FORM 10-Q

                    Securities and Exchange Commission
                         Washington, D.C.  20549

          [ 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 no.:     0-12377


                       BT FINANCIAL CORPORATION
                       ------------------------
          (Exact Name of Registrant as Specified in its Charter)

               Pennsylvania             25-1441348
               ------------             ----------

   (State of Incorporation)  (I.R.S. Employer Identification Number)

             551 Main Street, Johnstown, Pennsylvania  15901
             -----------------------------------------------

          (Address of Principal Executive Offices)  (Zip Code)


                           (814) 532-3801
                           --------------

                    Registrant's Telephone Number



     Indicate by checkmark 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 practicable
date:

                    5,682,215 shares common stock
                          ($5.00 par value)
                       as of November 1, 1996


 
                 BT FINANCIAL CORPORATION AND AFFILIATES


                              FORM 10-Q

                          September 30, 1996



     Part I.  Financial Information                      Page No.
     ------------------------------                      ------- 

     Item 1.
     -------

          Consolidated Balance Sheet - September 30, 1996
               and December 31, 1995                         3

          Consolidated Statement of Income
               Three and Nine Months Ended
               September 30, 1996 and 1995                   4

          Consolidated Statement of Cash Flows
               Nine Months Ended September 30, 1996
               and 1995                                      5

          Notes to Consolidated Financial Statements         6

     Item 2.
     -------

          Management's Discussion and Analysis of
               Financial Condition and Results
               of Operations                                11

     Part II.  Other Information
     ---------------------------

     Item 6.
     -------

          Exhibits and Reports                              16


    Signatures                                              17


                               ITEM 1
                               ------
                         FINANCIAL STATEMENTS
                         --------------------
                BT FINANCIAL CORPORATION AND AFFILIATES
                ---------------------------------------
                     CONSOLIDATED BALANCE SHEET
                     --------------------------
                            (Unaudited)
                            -----------

                                 (In thousands, except share data)
                                     September 30      December 31
                                             1996             1995
                                    ------------------------------
ASSETS
Cash and Cash equivalents                 $58,470           59,043

Money market investments:
  Interest-bearing deposits with banks        450            1,484 
  Federal funds sold                       12,000           10,165
                                     ------------------------------
       Total money market investments      12,450           11,649
                                     ------------------------------

Securities available-for-sale             237,176          268,194
Securities held-to-maturity (market value
  of $75,048 at September 30, 1996 and
  $35,924 at December 31, 1995)            75,155           35,161
                                     ------------------------------
       Total securities                   312,331          303,355
                                     ------------------------------

Loans:                                  1,096,272        1,060,871
  Less:  Unearned interest                 56,438           49,631
         Reserve for loan losses            9,617           10,033
                                     ------------------------------
       Net loans                        1,030,217        1,001,207

Premises and equipment                     32,102           31,724
Accrued interest receivable                10,109            9,555
Other assets                               32,795           26,027
                                     ------------------------------
       Total assets                    $1,488,474      $ 1,442,560
                                     ==============================

LIABILITIES
Deposits:
  Non-interest-bearing                    167,118          161,355
  Interest-bearing                      1,116,625        1,091,897
                                     ------------------------------
       Total deposits                   1,283,743        1,253,252

Federal funds purchased and securities
 sold under agreements to repurchase       36,308           35,313
Short-term borrowings                       5,280            2,366
Accrued interest payable                    6,987            6,788
Other liabilities                           4,644            2,659
Long-term debt                             17,928           20,083
                                     -----------------------------
       Total liabilities               $1,354,890       $1,320,461
                                     -----------------------------

SHAREHOLDERS' EQUITY
Preferred stock, no par value
  2,000,000 shares authorized,
  shares issued:  14,000 at 
  December 14, 1995                          -               1,378
Common stock, par value $5 per share,
  10,000,000 shares authorized, 
  shares issued:  5,165,650 at 
  September 30, 1996
  and 4,865,100 at December 31, 1995      25,828            24,326
Surplus                                   58,309            33,675
Retained earnings                         49,535            61,116
Net unrealized holding gains (losses) on
  securities available-for-sale              (88)            1,604 
                                     ------------------------------
       Total shareholders' equity        133,584           122,099
                                     ------------------------------
       Total liabilities and 
            shareholders' equity      $1,488,474        $1,442,560
                                     ==============================

The accompanying notes are an integral part of the consolidated
financial statements.

                            3


           BT FINANCIAL CORPORATION AND AFFILIATES
            ---------------------------------------
               CONSOLIDATED STATEMENT OF INCOME
               --------------------------------
                        (Unaudited)
                        -----------

       (In thousands, except shares and per share data)

                           Three-months-ended  Nine-months-ended
                                 September 30       September 30
                             1996        1995     1996      1995
                            ------------------  -----------------
INTEREST INCOME

Loans, including
 fees                      $22,216    $20,170   $65,791   $58,687
Investment securities:
  Taxable                    5,027      4,929    13,982    14,401
  Tax-exempt                   152        153       445       543
Deposits with banks              3         47        32       294
Federal funds sold             265         42       911       220
                           -------------------  -----------------
  TOTAL INTEREST
  INCOME                    27,663     25,341    81,161    74,145
                           -------------------  -----------------
INTEREST EXPENSE

