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 June 30, 1997  

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

             Class              Outstanding at June 30, 1997
(Common stock, $0.63 par value)        400,000


















































                            FNB FINANCIAL CORPORATION

                                      INDEX

                                                               Page
PART I  -  FINANCIAL INFORMATION

    Condensed consolidated balance sheets - 
      June 30, 1997 and December 31, 1996                      5

    Condensed consolidated statements of income -     
      Three months ended June 30, 1997 and 1996                6

    Condensed consolidated statements of income - 
      Six months ended June 30, 1997 and 1996                  7 

    Condensed consolidated statements of cash flows -
      Six months ended June 30, 1997 and 1996                  8

    Notes to condensed consolidated financial
      statements                                              9-11

    Table #1 - Schedule of held to maturity and
      available for sale investment activity for the
      period January 1, 1997 through June 30, 1997            12

    Table #2 - Schedule of gross unrealized gains and
      unrealized losses within the held to maturity and
      available for sale investment portfolios by 
      investment type                                         13

    Management's discussion and analysis of financial
      condition and results of operations                    14-17


PART II  -  OTHER INFORMATION                                    19

    Signatures                                                20



























                         PART I - FINANCIAL INFORMATION

































            FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<S>                                          <C>            <C>
                                              June 30,     December 31,
                                                1997           1996
ASSETS:                                      (unaudited)    (audited*)

Cash and Due from banks                      $ 4,429,266    $ 2,473,315
Interest-bearing deposits with banks             317,459        327,276
Marketable Debt Securities
       Held-to-maturity (Market value - 1997:
       $3,972,434 and 1996: $4,567,903)        3,961,345      4,559,739
       Available-for-sale                     27,267,730     28,755,272
Marketable Equity Securities
   Available for Sale                            124,020        115,640
Federal Reserve, Atlantic Central Banker's Bank
   and Federal Home Loan Bank Stock              389,600        383,700
Federal Funds Sold                             2,132,000      1,239,000
Loans, net of unearned discount &
       Allowance for loan losses              56,591,051     56,259,929
Bank buildings, equipment, furniture &
       fixtures, net                           3,168,107      3,107,960
Accrued interest receivable                      624,720        675,180
Deferred income tax charges                          0            6,548
Other real estate owned                          369,028        318,992
Intangible Assets                                183,298        210,588
Other assets                                     190,282        210,933

    Total Assets                             $99,747,906    $98,644,072
                                              ==========     ==========
LIABILITIES :

Deposits:
   Demand deposits                           $ 8,411,313    $ 9,249,700
   Savings deposits                           26,797,063     26,674,628
   Time certificates                          52,180,345     50,957,962
   Other time deposits                           480,943        251,678
      Total deposits                         $87,869,664    $87,133,968
Accrued interest payable & other liabilities     723,057        708,072
Deferred income taxes                             14,989            0  
Accrued dividends payable                         72,000        100,000

    Total Liabilities                        $88,679,710    $87,942,040

STOCKHOLDERS' EQUITY:

Capital stock, Common, par value $0.63; 
   6,000,000 shares authorized; 400,000
   outstanding                               $   252,000    $   252,000
Additional paid-in capital                     1,789,833      1,789,833
Retained earnings                              8,952,540      8,628,183
Net unrealized gain/(loss) on Available-for-sale
   securities, net of tax effects                 73,823         32,016

    Total Stockholders' Equity               $11,068,196    $10,702,032

    Total Liabilities & Stockholders' Equity $99,747,906    $98,644,072
                                              ==========     ==========
</TABLE>
*Condensed from audited financial statements.

