UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC   20549
                                    
                                Form 10-Q
                                    
(Mark One)
(X)            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934
                                    
                                    
           For the quarterly period ended:  September 30, 1996
                                    
                                   OR
                                    
( )           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934 


            For the transition period from        to        
                                    
                     Commission file number 0-16267
                                    
                           WALSHIRE ASSURANCE COMPANY                      
(Exact name of registrant as specified in its charter)
            
      Pennsylvania                                  23-2023240    
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization                     Identification Number)

3350 Whiteford Road, P. O. Box 3849, York, PA                      17402-0138 
(Address of principal executive offices)                           (Zip code)

                               (717)757-0000                          
(Registrant s telephone number, including area code)
          
    
    
                                                                     
(Former name, former address and former fiscal year,
        if changed since last report)

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

          Class:                      Outstanding at October 31, 1996:
Common stock - $.01 Par Value                    4,226,739 shares


                        
                
                
                WALSHIRE ASSURANCE COMPANY
   AND SUBSIDIARIES
        
                
                
                INDEX
              


                                                             PAGE 
                                                             NUMBER



Part I    FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets as of September 30, 1996
          (unaudited) and December 31, 1995. . . . . . . . . . .         2

          Consolidated Statements of Income for the three
          months ended September 30, 1996 and 1995
            (unaudited). . . . . . . . . . . . . . . . . . . . . .       4

          Consolidated Statements of Income for the nine months
          months ended September 30, 1996 and 1995 (unaudited) .         5

          Consolidated Statements of Cash Flows for the nine
          months ended September 30, 1996 and 1995 (unaudited) .    6

          Notes to Consolidated Financial Statements 
          (unaudited)  . . . . . . . . . . . . . . . . . . . . .    7

Item 2.   Management s Discussion and Analysis of Financial
          Condition and Results of Operations  . . . . . . . . .    8

Part II   OTHER INFORMATION  . . . . . . . . . . . . . . . . . .   10

Item 1.   Legal Proceedings  . . . . . . . . . . . . . . . . . .   10

Item 2.   Changes in Securities  . . . . . . . . . . . . . . . .   10

Item 3.   Defaults Upon Senior Securities  . . . . . . . . . . .        10

Item 4.   Submission of Matters to Vote of Security Holders. . .   10

Item 5.   Other Information  . . . . . . . . . . . . . . . . . .   10

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . .   10

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .        11





1
                                    



WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES



Consolidated Balance Sheets

    
    
                                                   (In thousands,
                                                    except per share data)
                                         September 30,  December 31,
               Assets                         1996          1995
                                          (Unaudited)

Investments:
  Held to maturity:
     Fixed maturities (fair value $17,036 and
       $15,712) . . . . . . . . . . . . . . . .  $ 16,999        $ 15,217
  Available for sale:
     Fixed maturities (cost $32,067 and
       $27,007) . . . . . . . . . . . . . . . .    31,927         27,215
     Equity securities (cost $9,607 and
       $8,189). . . . . . . . . . . . . . . . .     9,846          8,720
  Short-term investments . . . . . . . . . . . .     7,934          5,191
  Other investments. . . . . . . . . . . . . . .     2,084         1,867

     Total investments . . . . . . . . . . . . .    68,790        58,210

Cash. . . . . . . . . . . . . . . . . . . . . . .        415            99
Accrued investment income receivable. . . . . . .        916         864
Amounts receivable from reinsurers. . . . . . . .     2,317        3,315
Amounts receivable from reinsured company . . . .       632          595
Agents  balances (net of allowance for doubtful
  accounts of $120 and $100) . . . . . . . . . .     7,704          5,501
Installment premiums receivable . . . . . . . . .     6,876         5,965
Agents  balances and installment premiums 
  receivable from related parties. . . . . . . .     3,496          3,694
Premium finance receivables (net of unearned
  finance charges and allowance for credit
  losses of $124 and $135) . . . . . . . . . . .     5,372          6,534
Reinsurance receivable. . . . . . . . . . . . . .    19,623         8,615
Deferred acquisition costs. . . . . . . . . . . .     4,943        4,831
Property and equipment, (net of accumulated      
  depreciation of $1,688 and $1,284) . . . . . .     4,129          3,270
Other assets. . . . . . . . . . . . . . . . . . .     1,121           134

     Total assets. . . . . . . . . . . . . . . .  $126,334      $101,627



See accompanying notes to consolidated financial statements.

