UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 2000
                                        --------------

         Commission file number 0-133312
                               ---------


                         FIRST LIBERTY BANK CORP.
                         ------------------------
           (Exact name of registrant as specified in its charter)

Pennsylvania                                                  23  -2275242
------------                                                  ------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

645 Washington Avenue; P.O. Box 39; Jermyn Pennsylvania        18433-0039
-------------------------------------------------------        ----------
(Address of principal executive offices)                       (Zip Code)

Issuer's telephone number 570-876-6500
                          ------------

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act of 1934  during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes X                      No __
    -

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

                  Class                            Outstanding at May 5,2000
                  -----                            -------------------------
Common stock, $.31 par value                              6,427,804


                                   1

<PAGE>




FIRST LIBERTY BANK CORP. AND SUBSIDIARIES

                                    FORM 10-Q

                          QUARTER ENDED MARCH 31, 2000

                                      INDEX


                                                                         Page

PART 1 - FINANCIAL INFORMATION

         ITEM 1. FINANCIAL STATEMENTS UNAUDITED:

         Consolidated Balance Sheets - March 31, 2000 and
                  December 31, 1999                                       1

         Consolidated Statements of Operations - Three Months
                  Ended March 31, 2000 and 1999                           2

         Consolidated Statements of Cash Flows -
                  Three Months Ended March 31, 2000 and 1999              3

         Notes to Consolidated Financial Statements-
                  Three Months Ended March 31, 2000 and 1999 and
                  December 31, 1999                                       4

         ITEM 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations           6

         ITEM 3.   Quantitative and Qualitative Disclosures
                  About Market Risk                                      12

PART II - OTHER INFORMATION                                              13

SIGNATURES                                                               14


                                       2

<PAGE>



PART I.   FINANCIAL INFORMATION
         Item I.  Financial Statements

<TABLE>
FIRST LIBERTY BANK CORP. AND SUBSIDIARIES

Consolidated Balance Sheets
(In thousands of dollars, except per share information)
(unaudited)
------------------------------------------------------------------------------------------------------------
                                                                                March 31,        December 31,
Assets                                                                            2000               1999
----------------------------------------------------------------------------------------------------------
<S>                                                                              <C>             <C>
Cash and due from banks                                                       $   12,696                26,023
Securities available for sale                                                    175,888               185,908

Loans, gross                                                                     424,142               417,249
Less: Unearned discount and origination fees                                        (676)                 (699)
         Allowance for loan losses                                                (5,283)               (5,107)
---------------------------------------------------------------------------------------------------------------
Loans, net                                                                       418,183               411,443

Accrued interest receivable                                                        3,991                 3,397
Bank premises, leasehold improvements and furniture and equipment -net            14,332                14,431
Real estate owned other than bank premises                                           277                   558
Other assets                                                                      11,943                11,515
---------------------------------------------------------------------------------------------------------------

Total assets                                                                  $  637,310               653,275
===============================================================================================================
Liabilities
Deposits:
   Noninterest-bearing demand                                                 $   56,470                49,502
   Interest-bearing                                                              441,508               434,944
   ------------------------------------------------------------------------------------------------------------

Total deposits                                                                   497,978               484,446
---------------------------------------------------------------------------------------------------------------
Other borrowed money                                                              77,242                75,567
Federal Funds Purchased                                                               --                32,450
Accrued interest payable                                                           2,626                 2,040
Other liabilities                                                                  1,545                 1,555
---------------------------------------------------------------------------------------------------------------

Total liabilities                                                                579,391               596,058
---------------------------------------------------------------------------------------------------------------

Shareholders' Equity

Common stock, $.31 par value, authorized 10,000,000 shares;                        2,009                 2,009
     Outstanding 6,427,804 shares and 6,427,804 shares respectively
Surplus                                                                            6,107                 6,107
Retained earnings                                                                 54,457                53,790
Accumulated other comprehensive income                                            (4,458)               (4,493)
Less treasury stock-at cost (60,820)                                                (196)                 (196)
---------------------------------------------------------------------------------------------------------------
Total shareholders equity                                                         57,919                57,217
---------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                                    $  637,310               653,275
===============================================================================================================