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

     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME

             Three Months Ended June 30, 1997 and 1996
                            (UNAUDITED)
<TABLE>
<S>                                              <C>         <C>
                                                     1997      
1996
                    
Interest & Dividend Income

Interest & fees on loans                         $1,318,651 
$1,176,773
       Interest on investment securities:
              U.S. Treasury Securities               11,061     
13,153
              Obligations of other U.S.
                  Government Agencies               358,468    
344,122
              Obligations of State & Political
                  Subdivisions                      105,837    
117,297
       Interest on deposits with banks                4,930      
9,421
       Dividends on Equity Securities                 6,446      
6,361
       Interest on federal funds sold                43,473     
28,568
              Total Interest & Dividend Income    1,848,866  
1,695,695

Interest Expense

       Interest on deposits                         951,038    
920,870
              Net interest income                   951,038    
774,825
       Provision for loan losses                     43,500     
37,500
              Net interest income after 
              Provision for loan losses             854,328    
737,325

Other income

       Service charges on deposit accounts           18,268     
15,947
       Other service charges, collection &
              exchange charges, commissions
              and fees                               51,969     
43,131
       Other income                                  40,593     
13,386
       Net Securities gains/(losses)                     95       
 0  
              Total other income                    110,925     
72,464

Other expenses                                      650,028    
541,253
       Income before income taxes                   315,225    
268,536
       Applicable income taxes                       69,011     
56,150
  Net income                                       $246,214   
$212,386
                                                    =======    
=======
Earnings per share of Common Stock:
       Net income per share                           $0.62      
$0.53

Cash dividend declared per share                      $0.18      
$0.17

Weighted average number of shares outstanding       400,000    
400,000
</TABLE>

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






     FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME

              Six Months Ended June 30, 1997 and 1996
                            (UNAUDITED)
<TABLE>
<S>                                              <C>         <C>
                                                    1997       
1996
                    
Interest & Dividend Income

       Interest & fees on loans                  $2,589,431 
$2,352,627
       Interest on investment securities:
              U.S. Treasury Securities               22,130     
28,896
              Obligations of other U.S.
                Government Agencies                 728,419    
653,356
              Obligations of State & Political
                Subdivisions                        212,576    
237,186
       Interest on deposits with banks                8,817     
20,439
       Dividends on Equity Securities                13,887     
12,540
       Interest on federal funds sold                62,235     
75,186
              Total Interest & Dividend Income    3,637,495  
3,380,230

Interest Expense

       Interest on deposits                       1,878,301  
1,856,846
       Interest on FHLB Advances                        559       
 0  
              Total Interest Expense              1,878,860  
1,856,846
              Net interest income                 1,758,635  
1,523,384
       Provision for loan losses                     52,500     
45,000
              Net interest income after 
                Provision for loan losses         1,706,135  
1,478,384

Other income

       Service charges on deposit accounts           32,996     
31,383
       Other service charges, collection &
             exchange charges, commissions 
             and fees                                98,058     
84,114
       Other income                                  50,678     
19,822
       Net Securities gains/(losses)                     95     
(3,843)
              Total other income                    181,827    
131,476

Other expenses                                    1,305,788  
1,059,866
       Income before income taxes                   582,174    
549,994
       Applicable income taxes                      117,818    
108,705

       Net income                                  $464,356   
$441,289
                                                    =======    
=======
Earnings per share of Common Stock:
       Net income per share                           $1.16      
$1.10

Cash dividend declared per share                      $0.35      
$0.34

Weighted average number of shares outstanding       400,000    
400,000
</TABLE>




The accompanying notes are an integral part of these condensed
financial statements.
          FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Six Months Ended June 30, 1997 and 1996
<TABLE>
<S>                                               <C>              <C>
                                 (UNAUDITED)
                                                      1997            1996
Cash flows from operating activities:
      Net income                                  $  464,356       $  441,289
      Adjustments to reconcile net income
       to net cash provided by operating
       activities:                             
            Depreciation & amortization              138,012           85,686
            Provision for loan losses                 52,500           45,000
            Net (gain)/loss on sales of
              investments                                 95           
3,843 
            (Increase) decrease in accrued
                   interest receivable                50,460         
(54,061)
             Increase (decrease) in accrued
                   interest payable and
                   other liabilities                  14,985         
(76,198)
             Other (net)                              20,414         
(81,243)
Net cash provided (used)by operating
      activities                                     741,822          364,316
Cash flows from investing activities:
     Net (increase) decrease in interest-
            bearing deposits with banks                9,817             
440 
     Purchases of Held-to-maturity
            securities                              (151,662)       
(100,000)
     Purchases of Available-for-sale
            securities                            (1,875,375)     
(5,862,451)
     Proceeds from sales of Available-for-
            sale securities                          709,447              0  
     Proceeds from maturities of Held-to-
            maturity securities                      750,056           69,586
     Proceeds from maturities of Available-
            for-sale securities                    2,714,409        4,539,513
     Purchases of marketable equity securities        (5,880)             0 
 
