans are generally placed on a non-accrual status when principal or interest is
past  due 90 days or when  payment  in full is not  anticipated.  When a loan is
placed on nonaccrual status, all previously accrued but not collected is charged
against  current  income.  Loans are  returned  to accrual  status when past due
interest is collected and the collection of principal is probable.

Loans on which the accrual of interest has been discontinued or reduced amounted
to $1,031, $866 and $940 at December 31, 1997, 1996 and 1995,  respectively.  If
interest on those loans had been  accrued,  such income would have been $89, $66
and $69 for 1997, 1996 and

<PAGE>


ITEM 1. Business (continued)

1995, respectively.  Interest income on those loans, which is recorded only when
received,  amounted to $35, $45 and $56 for 1997,  1996 and 1995,  respectively.
There are no commitments to lend additional funds to individuals whose loans are
non-accrual status.

The  management  process for  evaluating  the adequacy of the allowance for loan
losses  includes  reviewing each month's loan  committee  reports which list all
loans that do not meet certain  internally  developed  criteria as to collateral
adequacy,  payment  performance,  economic  conditions  and overall credit risk.
These  reports  also  address the current  status and actions in process on each
listed loan.  From this  information,  adjustments are made to the allowance for
loan losses.  Such adjustments include both specific loss allocation amounts and
general  provisions  by loan  category  based on  present  and  past  collection
experience,  nature  and  volume of the loan  portfolio,  overall  quality,  and
current economic conditions that may affect the borrower's ability to pay. As of
December  31, 1997 there are no  significant  loans as to which  management  has
serious  doubt about their  ability to  continue to perform in  accordance  with
their contractual terms.

At  December  31,  1997,  1996 and  1995,  the  Company  did not have any  loans
specifically classified as impaired.

Most  of the  Company's  lending  activity  is  with  customers  located  in the
Company's  geographic  market  area  repayment  thereof is  affected by economic
conditions in this market area.



December 31,                             1997    1996    1995    1994    1993
-------------------------------------------------------------------------------
Non-accrual loans                        $1,031  $  866  $  940  $1,435  $1,924
Loans past due 90 days or more
  and accruing:
     Guaranteed student loans               343     342     166     187     118
     Credit card and home equity loans       98      93     133     101     140
-------------------------------------------------------------------------------
Total non-performing loans                1,472   1,301   1,239   1,723   2,182
Other real estate owned                     339     610     306     496     618
-------------------------------------------------------------------------------
Total non-performing assets              $1,811  $1,911  $1,545  $2,219  $2,800
-------------------------------------------------------------------------------



Real Estate  acquired  through  foreclosure  is recorded at the lower of cost or
market  at the time of  acquisition.  Any  subsequent  write-downs  are  charged
against operating expenses.  The other real estate owned as of December 31, 1997
and 1996 was $339 and $610,  respectively,  supported by  appraisals of the real
estate involved.



IV. SUMMARY OF LOAN LOSS EXPERIENCE

Loans are  stated  at the  principal  amount  outstanding,  net of any  unearned
income,  deferred  loan fees and the  allowance  for loan  losses.  Interest  on
discounted  loans is  generally  recognized  as  income  based on  methods  that
approximate the interest method. For all other loans,  interest is accrued daily
on the outstanding balances.

The  provision  for  loan  losses  is  based  on  past  loan  loss   experience,
management's  evaluation  of the  potential  loss in the current loan  portfolio
under current  economic  conditions  and such other factors as, in  management's
best  judgement,  deserve  current  recognition in estimating  loan losses.  The
provision for loan losses  represents  management's  determination of the amount
necessary  to bring the  allowance  for loan  losses to a level that  management
considers  adequate  to  reflect  the  risk of  future  losses  inherent  in the
Company's  loan  portfolio.  The  process of  determining  the  adequacy  of the
allowance  is  necessarily   judgmental  and  subject  to  changes  in  external
conditions.  Accordingly,  there can be no assurance that existing levels of the
allowance will ultimately prove adequate to cover actual loan losses. The annual
provision for loan losses  charged to operating  expense is that amount which is
sufficient  to bring the balance of the allowance for possible loan losses to an
adequate level to absorb anticipated losses.