Deposits                    10,722     10,118    31,757    29,895
Federal funds
  purchased and
  securities sold
  under agreements
  to repurchase                288        354       867     1,136
Short-term borrowings           48        104       115       226
Term debt                      312        148       967       507
                           -------------------  ------------------
  TOTAL INTEREST
  EXPENSE                   11,370     10,724    33,706    31,764
                           -------------------  ------------------

NET INTEREST INCOME         16,293     14,617    47,455    42,381

Provision for loan
  losses                       618        767     1,426     1,389
                           -------------------  ------------------
  NET INTEREST
  INCOME AFTER
  PROVISION FOR
  LOAN LOSSES               15,675     13,850    46,029    40,992
                           -------------------  ------------------

OTHER INCOME

Trust income                   764        629     2,156     1,879
Fees for other
  services                   1,665      1,466     4,844     4,115
Net security gains (losses)    123        (42)      406       115 
Other income                   151        200       753       453
                          -------------------  ------------------
  Total other
  income                     2,703      2,253     8,159     6,562
                          -------------------  ------------------

OTHER EXPENSES

Salaries and wages           5,029      4,868    15,326    14,746
Pension and other
  employee benefits            965      1,118     3,137     3,015
Net occupancy expense        1,127        999     3,546     3,096
Equipment expense            1,117        932     2,937     2,535
F.D.I.C. insurance           1,516         77     1,785     1,370
Amortization of
  intangible assets            525        291     1,461       872
Reorganization expense          --         --     1,309        --
Other operating expense      3,403      2,739     9,840     8,161
                          -------------------  ------------------
  Total other
    expenses                13,682     11,024    39,341    33,795
                          -------------------  ------------------

INCOME BEFORE
  INCOME TAXES               4,696      5,079    14,847    13,759

Provision for income
  taxes                      1,581      1,614     4,989     4,142
                          -------------------  ------------------
  NET INCOME               $ 3,115    $ 3,465    $9,858    $9,617
                          ===================  ==================

EARNINGS PER SHARE

Primary:
Net Income per share      $   .55    $   .64      $ 1.79    $ 1.78
Weighted average
  shares outstanding    5,682,215  5,346,953   5,478,862 5,339,584

Fully Diluted:
Net Income per share      $   .55    $   .64      $ 1.78    $ 1.77
Weighted average
  shares outstanding    5,682,215  5,444,358   5,541,785 5,441,627

DIVIDENDS PAID PER
  COMMON SHARE            $   .30     $  .24      $  .79    $  .73

The accompanying notes are an integral part of the consolidated
financial statements.

Note:  Share and per share data have been adjusted to reflect
       the 10% stock dividend distributed on October 22, 1996.        

                                       4            

                      BT Financial Corporation and Affiliates
                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

                                  (In thousands)

                                               Nine months ended
                                                    September 30
                                                  1996      1995
                                               -----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................        $ 9,858  $  9,617
Adjustments to reconcile net income to
  net cash provided by operating activities         
  Provision for loan losses............          1,426     1,389
  Provision for depreciation and
       amortization....................          2,853     2,466
  Amortization of intangible assets              1,461       872
  Amortization of premium, net of
       accretion of discount on loans and
       securities.......................            61       625
  Deferred income taxes...............            (242)      (10)
  Realized securities gains...........            (406)     (115)
  Decrease (increase) in interest receivable        10      (317)
  Increase (decrease) in interest
       payable..........................          (129)    2,791
  Equity in loss of limited partnerships           144       128
  Other assets and liabilities, net...           3,931    (4,364)
                                               -------------------
           Net cash provided by operating
            activities                          18,967    13,082
                                               -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities......          5,328    26,145
Repayments and maturities of securities
  available-for-sale..................          73,475    44,794
Repayments and maturities of securities
  held-to-maturity....................           4,000    11,000
Purchases of securities available-for-
  sale................................         (21,567)  (26,013)
Purchase of securities held-to-maturity        (41,961)  (31,219)
Net decrease (increase) in money market
  investments.........................            (202)    4,869 
Proceeds from sales of loans...........          6,247     5,567
Net increase in loans..................        (24,361)  (44,370)
Purchases of premises and equipment
  and other...........................          (3,009)   (3,515)
Net increase in investment in limited
  partnerships........................            (141)     (115)
Purchase of Bank, net of cash acquired.         (3,336)       --
                                               -------------------

          Net cash used in investing
            activities                          (5,527)  (12,857)
                                               -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits....        (11,376)   24,582
Net increase (decrease) in Federal
  Funds purchased and securities sold
  under agreements to repurchase......             995   (18,762)
Net increase (decrease) in short-term
  borrowings..........................           2,914    (6,421)
Proceeds from sale of common stock.....              0       135 
Preferred stock cash dividends paid....            (54)      (88)
Common stock cash dividends paid.......         (4,337)   (3,873)
Payment on long-term debt..............         (2,155)   (2,440)
                                               -------------------
            Net cash provided by (used in)
             financing activities              (14,013)   (6,867)
                                               -------------------
Decrease in cash and cash equivalents..           (573)   (6,642)
Cash and cash equivalents at beginning
  of the year.........................          59,043    56,018
                                               -------------------
Cash and cash equivalents at end of
  period..............................         $58,470   $49,376
                                               ===================

Supplemental disclosures of cash flow
  information:

Cash paid during the period for:
  Interest on deposits and other
       borrowings.......................      $ 33,507  $ 29,025
  Federal income taxes................           4,961     5,963


Details of the acquisition of The 
  Armstrong County Trust Company
  on June 13, 1996 follow:
       Fair value of assets acquired....      $ 54,285  $    --
       Fair value of liabilities assumed        42,307       --
                                              ------------------
       Net assets acquired..............      $ 11,978 $     --
                                              ==================

The accompanying notes are an integral part of the consolidated
financial statements.

