FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549-1004

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended              September 30, 2005

Commission file number:            33-66014


                            FNB Financial Corporation
             (Exact name of registrant as specified in its charter)

Commonwealth of Pennsylvania                      23-2466821
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                   Identification
                                                  No.)


  101 Lincoln Way West, McConnellsburg, PA        17233
  (Address of principal executive offices)        (Zip code)


Registrant's telephone number, including area code:  717/485-3123

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 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 Exchange Act).

                         YES           NO   X

Indicate by check mark whether the registrant is a shell company (as defined  in
Rule 12b-2 of the Exchange Act).

                         YES           NO   X

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

             Class                 Outstanding at September 30, 2005
(Common stock, $0.315 par value)                  800,000

Page 1 of 28
                     FNB FINANCIAL CORPORATION

                               INDEX

                                                    Page
PART I  -  FINANCIAL INFORMATION

Item 1 - Financial Statements

        Condensed consolidated balance sheets -
          September 30, 2005 and December 31, 2004   4

        Condensed consolidated statements of income -
          Three months ended September 30, 2005 and 2004    5

        Condensed consolidated statements of income -
          Nine months ended September 30, 2005 and 2004     6

        Condensed consolidated statements of comprehensive
          income - Nine months ended September 30, 2005
          and 2004                                   7
        Condensed consolidated statements of cash flows -
          Nine months ended September 30, 2005 and 2004     8

        Notes to condensed consolidated financial
          Statements                                     9-10

Item 2 - Management's discussion and analysis of financial
          condition and results of operations           11-17

Item 3 - Quantitative and qualitative disclosures about
          market risk                                      18

Item 4 - Controls and procedures                           18


PART II  -  OTHER INFORMATION

Item 1.  Legal Proceedings                                 20
Item 2.  Unregistered Sales of Equity Securities and Use
           of Proceeds                                     20
Item 3.  Defaults Upon Senior Securities                   20
Item 4.  Submission of Matters to a Vote of
        Security Holders                                   20
Item 5.  Other information                                 20
Item 6.  Index to Exhibits                                 20

Signatures                                                 21

Exhibits                                                22-28


Page 2 of 28



















                  PART I - FINANCIAL INFORMATION




































Page 3 of 28

FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
             CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<S>                                             <C>                     <C>
                                                     September 30,         December 31,
                                                         2005                  2004
                                                      (unaudited)           (audited*)
ASSETS:
Cash and Due from banks                                $     4,769,775      $     5,612,686
Interest-bearing deposits with banks                           495,721              195,131
Investment Securities
   Held-to-maturity (Market value - 2005
      $ 206,624; 2004 $ 253,216)                               208,620              255,170
   Available-for-sale                                       32,255,770           39,831,248
   Federal Reserve, Atlantic Central Banker's
      Bank and Federal Home Loan Bank Stock                  1,625,000            1,746,700
Loans                                                      136,631,832          113,639,286
Less:  Allowance for loan losses                      (     1,134,065)     (     1,087,755)
                                                       ---------------      ---------------
Loans, net                                                 135,497,767          112,551,531
 Bank building, equipment, furniture and
   fixtures, net                                             3,086,924            3,205,810
 Accrued interest receivable                                   660,989              589,724
 Deferred income taxes                                         283,806              130,783
 Cash surrender value of life insurance                      2,874,028            2,823,035
 Intangible assets                                           2,169,980            1,153,913
 Other assets                                                1,160,111              784,923
                                                       ---------------      ---------------
         Total Assets                                  $   185,088,491      $   168,880,654
                                                       ===============      ===============
LIABILITIES :
Deposits:
 Demand deposits                                       $    24,237,118      $    19,025,816
 Savings deposits                                           42,488,358           39,624,814
 Time certificates                                          74,613,755           69,214,188
 Other time deposits                                           690,393              283,521
                                                       ---------------      ---------------
      Total deposits                                       142,029,624          128,148,339
Accrued interest payable & other liabilities                 1,268,955              811,837
Liability for other borrowed funds                          26,126,212           24,434,759
Dividends payable                                              168,000              280,000
                                                       ---------------      ---------------
      Total Liabilities                                    169,592,791          153,674,935
                                                       ---------------      ---------------
STOCKHOLDERS' EQUITY:
Capital stock, Common, par value $ 0.315;
 6,000,000 shares authorized; 800,000
 outstanding                                                   252,000              252,000
Additional paid-in capital                                   1,789,833            1,789,833
Retained earnings                                           13,535,749           13,034,620
Accumulated other comprehensive income (loss)         (        81,882)              129,266
                                                       ---------------      ---------------
   Total Stockholders' Equity                               15,495,700           15,205,719
                                                       ---------------      ---------------
      Total Liabilities & Stockholders' Equity         $   185,088,491      $   168,880,654
                                                       ===============      ===============
</TABLE>
*Condensed from audited financial statements.