                                   
                                   
                                   2                                   

                                   
                                   
                                   
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES

                                   
                                   Consolidated Balance Sheets, Continued

                                   
                                   
                                   
                                                         (In thousands,
                                                     except per share data)
                                                   September 30, December 31,
Liabilities and Shareholders  Equity                   1996         1995
                                                          (Unaudited) 



Liabilities:
  Unpaid claims and claim settlement expenses.     $ 33,741      $ 20,153
  Unearned premiums. . . . . . . . . . . . . .       31,769        27,555
  Short-term notes payable . . . . . . . . . .        6,323         2,250
  Long-term notes payable. . . . . . . . . . .        1,206         1,481
  Deposits by insureds . . . . . . . . . . . .        1,891         1,488
  Commissions payable to agents. . . . . . . .        1,374         1,049
  Commissions payable to related parties . . .          341           473
  Other liabilities. . . . . . . . . . . . . .      _ 1,574         1,164

     Total liabilities . . . . . . . . . . . .       78,219        55,613

Shareholders  equity:
  Preferred stock, par value $.01 per share; 
     2,000 shares authorized; 142 shares  
     issued; 129 and 138 shares outstanding. .            1             1
  Common stock, par value $.01 per share; 
     10,000 shares authorized; 4,215 and
     4,064 shares issued and outstanding . . .           42            41
  Additional paid-in capital . . . . . . . . .       32,806        31,918
  Unrealized gain on investments available
     for sale (net of deferred taxes of $34
     and $181) . . . . . . . . . . . . . . . .           65           558 
  Retained earnings. . . . . . . . . . . . . .       15,201        13,496

     Shareholders  equity. . . . . . . . . . .       48,115        46,014

  Total liabilities and shareholders  equity .     $126,334      $101,627

 
                                    
                                    
      See accompanying notes to consolidated financial statements.
                                    
                                    
                                    
                                    3
                                     
                                    
                                    
                       WALSHIRE ASSURANCE COMPANY
                            AND SUBSIDIARIES
                    Consolidated Statements of Income


                                                  (In thousands,
                                                        except per share data)
                                                         Three Months Ended
                                                            September 30,_____ 
                                                          1996      1995   
                                                       (Unaudited)(Unaudited)


Revenues:
  Premiums earned . . . . . . . . . . . . . . . . .     $14,622   $ 11,452
  Premiums ceded. . . . . . . . . . . . . . . . . .     ( 2,956)   ( 2,669)
  Net premiums earned . . . . . . . . . . . . . . .      11,666      8,783
  Net investment income . . . . . . . . . . . . . .         821        705
  Net realized gains on investments . . . . . . . .         272        108
  Other . . . . . . . . . . . . . . . . . . . . . .         166        183
     Total revenues . . . . . . . . . . . . . . . .      12,925      9,779

Expenses:
  Claims and claim settlement expenses. . . . . . .       9,509      5,054
  Reinsurance recoveries. . . . . . . . . . . . . .     ( 1,773)   (   129)
  Net claims and claim settlement expenses. . . . .       7,736      4,925
  Amortization of deferred acquisition costs. . . .       1,909        891
  Underwriting, general and administrative 
     expenses. . . . . . . . . . . . . . . . . . . .       2,055      1,953
  Interest. . . . . . . . . . . . . . . . . . . . .         118         65
     Total expenses . . . . . . . . . . . . . . . .      11,818      7,834 

Income before income taxes . . . . . . . . . . . . .       1,107      1,945
Provision for income taxes . . . . . . . . . . . . .         172        411
Net income . . . . . . . . . . . . . . . . . . . . .         935      1,534
Less dividends on convertible preferred stock. . . .         104        115
Net income available for common stock. . . . . . . .     $   831   $  1,419

Net income per common share and common equivalent
  share:
  Primary:
     Net income . . . . . . . . . . . . . . . . . .     $   .19   $    .33

     Weighted average shares outstanding. . . . . .       4,343      4,261

  Fully diluted:
     Net income . . . . . . . . . . . . . . . . . .     $   .19   $    .32

     Weighted average shares outstanding. . . . . .       4,886      4,846




See accompanying notes to consolidated financial statements.