                             5

             BT FINANCIAL CORPORATION AND AFFILIATES
             ---------------------------------------
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            ------------------------------------------

                           (Unaudited)

1.     In the opinion of the management of BT Financial Corporation
       (BT or the Corporation), the accompanying consolidated
       financial statements include all normal recurring
       adjustments necessary for a fair presentation of the
       financial position and results of operations of BT for the
       periods presented.  All significant intercompany
       transactions have been eliminated in consolidation.  Certain
       amounts have been reclassified for comparative purposes. 
       The consolidated financial statements of BT include the
       accounts of BT and its wholly-owned affiliates, Johnstown
       Bank and Trust Company (Bank and Trust), Laurel Bank
       (Laurel), Fayette Bank (Fayette), BT Management Trust
       Company (Trust Company), Bedford Associates, Inc., and the
       Moxham Community Development Corporation.  The consolidated
       financial statements have been restated for periods prior to
       June 30, 1996 to reflect the merger with Moxham Bank
       Corporation, a pooling-of-interests transaction consummated
       on June 25, 1996.  These statements should be read in
       conjunction with the financial statements and the notes
       thereto included in BT's annual report to the Securities and
       Exchange Commission on Form 10-K for the year ended December
       31, 1995.  The results of operations for the nine month
       period ended September 30, 1996 are not necessarily
       indicative of the results which may be expected for the full
       year. 

2.     Tax provisions for interim financial statements are based on
       the estimated effective tax rates for the full fiscal year. 
       The estimated effective tax rates differ from the statutory
       tax rate principally due to tax-exempt interest income.

3.     Allowance for credit losses -- The Corporation adopted FASB
       Statement No. 114, "Accounting by Creditors for Impairment of
       a Loan", and FASB Statement No. 118, "Accounting by Creditors
       for Impairment of a Loan-Income Recognition and Disclosures,"
       on January 1, 1995.  Under these guidelines, a loan is
       considered impaired, based on current information and events,
       if it is probable that the Corporation will be unable to
       collect the scheduled payments of principal or interest when
       due according to the contractual terms of the loan agreement. 
       When conducting loan evaluations, management considers various
       factors such as historical loan performance, the financial
       condition of the debtor and collateral adequacy to determine
       when a loan is impaired.  Recurring shortfalls or delays in
       payments and/or extended delinquency periods may provide
       evidence that a delay or shortfall is significant to warrant a
       review of the loan for impairment.  Generally, the minimum
       period without payment that typically can occur before a loan
       is considered for impairment is 90 days.  The measurement of
       impaired loans is generally based on the present value of
       expected future cash flows discounted at the historical
       effective interest rate, except that all collateral-dependent
       loans are measured for impairment based on the fair value of
       the collateral.  FASB 114 does not apply to large groups of
       smaller balance homogeneous loans such as residential mortgage
       and consumer loans due to the similarity of the attributes and
       risks associated with these loan types.  The Corporation
       collectively evaluates these types of loans for impairment. 
       In addition, the Corporation collectively reviews for
       impairment, commercial real estate and commercial loans under
       $250,000.   The aggregation of these loans is based upon
       common risk characteristics such as, among other factors, loan
       type; geographic or industry risk concentrations; whether the
       loans have similar terms, such as interest and principal
       repayment terms; levels and types of collateral; and external
       credit ratings or internal risk ratings for the particular
       loans.

       The adequacy of the allowance for credit losses is periodically

                                    6

       evaluated by the Corporation in order to maintain
       the allowance at a level that is sufficient to absorb probable
       credit losses.  Management's evaluation of the adequacy of the
       allowance is based on a review of the Corporation's historical
       loss experience, known and inherent risks in the loan
       portfolio, including adverse circumstances that may affect the
       ability of the borrower to repay interest and/or principal,
       the estimated value of collateral, and an analysis of the
       levels and trends of delinquencies, charge-offs, and the risk
       ratings of the various loan categories.  

       At September 30, 1996, the recorded investment in loans for
       which impairment has been recognized in accordance with FASB
       114 totalled $4.8 million, with a corresponding valuation
       allowance of $2.4 million.  All of the impaired loans at
       September 30, 1996, are collateral-dependent loans measured
       for impairment based on the fair value of the collateral
       securing the loan.  The Corporation does not have any impaired
       loans for which there is not a related valuation allowance.

       For the quarter ended September 30, 1996, the average recorded
       investment in impaired loans did not differ materially from
       the amount outstanding at September 30, 1996.  The allowance
       for loan losses related to impaired loans increased $577,000
       during the third quarter of 1996.  The increase was mainly due
       to the addition of two impaired commercial loans and their
       associated valuation allowances.