 The accompanying notes are an integral part of these
            condensed financial statements.
Page 4 of 28

     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME
          Three Months Ended September 30, 2005 and 2004
                            (UNAUDITED)

<TABLE>
<S>                                                <C>           <C>
                                                       2005          2004
Interest & Dividend Income
Interest & fees on loans                             $2,141,262     $1,788,162
   Interest on investment securities:
       Obligations of other U.S. Government Agencies    252,255        296,732
       Obligations of State & Political                  85,914        109,154
Subdivisions
   Interest on deposits with banks                        3,994          4,336
   Dividends on Equity Securities                        13,424          6,503
   Interest on federal funds sold                             0             92
                                                     ----------     ----------
          Total Interest & Dividend Income            2,496,849      2,204,979
                                                     ----------     ----------
Interest Expense
   Interest on deposits                                 751,794        658,372
   Interest on other borrowed money                     236,072        172,187
                                                     ----------     ----------
          Total interest expense                        987,866        830,559
                                                     ----------     ----------
          Net interest income                         1,508,983      1,374,420
   Provision for loan losses                             30,000         54,000
                                                     ----------     ----------
          Net interest income after provision
             for loan losses                          1,478,983      1,320,420
                                                     ----------     ----------
Other income
   Service charges on deposit accounts                  136,954        134,264
   Other service charges, collection & exchange
      charges, commissions and fees                     102,232        131,489
   Other income                                          29,670         25,609
   Net securities gains/(losses)                         54,280              0
                                                     ----------     ----------
          Total other income                            323,136        291,362
                                                     ----------     ----------
Operating expenses
   Salaries and employee benefits                       629,145        546,671
   Occupancy and equipment expense                      237,916        170,951
   Other operating expenses                             582,516        414,580
                                                     ----------     ----------
          Total operating expense                     1,449,577      1,132,202
                                                     ----------     ----------
   Income before income taxes                           352,542        479,580
   Applicable income taxes                               99,478        121,000
                                                     ----------     ----------
          Net income                                 $  253,064     $  358,580
                                                     ==========     ==========
Earnings per share of Common Stock:
   Net income per share                              $     0.32     $     0.45
Cash dividend declared per share                     $     0.21     $     0.17
Weighted average number of shares outstanding           800,000        800,000

</TABLE>
       The accompanying notes are an integral part of these
                  condensed financial statements.
Page 5 of 28

     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME
           Nine Months Ended September 30, 2005 and 2004
                            (UNAUDITED)

<TABLE>
<S>                                                  <C>              <C>
                                                           2005            2004
Interest & Dividend Income
   Interest & fees on loans                            $   5,963,476    $   5,255,107
   Interest on investment securities:
      Obligations of other U.S. Government Agencies          819,232          679,146
      Obligations of State & Political Subdivisions          287,995          325,328
   Interest on deposits with banks                            12,766           10,019
   Dividends on Equity Securities                             42,662           22,890
   Interest on federal funds sold                                  0              695
                                                       -------------    -------------
          Total Interest & Dividend Income                 7,126,131        6,293,185
                                                       -------------    -------------
Interest Expense
   Interest on deposits                                    2,079,988        1,956,361
   Interest on other borrowed money                          716,840          439,190
                                                       -------------    -------------
          Total interest expense                           2,796,828        2,395,551
                                                       -------------    -------------
          Net interest income                              4,329,303        3,897,634
   Provision for loan losses                                  90,000          206,000
                                                       -------------    -------------
          Net interest income after
          provision for loan losses                        4,239,303        3,691,634
                                                       -------------    -------------
Other income
   Service charges on deposit accounts                       343,442          329,766
   Other service charges, collection & exchange
      charges, commissions and fees                          339,061          336,459
   Other income                                              147,871           82,159
   Net securities gains/(losses)                              69,019           79,417
                                                       -------------    -------------
          Total other income                                 899,393          827,801
                                                       -------------    -------------
Operating expenses
   Salaries and employee benefits                          1,865,594        1,626,705
   Occupancy and equipment expense                           561,794          515,451
   Other operating expenses                                1,373,328        1,123,425
                                                       -------------    -------------
          Total operating expenses                         3,800,716        3,265,581
                                                       -------------    -------------
   Income before income taxes                              1,337,980        1,253,854
   Applicable income taxes                                   364,851          326,149
                                                       -------------    -------------
          Net income                                   $     973,129    $     927,705
                                                       =============    =============
Earnings per share of Common Stock:
   Net income per share                                $        1.22    $        1.16
Cash dividend declared per share                       $        0.59    $        0.47
Weighted average number of shares outstanding                800,000          800,000

</TABLE>
       The accompanying notes are an integral part of these
                  condensed financial statements.
Page 6 of 28

     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

     CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
           Nine Months Ended September 30, 2005 and 2004
                            (UNAUDITED)

<TABLE>
<S>                                                  <C>              <C>
                                                           2005            2004
Net Income                                               $  973,129        $  927,705
                                                         -----------      -----------
Other Comprehensive:
   Gross unrealized holding gains (losses)              (   250,902)     (   131,767)
   Reclassification adjustment for(gains)losses
      realized in net income                            (    69,019)     (    79,417)
                                                        ------------     ------------
   Net unrealized holding gains(losses)before taxes     (   319,921)     (   211,184)
   Tax effect                                               108,773            71,803
                                                         -----------     ------------
   Other comprehensive income (loss)                    (   211,148)     (   139,381)
                                                         ----------        ----------
Comprehensive income (loss)                              $  761,981        $  788,324
                                                         ===========      ===========
</TABLE>


































       The accompanying notes are an integral part of these
                  condensed financial statements.
Page 7 of 28