4                                    

                                   
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
Consolidated Statements of Income


                                                            (In thousands,
                                                        except per share data)
                                                          Nine Months Ended
                                                            September 30,   _ 
                                                          1996      1995   
                                                       (Unaudited)(Unaudited)


Revenues:
  Premiums earned . . . . . . . . . . . . . . . . .     $42,799   $ 33,348
  Premiums ceded. . . . . . . . . . . . . . . . . .     ( 9,015)   ( 7,523)
  Net premiums earned . . . . . . . . . . . . . . .      33,784     25,825
  Net investment income . . . . . . . . . . . . . .       2,294      2,040
  Net realized gains on investments . . . . . . . .       1,041        247
  Other . . . . . . . . . . . . . . . . . . . . . .         528        531
     Total revenues . . . . . . . . . . . . . . . .      37,647     28,643

Expenses:
  Claims and claim settlement expenses. . . . . . .      26,276     16,040
  Reinsurance recoveries. . . . . . . . . . . . . .     ( 3,462)   ( 1,359)
  Net claims and claim settlement expenses. . . . .      22,814     14,681
  Amortization of deferred acquisition costs. . . .       5,295      3,399
  Underwriting, general and administrative 
     expenses. . . . . . . . . . . . . . . . . . . .       5,743      5,115
   Dividends to policyholders. . . . . . . . . . . .         117        - 
  Interest. . . . . . . . . . . . . . . . . . . . .         291        212
     Total expenses . . . . . . . . . . . . . . . .      34,260     23,407 

Income before income taxes . . . . . . . . . . . . .       3,387      5,236
Provision for income taxes . . . . . . . . . . . . .         554      1,100
Net income . . . . . . . . . . . . . . . . . . . . .       2,833      4,136
Less dividends on convertible preferred stock. . . .         320        345
Net income available for common stock. . . . . . . .     $ 2,513   $  3,791

Net income per common share and common equivalent
  share:
  Primary:
     Net income . . . . . . . . . . . . . . . . . .     $   .58   $    .90

     Weighted average shares outstanding. . . . . .       4,344      4,208

  Fully diluted:
     Net income . . . . . . . . . . . . . . . . . .     $   .58   $    .86

     Weighted average shares outstanding. . . . . .       4,896      4,825




See accompanying notes to consolidated financial statements.



5                                   

WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
                                                           (In thousands)
                                                       except per share data)  
             
                                                         Nine Months Ended
                                                           September 30, ____  

                                                          1996        1995
                                                       (Unaudited) (Unaudited)
Cash flows from operating activities:
  Net income . . . . . . . . . . . . . . . . . . . .    $  2,833    $  4,136
  Adjustments to reconcile net income to net
    cash provided by operating activities
      Net realized gains on investments. . . . . . .     ( 1,041)     (  247)
      Decrease (increase) in assets:
       Accrued investment income receivable. . . . .     (    52)        -   
       Amounts receivable from reinsurers. . . . . .         998      (  962)
       Amounts receivable from reinsured company . .     (    37)     (  143)
       Agents  balances and installment premiums
        receivable . . . . . . . . . . . . . . . . .     ( 2,203)     (  846)
       Agents  balances and installment premiums
        receivable from related parties. . . . . . .     (   713)     (  971)
       Premium finance receivables . . . . . . . . .       1,162      (  930)
       Reinsurance receivables . . . . . . . . . . .     (11,008)     (  439)
       Deferred acquisition costs. . . . . . . . . .     (   112)     (  404)
       Other, net. . . . . . . . . . . . . . . . . .     (   554)        669
      (Decrease) increase in liabilities:
       Unpaid claims, claim settlement expenses and 
        claim drafts outstanding . . . . . . . . . .      13,588       3,756
       Unearned premiums . . . . . . . . . . . . . .       4,214       2,207
       Deposits by insureds. . . . . . . . . . . . .         403         505 
       Other, net. . . . . . . . . . . . . . . . . .         603         460
  Net cash provided by operating activities. . . . .       8,081       6,791
Cash flows from investing activities:
  Purchase of investments:
    Held to maturity . . . . . . . . . . . . . . . .     ( 3,713)     (2,410)
    Available for sale . . . . . . . . . . . . . . .     (12,755)     (5,440)
  Sale of investments:
    Available for sale . . . . . . . . . . . . . . .       4,703       3,929
  Maturity of investments. . . . . . . . . . . . . .       4,267         785
  Net (purchase) sale of short term and other
    investments. . . . . . . . . . . . . . . . . . .     ( 2,939)      1,042 
  Purchase of property and equipment . . . . . . . .     ( 1,301)     (1,176)
  Sale of property and equipment . . . . . . . . . .           9         136
  Other, net . . . . . . . . . . . . . . . . . . . .         403      (  436)
    Net cash used in investing activities. . . . . .     (11,326)     (3,570)
Cash flows from financing activities:
  Cash dividends paid. . . . . . . . . . . . . . . .     ( 1,128)     (1,060)
  Issuance of common stock . . . . . . . . . . . . .         890         307
  Proceeds from notes payable  . . . . . . . . . . .       4,159         750 
  Payment of notes payable . . . . . . . . . . . . .     (   360)     (3,275)
    Net cash provided by (used in) financing 
      activities . . . . . . . . . . . . . . . . . .       3,561      (3,278)
Net increase (decrease) in cash. . . . . . . . . . .         316      (   57)
Cash at beginning of the period. . . . . . . . . . .          99         184
Cash at end of the period. . . . . . . . . . . . . .    $    415     $   127

Se     e accompanying notes to consolidated financial statements.