</TABLE>




                                               1

<PAGE>



FIRST LIBERTY BANK CORP. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands of dollars, except for per share information )
(unaudited)
<TABLE>

--------------------------------------------------------------------------------------------------------------
                                                                                  Three months ended March 31,
                                                                                    2000                1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                        <C>
Interest income:
     Interest and fees on loans                                               $    8,229                 7,410
     Interest on interest bearing deposits                                             8                   255
     Interest and dividends on securities:
     Taxable                                                                       2,356                 1,999
     Exempt from Federal Taxes                                                       422                   625
     Interest of Fed Funds Sold                                                      ---                     9
--------------------------------------------------------------------------------------------------------------

         Total interest income                                                    11,015                10,298
--------------------------------------------------------------------------------------------------------------

Interest expense:
     Deposits                                                                      4,701                 4,711
     Fed Funds Purchased                                                             357                    --
     Capitalized lease obligation and borrowed funds                               1,030                   697
--------------------------------------------------------------------------------------------------------------

          Total interest expense                                                   6,088                 5,408
--------------------------------------------------------------------------------------------------------------

Net interest income                                                                4,927                 4,890
Provision for loan losses                                                            180                   180
--------------------------------------------------------------------------------------------------------------

Net interest income after provision for loan losses                                4,747                 4,710
--------------------------------------------------------------------------------------------------------------

Noninterest income:
     Service charges and fees                                                        163                   183
     Gain on sale of securities                                                       53                    74
     Trust                                                                           170                   164
     Other                                                                           133                   131
--------------------------------------------------------------------------------------------------------------
         Total noninterest income                                                    519                   552
--------------------------------------------------------------------------------------------------------------

Noninterest expense:
     Salaries and benefits                                                         1,977                 1,781
     Net occupancy and furniture/equipment expenses                                  650                   551
     Data processing services                                                         48                   115
     Foreclosures and other real estate expense                                        9                    56
     Other expense                                                                   834                   826
--------------------------------------------------------------------------------------------------------------

         Total noninterest expense                                                 3,518                 3,329
--------------------------------------------------------------------------------------------------------------

Income before income tax provision                                                 1,748                 1,933
Income tax provision                                                                 381                   415
--------------------------------------------------------------------------------------------------------------


Net income                                                                         1,367                 1,518
--------------------------------------------------------------------------------------------------------------

Other comprehensive income net of tax Unrealized gains/(losses) on securities:
     Unrealized holding (loss)/gain arising during the period                         70                  (395)
     Reclassification adjustment for gains included in net income                    (35)                  (49)
Comprehensive income                                                          $    1,402                 1,074
==============================================================================================================

Per share information
    Net income-basic                                                          $      .21                   .24
    Net income-diluted                                                               .21                   .24

</TABLE>




                                        2

<PAGE>

FIRST LIBERTY BANK CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands of dollars)
(unaudited)
<TABLE>

------------------------------------------------------------------------------------------------------------------------
                                                                                          Three months ended March 31,
                                                                                        2000                        1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>
Operating activities:
     Net income                                                               $        1,367           1,518
Adjustments to reconcile net income to net cash (used) provided by
         Operating activities:
               Provision for loan losses                                                 180             180
               Depreciation and amortization of investment securities,  bank
                  premises, leasehold improvements and furniture and equipm327           205
                Increase in interest receivable and other assets                      (1,041)         (1,918)
              Increase/(decrease) in interest payable and other liabilities              576            (589)
-------------------------------------------------------------------------------------------------------------

Net cash (used) provided by operating activities                                       1,409            (604)
-------------------------------------------------------------------------------------------------------------

Investing activities:

     Proceeds from maturities of securities                                            4,730          22,738
     Purchases of securities available for sale                                          ---          (6,000)
     Proceeds from sales of securities available for sale                              5,344          12,000
     Net (increase) in loans                                                          (6,949)           (116)
     Purchase of bank premises, leasehold improvements and
                  furniture and equipment-net                                           (228)         (1,090)
     Sales of assets acquired through foreclosure, net                                   310              92
------------------------------------------------------------------------------------------------------------

Net cash provided by investing activities                                              3,207          27,624
------------------------------------------------------------------------------------------------------------