<PAGE>


ITEM 1. Business (continued)

The following  tables  present the  Company's  loan loss  experience  during the
periods indicated:

Years Ended December 31,            1997    1996    1995    1994    1993
--------------------------------------------------------------------------------
Balance at beginning  of year       $2,300  $2,100  $2,100  $2,100  $2,100
Charge-offs:
     Real estate mortgages              38      87     300     341      79
     Commercial (time and demand)
       and all others                    -       -      11       -      14
     Credit card and related plans      52      64      67      55      77
     Installment loans                  32      32       3      12      20
--------------------------------------------------------------------------------
Total charge-offs                      122     183     381     408     190
--------------------------------------------------------------------------------
Recoveries:
     Real estate mortgages              79      22       2       3       -
     Commercial (time and demand)
       and all others                    1       2       1      25       6
     Credit card and related plans      17      16      11      18      19
     Installment loans                   9       9      46      25      47
--------------------------------------------------------------------------------
Total recoveries                       106      49      60      71      72
--------------------------------------------------------------------------------
Net charge-offs                         16     134     321     337     118
--------------------------------------------------------------------------------
Provision charged to operations        316     334     321     337     118
--------------------------------------------------------------------------------
Balance at End of Year              $2,600  $2,300  $2,100  $2,100  $2,100
--------------------------------------------------------------------------------
Ratio of net charge-offs
to average loans outstanding        0.001%   0.06%   0.17%   0.19%   0.06%
--------------------------------------------------------------------------------

The allowance for loan losses is allocated as
follows:

                              As of December 31,
                             ---------------------------------------------------
                                     1997              1996             1995
                             ---------------------------------------------------
                               Amount      %*    Amount     %*    Amount     %*
Real estate mortgages          $  1,350    71%   $  1,125   71%   $ 1,100   72%
Commercial (time and demand)
     and all others                 850    19%        875   22%       750   23%
Credit card and related plans       150     1%        150    1%       150    1%
Personal installment loans          250     9%        150    6%       100    4%
                             ---------------------------------------------------
Total                          $  2,600   100%   $  2,300  100%   $ 2,100   100%
                             ---------------------------------------------------


                              As of December 31,
                             ---------------------------------------
                                         1994              1993
                             ---------------------------------------
                                   Amount     %*     Amount      %*

Real estate mortgages              $  1,100  74%     $  1,200   74%
Commercial (time and demand)
     and all others                     700  22%          600   21%
Credit card and related plans           200  2%           200    2%
Personal installment loans              100  2%           100    3%
                             ---------------------------------------
Total                              $  2,100 100%     $  2,100  100%
                             ---------------------------------------

* Percent of loans in each category to total
loans


V. DEPOSITS

The primary source of funds to support the Company's growth is its deposit base.
Company deposits  increased $22.5 million to $374.5 million at December 31, 1997
from $352.0 million at December 31, 1996, an increase of 6.4%.  Company deposits
increased  $15.6  million to $352.0  million at  December  31,  1996 from $336.4
million at December 31, 1995, an increase of 4.6%. This growth occurred  despite
the  trend  of  customers  finding  alternate   repositories  for  their  funds,
principally the equity market via mutual funds.  Management is responding to the
competition  for these funds by  offering  competitively  priced or  alternative
banking products.


DEPOSITS (in millions)      YEAR

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

        $374,488            1997
         352,026            1996
         336,386            1995
         326,482            1994
         310,509            1993


The maturities of time deposits of $100,000 or more
are as follows:

Three months or less                  $   8,128
Over three months through six months     14,261
Over six months through twelve months     5,728
Over twelve months                       10,035
                                      ----------
Total                                 $  38,152


<PAGE>


ITEM 1. Business (continued)

December 31,                      1997           1996

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

Demand - Non-interest bearing  $    46,127    $    44,657
Demand - Interest bearing           23,826         25,291
Savings                             71,722         75,095
Money markets                       63,055         73,145
Time - Over $100,000                38,152         22,738
Time - Other                       131,606        111,100
----------------------------------------------------------
     Total                     $  374,488     $   352,026
----------------------------------------------------------

Scheduled maturities of time deposits
are as follows:


1998                        $134,008
1999                          28,098
2000                           4,032
2001                           1,854
2002                           1,754
2003 and thereafter               12
------------------------------------
            Total           $169,758
------------------------------------

VI. RETURN OF EQUITY AND ASSETS

FINANCIAL RATIOS:                  1997      1996      1995      1994      1993
                                  ------    ------    ------    ------    ------

Return on Average Assets           1.14%     1.17%     1.19%     1.02%     1.13%

Return on Average Equity          11.22%    11.54%    11.86%    10.76%    12.31%

Dividend Payout Ratio             47.73%    46.67%    45.18%    48.01%    44.04%

Average Equity to Average Assets  10.16%    10.14%    10.01%     9.47%     9.14%


VII. SHORT TERM BORROWINGS

At December 31, 1997 and 1996, other borrowed funds consisted of demand notes to
the U.S. Treasury and Repurchase Agreements.