                                   6                                   

WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 1.  The consolidated balance sheet as of September 30, 1996, the consolidated 
statements of income for the three and nine months ended September 30, 1996 and
1995, and the consolidated statements of cash flows for the nine months then
ended have been prepared by Walshire Assurance Company ( the Company ) without
audit.  In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at September 30, 1996 and for all periods
presented, have been made.

2.  Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted.  It is suggested that these unaudited consolidated financial
statements be read in conjunction with the financial statements and notes 
thereto
included in the Company s 1995 Annual Report.  The results of operations for the
period ended September 30, 1996 are not necessarily indicative of the results of
operations for the full year.

3.Net income per common share is computed after recognition of preferred stock
dividend requirements and is based on the weighted average number of shares of
common stock and common stock equivalents outstanding.  The number of common
shares was increased by the number of shares issuable on the exercise of options
when the market price of the common stock exceeds the exercise price of the
options.  This increase in the number of common shares was reduced by the number
of common shares that are assumed to have been purchased with the proceeds from
the exercise of the options; these purchases were assumed to have been made at
the average price of the common stock during that part of the year when the
market price of the common stock exceeded the exercise price of the options.

     Fully diluted net income per share was determined on the assumption that
the convertible preferred stock was converted and the outstanding stock options
were exercised on January 1, 1996 and 1995.  As to the preferred stock, net
income was adjusted for dividends declared.  As to the options, outstanding
shares were increased as described above except that purchases of common stock
are assumed to have been made at the higher of the period-end price or the
average price of the common stock during that part of the year when the market
price of the common stock exceeded the exercise price of the options.

4.  On September 30, 1996, the Company acquired Yorktowne Mutual Insurance
Company and changed its name to Yorktowne Insurance Company ("Yorktowne").  
Yorktowne is a multi-line writer operating solely in Pennsylvania; direct
premiums written in 1995 were $6.7 million. This transaction, accounted for by
the purchase method of accounting, should not materially affect Walshire's
financial results for 1996.

5.  Forward Looking Statements.  The information contained in this Quarterly
Report contains forward looking statements (as such term is defined in the
Securities Exchange Act of 1934 and the regulations thereunder), including
without limitation, statements as to the allowances for doubtful accounts and 
credit losses, liabilities for unpaid claims and claim settlement expenses, the
classification of the Company's investment portfolio and other statements as to
management's beliefs, expectations or opinions.  Such forward looking statements
are subject to risks and uncertainties and may be affected by various factors
which may cause actual results to differ materially from those in the forward
looking statements.  Certain of these risks, uncertainties and
    7
other factors are discussed in this Quarterly Report or in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, a copy of which may be
obtained from the Company upon request and without charge (except for the
exhibits thereto).

6.  Investment Considerations.  In analyzing whether to make, or to continue, 
an investment in the Company, investors should consider, among other factors, 
certain investment considerations more particularly described in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.

Item 2.  Management s Discussion and Analysis of Financial Condition and
        Results of Operations

Revenues for the three month period ended September 30, 1996 increased $3.1 
million, or 32.2%, from revenues for the three month period ended September 30,
1995.  This increase was primarily the result of increases in net premiums
earned. Direct premiums written increased $2.6 million, or 25.0%, in the three
month period ended September 30, 1996 when compared to the same period in 1995. 
The following table sets forth the direct premiums written by the Company for 
the three month periods ended September 30, 1996 and 1995 by line of business. 

