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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K/A


[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 SECURITIES EXCHANGE
         ACT OF 1934 [NO FEE REQUIRED]

For the transition period from            to

Commission file Number:  2-85306

                            LAKE ARIEL BANCORP, INC.
             (Exact name of registrant as specified in its charter)

PENNSYLVANIA                                                 23-2244948
(State of other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification Number)

Post Office Box 67, Route 191, Lake Ariel, Pennsylvania                18436
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code:  (717) 698-5695

Securities registered pursuant to Section 12(b) of the Act:  Not Applicable

Securities registered pursuant to Section 12(g) of the Act:
                                 Common Stock, par value $.42 per share

                  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 past 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. [X]

                  The aggregate market value of the voting stock held by
non-affiliates of the registrant based on average bid and asked prices:
$27,580,258 million at March 18, 1997.

                  As of March 18, 1997, the registrant had outstanding 1,771,328
shares of its common stock, par value $.42 per share.

                       DOCUMENTS INCORPORATED BY REFERENCE

                  Portions of the Annual Report to shareholders of the
registrant for the year ended December 31, 1996, are incorporated by reference
in Part II of this Annual Report.

                                  Page 1 of 40
                            Exhibit Index on Page 36

                                        1

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                            LAKE ARIEL BANCORP, INC.
                                    FORM 10-K/A

                                      Index
Part I                                                                    Page

Item 1.     Business.............................................        3

Item 2.     Properties...........................................       17

Item 3.     Legal Proceedings....................................       19

Item 4.     Submission of Matters to a Vote of Security Holders.. Not Applicable

Part II

Item 5.     Market for the Registrant's Common Equity and
              Related Shareholder Matters........................       19

Item 6.     Selected Financial Data..............................       21

Item 7.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations................       21

Item 8.     Financial Statements and Supplementary Data..........       22

Item 9.     Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure................ Not Applicable

Part III

Item 10.    Directors and Executive Officers of the Registrant...       22

Item 11.    Executive Compensation...............................       25

Item 12.    Security Ownership of Certain Beneficial Owners and
              Management.........................................       27

Item 13.    Certain Relationships and Related Transactions.......       29

Part IV

Item 14.    Exhibits, Financial Statement Schedules and Reports
               on Form 8-K.......................................       30

Signatures        ...............................................       32

Exhibit Index     ...............................................       35

                                                         2

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Report of Independent Certified Public Accountants


Board of Directors and Stockholders
Lake Ariel Bancorp, Inc. and Subsidiary:

We have audited the accompanying consolidated balance sheets of Lake Ariel
Bancorp, Inc. and Subsidiary as of December 31, 1996 and 1995, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lake Ariel Bancorp,
Inc. and Subsidiary as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.





Parente, Randolph, Orlando, Carey & Associates


Wilkes-Barre, Pennsylvania
January 24, 1997