       Income recognition on impaired and nonaccrual loans -- Loans,
       including impaired loans, are generally classified as
       nonaccrual if they are past due as to maturity or payment of
       principal or interest for a period of more than 90 days,
       unless such loans are well-secured and in the process of
       collection.   Loans that are on a current payment status or
       past due less than 90 days may also be classified as impaired
       or nonaccrual if repayment in full of principal and/or
       interest is in doubt.  Impaired loans are generally nonaccrual
       loans, however, the ultimate determination of an impaired loan
       is based on the aforementioned factors without regard solely
       to nonaccrual classification.  The adoption of FASB 114 did
       not have any material impact on the comparability of BT's
       nonperforming asset tables.

       A loan remains on nonaccrual status until it becomes current
       as to principal and interest or it is determined to be
       uncollectible and is charged off against the reserve for loan
       losses.  Impaired loans are charged off when the loans are
       determined to be uncollectible.

       While a loan is classified as nonaccrual and the future
       collectibility of the recorded loan balance is doubtful,
       collections of interest and principal are generally recorded
       as a reduction to principal outstanding.  When the future
       collectibility of the recorded loan balance is expected,
       interest income may be recognized on a cash basis.  BT
       recognized approximately $17,000 of interest revenue on
       impaired loans during the third quarter of 1996, all of which
       was recognized using the accrual basis method of income
       recognition.

4.     In March 1995, FASB issued Statement No. 121, "Accounting for
       the Impairment of Long-Lived Assets to Be Disposed Of."  This
       standard requires long-lived assets and certain identifiable
       intangible assets, such as goodwill, be reviewed for
       impairment whenever events or changes in circumstances
       indicate that the carrying amount of an asset may not be
       recoverable.  BT adopted this statement on January 1, 1996,
       and the effect on BT's financial statements as a result of the
       adoption was not material.

5.     In May 1995, FASB issued Statement No. 122, "Accounting for
       Mortgage Servicing Rights."  On January 1, 1996, BT adopted
       Statement 122.  The new standard requires capitalization of
       mortgage servicing rights on mortgage loans originated for

                                    7

       sale and measurement of impairment of all capitalized mortgage
       servicing rights based on their fair values.  Adoption of
       Statement No. 122 did not have any material impact on BT's
       financial condition or results of operations.

6.     In October 1995, FASB issued Statement No. 123, "Accounting
       for Stock-Based Compensation," which requires adoption no
       later than fiscal years beginning after December 15, 1995. 
       The new standard defines a fair value method of accounting for
       stock options and similar equity instrument compensation
       plans.  BT Financial has no stock-based compensation plans. 
       Therefore, Statement No. 123 will have no effect on BT's
       financial condition or results of operations.

7.  Recent Mergers and Acquisitions:
    -------------------------------

  On December 14, 1995, BT acquired The Huntington National Bank
  of Pennsylvania, (Huntington), Uniontown, Pennsylvania, and
  merged it into Fayette Bank.  Huntington had total assets of
  approximately $102 million and operated five branches in
  Fayette and Greene counties.  On January 8, 1996, Huntington's
  former Uniontown branch was closed and merged into Fayette
  Bank's Uniontown office.  The acquisition was accounted for as
  a purchase, with a purchase price of $25.5 million in cash. 
  Goodwill and other intangibles of approximately $10.2 million
  were recorded in connection with the transaction.  Goodwill is
  being amortized over 15 years.

  On June 13, 1996, BT acquired and accounted for as a purchase
  The Armstrong County Trust Company (Armstrong) of Kittanning,
  Pennsylvania.  Subsequent to the acquisition, BT merged
  Armstrong into Bank and Trust.  Armstrong had assets of
  approximately $50 million and operated one office in Armstrong
  County.  Each Armstrong common share was exchanged for 26.50
  shares of BT common stock and $533.21 in cash.  The total
  consideration for the Armstrong acquisition was approximately
  $12 million in the aggregate for all 8,000 Armstrong shares
  outstanding.  The cash portion of approximately $4.3 million
  was financed through short-term borrowing from a commercial
  bank.  In connection with this acquisition, goodwill and other
  intangibles of approximately $5.2 million were recorded. 
  Goodwill is being amortized over 15 years.  Armstrong's
  results of operations after June 13, 1996 are included in BT's
  Consolidated Statement of Income.  The following unaudited
  pro-forma information has been prepared assuming that the
  Armstrong acquisition had taken place at the beginning of the
  respective periods, after including the impact of certain
  adjustments relevant to the transaction, such as the
  amortization of goodwill and other intangibles, and the
  amortization of certain assets acquired based on their
  respective fair values.


                           PRO-FORMA RESULTS (UNAUDITED)
                     Three Months Ended       Nine Months Ended
(In thousands,             September 30            September 30
except share data)                 1995         1996       1995
                     ---------------------    -----------------    

Net Interest
Income                          $15,095        $48,362  $43,815

Net Income                        3,619          9,806    9,965

Earnings per
share:*                  
  Primary                           .64           1.74     1.77
  Fully Diluted                     .64           1.73     1.76 

  *Reflects the issuance of 26.5 shares of BT common stock
  (212,000 shares in total) for each share of Armstrong common
  stock.

  Note:     Per share data has been adjusted to reflect the 10%
            stock dividend distributed on October 22, 1996.