     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           Nine Months Ended September 30, 2005 and 2004
                            (UNAUDITED)
<TABLE>
<S>                                                      <C>               <C>
                                                               2005            2004
Cash flows from operating activities:
   Net income                                               $    973,129    $    927,705
   Adjustments to reconcile net income to
      net cash provided by operating activities:
         Depreciation & amortization                             354,492         240,707
         Provision for loan losses                                90,000         206,000
         Increase in cash surrender value of life
            insurance                                      (      50,993) (      54,681)
         Net (gain) on sales of investments                (      69,019) (      79,417)
         Net loss on disposal of equipment                        36,298               0
         (Increase) in accrued interest receivable         (      71,265) (     125,243)
         Increase (decrease) in accrued interest
            payable and other liabilities                        457,118         357,564
         (Increase) decrease in other assets               (     386,010) (     161,315)
                                                            ------------    ------------
Net cash provided by operating activities:                     1,333,750       1,311,320
                                                            ------------    ------------
Cash flows from investing activities:
   Net (increase) decrease in interest-
      bearing deposits with banks                          (     300,590)       245,392
   Purchases of Available-for-sale securities                          0  (  19,413,310)
   Proceeds from maturities and calls of securities            5,477,652       3,425,146
   Proceeds sale of available-for-sale securities              1,893,475       5,986,028
   Net (increase) decrease in other real estate owned      (      57,429)             0
   Net (increase) decrease in loans                        (  23,036,235) (   8,613,412)
   Purchases of bank premises & equipment (net)            (     170,783) (     197,354)
   (Purchase) sale of other bank stock                           121,700  (     584,500)
                                                            -------------  -------------
Net cash (used) by investing activities                    (  16,072,210) (  19,152,010)
                                                            ------------    ------------
Cash flows from financing activities:
   Net increase (decrease) in deposits                           406,685  (     709,230)
   Purchase of deposits                                       12,381,410       8,971,683
   Net increase (decrease) in other borrowings                 1,691,454      10,675,759
   Cash dividends paid                                     (     584,000) (     512,000)
                                                            ------------    ------------
Net cash provided (used) by financing activities              13,895,549      18,426,212
                                                            -------------  ------------
Net increase (decrease) in cash & cash equivalents         (     842,911)       585,522
Cash & cash equivalents, beginning balance                     5,612,686       3,495,604
                                                            ------------    ------------
Cash & cash equivalents, ending balance                     $  4,769,775    $  4,081,126
                                                            ============    ============
Supplemental schedule of non cash investing and
 financing activities:
  Acquisition of Deposits:
   Liability assumed for deposits acquired                  $ 13,474,600    $ 10,039,743
   Acquisition (premium) discount                                         (   1,068,060)
                                                           (   1,093,190)
                                                            ------------    ------------
   Cash received for deposits acquired                      $ 12,381,410    $  8,971,683
                                                            ============    ============
   Acquisition of loans                                     $    881,947    $          0
                                                            ============    ============
</TABLE>
       The accompanying notes are an integral part of these
                  condensed financial statements.

Page 8 of 28

                     FNB FINANCIAL CORPORATION

                        SEPTEMBER 30, 2005
                            (UNAUDITED)

        REVIEW OF INTERIM FINANCIAL STATEMENTS

        The condensed consolidated financial statements as of and
        for the three and nine month periods ended September 30,
        2005 and 2004 have been reviewed by independent certified
        public accountants.  Their report on their review is
        attached as Exhibit 99 to this 10-Q.


NOTE 1 - BASIS OF PRESENTATION

        The financial information presented at and for the nine
        months ended September 30, 2005 and September 30, 2004 is
        unaudited.  Information presented at December 31, 2004, is
        condensed from audited year-end financial statements.
        However, this unaudited information reflects all
        adjustments, consisting solely of normal recurring
        adjustments, that are, in the opinion of management,
        necessary for a fair presentation of the financial
        position, results of operations and cash flows for the
        interim period.  The results of operations for the nine
        months ended September 30, 2005 are not necessarily
        indicative of the results that may be expected for the full
        year.

NOTE 2 - PRINCIPLES OF CONSOLIDATION

        The consolidated financial statements include the accounts
        of the corporation and its wholly-owned subsidiaries, The
        First National Bank of McConnellsburg and FNB Mortgage
        Brokers, Inc.  All significant intercompany transactions
        and accounts have been eliminated.

NOTE 3 - CASH FLOWS

        For purposes of the statements of cash flows, the
        Corporation has defined cash and cash equivalents as those
        amounts included in the balance sheet captions "cash and
        due from banks" and "federal funds sold".  As permitted by
        Statement of Financial Accounting Standards No. 104, the
        Corporation has elected to present the net increase or
        decrease in deposits in banks, loans and deposits in the
        statement of cash flows.

NOTE 4 - FEDERAL INCOME TAXES

        For financial reporting purposes the provision for loan
        losses charged to operating expense is based on
        management's judgment, whereas for federal income tax
        purposes, the amount allowable under present tax law is
        deducted.  Additionally, certain expenses are charged to
        operating expense in the period the liability is incurred
        for financial reporting purposes, whereas for federal
        income tax purposes, these expenses are deducted when paid.
        As a result of these timing differences, deferred taxes
        were computed after reducing pre-tax accounting income for
        nontaxable municipal and loan income.

Page 9 of 28

NOTE 5 - OTHER COMMITMENTS

        In the normal course of business, the bank makes various
        commitments and incurs certain contingent liabilities
        which are not reflected in the accompanying financial
        statements. These commitments include various guarantees
        and commitments to extend credit.  The bank does not
        anticipate any losses as a result of these transactions.

        Entry into a Material Definitive Agreement

        On September 21, 2005, FNB Financial Corporation ("FNB")
        the parent company of The First National Bank of
        McConnellsburg and Tower Bancorp, Inc. ("Tower") the
        parent company of The First National Bank of Greencastle
        signed a definitive agreement to combine their
        companies.

        Pursuant to the terms of the agreement, FNB shareholders
        will be entitled to receive either 0.8663 shares of
        Tower common stock or $ 39.00 for each share of FNB
        common stock.  Each share holder of FNB will have the
        ability to elect to receive shares of Tower common stock
        for a portion of their shares and cash for the remaining
        portion of their shares.  Shareholder elections will be
        subject to allocation procedures, which are intended to
        ensure that a minimum 85% of the outstanding FNB common
        stock will be converted into shares of Tower common
        stock and up to 15% of the FNB common stock will be paid
        in cash.  The total value of the merger is valued at
        approximately $ 31.2 million.