     Net (increase) decrease in loans               (443,933)       
(199,353)
     Proceeds from sale of Other real
            estate owned                              10,075           39,000
     Purchases of bank premises &
            equipment (net)                         (170,621)       
(718,249)
     Purchase of other bank stock                     (5,900)        
(13,700)
Net cash provided (used) by investing 
            activities                             1,540,433      
(2,245,214)
Cash flows from financing activities:
     Net increase (decrease) in deposits             735,696       
2,695,810 
     Cash dividends paid                            (168,000)       
(160,000)
Net cash provided (used) by financing
     activities                                      567,696       
2,535,810)
Net increase (decrease) in cash & cash
     equivalents                                   2,848,951         
654,912 
Cash & cash equivalents, beginning balance         3,712,315        3,110,762
Cash & cash equivalents, ending balance           $6,561,266       $3,765,674
                                                   =========        =========
Supplemental disclosure of cash flows information
     Cash paid during the year for:
           Interest                               $1,876,388       $1,698,571
           Income taxes                               38,924          206,688
Supplemental schedule of noncash investing &
      financing activities
      Unrealized gain (loss) on Available-for-sale         
           securities                                111,853        (327,302)
      Deferred income tax asset (liability) on   
           unrealized gain or loss on 
           available-for-sale securities             (38,030)        111,283
      Accrued dividends payable                       72,000          68,000
      Other real estate acquired in 
           settlement of loans                        59,311          59,090
      Loan advanced for sale of other real
           estate owned                                  0            50,000
</TABLE> 

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



                          FNB FINANCIAL CORPORATION
                                                                   
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                           JUNE 30, 1997
                            (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

     The financial information presented at and for the six
     months ended June 30, 1997 and June 30, 1996 is unaudited.  
     Information presented at December 31, 1996, 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.

NOTE 2 - PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of
     the corporation and its wholly-owned subsidiary, The First
     National Bank of McConnellsburg.  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 time 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
     judgement, 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.

NOTE 5 - INVESTMENTS

     The activity within the held to maturity and available for
     sale portfolios for the period January 1, 1997, through
     June 30, 1997, is summarized in Table #1 on page 11.  No
     sales were conducted from securities contained within the held
     to maturity portfolio.
     The amortized cost and estimated market values of investments
     by investment type and classification as available for sale or
     held to maturity along with each portfolio's gross unrealized
     gain or gross unrealized loss are contained in Table #2 on
     page 12.

     Management has purchased for the portfolio mortgage-backed
     securities.  The large portion of these securities have a
     variable rate coupon and all have scheduled principal
     payments.  During periods of rising interest rates, payments
     from variable rate mortgage-backed securities may accelerate
     as prepayments of underlying mortgages occur as home-owners
     refinance to a fixed rate while during periods of declining
     interest rates, prepayments on high fixed rate mortgage-backed
     securities may accelerate as home owners refinance to lower
     rate mortgages. These prepayments cause yields on mortgage-
     backed securities to fluctuate as larger payments of principal
     necessitate the acceleration of premium amortization or
     discount accretion.  Due to the low dollar amount of mortgage-
     backed securities in relation to the total portfolio,
     management feels that interest rate risk and prepayment risks
     associated with mortgage-backed securities will not have a
     material impact on the financial condition of the Bank.