Short-term  borrowings  generally have original maturity dates of thirty days or
less.

Investment  securities with amortized costs of $7,987 and $5,964 and fair values
of $8,023 and $5,990 were pledged to secure  repurchase  agreements  at December
31, 1997 and 1996.

Years Ended December 31,                          1997            1996
---------------------------------------------------------------------------
Amount outstanding at year end                  $    6,815      $    2,468
Average interest rate at year end                    4.57%           4.70%
Maximum amount outstanding at any month end     $    6,815      $    4,667
Average amount outstanding                      $    4,807      $    1,156
Weighted average interest rate during the year:
     Federal funds purchased                         5.04%           4.11%
     Repurchase agreements                           4.05%           4.00%
     Demand notes to U.S. Treasury                   5.38%           5.23%

The Company has an available  credit  facility with the Federal  Reserve Bank in
the amount of $10,000  (secured by pledged  securities  with amortized costs and
fair  values of $9,971 and $9,919 at  December  31 1997 and $9,998 and $9,962 at
December 31, 1996 with an interest  rate of 5.00% at each year end.  There is no
stated  expiration date for the credit facility as long as the Company maintains
the pledged  securities at the Federal  Reserve Bank.  There was no  outstanding
balance as of December 31, 1997 and 1996.

ITEM 2. Properties

The Bank owns all of its offices  either  directly  or through its wholly  owned
subsidiary,  Penseco Realty, Inc., with the exception of the Mount Pocono Office
which is owned by the Bank but is located on land leased by the Bank over a long
term. The principal  office is located in the "Central City" section of Scranton
in its business  district.  The Central  City  Office,  located at the corner of
North Washington Avenue and Spruce Street in Scranton, utilizes nine (9) stories
and the basement of a ten (10) story - 50,000 sq. ft. office building,  the Penn
Security Bank Building,  formerly the Mears Building, and houses the operations,
trust,  marketing,  credit  card and  audit  departments  as well as the  Bank's
executive offices. The balance of the building is leased to other tenants. Title
to the Penn  Security Bank  Building is held by Penseco  Realty,  Inc., a wholly
owned  subsidiary of Penn Security Bank and Trust  Company.  Parking is provided
for  approximately  40 customers and it has two (2) ATM's,  one drive up and one
covered  walk-up.  The South  Scranton  Office is located  in the  "South  Side"
section of Scranton in a business district. It has 13,583 sq. ft. of floor space
all of which is  presently  being  used in the  business  of the  Bank.  Parking
facilities  are provided for  approximately  70  automobiles.  The East Scranton
Office is located in that  section of Scranton at the corner of Prescott  Avenue
and Ash Street. It has 2,290 sq. ft. of floor space all of which is presently

<PAGE>


ITEM 2. Properties (continued)

being used in the business of banking.  Parking  facilities  are provided for 15
automobiles and it has a drive-up ATM. The Green Ridge Office is located in that
section of Scranton in a business district at the corner of Boulevard Avenue and
East Market Street.  It contains 5,601 sq. ft. of floor space about 3/4 of which
is used for  banking  purposes  and the rest  (located  on the second  floor) is
presently  unoccupied.  Parking  for 50  automobiles  is  provided  and it has a
drive-up  ATM.  The Moscow  Office  located  at the  corner of Main and  Academy
Streets in Moscow, has 4,000 sq. ft. of floor space, parking for 50 automobiles,
drive-in  windows and a drive-up  ATM.  The  Gouldsboro  Office,  located at the
corner of Second and Main Streets in Gouldsboro, has 480 sq. ft. of floor space,
parking for 15 automobiles,  drive-up  windows and an ATM. The Abington  Office,
located in South Abington  Township,  has 2,914 sq. ft. of floor space,  parking
for 32  automobiles,  drive-in  windows and an ATM. The Mount  Pocono  Office is
located at the junction of Routes 611 and 940 in Mount Pocono, has 2,143 sq. ft.
of floor space, parking for 20 automobiles,  drive-up windows and two ATM's. Two
remote ATM locations are leased by the Bank located on Meadow Avenue in Scranton
and the Red Barn Village in Newton  Township.  All offices  have closed  circuit
television monitored drive-ups and ATM's.