Financing activities:
     Net increase in deposits                                                         13,532          15,231
     Repay Fed Funds Purchased                                                       (32,450)         (5,000)
     Principal payments on capitalized lease obligation                                  (25)            (23)
     Borrowed funds                                                                    1,700              --
     Proceeds of stock issued through exercise of options                                ---             106
     Dividends paid                                                                     (700)             --
------------------------------------------------------------------------------------------------------------

Net cash (used) provided by financing activities                                     (17,943)         10,314
------------------------------------------------------------------------------------------------------------

(Decrease)/increase in cash and cash equivalents                                     (13,327)         37,334
Cash and cash equivalents at beginning of period                                      26,023          25,628
------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                    $       12,696          62,962
============================================================================================================

Cash paid during the period:
     Interest                                                                 $        5,502           5,466
     Federal income taxes                                                                200             494
============================================================================================================

Noncash transactions
     Net unrealized gain/(loss) on securities available for sale, net of ta$              35            (444)
     Transfers of loans to real estate owned other than bank premise                      29             234
============================================================================================================
</TABLE>


                                        3

<PAGE>



FIRST LIBERTY BANK CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)
--------------------------------------------------------------------------------


(1)      Summary of Significant Accounting Policies

         Basis of Financial Statement Presentation

         The  accompanying  consolidated  financial  statements of First Liberty
         Bank Corp. and  subsidiaries  (the Company) were prepared in accordance
         with  instructions  to  Form  10-Q,  and  therefore,   do  not  include
         information  or  footnotes  necessary  for a complete  presentation  of
         financial position,  results of operations and cash flows in conformity
         with generally accepted  accounting  principles.  However,  all normal,
         recurring  adjustments  which,  in  the  opinion  of  management,   are
         necessary for a fair  presentation  of the financial  statements,  have
         been included. These financial statements should be read in conjunction
         with the audited financial statements and the notes thereto included in
         the Company's Annual Report for the period ended December 31, 1999. The
         results for the three months  ended March 31, 2000 are not  necessarily
         indicative  of the  results  that may be  expected  for the year  ended
         December 31, 2000.

         Business

         The  Company's  principal  subsidiary,  First Liberty Bank & Trust (the
         Bank),  conducts  business  from its  branch  bank  system  located  in
         Lackawanna and Luzerne Counties,  Pennsylvania.  The Bank is subject to
         competition from other financial institutions and other companies which
         provide financial  services.  The Bank is subject to the regulations of
         certain federal and state agencies and undergoes periodic  examinations
         by those regulatory authorities.

         Principles of Consolidation

         On February 16, 1999, the Company merged its two principal subsidiaries
         , The First  National Bank of Jermyn and NBO National  Bank,  under the
         name First  Liberty  Bank & Trust.  Concurrent  with this  merger,  the
         Company  converted  the  charter  of  the  Bank  to a  State  chartered
         commercial bank subject to regulation by the Pennsylvania Department of
         Banking and the Federal Reserve Bank.

         The consolidated  financial  statements  include the accounts of all of
         the Company's wholly- owned subsidiaries.  All significant intercompany
         transactions  have  been  eliminated  in  consolidation.  Additionally,
         certain  reclassifications  have been made in order to conform with the
         current year's presentation.  The accompanying  consolidated  financial
         statements have been prepared on an accrual basis.





                                        4

<PAGE>



(2)      Earnings Per Share

         Basic  earnings per share were computed  based on the weighted  average
         number of shares outstanding  during each period.  Diluted earnings per
         share  include the dilutive  effect of the Company's  weighted  average
         stock options outstanding.

         The  following  table sets forth the  computation  of basic and diluted
         earnings per share (in thousands, except per share amounts)

<TABLE>

                                                                                        3 months ended March 31
                                                                                        2000              1999
                                                                                        ----              ----
<S>                                                                             <C>                   <C>

Numerator:
         Net income                                                             $       1,367       $      1,518

Denominator:
         Denominator for basic earnings
         per share weighted average
         shares                                                                         6,367              6,351

Effect of dilutive securities:
         Employee stock options                                                            34                 54
Denominator for diluted earnings
         per share adjusted weighted
         average shares and assumed
         exercise                                                                       6,401              6,405

Basic earnings per share                                                                 .21                 .24

Diluted earnings per share                                                               .21                 .24

</TABLE>





















                                        5

<PAGE>



Item 2.