        The merger is subject to shareholder approvals by FNB
        and Tower shareholders and customary regulatory
        approvals.  Directors and executive officers of FNB
        holding approximately 150,940 shares (18.8% of the
        outstanding FNB shares) have agreed to vote their shares
        in favor of the merger pursuant to individually signed
        voting agreements.  FNB expects to circulate a proxy
        statement and other relevant documents once they become
        available.

        The merger is expected to close late in the first
        quarter or early second quarter of 2006.

        A copy of the merger agreement was attached to Form 8-K
        filed September 23, 2005 by FNB with the Securities and
        Exchange Commission.

Page 10 of 28

FNB FINANCIAL CORPORATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


INTRODUCTION

Some of the matters discussed below include forward-looking
statements.  Forward-looking statements, including statements as to
industry tends, future expectations and other matters that do no
relate strictly to historical facts, are based on certain
assumptions by management, and are often identified by words or
phrases such as "anticipated", "believe", "except", "intend",
"seek", "plan", "objective", "trend", and "goal".  Forward-looking
statements are subject to various assumptions, risks, and
uncertainties, which change over time, and speak only as of the
date they are made.  Our actual results and the actual outcome of
our expectation and strategies could be different from those
anticipated or estimated for the reasons under the heading
"Information Regarding Forward-Looking Statements."  The Company
undertakes no obligation to update any forward-looking statements.

SUMMARY

Net income for the first nine months of 2005 was $ 973,129 compared
to $ 927,705, for the first nine months of 2004.  This represents
an increase of $ 45,424 or 4.90% from 2004.  Net income on an
adjusted per share basis for the first nine months of 2005 was
$ 1.22 which is an increase of $ 0.06 from the $ 1.16 per share for
the nine months ended September 30, 2004.

Net income for the three months ended September 30, 2005 was $
253,064 compared to $ 358,580 for the same three-month period ended
September 30, 2004.  This represents a decrease of $ 105,516 or
29.4% from 2004.  The decrease is primarily attributable to costs
related to compliance with the Sarbanes-Oxley Act, and to costs
related to the acquisition of the Farmers & Merchant's branch
deposits and the Hagerstown Trust Company branch, both of which are
in Hancock, Maryland.

CRITICAL ACCOUNTING POLICIES

The financial statements of the Company are prepared in accordance
with accounting principles generally accepted in the United States
of America (GAAP). The financial information contained within these
statements is, to a significant extent, based on measurements of
the financial effects of transactions and events that have already
occurred.  A variety of factors could affect the ultimate value
that is obtained when earning income, recognizing an expense,
recovering an asset or relieving a liability.  The Company uses
historical loss factors as one element in determining the inherent
loss that may be present in the loan portfolio.  Actual losses
could differ significantly from the historical factors that are
used.  In addition, GAAP itself may change from one previously-
acceptable method to another method.  Although the economics of the
transactions would be the same, the timing of events that would
impact the transactions could change.





Page 11 of 28

The allowance for loan losses is an estimate of the losses that may
be sustained in the Company's loan portfolio.  The allowance for
loan losses is based on two accounting principles: (1) Statement of
Financial Accounting Standards (SFAS) No. 5, Accounting for
Contingencies, which requires that losses be accrued when their
occurrence is probable and they can be estimated, and (2) SFAS No.
114, Accounting by Creditors for Impairment of a Loan, which
requires that losses be accrued based on the differences between
the loan balance and the value of its collateral, the present value
of future cash flows, or the price established in the secondary
market.  The Company's allowance for loan losses has three basic
components:  the formula allowance, the specific allowance and the
unallocated allowance.  Each of these components is determined
based upon estimates that can and do change when actual events
occur.  The formula allowance uses historical experience factors to
estimate future losses and, as a result, the estimated amount of
losses can differ significantly from the actual amount of losses
which would be incurred in the future.  However, the potential for
significant differences is mitigated by continuously updating the
loss history of the Company.  The specific allowance is based upon
the evaluation of specific loans on which a loss may be realized.
Factors such as past due history, ability to pay, and collateral
value are used to identify those loans on which a loss may be
realized.  Each of these loans is then classified as to how much
loss would be realized on its disposition.  The sum of the losses
on the individual loans becomes the Company's specific allowance.
This process is inherently subjective and actual losses may be
greater than or less than the estimated specific allowance.  The
unallocated allowance captures losses that are attributable to
various economic events which may affect a certain loan type within
the loan portfolio or a certain industrial or geographic sector
within the Company's market.  As the loans which are affected by
these events are identified, or losses are experienced on the loans
which are affected by these events, they will be reflected within
the specific or formula allowances.  The Notes to the Consolidated
Financial Statements provide additional information related to the
allowance for loan losses.

NET INTEREST INCOME

Total interest and dividend income for the first nine months of
2005 was $ 7,126,131 compared to $ 6,293,185 for the first nine
months of 2004, an increase of $ 832,946 or 13.2%.

This increase was due primarily to an increase in interest and fees
on loans of $ 708,369 and an increase in income from investments of
$ 102,753.  The increase in interest and fees on loans is
attributable primarily to an increase in loan balances.  Total
loans have grown 20.23% from September 30, 2004 to September 30,
2005.  Yields on loans have declined in 2005 due to higher rate
loans maturing and being replaced with lower rate loans.  The
result of the decline in yields has been an increase in interest
and fees on loans of only 13.48% for the nine months ended
September 30, 2005 versus the nine months ended September 30, 2004,
despite an increase of 20.23% in loan balances over the same
period.