ITEM 3. Legal Proceedings

              There  are  no  material  pending  legal  proceedings  other  than
ordinary routine  litigation  incidental to the business of the Company to which
the Company or  subsidiary  is a party or of which any of their  property is the
subject.

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

The  formation  of the  holding  company  was  over-whelmingly  approved  by the
stockholders  at the special  meeting held  December  16,  1997,  the vote being
485,312  shares  approving  and 1,668  shares  opposed,  of the  537,000  shares
eligible to vote. In addition, no stockholder elected to exercise any dissenting
stockholder  rights.  The  Bank  received  approval  from  the  Federal  Deposit
Insurance  Corporation,  the Pennsylvania  Department of Banking and the Federal
Reserve  Board  prior to year-end  and the  conversion  to the  holding  company
structure was effective December 31, 1997.

                                     PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

              The Company's capital stock is traded "Over-the-Counter"  BULLETIN
BOARD under the symbol  "PFNS".  The following  table sets forth the price range
together with dividends paid for each of the past two years. These quotations do
not necessarily reflect the value of actual transactions.

                                             Dividends
                                             Paid
1997                   High         Low      Per share
-----------------------------------------------------
First Quarter          $ 23        $ 22       $ 0.20
Second Quarter           23          23         0.20
Third Quarter            25          23         0.20
Fourth Quarter           29          25         0.45
                                             --------
                                              $ 1.05
                                             ========


                                             Dividends
                                             Paid
    1996              High         Low       Per share
-----------------------------------------------------
First Quarter         $ 22         $ 22      $ 0.187
Second Quarter          22           22        0.187
Third Quarter           22           22        0.187
Fourth Quarter          22           22        0.439
                                            ---------
                                             $ 1.000
                                            =========

As of March 13, 1998 there were approximately  1,019 stockholders of the Company
based on the number of recordholders.

The  information  on the  Dividend  Restrictions  of the Bank are listed  within
Exhibit 13 and incorporated herein by reference thereto.

ITEM 6. Selected Financial Data

The information  contained under the heading "Selected Financial Data" is listed
within Exhibit 13 and incorporated herein by reference thereto.

ITEM 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

The  information  contained  under  the  heading  "Management's  Discussion  and
Analysis"  is listed  within  Exhibit 13 and  incorporated  herein by  reference
thereto.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The  information  contained  under the  heading  "Quantitative  and  Qualitative
Disclosures  About Market  Risk" is listed  within  Exhibit 13 and  incorporated
herein by reference thereto.


<PAGE>



ITEM 8. Financial Statements and Supplementary Data

The  Consolidated   Financial  Statements  are  listed  within  Exhibit  13  and
incorporated herein by reference thereto.

ITEM  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

There  were no  changes  in or  disagreements  with  accountants  on  matters of
accounting principles or practices or financial statement disclosures in 1997.

                                    PART III

ITEM 10. Directors and Executive Officers of the Registrant

The  information  on  Directors  of the  Bank  listed  on  pages  4 and 5 of the
Company's  definitive proxy statement  relating to the Company's 1998 meeting of
stockholders is incorporated herein by reference thereto.

The  information on Executive  Officers listed on pages 6 and 7 of the Company's
definitive   proxy   statement   relating  to  the  Company's  1998  meeting  of
stockholders is incorporated herein by reference thereto.

ITEM 11. Executive Compensation

The information  contained under the heading "Executive  Compensation" on page 6
in the Company's  definitive  proxy  statement  relating to the  Company's  1998
meeting of stockholders is incorporated herein by reference thereto.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

The  information  contained  under the heading  "Voting  Securities  & Principal
Holders Thereof" on pages 2, 3 and 4 in the Company's definitive proxy statement
relating to the Company's 1998 meeting of stockholders is incorporated herein by
reference thereto.

ITEM 13. Certain Relationships and Related Transactions

The  information  contained  in Note 17  under  the  heading  "General  Notes to
Financial  Statements"  in the Company's 1997 Annual Report to  Stockholders  is
incorporated herein by reference thereto.

                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) The following documents are filed as part of this report:

     1.   Financial Statements

              As listed in the Index to Financial Statements on page 16 hereof.

      2.   Financial Statement Schedules

      3.   Exhibits

                As listed in the Index to Exhibits on pages 16 and 17 hereof.