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

Overview

The  Company's  net  income  for the three  months  ended  March 31,  2000 was $
1,367,000 or $.21 per diluted share  compared to $1,518,000 and $.24 per diluted
share for the same three-month period in the preceding year. The decrease in net
income was primarily  attributable  to a decrease in net interest income as well
as an increase in non-interest expenses.

The Company  recorded  an  annualized  return on average  assets of .85% for the
three-month period ending March 31, 2000,  compared to 1.00% for the same period
in 1999.  Return on average  equity of 9.59% was  recorded  for the  three-month
period ended March 31, 2000, compared to10.43% for the same period in 1999.

At March 31, 2000, the Company had total assets of $637 million compared to $653
million at December 31, 1999. The decrease in total assets was driven by a $13.3
million  decrease  in cash and due from banks and a $10.0  million  decrease  in
securities available for sale.

The Company is susceptible to a continued  increasing  interest rate environment
that may erode the net  interest  margin.  Strategies  to enhance  earnings  and
improve the interest  rate exposure of the Company will be  considered,  such as
the  sale  of  existing  mortgage-backed   securities  available  for  sale  and
purchasing higher yielding, rate sensitive assets with the proceeds.

The Company's wholly owned subsidiary, First Liberty Bank & Trust, is one of the
largest  community  banks in Northeastern  Pennsylvania.  The Company intends to
increase its market penetration  through,  the purchase of additional  branches.
Currently  the Company is  negotiating  the purchase of two branches from Mellon
Bank N.A.

Financial Condition

Cash and Due From Banks

Cash and due from banks decreased  approximately $ 13.3 million to $12.7 million
at March 31,  2000 from  $26.0  million  at  December  31,  1999 as the  company
utilized excess liquidity to pay down federal funds purchased.

Securities

Securities  available  for sale have  decreased  $10.0 million or 5.4% to $175.9
million from $185.9  million at December 31, 1999.  This  decrease was primarily
driven by the maturity  and sale of $4.7 million and $5.3 million of  securities
available for sale, respectively.





                                        6

<PAGE>



Loans Receivable, Net

Aggregate loans receivable totaled $418.2 million at March 31, 2000, an increase
of $6.8  million from $411.4  million at December 31, 1999.  The mix of loans is
substantially unchanged at those dates.

Non-Performing Assets

The Company's total non-performing  assets decreased  approximately  $410,000 to
$1.7  million  or .27% of total  assets at March 31,  2000 as  compared  to $2.2
million or .33% of total assets at December 31, 1999.  Loans greater than ninety
days delinquent but still accruing  increased from $154,000 at December 31, 1999
to $207,000 at March 31, 2000. However, nonaccrual loans decreased approximately
$182,000 to $1,264,000.

Real estate owned,  decreased  from $558,000 as of December 31, 1999 to $277,000
as of March 31,  2000,  due to four  sales of  residential  properties  totaling
$310,000,  offset by an addition of one property  with a $29,000  market  value.
There  were no  significant  gains or  losses on the sale of real  estate  owned
during the quarters ended March 31, 2000 and 1999.

<TABLE>

                                                          3/31/00                        12/31/99
                                                          -------                        --------
<S>                                                     <C>                              <C>
         Nonaccrual                                      1,264,000                       1,446,000

         Loans 90 days or more delinquent                  207,000                         154,000

         Restructured                                          ---                             ---
                                                        ----------                       ---------

             Total non-performing loans                 $1,471,000                      $1,600,000

         Real estate owned other than

             Bank premises                                 277,000                         558,000
                                                           -------                         -------

             Total non-performing assets                $1,748,000                      $2,158,000
</TABLE>


At March 31, 2000,  the Company's  allowance  for loan losses  amounted to $5.28
million or 1.25% of gross loans receivable.  At December 31, 1999, the Company's
allowance for loan losses was $5.11 million or 1.22% of gross loans receivable.