Total interest and dividend income for the three months ended
September 30, 2005 was $ 2,496,849 compared to $ 2,204,979 for the
same three-month period ended September 30, 2004.  This represents
an increase of $ 291,870, or 13.2% and is attributable primarily to
higher loan levels.

Page 12 of 28

This increase was due primarily to an increase in interest and fees
on loans of  $ 353,100.  Income from investments declined $ 61,230
due primarily to a decrease in volume.  The increase in interest
and fees on loans was attributable primarily to an increase in loan
volume.  Total loans averaged $ 130,884,591 for the three monthly
ended September 30, 2005.  This represents an increase of $
22,877,059, or 21.2%, from the average of total loans for the three
months ended September 30, 2004 of $ 108,007,532.  Yields on loans
declined in 2005 due to higher rate loans maturing and being
replaced with lower rate loans.  The yield on total loans decreased
from 6.62% for the three months ended September 30, 2004 to 6.54%
for the three months ended September 30, 2005.

Interest expense, which consists of interest paid on deposits and
borrowings, for the nine months ended September 30, 2005, was
$ 2,796,828, an increase of $ 401,277 from the $ 2,395,551 for the
same period in 2004.  From September 30, 2004 to September 30,
2005, deposit liabilities and other borrowed funds increased
10.21%.  However, due to higher costs for these funds, total
interest expense increased 16.75%.  The average cost of borrowing
increased by 80 basis points.

Interest expense for the three months ended September 30, 2005 was
$ 987,866 compared to $ 830,559 for the same three-month period
ended September 30, 2004.  This represents an increase of $
157,307, or 18.9%.  The increase is due primarily to an increase in
deposit levels associated with branch acquisitions and an increase
in short-term interest rates.  The average cost of borrowing
increased by 146 basis points.

The net interest margin has increased 5 basis points to 3.46% for
the first nine months of 2005 from that of the first nine months of
2004, which was 3.41%.  Management will continue to competitively
price its loan and deposit products to maintain desired net
interest spreads.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

Provision for loan losses decreased from $ 206,000 during the first
nine months of 2004, to $90,000 during the first nine months of
2005.  This represents a decrease of 56.31% between the two
periods.

Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<S>                                                  <C>           <C>           <C>          <C>
                                                              Nine Months               Three Months
                                                                Ended                      Ended
                                                     9/30/2005     9/30/2004     9/30/2005    9/30/2004
                                                                  (000 Omitted)

Allowance for loan losses beginning of the period     $1,088        $  893          $ 1,106     $   985
the period
   Loans charged-off during the year
      Real estate mortgages                               33             0                0           0
      Installment loans                                   25            86                4          17
      Commercial and all other                             0            38                0          23
                                                      ------        ------          -------     -------
         Total charge offs                                58           124                4          40
                                                      ------        ------          -------     -------
   Recoveries of loans previously
charged-off:
      Real estate mortgages                                0             0                0           0
      Installment loans                                   14            58                2          34
      Commercial and all other                             0             0                0           0
                                                      ------        ------          -------      ------
         Total recoveries                                 14            58                2          34
                                                      ------        ------          -------      ------
   Net loans charged-off (recovered)                      44            66                2           6
   Provision for loan losses charged to operations        90           206               30          54
                                                      ------        ------          -------      ------
         Allowance for loan losses, September 30      $1,134        $1,033          $ 1,134      $1,033
                                                      ======        ======          =======      ======
</TABLE>
Page 13 of 28

We utilize a comprehensive systematic review of our loan portfolio
on a quarterly basis in order to determine the adequacy of the
Allowance for Loan losses.  Each quarter the loan portfolio is
categorized into various Pools as follows:

POOL #1  Specific allowances for any individually identified
         trouble loans
POOL #2  Commercial and Industrial
POOL #3  Commercial and Industrial - Real Estate Secured
POOL #4  Consumer Demand and Installment
POOL #5  Consumer Mortgage and Home Equity

Lines of credit and non-secured commercial loans with balances of
$ 100,000 and over are individually reviewed.  Also, loans that are
90 days or more past due or have been previously classified as
substandard are individually reviewed.  Allocations to the
Allowance for Loan Losses are based upon classifications assigned
to those loans.

Loan classifications utilized are consistent with OCC regulatory
guidelines and are as follows:

                       Allowance Factors
Loss                      Charge-off
Doubtful                   20% - 50%
Substandard                10% - 20%
Special Mention             5% - 10%
Watch                       1% -  5%


The remaining portion of the Pools are evaluated as groups with
allocations made to the Allowance based on historical loss
experience, current and anticipated trends in delinquencies, and
general economic conditions within the bank's trading area.

In addition to the aforementioned internal loan review, the Bank
engaged an outside Firm to conduct an independent loan review
during the first quarter of 2005 in order to validate the
methodologies used internally and to independently test the
adequacy of the Allowance for Loan Losses.

Delinquencies are well below peer group averages and management is
not aware of any problem loans that are indicative of trends,
events, or uncertainties that would significantly impact
operations, liquidity or capital.

NON-INTEREST INCOME AND EXPENSES

Total non-interest income for the first nine months of 2005
increased $ 71,592 over totals for the first nine months of 2004.
This was due primarily to an increase in deposit levels stemming
from the two branch acquisitions in Hancock, Maryland in June, 2004
and June, 2005.  Operating expenses for the period ended September
30, 2005, were $ 3,800,716, a $ 535,135 increase from the operating
expenses incurred for the same period in 2004 of $3,265,581.  This
increase was mainly the result of costs associated with branch
acquisitions, increased regulatory costs, and increased personnel
costs, supplies, assessments, and other expenses associated with
higher deposit levels.