     In regard to Collateralized Mortgage Obligations (CMOs), the
     Bank presently has none of these types of investments in its
     portfolio.

NOTE 6 - ALLOWANCE FOR LOAN LOSSES

     Activity in the allowance for loan losses is summarized as
     follows:
<TABLE>
<S>                                          <C>       <C>
                                                1997       1996    
                                             
     Allowance for loan losses beginning of the year   $405,612   
$405,000
     Loans charged-off during the year:
          Real estate mortgages                      3,785     
51,090
          Installment loans                         11,231      
5,712
          Commercial & all other                     3,313       
3,766
               Total charge-offs                    18,329     
60,568
     Recoveries of loans previously charged-off:
          Real estate mortgages                        507        
 0 
          Installment loans                          4,531      
6,177
          Commercial & all other                       416        
481
               Total recoveries                      5,454      
6,658
     Net loans charged-off (recovered)              12,875     
53,910 
     Provision for loan losses charged to operations     52,500   
  45,000
     Allowance for loan losses, June 30                $445,236   
$396,090
                                             ========  ========
</TABLE>
     





The following table shows the principal balance of nonaccrual loans
as of June 30, 1997:
<TABLE>
<S>                                                 <C>     
Nonaccrual loans                                    $ 703,085.66
                                                      ==========
Interest income that would have been
   accrued at original contract rates                $ 33,755.42
Amount recognized as interest income                   15,692.22
   Foregone revenue                                  $ 18,063.20
                                                       =========   
</TABLE>
NOTE 7  - COMMITMENTS
     
     Fort Loudon Office Renovation/Expansion
     As of June 30, 1997, the Board of Directors has committed to
     an expansion project for the Fort Loudon Branch Office.  This
     project was approved by the Board on August 28, 1996.  This
     renovation/expansion will increase the size of the office,
     improve customer access and add one lane drive up facility. 
     Management estimates total expenditures related to this
     project including additional equipment purchases will be
     approximately $200,000.
     

NOTE 8 - 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.

























                             TABLE #1
        SCHEDULE OF HELD TO MATURITY AND AVAILABLE FOR SALE
                     DEBT SECURITY PORTFOLIOS
                        TRANSACTION SUMMARY
       FOR THE PERIOD JANUARY 1, 1997 THROUGH JUNE 30, 1997
<TABLE>
<S>                        <C>           <C>          <C>
                            HELD TO        AVAILABLE      TOTAL
                            MATURITY       FOR SALE    INVESTMENT
                            PORTFOLIO      PORTFOLIO    PORTFOLIO

BEGINNING BALANCE 1/1/97   $4,559,739    $28,737,883  $33,297,622

PURCHASES                     151,662      1,875,375    2,027,037

PROCEEDS FROM SALES                 0        709,447      709,447

NET LOSSES/(GAINS)                  0             95           95 

MATURITIES/CALLS PAYDOWNS/
PREMIUM AMORTIZATION/DISCOUNT
ACCRETION                     750,056      2,714,409    3,464,465

ENDING BALANCE 6/30/97     $3,961,345    $27,189,497  $31,150,842
                            =========     ==========   ==========
</TABLE>




























                                     TABLE #2
                SCHEDULE OF UNREALIZED GAINS AND UNREALIZED LOSSES
                WITHIN THE HELD TO MATURITY AND AVAILABLE FOR SALE
                     INVESTMENT PORTFOLIOS BY INVESTMENT TYPE
                                  JUNE 30, 1997
<TABLE>
<S>                        <C>        <C>            <C>         <C>      <C>    
    <C>             <C>         <C>       
                             HELD TO    HELD TO     HELD TO    HELD TO     
AVAILABLE   AVAILABLE   AVAILABLE   AVAILABLE
                             MATURITY   MATURITY    MATURITY   MATURITY     FOR
SALE    FOR SALE    FOR SALE    FOR SALE
                              BOOK      MARKET     UNREALIZED UNREALIZED     BOOK
      MARKET     UNREALIZED  UNREALIZED
SECURITY PORTFOLIO            VALUE      VALUE         GAIN       LOSS      
VALUE       VALUE         GAIN        LOSS   