Deposits

Deposits  increased  $13.5  million or 2.8% from $484.4  million at December 31,
1999 to $498.0 million at March 31, 2000. The increase in deposits was primarily
due to an increase in demand and NOW accounts from the local market.



                                        7

<PAGE>



Equity

At March 31,  2000,  total  equity  was $57.9  million  or 9.1% of total  assets
compared to $57.2 million or 8.8% of total assets as of December 31, 1999. Total
equity  increased  primarily  due to the  retention  of net  income  during  the
intervening period.

Results of Operations

Net Income

The  Company's  net income was  $1,367,000  for the three months ended March 31,
2000,  compared to $1,518,000  recorded in the  comparable  prior  period.  In a
competitive rate environment, the Company was able to substantially maintain its
level of core earnings as net interest  income before  provision for loan losses
approximated  $4.9  million for the three  months ended March 31, 2000 and March
31, 1999. The Company's  noninterest  income decreased  slightly to $519,000 for
the period  ending  March 31, 2000 from  $552,000  for the period  ending  March
31,1999,  while  noninterest  expense  increased  to $3.5  million for the three
months ended March 31, 2000,  compared to $3.3 million for the comparable  prior
period.

Net Interest Income

Net interest income before provision for loan losses was relatively  constant at
approximately $4.9 million for the three-month  periods ended March 31, 2000 and
March 31,1999.

Total  interest  income  increased by $717,000 or 7.0% to $11.0  million for the
three month period ended March 31, 2000 from $10.3 during the  comparable  prior
period. The average  interest-earning assets increased $22,177,000 for the three
months  ended March 31, 2000  compared to the three months ended March 31, 1999.
Additionally,  there was an increase of 18 basis  points in the yield  earned on
average  interest-earning  assets  during the three  months ended March 31, 2000
compared to the 1999 period.

Total  interest  expense  increased by $680,000 or 12.6% to  $6,088,000  for the
three  months  ended March 31, 2000 from  $5,408,000  for the  comparable  prior
period.  The increase was due to an increase in interest expense associated with
borrowings.  The average balance of borrowings  increased by $43,855,000  during
the three months ended March 31, 2000,  compared to the comparable  1999 period.
Additionally, there was an increase of 34 basis points in the average rates paid
for the three months ended March 31, 2000 over the comparable 1999 period.

Provision for Loan Losses

The  Company  establishes  a  provision  for loan  losses,  which is  charged to
operations,  in order to maintain the allowance for loan losses at a level which
is deemed to be appropriate  based upon an assessment of prior loss  experience,
the  volume  and type of  lending  presently  being  conducted  by the  Company,
industry standards,  past due loans, economic conditions in the Company's market
area and other  factors  related to the  collectability  of the  Company's  loan
portfolio. The Company's provision for loan losses amounted to $180,000 for both
of the three month periods ended March 31, 2000 and March 31, 1999.

                                        8

<PAGE>




Although management utilizes its best judgment in providing for inherent losses,
there  can be no  assurance  that the  Company  will not  have to  increase  its
provisions for loan losses in the future as a result of the future  increases in
non-performing  loans or for other  reasons  which  could  adversely  affect the
Company's results of operations. In addition, various regulatory agencies, as an
integral part of their examination  process,  periodically  review the allowance
for loan losses. Such agencies may require the Company to recognize additions to
the allowance for loan losses based on their evaluations of information which is
available to them at the time of their examination.

Noninterest Income

Noninterest income for the period ending March 31, 2000 decreased  approximately
$33,000 to $519,000 from the  comparable  prior period,  primarily due a $20,000
and $21,000  decrease in service charges and fees on loans and deposits and gain
on sale of securities, respectively.

Noninterest Expenses

Noninterest   expenses  for  the  period   ending   March  31,  2000   increased
approximately  $189,000 from the  comparable  prior period.  Salary and benefits
increased  $196,000;  net  occupancy  expense  increased  by $99,000;  and other
expense  increased  by $8,000 over the prior  period as a result of new branches
opened in Kingston and Dickson City in July and  September  1999,  respectively.
Offsetting  these increases was a $67,000  decrease in data processing  services
primarily as a result of the Company  reconfiguring  certain vendor contracts to
realize  efficiencies  permitted by the merger of the two predecessor banks into
First Liberty Bank & Trust.

