SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549

                           FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [FEE REQUIRED]
     For the fiscal year ended December 31, 1996

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIE
     EXCHANGE  ACT OF 1934 [NO FEE REQUIRED]
     For the transition period from              to


                 Commission file number  0-18533

            LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
        (Name of Small Business Registrant in Its Charter)

          New York                      16-1168175

(State or Other Jurisdiction            (I.R.S. Employer
 of Incorporation or Organization)       Identification Number)

50 North Main Street, Castile, New York           14427
(Address of Principal Executive Offices)      (Zip Code)

                    (716) 493-2577
        (Registrant's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

                  Common Stock, $1.00 par value
                         (Title of Class)

           Warrants to Purchase Shares of Common Stock
                         (Title of Class)

     Check whether the Registrant:  (1) 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-B 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-KSB or any amendment to this Form 10-KSB.  [ X ]

     State Registrant's revenues for its most recent fiscal year:
$19,309,196.

     The aggregate market value of the shares of Registrant's voting
stock held by non-affiliates of Registrant as of December 31, 1996 was
$21,442,498, based upon the average "Bid" and "Ask" price of
Registrant's common stock on said date.

     The number of shares outstanding of Registrant's common stock as of
March 17, 1997 was 943,172.

               Documents Incorporated by Reference
<TABLE>
<CAPTION>
     None

                  Shares              No. of Unexercised   Value of "In-the-Money"
                 Acquired      Value       Options at      Unexercised Options at
                on Exercise  Realized*   December 31, 1996   December 31, 1996
Name                                     (Exercisable/         (Exercisable/
                                         Unexercisable)         Unexercisable)**
<S>                 <C>       <C>       <C>    <C>          <C>       <C>
James W. Fulmer     10,000   $157,500   13,503/10,073       $216,672/$158,650
Brenda L. Copeland   8,400    132,300    9,227/ 7,555       $145,325/$118,991

</TABLE>
*  Represents the value of "in-the money" options exercised by Mr.
Fulmer and Ms. Copeland during 1996.

** Assumes that the "Bid" price of $30.75 at December 31, 1996
represents a reasonable valuation of the Company's common stock.

  No assurances can be given relating to the dilutive effect
that the Option Plan or options granted thereunder may have on the
outstanding common stock.
                         SIGNATURES

          In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report
on Form 10-KSB to be signed on its behalf by the undersigned, thereunto
duly authorized.

Date:     March 26, 1997      LETCHWORTH INDEPENDENT
                              BANCSHARES CORPORATION

                              By: /s/ James W. Fulmer
                                 James W. Fulmer, President
                                  and Chief Executive Officer


                        POWER OF ATTORNEY

          KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints JAMES W. FULMER his
true and lawful attorney-in-fact and agent with full power of
substitution and re-substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Annual Report on Form 10-KSB, and to file the same, with all exhibits
thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or
his substitute, may lawfully do or cause to be done by virtue thereof.

          In accordance with the Securities Exchange Act of 1934, this
Annual Report on Form 10-KSB has been signed below on March 26, 1997 by
the following persons on behalf of the Registrant and in the capacities
indicated.

      Signatures                         Title


 /s/ James W. Fulmer             President, Chief Executive
     James W. Fulmer              Officer and Director

 /s/ Charles L. Van Arsdale      Director
     Charles L. Van Arsdale

/s/ James H. Van Arsdale, III    Chairman of the Board
    James H. Van Arsdale, III     of Directors

 /s/ Stanley J. Harmon           Secretary and Director
     Stanley J. Harmon

 /s/ Steven C. Lockwood          Treasurer and Chief
     Steven C. Lockwood           Financial Officer

 /s/ Gunther K. Buerman          Director
     Gunther K. Buerman