Page 14 of 28

Total non-interest income for the three months ended September 30,
2005 was
$ 323,136 compared to $ 291,362 for the same three-month period
ended September 30, 2004.  This represents an increase of $ 31,774
or 10.9%.  This increase was primarily attributable to an increase
in deposit levels stemming from the two branch acquisitions in
Hancock, Maryland in June, 2004 and June, 2005.  Operating expenses
for the three months ended September 30, 2005 were $ 1,449,577
compared to $ 1,132,202 for the same three-month period ended
September 30, 2004.  This represents an increase of $ 317,375 or
28.0%.  This increase is primarily attributable to costs related to
compliance with the Sarbanes-Oxley Act, and to costs related to the
acquisition of the Farmers & Merchant's branch deposits and the
Hagerstown Trust Company branch, both of which are in Hancock,
Maryland.

Our income tax provision for the first nine months of 2005 was
$ 364,851 as compared to $ 326,149 for the first nine months of
2004.  We continue to operate with a marginal tax rate of 34%
during the first nine months of 2005. The effective income tax rate
for the first nine months of 2004 was 27.27% compared to 26.01% for
the first nine months of 2004.

BALANCE SHEET AND EQUITY CHANGES

In June, 2004, the bank acquired the deposits of F&M Trust of
Hagerstown Maryland's Hancock Office.  The purchase resulted in
additional deposits of approximately $ 10 million.  In June, 2005,
the bank acquired the deposits of Hagerstown Trust's Hancock,
Maryland Office.  The purchase resulted in additional deposits of
approximately $ 13 million.

Total assets as of September 30, 2005, were $ 185,088,491, an
increase of $ 17,413,319 from the period ended September 30, 2004,
representing an
increase of 10.4%.  This increase was primarily due to the
acquisition of the deposits of Hagerstown Trust's Hancock, Maryland
Office.  The increase was also due to increased borrowings.
Borrowings as of September 30, 2005, were $ 26,126,212 compared to
$ 25,356,751 as of September 30, 2004.

CAPITAL RESOURCES

The company continues to be a well-capitalized financial
institution.  Total shareholders' equity at September 30, 2005 was
$ 15,495,700, reflecting a percentage of total assets of 8.37%, as
compared to $ 15,131,464 and 9.0% at September 30, 2004.  The
common stock's book value increased $0.46 or 2.4% to
$ 19.37 per share at September 30, 2005 from $ 18.91 per share at
September 30, 2004.

Page 15 of 28

Federal regulatory risk-based capital guidelines require
percentages to be applied to various assets, including off-balance
sheet assets, based on their perceived risk in order to calculate
risk-weighted assets.  Tier I capital consists of total
shareholders' equity plus qualifying trust preferred securities
outstanding less net unrealized holding gains and losses on
available-for-sale securities, goodwill and other intangible
assets.  Total capital is comprised of Tier I capital plus the
allowable portion of the allowance for loan losses and any excess
trust preferred securities that do not qualify as Tier I capital.
Financial institutions must maintain a Tier I risk-based capital
ratio of at least 4%, a total risk-based capital ratio of at least
8% and a minimum Tier I leverage ratio of at least 4%.  The
Company's Tier I risk-based capital ratio was 10.60% at September
30, 2005 compared to 12.75% at September 30, 2004.  The Company's
total risk-based capital ratio was 11.50% at September 30, 2005
compared to 13.72% at September 30, 2004.  The Company's Tier I
leverage ratio was 7.47% at September 30, 2005 compared to 8.51% at
September 30, 2004.  The Company monitors these ratios on a monthly
basis and has several strategies, including without limitation, the
issuance of trust preferred securities and sale of investment
securities, to ensure that these ratios remain above regulatory
minimums.

LIQUIDITY

Liquidity management involves meeting the present and future
financial obligations of the Company with the sale or maturity of
assets or with the occurrence of additional liabilities.  Liquidity
needs are met with cash on hand, deposits in banks, federal funds
sold, securities classified as available-for-sale, and loans
maturing within one year.  At September 30, 2005, liquid assets
totaled $ 52,134,000 compared to $ 59,820,000 at September 30,
2004.  These amounts represent 30.7% and 39.2% of total liabilities
at September 30, 2005 and September 30, 2004, respectively.  The
Company minimizes liquidity demand by utilizing core deposits to
fund asset growth.  Securities provide a constant source of
liquidity through paydowns, maturities, calls and sales.  Also, the
company maintains short-term and long-term borrowing arrangements
with larger financial institutions as an additional source of
liquidity.  The primary source of borrowed funds is the Federal
Home Loan Bank of Pittsburgh.  The Company's senior management
monitors the liquidity position regularly and attempts to maintain
a position that utilizes available funds most efficiently.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

In addition to the historical information contained in Part I of
this Quarterly Report on Form 10-Q, the discussion in the Quarterly
Report contains certain forward-looking statements.  Forward-
looking statements, including statements as to industry trends,
future expectation and other matters that do not relate strictly to
historical facts, are based on certain assumptions by management,
and are often identified by words or phrases such as "anticipated",
"believe", "except", "intend", "seek", "plan", "objective",
"trend", and "goal".