                                          (In thousands)
                                  Three months ended September 30,
                                        1996          1995        %Change 
          Auto liability        $ 5,092       $ 4,532         12.4%
          Auto physical damage        4,980         4,458         11.7%
          Workers  compensation       1,955           768        154.6%
          Inland marine                 752           545         38.0%
          Other                         437           269         62.5%
                 Total             $13,216       $10,572         25.0%

Expenses for the three month period ended September 30, 1996 increased $4.0
million, or 50.9%, over expenses for the three month period ended September 30,
1995.  The increase was primarily the result of increases in net claims and 
claim
settlement expenses and amortization of deferred acquisition costs.  The 
increase
in net claims and claim settlement expenses was the result of an increase in
earned premiums, as well as an increase in the statutory loss ratio from 57.7%
in 1995 to 67.7% in 1996. The increase in the loss ratio was due primarily to
increases in the loss ratio of the Company's auto liability and auto physical
damage products. These increases were a result of increased loss severity during
the third quarter of 1996 when compared to the same period in 1995.  The 
increase
in the amortization of deferred acquisition costs was primarily the result of 
the
increase in net premiums earned and a decrease in ceding commission income. The
statutory combined ratio for the three month period ended September 30, 1996 was
99.4%, an increase from 87.3%  for the three month period ended September 30,
1995.  The decrease in the effective tax rate from 21% in 1995 to 16% in 1996 is
primarily the result of a greater portion of net income being attributable to 
tax exempt interest.

Revenues for the nine month period ended September 30, 1996 increased $9.0
million, or 31.4%, from revenues for the nine month period ended September 30,
1995.  This increase was primarily the result of increases in net premiums 
earned
and net realized gains on investments.  Direct premiums written increased $7.6
million, or 21.4%, in the nine month period ended September 30, 1996 when
compared to the same period in 1995.  The following table sets forth the direct
premiums written by the Company for the nine month periods ended September 30,
1996 and 1995 by line of business.

8
                                            (In thousands)
                                   Nine months ended September 30,
                                        1996          1995        %Change 
          Auto liability        $18,211       $15,927        14.3%
          Auto physical damage       16,390        13,540        21.0%
          Workers  compensation       5,066         3,316        52.8%
          Inland marine               2,491         1,912        30.3%
          Other                         802           684        17.3%
                 Total             $42,960       $35,379        21.4% 
 

Expenses for the nine month period ended September 30, 1996 increased $10.9 
million, or 46.4%, over expenses for the nine month period ended September 30,
1995.  The increase was primarily the result of increases in net claims and 
claim
settlement expenses, amortization of deferred acquisition costs and 
underwriting,
general and administrative expenses.  Increases in net claims and claim
settlement expenses were the result of increases in earned premiums, and an
increase in the statutory loss ratio from 59.3% in 1995 to 68.9% in 1996. First
quarter 1996 claims were negatively impacted by the most severe winter weather
conditions in recent history. Claims in the second and third quarters of 1996
were higher due to an increase in the auto physical damage and auto liability
loss ratios. These increases were a result of increased loss severity when
compared to the same periods in 1995. The increase in the amortization of
deferred acquisition costs was primarily the result of the increase in net
premiums earned.  Increases in underwriting, general and administrative expenses
were primarily the result of increases in premiums written.  The statutory
combined ratio for the nine month period ended September 30, 1996 was 98.4%, an
increase from 87.1% for the nine month period ended September 30, 1995.  The
decrease in the effective tax rate from 21% in 1995 to 16% in 1996 is a result
of a greater portion of net income being attributable to tax exempt interest.

Liquidity and Capital Resources

Historically, the Company has generated funds sufficient to support its
operations and has maintained a high degree of liquidity in its investment
portfolio.  The primary sources of funds to meet the demands of claim 
settlements
and operating expenses are premiums, ceding commissions, investment income and
existing lines of credit.  The Company s funds generally are invested in
securities with maturities intended to provide adequate funds to pay claims and
expenses without the forced sale of investments.  The Company believes that its
current cash and short term investments, together with funds generated from
operations, will be sufficient to meet its operating and capital requirements 
for the foreseeable future.














9
        
Part II   OTHER INFORMATION

Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities

          None

Item 3.   Defaults Upon Senior Securities

          None

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

          None
          
Item 5.   Other Information

          None

Item 6.   Exhibits and Reports on Form 8-K

          Exhibits
            
            (a) Exhibit 27.1 Financial data schedule

          Reports on Form 8-K

            None


      
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  10
                                 
SIGNATURES

 Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.



                                   WALSHIRE ASSURANCE COMPANY
                                   (Registrant)




DATE:  November 14, 1996           /s/ Kenneth R. Taylor                
       
                                   Kenneth R. Taylor
                                   President and Chief
                                   Executive Officer





DATE:  November 14, 1996           /s/ Gary J. Orndorff                 
        
                                   Gary J. Orndorff
                                   Vice President/Treasurer
                                   and Chief Financial Officer

                   
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     11
                    
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