                            8

  The pro-forma results are not necessarily indicative of what
  actually would have occurred if the acquisition had been in
  effect for the entire periods presented.  In addition, they
  are not intended to be a projection of future results and do
  not reflect any synergies that might be achieved from the
  combined operations of Armstrong and Bank and Trust.

  On June 25, 1996, BT completed a merger with Moxham Bank
  Corporation (Moxham) whereby Moxham was merged directly into
  BT.  Exactly 1,038,519 shares of BT common stock were
  exchanged for all of the outstanding common stock of Moxham. 
  In addition, all of the outstanding Moxham preferred stock was
  exchanged for 88,550 shares of BT common stock.  The merger
  has been accounted for as a pooling of interests and
  accordingly BT's accompanying consolidated financial
  statements have been restated to include the accounts and
  operations of Moxham for all periods prior to the merger. 
  Moxham's banking subsidiaries included The Moxham National
  Bank and The First National Bank of Garrett.  Moxham also held
  a non-bank subsidiary known as the Moxham Community
  Development Corporation.  In connection with the merger,
  Moxham's banking subsidiaries were merged into Bank and Trust
  on June 25, 1996.  At the time of the merger, Moxham had
  assets of approximately $235 million and operated 12 branches
  in Cambria, Somerset, and Westmoreland counties.  In
  conjunction with the merger, four of these branches closed
  during the third quarter of 1996 along with two branches of
  Bank and Trust and one branch of Laurel Bank as a result of
  duplicate service areas.

  Separate results of the combining entities are presented for
  the interim  periods shown below.  All significant
  intercompany transactions have been eliminated.  BT's results
  include the effect of the Armstrong transaction after the
  acquisition date of June 13, 1996.

(In thousands,       THREE MONTHS ENDED SEPTEMBER 30
except share data)               1995   


                       BT      Moxham     Combined
                       --      ------     --------
Net Interest
Income            $12,384     $ 2,233      $14,617

Net Income          3,044         421        3,465

Earnings per
share:
  Primary             .72           -          .64
  Fully Diluted       .72           -          .64




(In thousands,                 NINE MONTHS ENDED SEPTEMBER 30
except share data)            1996                        1995

                  BT      Moxham    Combined       BT     Moxham    Combined
                  --      ------    --------       --     ------    --------  
Net Interest
Income       $42,763     $ 4,692     $47,455   $35,846    $6,535    $42,381

Net Income     9,075         783       9,858     8,488     1,129      9,617

Earnings per
share:
  Primary          -           -        1.79      2.02         -       1.78
  Fully Diluted    -           -        1.78      2.02         -       1.77

  Note:     Per share data has been adjusted to reflect the 10%
            stock dividend distributed on October 22, 1996.

                              9

  Certain reclassifications have been made to Moxham's financial
  information to conform to BT's classification.

  In connection with the Moxham merger, $1.3 million of merger
  costs and expenses ($959,000 after-tax or $.17 per fully
  diluted share) were incurred and have been charged to expense
  in the nine month period ended September 30, 1996.  The merger
  costs and expenses consisted primarily of severance pay to
  furloughed employees and various legal, accounting, and
  investment banking fees associated with the transaction.

8.     On August 28, 1996, the Board of Directors declared a 10%
       stock dividend payable October 22, 1996, to shareholders of
       record September 20, 1996.  BT transferred $17,046,645,
       representing 516,565 common shares at a market value of $33.00
       from retained earnings to surplus on a declaration date.  On
       October 22, 1996, $2,582,825 was transferred from surplus to
       common stock, representing the $5.00 par value of the common
       shares issued.

9.     The following is a summary of BT's changes in shareholders'
       equity during the first nine months of 1996:

                                                        Net
                                                        Unrealized
(In thousands,                                          holding
except share                                            gains
data)                                                   (losses)
                                                        on 
                                                        securities
                     Preferred Common         Retained  available 
                     Stock     Stock  Surplus Earnings  for sale    Total
                     -----------------------------------------------------
Balance December 31,
1995 as restated    $ 1,378   $24,326 $33,675  $61,116 $ 1,604    $122,099

Net Income                                       9,858               9,858

Common Stock
Dividends, $.79
per share                                       (4,337)             (4,337)

Preferred Stock
Dividends                                          (54)                (54)

Acquisition of
The Armstrong
County Trust
Company and Other               1,060   6,652       (2)              7,710

Conversion of
Preferred Stock
into Common Stock    (1,378)      442     936                           --

10% Stock
Dividend                               17,046  (17,046)                 --

Change in Net
Unrealized
holding gains
(losses) on
securities
available for
sale                                                    (1,692)     (1,692)
                     -----------------------------------------------------

BALANCE SEPTEMBER 30,
1996                     $0   $25,828 $58,309  $49,535 $   (88)   $133,584
                    ======================================================

Note:  Per share data has been adjusted to reflect the 10%
       stock dividend distributed on October 22, 1996.

                            10                                    

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


The following is Management's Discussion and Analysis of the
material changes in financial position between December 31, 1995
and September 30, 1996, and the material changes in results of
operations comparing the three and nine month periods ending
September 30, 1996 with the respective results for the comparable
periods of 1995 for BT Financial Corporation.  The following
should be read in conjunction with BT's Annual Report on Form 10-K
for the year ended December 31, 1995.