Page 16 of 28

Actual results could differ materially from those anticipated in
forward-looking statements and future results could differ
materially from historical performance. In addition to factors
mentioned elsewhere in this Quarterly Report or previously
disclosed in our SEC reports (accessible on the SEC's website at
www.sec.gov), the following factors, among others, could cause
actual results to differ materially from forward-looking statements
and future results could differ materially from historical
performance:  general political and economic conditions may be less
favorable than expected; developments concerning credit quality in
various corporate lending industry sectors as well as consumer and
other types of credit may result in an increase in the level of our
provision for credit losses, nonperforming assets, net charge-offs
and reserve for credit losses; customer borrowing, repayment,
investment, and deposit practices generally may be less favorable
than anticipated; interest rate and currency fluctuations, equity
and bond market fluctuations; inflation may be greater than
expected; the mix of interest rates and maturities of our interest
earning assets and interest bearing liabilities (primarily loans
and deposits) may be less favorable than expected; competitive
product and pricing pressures among financial institutions within
our markets may increase; legislative or regulatory developments,
including changes in laws or regulations concerning taxes, banking,
securities, capital requirements and risk-based capital guidelines,
reserve methodologies, deposit insurance and other aspects of the
financial services industry, may adversely affect the businesses in
which we are engaged or our financial results; legal and regulatory
proceedings and related matters with respect to the financial
services industry, including those directly involving the Company
and its subsidiaries, could adversely affect the Company or the
financial services industry generally; pending and proposed changes
in accounting rules, policies, practices, and procedures could
adversely affect our financial results; instruments and strategies
used to manage exposure to various types of market and credit risk
could be less effective than anticipated, and we may not be able to
effectively mitigate our risk exposures in particular market
environments or against particular types of risk; terrorist
activities or other hostilities, including the situation
surrounding Iraq, may adversely affect the general economy,
financial and capital markets, specific industries, and the
Company; and technological changes, including the impact of the
Internet on our businesses, may be more difficult or expensive than
anticipated.

Page 17 of 28


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the quantitative and
qualitative disclosures made in FNB Financial Corporation's annual
report on Form 10-K for the year ended December 31, 2004.

ITEM 4 - CONTROLS AND PROCEDURES

The company's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the company's disclosure
controls and procedures (as such term is defined in Rules 13a-14(c)
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) as of September 30, 2005.  Based on such
evaluation, such officers have concluded that, as of September 30,
2005, the company's disclosure controls and procedures are
effective.  Disclosure controls and procedures are controls and
other procedures that are designed to ensure that information
required to be disclosed by FNB Financial Corporation in the
reports that it files or submits under the Securities Exchange Act
of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and
Exchange Commission's rules and forms.

CHANGES IN INTERNAL CONTROLS

There were no changes in FNB Financial Corporation's internal
controls over financial reporting (as defined in Rule 13a-15 or
Rules 15d-15 under the Securities Act of 1934, as amended) during
the quarter ended September 30, 2005, that have materially
affected, or are reasonably likely to materially affect, FNB
Financial Corporation's internal control over financial reporting.


Page 18 of 28















                    PART II - OTHER INFORMATION






Page 19 of 28

                  PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

          None

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

          None

Item 3 - Defaults Upon Senior Securities

          Not Applicable

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

          Not Applicable

Item 5 - Other Information

          None

Item 6 - Exhibits and Reports on Form 8-K


     Exhibit Number Referred to
     Item 601 of Regulation S-K:         Description of Exhibit:

            31.1                  Certification of Chief
                                   Executive Officer pursuant to
                                   Section 302 of the
                                   Sarbanes-Oxley Act of 2002.

            31.2                  Certification of Chief
                                   Financial Officer pursuant to
                                   Section 302 of the
                                   Sarbanes-Oxley Act of 2002.

            32.1                  Certification of Chief
                                   Executive Officer pursuant to
                                   18 U.S.C. Section 1350.

            32.2                  Certification of Chief
                                   Financial Officer pursuant to
                                   18 U.S.C. Section 1350.

            99                    Report of Independent
                                   Accountant's on interim
                                   financial statements.

Page 20 of 28

                           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.




Date November 10,2005          /s/John C. Duffey
                               John C. Duffey, President
                               and Director of the Company and
                               President/CEO of the Bank
                               (Duly Authorized Officer)



Date November 10,2005           /s/Brian F. McNamara
                                Brian F. McNamara, Treasurer
                               (Principal Financial &
                                Accounting Officer)






Page 21 of 28

                                                     Exhibit 31.1
                          CERTIFICATION

I, John C. Duffey, President/CEO, certify, that:

     1.   I have reviewed this quarterly report on Form 10-Q of
          FNB Financial Corporation.

     2.   Based on my knowledge, the quarterly report does not
          contain any untrue statement of a material fact or omit
          to state a material fact necessary to make the
          statements made, in light of the circumstances under
          which such statements were made, not misleading with
          respect to the period covered by this quarterly report.

     3.   Based on my knowledge, the financial statements, and
          other financial information included in this quarterly
          report, fairly present in all material respects the
          financial condition, results of operations and cash
          flows of the registrant as of, and for, the periods
          presented in this quarterly report.

          4.   The registrant's other certifying officer and I
          are responsible for establishing and maintaining
          disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
          registrant and we have:

          (a)  designed such disclosure controls and procedures,
               or caused such disclosure controls and procedures
               to be designed under our supervision, to ensure
               that material information relating to the
               registrant, including its consolidated
               subsidiaries, is made known to us by others within
               those entities, particularly during the period in
               which this quarterly report is being prepared;

          (b)  evaluated the effectiveness of the registrant's
               disclosure controls and procedures and presented
               in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and
               procedures, as of the end of the period covered by
               this quarterly report based on such evaluation;
               and

          (c) disclosed in this quarterly report any change in
               the registrant's internal control over financial
               reporting that occurred during the registrant's
               most recent fiscal quarter that has materially
               affected, or is reasonably likely to materially
               affect, the registrant's internal control over
               financial reporting.

