SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                           FORM 10-QSB

(X)  Quarterly report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for Quarterly period ended
     September 30, 1997

( )  Transition report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the transition period
     from ______ to ____________.

                           No. 0-24114      
                    (Commission File Number)

                BCB FINANCIAL SERVICES CORPORATION         
     (Exact Name of Registrant as Specified in its Charter)

         PENNSYLVANIA                       232444807        
  (State of Incorporation)           (IRS Employer ID Number)

    400 WASHINGTON STREET, READING, PA                 19601  
  (Address of Principal Executive Offices)          (Zip Code)

                         (610) 376-5933         
                 (Registrant's Telephone Number)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities 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_____

       Number of Shares Outstanding as of October 31, 1997

       COMMON STOCK ($2.50 Par Value)            3,469,930      
             (Title of Class)               (Outstanding Shares)
<PAGE>
               BCB FINANCIAL SERVICES CORPORATION

                           FORM 10-QSB

            For the Quarter Ended September 30, 1997

                            Contents

PART I    FINANCIAL INFORMATION                          Page No.

Item 1.   Financial Statements (Unaudited)

           Consolidated Balance Sheets
             as of September 30, 1997 and 
             December 31, 1996                               3
           Consolidated Statements of Income
             for the Nine and Three Month
             Periods ended September 30, 1997 and 1996       5
           Consolidated Statement of Stockholders'
             Equity for the Nine-Month Period
             Ended September 30, 1997                        6
           Consolidated Statements of Cash Flows
             for the Nine-Month Periods Ended 
             September 30, 1997 and 1996                     7
           Notes to Consolidated Financial Statements      9-10

Item 2.   Management's Discussion and Analysis of 
            Financial Condition and Results of 
            Operations                                    11-26

PART II   OTHER INFORMATION

          Item 1.  Legal Proceedings                        27
          Item 2.  Changes in Securities                    27
          Item 3.  Defaults Upon Senior Securities          27
          Item 4.  Submission of Matters to a 
                   Vote of Security Holders                 27
          Item 5.  Other Information                        27
          Item 6.  Exhibits and Reports on Form 8-K         27
<PAGE>
BCB FINANCIAL SERVICES CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY,
BERKS COUNTY BANK
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS                                     September 30,    December 31,
                                                1997            1996    
                                            (Unaudited)
<S>                                        <C>             <C>
Cash and due from banks                     $10,306,403    $ 8,984,814
Interest-bearing deposits with banks             20,287     21,407,097
Federal funds sold                              270,000      1,290,000
Securities available for sale               113,833,934     53,488,975
Securities held to maturity, fair value 
  September 30, 1997 $60,980,607
  December 31, 1996 $35,147,354              60,532,393     35,065,480
Loans receivable, net of allowance for
  loan losses September 30, 1997
  $2,532,942; December 31, 1996 $2,000,612  236,654,641    192,147,673
Mortgages held for sale                         477,608        609,397
Due from mortgage investors                   7,949,038      3,478,353
Bank premises and equipment, net              6,354,642      4,394,797
Accrued interest receivable                   3,362,345      2,129,185
Foreclosed real estate                          290,772        761,500
Deferred income taxes                            83,974        245,935
Prepaid expenses and other assets               754,183        519,096
       TOTAL ASSETS                        $440,890,220   $324,522,302

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Deposits:
  Demand, non-interest bearing             $ 35,924,014   $ 29,048,391
  Demand, interest bearing                  152,243,885    100,846,581
  Savings                                     9,425,539     12,123,061
  Time deposits                             137,547,998    122,305,298

       TOTAL DEPOSITS                       335,141,436    264,323,331

Accrued interest payable and other
 liabilities                                  6,774,749      4,776,903
Other borrowed funds                         43,888,794     13,718,399
Long-term debt                               12,000,000     22,000,000

       TOTAL LIABILITIES                    397,804,979    304,818,633

Stockholders' equity:
  Common stock, par value $2.50 per share;
    authorized 20,000,000 shares; issued
    and outstanding September 30, 1997
    3,467,380 shares; December 31, 1996
    2,070,385 shares                          8,668,451      5,175,963
  Surplus                                    27,514,686      9,876,483
  Retained earnings                           6,312,797      4,700,631
  Net unrealized appreciation 
   (depreciation) on securities available 
   for sale, net of taxes                       589,307        (49,408)

       TOTAL STOCKHOLDERS' EQUITY            43,085,241     19,703,669

       TOTAL LIABILITIES AND 
       STOCKHOLDERS' EQUITY                $440,890,220   $324,522,302

</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
BCB FINANCIAL SERVICES CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY,
BERKS COUNTY BANK
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