On June 25, 1996, BT Financial Corporation (BT) completed a
merger with Moxham Bank Corporation (Moxham) whereby Moxham was
merged directly into BT.  Exactly 1,127,069 shares of BT common
stock were exchanged for all of the outstanding preferred and
common stock of Moxham.  The merger has been accounted for as a
pooling of interests and accordingly, BT's consolidated financial
statements have been restated to include the accounts and
operations of Moxham for all periods prior to the merger. 
Additionally, BT acquired and accounted for as a purchase The
Armstrong County Trust Company (Armstrong) on June 13, 1996. 
Each Armstrong common share was exchanged for 26.50 shares of BT
common stock and $533.21 in cash.  The total consideration for
the Armstrong acquisition was approximately $12 million.

Certain information contained in this report may be considered
"forward-looking" information.  Refer to BT's Annual Report on
Form 10-K for the year ended December 31, 1995 for a discussion
of factors that may affect such forward-looking information.


FINANCIAL REVIEW
----------------

OVERVIEW
--------

A key element in BT's growth strategy is expansion of the
Corporation through mergers and acquisition activity.  Recent
merger activity has served to enlarge BT's total assets to
approximately $1.5 billion at September 30, 1996.  This
represents a sizeable 34% increase in assets over September 30,
1995, on a historical non-pooled basis.  BT's financial position
and results of operations have been largely impacted due to the
recent merger with Moxham and the acquisitions of Armstrong and
The Huntington National Bank of Pennsylvania (Huntington) which
occurred in December 1995.  Most of the significant changes in
the financial statements presented are a direct result of such
merger activity.  The Moxham merger resulted in one-time
reorganization costs of approximately $1.3 million ($959,000 net
of tax).  Most of these costs were expensed in the second quarter
of 1996.  Additionally, BT's third quarter 1996 earnings were
affected by a nonrecurring deposit insurance assessment of $1.4
million ($899,000 net of tax).  The one-time charge was related
to deposits acquired from savings and loan institutions in past
acquisitions.  Despite these significant nonrecurring expenses,
BT achieved increased earnings for the nine months ended
September 30, 1996, compared to the same period of 1995.

CHANGES IN FINANCIAL POSITION

Total loans outstanding, net of unearned interest, increased
$28.6 million at September 30, 1996, compared to year-end 1995
and $110.3 million compared to September 30, 1995.  The increase
in loans over year-end 1995 is due to approximately $12 million
in loans acquired in the Armstrong acquisition and growth in
commercial loans.  The increase over the prior year is
principally due to loans acquired in the acquisition of
Huntington.  At September 30, 1996, the level of nonperforming
loans increased $5.9 and $8.4 million compared to December 31,
1995, and September 30, 1995, respectively.  Nonperforming loans

                              11
 
as a percent of outstanding loans, net of unearned interest, were
1.28% at September 30, 1996 and .73% at December 31, 1995
compared to .53% at September 30, 1995.  At September 30, 1996,
various loans acquired in the Huntington acquisition accounted
for approximately $3.0 million of the increase in nonperforming
loans compared to September 30, 1995 and $1.3 million of the
increase compared to year-end 1995.  Roughly $2.2 million of the
increase over both periods was due to a higher level of
nonperforming consumer loans.  Increased nonperforming commercial
loans accounted for approxmately $2.0 million and $1.4 million of
the increases over September 30, 1995 and year-end 1995,
respectively.  The following table provides information with
respect to the components of BT's nonperforming assets for the
periods indicated.  
         

                       SEPTEMBER 30     DECEMBER 31  SEPTEMBER 30
(In thousands)                 1996            1995          1995
                            ------------------------------------- 
Loans 90 days or more
  past-due                  $   128          $ 2,077      $ 1,019 
Restructured loans              317              318          319
Nonaccrual loans             12,870            5,013        3,576
                            --------------------------------------
  Total non-performing
   loans                     13,315            7,408        4,914
  Other real estate owned       809              912        1,073
                            --------------------------------------
   Total non-performing
    assets                  $14,124          $ 8,320      $ 5,987
                            ======================================

The reserve as a percent of nonperforming loans was 72%, 135% and
192% for September 30, 1996, December 31, 1995 and September 30,
1995, respectively.  The BT Credit and Collection functions
continuously monitor and assess credit quality to minimize
exposure to potential future credit losses.  As a percent of
total outstanding loans, net of unearned interest, the reserve
for loan losses was .92% at September 30, 1996, compared to .99%
at year-end 1995 and 1.02% at September 30, 1995.  Based upon
loan reviews and corresponding collateral, management believes
the reserve for loan losses is adequate to cover foreseeable
potential losses in the current portfolio.

Total securities increased $9.0 million at September 30, 1996
compared to year-end 1995 mainly due to securities acquired in
the Armstrong acquisition.  Money market investments increased
$801,000 compared to year-end 1995 while increasing $8.5 million
compared to September 30, 1995.  Management intends to redeploy
excess money market investments to fund anticipated loan growth
and acquire additional securities.  

Total deposits at September 30, 1996, increased $30.5 million
over year-end 1995 and $111.2 million over September 30, 1995. 
The increase over year-end 1995 is primarily due to approximately
$42 million in deposits acquired in the Armstrong acquisition. 
The increase over the prior year is essentially due to deposits
acquired in the Huntington and Armstrong acquisitions.