Income Taxes

Income tax expense totaled  $381,000 for the three-month  period ended March 31,
2000  compared  to $415,000  for the  comparable  prior  period.  These  amounts
resulted in effective tax rates calculated at 21.8% and 21.5%, respectively.  It
has  been  the  Company's  tax  strategy  to  increase  tax-exempt  income  as a
percentage of total net income through  investments  in tax- exempt  securities,
bank owned life insurance, and low income housing credits.

 Liquidity & Capital Adequacy

The  Company's  primary  source of funds on a long term and short term basis are
deposits,  principal and interest payments on loans, mortgage backed securities,
and FHLB advances.  The Company uses the funds  generated to support its lending
and  investment  activities as well as any other  demands for liquidity  such as
deposit out flows.

The Company has  continued to maintain the required  levels of liquid  assets as
defined by Federal regulations.

A strong  capital  position is important to the continued  profitability  of the
Company and promotes  depositor and investor  confidence.  The Company's capital
consists of shareholders'  equity,  which provides a basis for future growth and
expansion and also provides a buffer

                                       9

<PAGE>



against unexpected losses.

Shareholders'  equity increased $702,000 to $57,919,000 at March 31, 2000. It is
management's  intention to continue paying a reasonable  return on shareholders'
investment while retaining adequate earnings to allow for continued growth.

The Federal Reserve Board measures capital  adequacy for bank holding  companies
by using a risk-based  capital  frame-work  and by  monitoring  compliance  with
minimum leverage ratio guidelines. The minimum ratio of total risk-based capital
to  risk-adjusted  assets  is 8% at March 31,  2000,  of which 4% must be Tier 1
capital.  The Company's total  risk-based  capital ratio was 16.87% at March 31,
2000.  The  Company's  Tier 1 risk-based  capital  ratio was 15.62% at March 31,
2000.

In addition,  the Federal Reserve Board has established  minimum  leverage ratio
guidelines for bank holding  companies.  These guidelines  provide for a minimum
leverage  ratio of 3% for bank holding  companies  that meet  certain  criteria,
including  that they  maintain  the highest  regulatory  rating.  All other bank
holding  companies  are  required  to  maintain a  leverage  ratio of 3% plus an
additional  cushion of at least 100 to 200 basis  points.  The  Federal  Reserve
Board has not  advised  the  Company  of any  specific  minimum  leverage  ratio
applicable to it. The Company's leverage ratio was 9.61% at March 31, 2000.

The Federal Deposit Insurance  Corporation  Improvement Act (FDICIA) establishes
minimum capital  requirements  for all depository  institutions  and established
five   capital   tiers:   "well    capitalized",    "adequately    capitalized,"
"under-capitalized:,    "significantly   under-capitalized,"   and   "critically
under-capitalized," FDICIA imposes significant restrictions on the operations of
a bank which is not at least adequately capitalized.  A depository institutions'
capital  tier will  depend  upon where its  capital  levels are in  relation  to
various other capital  measures which include a risk-based  capital  measure,  a
leverage ratio capital measure and other factors. Under regulations adopted, for
an institution to be well  capitalized it must have a total  risk-based  capital
ratio of at least 10%, a Tier I risk-based  capital  ratio of at least 6%, and a
Tier I leverage ratio of at least 5%, and not be subject to any specific capital
order or directive.

At March 31,  2000,  the Bank's  total  risk-based  capital,  Tier I  risk-based
capital and Tier I leverage ratios were 16.51%, 15.26% and 9.56%,  respectively.
As of March 31,2000, the Bank maintains a classification of "well-capitalized".

Market Risk and Interest Rate Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's  market risk arises  primarily from interest rate risk inherent in
its lending,  investment, and deposit taking activities. To that end, management
actively monitors and manages its interest rate risk exposure.

The Company uses  simulation  analysis to help monitor and manage  interest rate
risk. In this analysis the Company examines the result of 100, 200 and 300 basis
point change in market interest rates and the effect on net interest income.  It
is  assumed  that the  change  is  instantaneous  and that all  rates  move in a
parallel manner. In addition,  it is assumed that rates on core deposit products
such as NOWs, savings accounts, and the MMDA accounts will be

                                       10

<PAGE>



adjusted by 50% of the assumed rate change. Assumptions are also made concerning
prepayment speeds on mortgage loans and mortgage securities. The results of this
rate shock are a useful tool to assist the Company in  assessing  interest  rate
risk inherent in their balance sheet.