U.S. GOVERNMENT TREASURIES         0          0           0           0     
499,851     501,190        1,339            0

U.S. GOVERNMENT TREASURIES         0          0           0           0      
99,135      98,940            0         (195)

U.S. GOVERNMENT AGENCIES           0          0           0           0   
8,337,803   8,368,157       30,354            0

U.S. GOVERNMENT AGENCIES           0          0           0           0   
7,097,462   7,025,600            0      (71,862)

SBA GUARANTEED LOAN POOL 
CERTIFICATES                 316,152    318,900       2,748           0   
2,763,000   2,814,953       51,953            0

SBA GUARANTEED LOAN POOL
CERTIFICATES               1,270,241  1,263,968           0       (6,273)   
302,587     301,515            0       (1,072)

MORTGAGE-BACKED SECURITIES         0          0           0           0     
941,533     958,638       17,105            0

MORTGAGE-BACKED SECURITIES         0          0           0           0     
485,517     483,619            0       (1,898)

SECURITIES ISSUED BY STATES
& POLITICAL SUBDIVISIONS IN
THE U.S.                   1,844,974  1,860,703      15,729           0   
4,571,250   4,637,633       66,383            0 

SECURITIES ISSUED BY STATES
& POLITICAL SUBDIVISIONS IN
THE U.S.                     529,978    528,863           0       (1,115) 
2,091,358   2,077,485            0      (13,873)

MARKETABLE EQUITY SECURITIES       0          0           0           0      
90,400     124,020       33,620            0

FEDERAL RESERVE BANK STOCK,
ATLANTIC CENTRAL BANKERS BANK
STOCK AND FEDERAL HOME LOAN
BANK STOCK                         0          0           0           0     
389,600     389,600            0            0

GRAND TOTALS               3,961,345  3,972,434       18,477      (7,388)
27,669,497  27,781,350      200,754      (88,900)
                           =========  =========       ======      ====== 
==========  ==========      =======      =======
</TABLE>
CLASSIFICATION OF HELD TO MATURITY AND AVAILABLE FOR SALE
SECURITIES

Due to the implementation of FAS 115, management has segregated
securities as Held to Maturity, Available for Sale or Trading
securities.  At the implementation of FAS 115 on January 1, 1994,
management determined that no securities were Trading securities;
that tax-free municipal with maturity dates less than the year 2000
were classified as Held to maturity securities due to management's
intention to hold these securities for tax planning purposes; and
that all other securities were classified as Available for Sale
securities due to management's intention to hold these securities
for liquidity planning purposes.  Purchases of tax-free municipals
with maturities of 5 years or less made following implementation of
FAS 115 are classified as Held to Maturity securities with all
other purchase Available for Sale; however, management may decide
on a case-by-case basis that a security may be either classified as
Held to Maturity or Available for Sale depending upon the reasons
for purchase.  Held to Maturity classifications are typically used
for securities purchased specifically for interest rate management
or tax-planning purposes while Available for Sale classifications
are typically used for liquidity planning purposes.         




                  FNB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

Net income for the first six months of 1997 was $464,356 compared
to $441,289 for the same period in 1996.  This represents an
increase of $23,067 or 5.23%.  Net income on an adjusted per share
basis for the first six months of 1997 was $1.16 per share, a
decrease of $0.06 from the $1.10 per share for the six months ended
June 30, 1996.