Page 22 of 28

     5.   The registrant's other certifying officer and I have
          disclosed, based on our most recent evaluation of
          internal control over financial reporting, to the
          registrant's auditors and the audit committee of
          registrant's board of directors (or persons performing
          the equivalent function):

          (a)  all significant deficiencies and material
               weaknesses in the design or operation of internal
               control over financial reporting which are
               reasonably likely to adversely affect the
               registrant's ability to record, process, summarize
               and report financial information; and

          (b)  any fraud, whether or not material, that involves
               management or other employees who have a
               significant role in the registrant's internal
               control over financial reporting.



Date: November 10,2005             By:  /s/John C. Duffey
                                        John C. Duffey, President/CEO
                                        (Principal Executive Officer)







Page 23 of 28

                                                     Exhibit 31.2
                          CERTIFICATION


I, Brian F. McNamara, Treasurer, certify, that:

     1.   I have reviewed this quarterly report on Form 10-Q of
          FNB Financial Corporation.

     2.   Based on my knowledge, the quarterly report does not
          contain any untrue statement of a material fact or omit
          to state a material fact necessary to make the
          statements made, in light of the circumstances under
          which such statements were made, not misleading with
          respect to the period covered by this quarterly report.

     3.   Based on my knowledge, the financial statements, and
          other financial information included in this quarterly
          report, fairly present in all material respects the
          financial condition, results of operations and cash
          flows of the registrant as of, and for, the periods
          presented in this quarterly report.

          4.   The registrant's other certifying officer and I
          are responsible for establishing and maintaining
          disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
          registrant and we have:

          (a)  designed such disclosure controls and procedures,
               or caused such disclosure controls and procedures
               to be designed under our supervision, to ensure
               that material information relating to the
               registrant, including its consolidated
               subsidiaries, is made known to us by others within
               those entities, particularly during the period in
               which this quarterly report is being prepared;

          (b)  evaluated the effectiveness of the registrant's
               disclosure controls and procedures and presented
               in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and
               procedures, as of the end of the period covered by
               this quarterly report based on such evaluation;
               and

          (c) disclosed in this quarterly report any change in
               the registrant's internal control over financial
               reporting that occurred during the registrant's
               most recent fiscal quarter that has materially
               affected, or is reasonably likely to materially
               affect, the registrant's internal control over
               financial reporting.


Page 24 of 28

     5.   The registrant's other certifying officer and I have
          disclosed, based on our most recent evaluation of
          internal control over financial reporting, to the
          registrant's auditors and the audit committee of
          registrant's board of directors (or persons performing
          the equivalent function):

          (a)  all significant deficiencies and material
               weaknesses in the design or operation of internal
               control over financial reporting which are
               reasonably likely to adversely affect the
               registrant's ability to record, process, summarize
               and report financial information; and

          (b)  any fraud, whether or not material, that involves
               management or other employees who have a
               significant role in the registrant's internal
               control over financial reporting.


Date: November 10,2005             By:  /s/Brian F. McNamara
                                    Brian F. McNamara, Treasurer
                                   (Principal Financial Officer)


Page 25 of 28

Exhibit 32.1


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of FNB Financial
Corporation (the "Company") on Form 10-Q for the period ending
September 30, 2005 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, John C. Duffey,
Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that:

     1)  The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and

     (2)  The information contained in the Report fairly
presents, in all material respects, the financial condition and
results of operations of the Company.



                                    /s/  John C. Duffey
                                    Chief Executive Officer
                                    November 10, 2005


Page 26 of 28

Exhibit 32.2


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of FNB Financial
Corporation (the "Company") on Form 10-Q for the period ending
September 30, 2005 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Brian F.
McNamara, Treasurer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and

     (2)  The information contained in the Report fairly
presents, in all material respects, the financial condition and
results of operations of the Company.



                                   /s/  Brian F. McNamara
                                   Treasurer
                                   November 10, 2005


Page 27 of 28

                                                       EXHIBIT 99

     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of DirectorsFNB Financial Corporation
McConnellsburg, Pennsylvania


     We have reviewed the accompanying consolidated balance sheet
of FNB Financial Corporation and Subsidiaries as of September 30,
2005 and the related consolidated statements of income for the
three and nine months ended September 30, 2005 and 2004 and
consolidated statements of comprehensive income for the nine
months ended September 30, 2005 and 2004 and consolidated
statements of cash flows for the nine months ended September 30,
2005 and 2004. These financial statements are the responsibility
of the corporation's management.

     We conducted our reviews in accordance with standards of the
Public Company Accounting Oversight Board (United States).  A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit
conducted in accordance with the standards of the Public Company
Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the consolidated financial
statements taken as a whole.  Accordingly, we do not express such
an opinion.

     Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying
consolidated financial statements for them to be in conformity
with generally accepted accounting principles.

     We have previously audited, in accordance with auditing
standards of the Public Company Accounting Oversight Board
(United States), the balance sheet of FNB Financial Corporation
and Subsidiaries as of December 31, 2004, and the related
statements of income, changes in stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our
report dated March 12, 2005, we expressed and unqualified opinion
on those financial statements. In our opinion, the information
set forth in the accompanying condensed consolidated balance
sheet as of December 31, 2004, is fairly stated, in all material
respects, in relation to the balance sheet from which it has been
derived.

                         /s/ Smith Elliott Kearns & Company, LLC
                         SMITH ELLIOTT KEARNS & COMPANY, LLC





Chambersburg, Pennsylvania
November 3, 2005

Page 28 of 28