<TABLE>
<CAPTION>
                                                      For the Three Months Ended          For the Nine Months Ended   
                                                    September 30,     September 30,     September 30,    September 30,
                                                        1997              1996              1997             1996     
<S>                                                 <C>               <C>               <C>              <C>
Interest Income: 
  Loan Receivable, including fees                    $ 4,880,866       $3,646,723        $13,398,084       $10,144,603
  Interest and dividends on securities:
    U.S. Treasury                                         38,052           60,854            142,736           199,167
    U.S. Government agencies and corporations          1,843,687          499,875          4,130,387           958,824
    State and political subdivisions, tax exempt         435,153          344,605          1,341,056           855,860
    Dividends                                             90,409           22,793            208,120            60,706
  Interest-bearing deposits with banks                    14,911           84,604            201,138           372,898
  Interest on federal funds sold                           6,596           21,027             27,638           105,884
         Total interest income                         7,309,674        4,680,481         19,449,159        12,697,942

Interest expense:
  Deposits                                             3,500,451        2,340,563          9,591,263         6,541,738
  Other borrowed funds                                   343,824           87,846            652,796           127,164
  Long-term debt                                         175,682           60,470            637,379           160,356

         Total interest expense                        4,019,957        2,488,879         10,881,438         6,829,258

              Net interest income                      3,289,717        2,191,602          8,567,721         5,868,684

Provision for loan losses                                270,000          160,000            771,500           485,000

              Net interest income after provision
                for loan losses                        3,019,717        2,031,602          7,796,221         5,383,684

Other income:
  Customer service fees                                  248,216          177,566            700,911           489,469
  Mortgage banking activities                            267,586          160,565            611,615           419,833
  Net realized (loss) on sale of securities                  ---              ---             (4,465)             (682)
  Other                                                    8,042            4,489             29,510            14,104
         Total other income                              523,844          342,620          1,337,571           922,724

Other expenses:
  Salaries and wages                                   1,042,573          582,491          2,672,451         1,570,199
  Employee benefits                                      228,817          143,314            629,144           408,905
  Occupancy                                              187,831          163,374            510,701           437,678
  Equipment depreciation and maintenance                 138,278          109,048            390,800           313,939
  Other operating expenses                               716,115          719,628          2,235,452         1,959,338

         Total other expenses                          2,313,614        1,717,855          6,438,548         4,690,059

    Income before income taxes                         1,229,947          656,367          2,695,244         1,616,349

Federal income taxes                                     246,426          117,601            515,186           298,652

         Net Income                                  $   983,521       $  538,766         $2,180,058       $ 1,317,697
                                                     ===========       ==========         ==========       ===========
Earnings per common and common equivalent share      $      0.31       $     0.26         $     0.87       $      0.63
                                                     ===========       ==========         ==========       ===========
Weighted average common and common equivalent
  shares outstanding                                   3,146,731        2,085,024          2,465,584         2,084,303
                                                     ===========       ==========         ==========       ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
BCB FINANCIAL SERVICES CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY,
BERKS COUNTY BANK
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 1997 (Unaudited)

<TABLE>
<CAPTION>
                                                                              Net Unrealized   
                                                                                Appreciation
                                                                               (Depreciation)
                                                                               On Securities
                                      Common                      Retained     Available for
                                       Stock        Surplus       Earnings         Sale            Total   

<S>                                 <C>           <C>            <C>             <C>            <C> 
Balance, December 31, 1996          $5,175,963    $ 9,876,483    $4,700,631      $(49,408)      $19,703,669
Issuance of 2,464 shares of common
  stock upon exercise of stock
  options                                6,160         11,570           ---           ---            17,730
Issuance of 14,531 shares of
  common stock under dividend
  reinvestment plan                     36,328        211,902           ---           ---           248,230
Issuance of 1,380,000 shares of
  common stock upon completion of
  stock offering                     3,450,000     19,147,500           ---           ---        22,597,500
Expense relating to stock offering                 (1,732,769)                                   (1,732,769)
Net change in unrealized
  appreciation (depreciation) on
  securities available for sale,
  net of taxes                             ---            ---           ---       638,715           638,715
Cash dividends                             ---            ---      (567,892)          ---          (567,892)
Net income                                 ---            ---     2,180,058           ---         2,180,058

Balance, September 30, 1997         $8,668,451    $27,514,686    $6,312,797      $589,307       $43,085,241
                                    ==========    ===========    ==========      ========       ===========