(b) Report on Form 8-K was filed for the  fourth  quarter of 1997 on the date of
    February 11, 1998.

(c)  See item 14. (a) 3. above

(d)  See item 14. (a) 2. above



<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Bank has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


By:  /s/  Otto P. Robinson, Jr.
          Otto P. Robinson, Jr.
          President
          Date:   March 27, 1998


By:  /s/  Richard E. Grimm
          Richard E. Grimm
          Executive Vice-President
          Date:   March 27, 1998


By:  /s/  Patrick Scanlon
          Patrick Scanlon
          Controller
          Date:  March 27, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.




<PAGE>


By: /s/  Edwin J. Butler
         Edwin J. Butler
         Director
         Date:  March 27, 1998


By: /s/  Richard E. Grimm
         Richard E. Grimm
         Director
         Date:  March 27, 1998


By: /s/  Russell C. Hazelton
         Russell C. Hazelton
         Director
          Date:  March 27, 1998


By: /s/  D. William Hume
         D. William Hume
         Director
         Date:  March 27, 1998


By: /s/  James G. Keisling
         James G. Keisling
         Director
         Date:  March 27, 1998


By: /s/  P. Frank Kozik
         P. Frank Kozik
         Director
         Date:  March 27, 1998

By: /s/  Robert W. Naismith, Ph.D.
         Robert W. Naismith, Ph.D.
         Director
         Date:  March 27, 1998


By: /s/  James B. Nicholas
         James B. Nicholas
         Director
         Date:  March 27, 1998


By:  /s/ Emily S. Perry
         Emily S. Perry
         Director
         Date:  March 27, 1998


By: /s/  Sandra C. Phillips
         Sandra C. Phillips
         Director
         Date:  March 27, 1998


By: /s/  Otto P. Robinson, Jr.
         Otto P. Robinson, Jr.
         Director
         Date:  March 27, 1998




<PAGE>




                          INDEX TO FINANCIAL STATEMENTS


Independent Auditor's Report on the 1997 Consolidated Financial Statements *


Consolidated Balance Sheets at December 31, 1997 and 1996  *


Consolidated  Statements of Income for the Years Ended  December 31, 1997,  1996
and 1995 *


Consolidated  Statements of Changes in Stockholders'  Equity for the Years Ended
December 31, 1997, 1996 and 1995 *


Consolidated  Statements  of Cash Flows for the Years Ended  December  31, 1997,
1996 and 1995 *


General Notes to Consolidated Financial Statements  *



         *   Incorporated  by reference to the  Company's  1997 Annual Report to
             Shareholders. See Item 8 of this report on Form 10-K.









             (The remainder of this page left intentionally blank.)


<PAGE>


                                INDEX TO EXHIBITS

Exhibit Number                                                Prior Filing or
Referred to Item 601                                          Exhibit Page
of Regulation S-K    DESCRIPTION OF EXHIBIT                   Number Herein

         2           Plan of acquisition, reorganization,
                     arrangement, liquidation or succession   None

         3           i)   Articles of Incorporation           Page 16
                     ii)  By-Laws                             Page 18

         4           Instruments defining the rights of
                     security holders, including indentures   None

         9           Voting trust agreement                   None

         10          Material contracts - Supplemental        Page 8 of the
                     Benefit Plan Agreement                   Definitive Proxy
                                                              Statement relating
                                                              to the Company's
                                                              1998 Meeting of
                                                              Stockholders is
                                                              holders incorp-
                                                              orated herein by
                                                              reference thereto.

         11          Statement re computation of per share
                     earnings                                 None

         12          Statements re computation of ratios      None

         13          Annual report to security holders,
                     Form 10-Q or quarterly report to
                     security holders                         Page 24

         16          Letter re change in certifying
                     accountant                               None

         18          Letter re change in accounting
                     principles                               None

         21          Subsidiaries of the registrant           Page 78

         22          Published report regarding matters       The Definitive
                     submitted to vote of security holders    Proxy Statement
                                                              relating to the
                                                              Company's Special
                                                              Meeting of Stock-
                                                              holders held on
                                                              December 16, 1997,
                                                              filed on October
                                                              24, 1997 is
                                                              incorporated
                                                              herein by
                                                              reference thereto.

         23          Consents of experts and counsel          None

         24          Power of attorney                        None

         27          Financial Data Schedule                  None

         99          Additional Exhibits                      None