RESULTS OF OPERATIONS

A ten percent stock dividend was distributed on October 22, 1996,
to shareholders of record September 20, 1996.  All per share data
in the following discussions has been adjusted to reflect the
stock dividend.


Third Quarter 1996 vs. Third Quarter 1995

Third quarter results for 1996 were adversely impacted by a
recently enacted one-time deposit insurance assessment of
approximately $1.4 million ($899,000 net of tax) related to
deposits acquired from savings and loan institutions.  Net income
for the third quarter of 1996, before the nonrecurring
assessment, was $4.0 million, or $0.71 per fully diluted share,
compared to $3.5 million, or $.64 per share for the same period
of 1995.  Higher levels of net interest income and total other
income offset increases in total other expenses and the provision
for income taxes.  The inclusion of the nonrecurring deposit
insurance assessment reduced third quarter 1996 earnings to $3.1
million or $.55 per fully diluted share.

                           12

Excluding the one-time deposit insurance assessment, the 1996
annualized return on average assets for the third quarter was
1.08% and the third quarter 1996 annualized return on average
shareholders' equity was 12.13%.  Including the nonrecurring
assessment, the annualized return on average assets for the third
quarters of 1996 and 1995 was .84% and 1.03%, respectively, and
the annualized return on average shareholders' equity was 9.41%
in 1996 and 11.84% in 1995 for the third quarter.  

Net interest income on a fully taxable equivalent basis was $16.7
million for the third quarter of 1996 compared to $15.0 million
for the same period of 1995.  The increase of $1.7 million was
due essentially to a higher level of interest-earning assets
resulting from the Huntington and Armstrong acquisitions.  Also
contributing to the increase in net interest income was a higher
net interest margin.  Third quarter net interest margins for 1996
and 1995 were 4.81% and 4.74%, respectively.

The provision for loan losses decreased $149,000 in the third
quarter of 1996 compared to the third quarter of 1995 due to
management's assessment of the provision necessary to maintain an
adequate reserve against potential future losses based upon the
current size and quality of the loan portfolio.  Net charge-offs
were $617,000 in the third quarter of 1996 compared to $314,000
in 1995.  The increase over 1995 was mainly due to a higher level
of consumer loan charge-offs.

Total other income increased $450,000 in the third quarter of
1996 compared to the same period of 1995.  Trust income increased
$135,000 due to greater volumes of trust assets under management
as a result of the Moxham merger and additional growth through
increased market penetration.  Also contributing to the increase
in total other income was higher fee income associated with an
enlarged deposit account base and increased security gains.

Total other expenses increased $2.7 million in the third quarter
of 1996 compared to the third quarter of 1995.  Approximately 52%
of the increase was due to the one-time deposit insurance
assessment of approximately $1.4 million.  The Huntington and
Armstrong acquisitions were largely responsible for the other
increases in operating expenses.  Salaries increased a modest 3%
due to merit increases while full-time equivalent employees fell
to 771 from 784.  Employee benefits expense fell approximately
14% mainly due to lower pension expense.  Occupancy expense
increased primarily due to an increase in branch locations from
the recent acquisitions.  Equipment expense increased
approximately 20% in the third quarter of 1996 compared to the
third quarter of 1995 due to increased depreciation expense
associated with the automation of various branch banking offices
as well as other technology investments.  FDIC insurance expense
increased approximately $1.4 million primarily due to the
nonrecurring assessment.  In the third quarter of 1995, FDIC
insurance expense was reduced $590,000 due to a retroactive
deposit insurance rate adjustment.  Amortization of intangible
assets increased $234,000 or 80% due to the amortization of
intangible assets associated with the recent acquisitions.  Other
operating expenses increased $664,000 due to the Huntington and
Armstrong acquisitions, conversion costs associated with recent
acquisitions and some increased costs related to corporate
restructurings and the centralization of various operational
functions.  Seven branch bank offices closed as a result of the
Moxham merger in the third quarter of 1996.  These closings and
the installation of various technologies and corporate
restructurings are expected to provide additional operating
efficiencies in future periods.

BT's effective tax rate for the third quarter of 1996 was 33.7%
compared to 31.8% for the third quarter of 1995.  The Moxham
merger contributed to the lower effective tax rate in 1995 due to
increased investment tax credits resulting from community
development activities.

                           13

Nine Months Ended September 30, 1996 vs. Nine Months Ended
September 30, 1995

The financial results of BT for the first nine months of 1996
were negatively impacted by two significant nonrecurring items
consisting of reorganization costs associated with the Moxham
merger and the special insurance assessment related to deposits
acquired from savings and loan institutions.  Approximately $1.3
million of merger costs and expenses related to the Moxham merger
($959,000 after-tax or .17 per fully diluted share) were incurred
and charged to expense in 1996.  The merger charges consisted
primarily of severance pay to furloughed employees and various
legal, accounting, and investment banking fees associated with
the transaction.  In 1996, BT also incurred a one-time deposit
insurance assessment of approximately $1.4 million ($899,000
after-tax or .16 per fully diluted share) related to deposits
acquired from savings and loan institutions.  Exclusive of
nonrecurring items, BT produced $11.7 million in net income for
the first nine months of 1996, a $2.1 million increase, or 21.8%
improvement over the same period in 1995.  On a fully diluted
per-share basis, earnings were $2.11 in 1996 compared to $1.77 in
1995, an increase of $.34, or 19.2%, before the nonrecurring
items.  Higher levels of net interest income and total other
income offset increases in total other expenses and the provision
for income taxes.  The inclusion of the one-time deposit
insurance assessment and costs related to the Moxham merger
reduced net income to $9.9 million, or $1.78 per fully diluted
share for the first nine months of 1996.