Total interest and dividend income for the first six months of 1997
was $3,637,495 compared to $3,380,230 for the six months ended June
30, 1996, representing an increase of $257,265.  This increase is
a result of both higher yields on investments and an increase in
the average balances of loans in the loan portfolio.  Since June
30, 1996, net loans have increased $3,651,923 or 6.90%.  This
increase combined with an slight decrease in the yield on the loan
portfolio from 9.25% for the first six months of 1996 to 9.15% for
the first six months in 1997 resulted in an increase of loan
interest income in the amount of $236,804.  The book value of
investment debt securities has decreased $1,688,231 since June 30,
1996; however, interest income on these securities increased
$43,687 as a result of an increase in the yield on these securities
from 6.50% for the first six months of 1996 to 6.70% for the first
six months of 1997.

During the first quarter of 1997, short-term interest rates were
increased 0.25% by the Federal Reserve Board.  Since that increase,
interest rates have remained relatively the same.   As a result of
this stable interest rate environment in which interest rates are
not anticipated to increase, several investment securities with
call features were called by the issuer resulting in the loss of
higher interest earning assets.  At the same time, management has
increased deposit rates only slightly but not at the same pace as
that of earning assets.  The result, combined with the
aforementioned increase in loans and increase in investment yield,
has been an increase in the bank's net interest margin and interest
spread during the first and second quarters of 1997.  Management
anticipates the increase in interest rates on loans and investments
and the retention of deposit rates at lower levels will result in
a slight increase in interest spreads and net interest margins.

Interest expense for the six months ended June 30, 1997, was
$1,878,860, an increase of $22,014 over the $1,856,846 incurred for
the same period in 1996.  This very small increase is due to the
retention of deposits rates at lower levels.  Total deposit volume
increased $4,257,567 or 5.09% since June 30, 1996.  This increase
is the result of a $1,970,266 or 3.92% increase in time
certificates of deposit due to movement of funds from lower
yielding savings accounts and other financial institutions. 
Savings accounts increased $1,963,700 or 7.91% while non-interest
bearing demand deposit accounts increased $285,355 or 3.51% from
June 30, 1996.  Although the volumes of deposits in both time
deposits and savings accounts have increased, the cost of these
deposits has decreased from the same period in 1996.  The cost of
total interest bearing deposits for the first six months of 1997
was 4.80% compared to 4.94% for the same period in 1996.  This
decrease in cost of deposits and increase in volume of interest
bearing deposits resulted in the $22,014 increase in interest
expense as discussed earlier.

The tax-adjusted net interest margin has increased 37 basis points
to 4.21% for the first six months of 1997 from that of the first
six months of 1996 which was 3.84%.  This increase occurred due to
an increase in the yield on earning assets while the cost of
interest bearing liabilities has decreased.  The tax-equivalent
yield on earning assets for the first six months of 1997 increased
 .33% to 8.39% from 8.06% for the same period in 1996 while the cost
of interest-bearing liabilities decreased .14% to 4.80% from 4.94%
for the same period in 1996.  This decrease in cost of
interest-bearing liabilities and increase in yield on earning
assets has
resulted in an increase in the net interest margin.  Management
anticipates to continue to concentrate on the retention and
improvement of the net interest margin at this higher level
throughout the year and has taken steps to improve it by decreasing
rates on money market accounts.

Total noninterest income increased $50,351 due primarily to a
$31,211 gain on the sale of the Bank's portfolio of student loans
on June 19 and a $10,000 increase in the commission received on the
disability and life insurance written on consumer installment and
mortgage loans over the same period in 1996.  Operating expenses
for the period ended June 30, 1997, were $1,305,788, a $245,922
increase from the operating expenses incurred for the same period
in 1996 of $1,059,866.  This increase is due to 1) increases in
employee wages and benefits of $104,898, a result of an increase in
wage rates, an increase in the number of employees due to the
opening of the Hancock Community Bank in November 1996 which
increased personnel by six employees and an increase in employee
participation in the Company's retirement plan and health insurance
plans; 2) an increase in the cost of fixed assets in the amount of
$60,261 due to increased utility bills, depreciation, insurance and
taxes as a result of the completed renovation/expansion of the main
office facility in September 1996 and the opening of Hancock
Community Bank in November 1996; 3) an increase in the
Promotion/Advertising expenses of the Bank in the amount of $22,049
over 1996 due to increased promotional/advertising campaigns; and
4) an $8,400 increase in communications expenses due to computer
connection fees of Hancock Community Bank; a $6,400 increase in
professional fees due to appraisal costs of the main office; a
$6,000 increase in regulatory assessments due to FDIC charges for
FICO Bond interest; and a $9,500 increase in professional
development expenses due to increased costs of conventions,
seminars, and other banking related education. 