The results of this rate shock analysis as of March 31, 2000 are as follows:
<TABLE>
<S>           <C>                              <C>
               Change in Rate                   Net Interest Income Change (After tax, in thousands)
               --------------                   ----------------------------------------------------
                     +300                                                 (2954.7)
                     +200                                                 (1971.6)
                     +100                                                  (980.7)
                     -100                                                   844.0
                     -200                                                  1572.3
                     -300                                                  1932.4
</TABLE>


Year 2000 Issues

Year  2000  issues  result  from the  inability  of many  computer  programs  or
computerized  equipment to accurately calculate,  store or use data for the year
2000 or later.  The potential  shortcomings  could result in a system failure or
miscalculations causing disruptions of operation,  including among other things,
a  temporary  inability  to  process  transactions,   track  important  customer
information,  provide convenient access to this information, or engage in normal
business operations. The Company did not incur any additional costs for the Year
2000 in the first quarter ended March 31, 2000.  While lingering  concern exists
about  certain dates during Year 2000,  the most  significant  date,  January 1,
2000, has passed without incident. As of the date of this filing the Company has
not experienced any significant  Year 2000 problems  relating to its internal or
third  party  computer  systems.  Nor has the  Company  experienced  any  issues
regarding the ability of  commercial  customers to meet debt service as a result
of Year 2000 issues.  The Company will continue to monitor  systems for problems
in the future, however, the costs related to that process are not expected to be
significant.


Forward Looking Statements

These  financial   statements  include  certain  "forward  looking   statements"
concerning the future  operations of the Company.  It is management's  desire to
take  advantage  of the  "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995.  This  statement  is for the express  purpose of
availing the Company of the  protections of such safe harbor with respect to all
"forward looking  statements"  contained in our financial  statements.  "Forward
looking  statements"   describe  the  future  plans  and  strategies   including
expectations of the Company's future financial results.  Management's ability to
predict  results  or the  effect of  future  plans and  strategy  is  inherently
uncertain.  Factors  that could affect  results  include  interest  rate trends,
competition,  the general  economic  climate in Northeastern  Pennsylvania,  the
mid-Atlantic  region and country as a whole, loan delinquency rates, and changes
in  federal  and  state  regulation.  These  factors  should  be  considered  in
evaluating the "forward  looking  statements",  and undue reliance should not be
placed on such statements.



                                       11

<PAGE>





Item 3. Quantitative and Qualitative Disclosures About Market Risk

The  information  set forth was under the caption "Market Risk and Interest Rate
Risk" under Item 2 of Part I is incorporated herein by reference.












































                                       12

<PAGE>




FIRST LIBERTY BANK CORP. AND SUBSIDIARIES
March 31, 2000



               PART II.      OTHER INFORMATION

         ITEM 1.     LEGAL PROCEEDINGS
                     None

         ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS
                     None

         ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
                     None

         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:
                                    FinancialData  Schedule,  which is submitted
                                             electronically  to  the  Securities
                                             and   Exchange    Commission    for
                                             information only and not filed.

                     (b):           Reports on Form 8-K:
                                    None



















                                       13

<PAGE>





FIRST LIBERTY BANK CORP. AND SUBSIDIARIES
March 31, 2000




    SIGNATURES

    In  accordance  with  requirement  of  the  Exchange  Act,   the  registrant
    caused  this  report  to  be  signed  on  its   behalf  by  the  undersigned
    thereunto duly authorized.

                            FIRST LIBERTY BANK CORP.
                                  (Registrant)


    Date        May 12, 2000                 By/s/  William M. Davis
                ------------                      --------------------
                                                    William M. Davis
                                                    Chairman, President and
                                                    Director
                                                   (Principal Executive Officer)

    Date        May 12,2000                  By /s/ Donald J. Gibbs
                -----------                        ------------------
                                                    Donald J. Gibbs
                                                    (Principal Financial Officer
                                                    And Treasurer)























                                       14