For the first nine months of 1996, the annualized return on
average assets was .90%, compared to .96% in 1995.  The
annualized return on average shareholders' equity for the first
nine months of 1996 and 1995 was 10.33% and 11.42%, respectively. 
Excluding the nonrecurring deposit insurance assessment and the
Moxham reorganization costs, the annualized return on average
assets was 1.07% and the annualized return on average
shareholders' equity was 12.27% for the nine months ended
September 30, 1996.    


Fully taxable equivalent net interest income was $48.6 million
for the first nine months of 1996, compared to $43.4 million for
the same period of 1995.  The increase of $5.2 million was due
primarily to a higher level of interest-earning assets resulting
from the Huntington and Armstrong acquisitions along with a
higher-yielding asset mix.  The net interest margin, on a fully
taxable equivalent basis, improved 15 basis points to 4.79% in
1996, compared to 4.64% in the first nine months of 1995.  The
current interest rate environment continues to have a favorable
impact on BT's net interest margin level.  

The provision for loan losses increased $37,000 in the first nine
months of 1996, compared to the same period of 1995 due to
management's assessment of the provision necessary to maintain an
adequate reserve against potential future losses based upon
current size and quality of the loan portfolio.  Net charge-offs
were approximately $2.0 million in 1996 compared to $992,000 in
the first nine months of 1995.  The increased level of net
charge-offs in 1996 is substantially higher due to credit losses
associated with certain loans acquired in the Huntington
acquisition.

Total other income increased $1.6 million in the first nine
months of 1996 compared to the same period last year.  Trust
income increased $277,000 due to greater volumes of trust assets
under management as a result of the Moxham merger and additional
growth through increased market penetration.  The sale of real
estate at Laurel and the sale of the Salem 22 office of the
former Moxham Bank contributed approximately $270,000 to other
income.  Increased service fees resulted from an enlarged deposit
account base and higher security gains also contributed to the
increase in total other income.
  
Total other expenses increased $5.5 million in the first nine
months of 1996 compared to the same period of 1995.  Roughly 49%
of the increase was due to the recording of approximately $1.3
million in nonrecurring reorganization costs associated with the

                         14

Moxham merger and the one-time deposit insurance assessment of
$1.4 million.  Most of the other increases are a result of the
Huntington acquisition, which occurred in December 1995. 
Salaries and wages increased $580,000, primarily due to periodic
merit increases.  In 1995, certain reserves associated with
self-funded health care costs provided additional reductions in those
costs when a new health care insurance provider was selected. 
Employee benefit costs increased in the first nine months of 1996
when health care costs returned to a level which is expected to
be representative of ongoing costs.  The transition to the new
carrier has resulted in reduced ongoing hospitalization expense
due to lower premiums.  Occupancy expense increased $450,000,
primarily due to the addition of four branches from the
Huntington acquisition.  Equipment expense increased $402,000
mainly due to greater depreciation expense.  F.D.I.C. insurance
increased $415,000 primarily due to the one-time assessment.  The
increase was mitigated by reduced deposit insurance premiums in
effect for 1996.  Excluding the special assessment, FDIC
insurance expense decreased $968,000 reflecting the lower
premiums.  Amortization of intangible assets increased $589,000
due to the onset of expense attributed to intangible assets
associated with recent acquisitions.  Other operating expenses
increased $1,679,000 due to the Huntington and Armstrong
acquisitions, conversion costs associated with these acquisitions
and some increased costs related to corporate restructurings and
the centralization of various operational functions. The Moxham
merger has resulted in the elimination of redundant activities
and improved operating efficiencies.

BT's effective tax rate was 33.6% for the first nine months of
1996, compared to 30.1% for the same period in 1995. 
Contributing to the increase was a change in federal income tax
rules resulting in the retroactive deduction in 1995 of goodwill
amortization associated with acquisitions in prior years and an
increased application of investment tax credits in 1995 relating
to community development activities due to the Moxham merger. 

                            15



                                     PART II
                                     -------
                                OTHER INFORMATION
                                -----------------


                                     ITEM 6
                                     ------
                        EXHIBITS AND REPORTS ON FORM 8-K
                        --------------------------------

(a) Exhibits
    --------
     Exhibit 11    Computation of Net Income Per Share.
     Exhibit 27.1  Financial Data Schedule.
     Exhibit 27.2  Restated Financial Data Schedule.

(b)  Reports on Form 8-K
     -------------------
       A Form 8-K dated as of July 31, 1996, was filed under item 5
to report BT's consolidated financial results for the one month
and seven month periods ended July 31, 1996. 



                                   16



                                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 14, 1996             /s/ John H. Anderson
       -----------------             --------------------
                                     John H. Anderson,
                                     Chairman and Chief Executive Officer


Date   November 14, 1996             /s/ Mark L. Sollenberger
       -----------------             ------------------------
                                     Mark L. Sollenberger,
                                     Executive Vice President, Treasurer and
                                     Assistant Secretary
                                     (Principal Financial Officer)

                          
                                17