The company's income tax provision for the first six months of 1997
was $117,818 as compared to $108,705 for the first six months of
1996.  This increase in the tax provision in the amount of $9,113
is due to an decrease in tax-free income in relation to income
before income taxes.  During the first six months of 1997 total
tax-free income was $258,922 or 44.48% of income before income
taxes compared to $321,813 or 58.51% of income before income taxes
for the same period in 1996.

Although the Company continues to operate with a marginal tax rate
of 34%, the effective income tax rate for the first six months of
1997 was 20.24%, an increase of 0.48% from the effective tax rate
for the first six months of 1996 of 19.76%.  This increase in the
effective tax rate is primarily due to the decrease of tax-free
interest income in relation to income before income taxes.

Total assets as of June 30, 1997, were $99,747,906 an increase of
$1,103,834 over the period ending December 31, 1996, representing
an increase of 1.12%.  Funding this increase in total assets was an
increase in total deposits of $735,696 or 0.84%.  The increase in
deposits was the result of increased balances in time deposits of
$1,222,383 and in savings account balances of $122,435 which were
offset by a decrease in demand deposits of $838,387 since December
31, 1996.  Net loans as of June 30, 1997, were $56,591,051 compared
to $56,259,929 as of December 31, 1996.  The allowance for loan
losses at the end of the six months was $445,236 compared to
$405,612 at year end 1996 and is considered adequate, in
management's judgement, to absorb possible losses on existing
loans.  The provision for loan losses for the first six months of
1997 was $52,500 compared to $45,000 for the same period in 1996. 

Total deposits were $87,869,664 as of June 30, 1997, compared to
$87,133,968 on December 31, 1996.  This represents an increase of
$735,696 or 0.84% which reflects the activity as discussed
previously.

Total equity as of June 30, 1997, was $11,068,196, 11.10% of total
assets as compared to $10,702,032, 10.85% of total assets as of
December 31, 1996.  This increase in equity reflects the
reinvestment of earnings into the corporation.

The Corporation has risk-based capital ratios exceeding regulatory
requirements.  Risk-based capital guidelines require a minimum
ratio of 8.0%.  At June 30, 1997, the risk-based capital ratio of
the Corporation was 19.66% while at December 31, 1996, the
risk-based capital ratio was 20.05%.  The following table presents
the
risk-based capital ratios for the Corporation:
<TABLE>
<S>                                          <C>          <C>
                                            June 30,    Regulatory
                                              1997       Minimum

Leverage Ratio                               10.84%       3.00%
Risk-based capital ratios:
    Tier I (core capital)                    18.94%       4.00%
    Total Capital
    (Tier I and Tier II Capital)             19.66%       8.00%
</TABLE>

 



                    PART II - OTHER INFORMATION

















































                    PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

          None

Item 2 - Changes in Securities

          None

Item 3 - Defaults Upon Senior Securities

          Not Applicable

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

          None

Item 5 - Other Information

          None

Item 6 - Exhibits and Reports on Form 8-K

          a.  Exhibits - None

          b.  Reports on Form 8-K  - None




























                            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.




                              /s/John C. Duffey             
                              (John C. Duffey, President           
                               and Director of the Company and
                               President of the Bank)
                              (Duly Authorized Officer)



Date August 12, 1997          /s/Daniel E. Waltz            
                              (Daniel E. Waltz, Treasurer
                               and Director of the Company and
                               Senior Vice President/CFO of
                               the Bank)
                              (Principal Financial &               
                               Accounting Officer)