</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
BCB FINANCIAL SERVICES CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY,BERKS COUNTY BANK
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>
                                                                                                  For the Nine Months Ended  
                                                                                                 September 30,  September 30,
                                                                                                      1997           1996    
<S>                                                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                                                   $   2,180,058    $  1,317,697
  Adjustments to reconcile net income to net cash provided by (used in) operating activities:
    Provision for loan and foreclosed real estate losses                                             881,816         528,000
    Provision for depreciation and amortization                                                      376,832         278,963
    (Gain) Loss on sale of equipment                                                                      42          (1,071)
    Net realized loss on sale of securities                                                            4,465             682
    Proceeds from sale of mortgage loans                                                          34,230,375      24,654,465
    Net (gain) loss on sale of mortgage loans                                                        (13,442)         11,685
    Mortgage loans originated for sale                                                           (34,233,325)    (24,666,150)
    Net amortization of securities premiums and discounts                                              2,132         (59,852)
    (Increase) decrease in:
      Due from mortgage investors                                                                 (4,470,685)      1,411,782
      Accrued interest receivable                                                                 (1,233,160)       (671,678)
      Deferred income taxes                                                                         (167,075)        (36,512)
      Prepaid expenses and other assets                                                                4,866        (197,943)
    Increase in accrued interest payable and other liabilities                                       776,765       1,044,538

      Net cash provided (used in) by operating activities                                         (1,660,336)      3,614,606

CASH FLOW FROM INVESTING ACTIVITIES
  Proceeds from sales of securities available for sale                                             4,197,254       1,133,078
  Proceeds from maturities of and principal repayments on securities available for sale           21,437,154       2,882,065
  Proceeds from maturities of securities held to maturity                                          4,645,000       1,385,000
  Purchases of securities available for sale                                                     (84,208,103)    (22,679,867)
  Purchases of securities held to maturity                                                       (30,094,062)    (23,079,129)
  Decrease in interest-bearing deposits with banks                                                21,386,810       6,497,867
  Net decrease in federal funds sold                                                               1,020,000       1,721,000
  Loans made to customers, net of principal collected                                            (46,134,794)    (34,489,319)
  Proceeds from sales of foreclosed real estate                                                    1,364,919         146,916
  Proceeds from sales of bank premises and equipment                                                     ---           2,895
  Purchases of premises and equipment                                                             (2,336,719)     (1,066,404)

    Net cash used in investing activities                                                       (108,722,541)    (67,545,898)

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposits                                                                        70,818,105      55,335,794
  Proceeds from other borrowed funds                                                              30,170,395       8,754,213
  Proceeds from long term borrowings                                                                     ---       5,000,000
  Principal payments of long-term borrowings                                                     (10,000,000)            ---
  Proceeds from exercise of stock options                                                             17,730          17,820
  Proceeds from issuance of stock under the dividend reinvestment plan                               248,230             ---
  Net proceeds from stock offering                                                                20,864,731             ---
  Cash dividends                                                                                    (414,725)       (296,535)

    Net cash provided by financing activities                                                    111,704,466      68,811,292
    Increase in cash and due from banks                                                            1,321,589       4,880,000

Cash and due from banks:
  Beginning                                                                                        8,984,814       7,656,846
  Ending                                                                                       $  10,306,403    $ 12,536,846
                                                                                               =============    ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash payments for:
    Interest                                                                                   $  10,628,284    $    666,830
                                                                                               =============    ============
    Income taxes                                                                               $     430,000    $    355,000
                                                                                               =============    ============
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
  Foreclosed real estate acquired in settlement of loans                                       $     829,586    $    159,782
                                                                                               =============    ============
</TABLE>
See Notes To Consolidated Financial Statements
<PAGE>
BCB FINANCIAL SERVICES CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY,
BERKS COUNTY BANK
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997

NOTE A.  BASIS OF PRESENTATION

     The unaudited consolidated financial statements include the
     accounts of the BCB Financial Services Corporation and its
     wholly-owned subsidiary, Berks County Bank.  All significant
     intercompany accounts and transactions have been eliminated.

     The accompanying unaudited consolidated financial statements
     have been prepared in accordance with generally accepted
     accounting principles for interim financial information. 
     Accordingly, they do not include all of the information and
     footnotes required by generally accepted accounting
     principles for complete financial statements.  In the
     opinion of management, all adjustments considered necessary
     for fair presentation have been included.  Operating results
     of the nine-month period ended September 30, 1997 are not
     necessarily indicative of the results that may be expected
     for the year ending December 31, 1997.

NOTE B.  EARNINGS PER SHARE

     Earnings per common and common equivalent share are computed
     based on the weighted average number of common shares and
     common equivalent shares outstanding during the period. 
     Common share equivalents included in the computations
     represent shares issuable upon the assumed exercise of
     outstanding stock option and grants that have an exercise
     price less than market price.  These common stock
     equivalents had a dilutive effect for the nine months ended
     September 30, 1997 and 1996.  The number of common shares
     outstanding was increased by the number of shares issuable
     under the common stock options and grants and was reduced by
     the number of common shares which are assumed to have been
     repurchased with the proceeds from the exercise of the
     options.  Weighted average number of common shares and
     common equivalent shares outstanding have been adjusted for
     all stock dividends and stock splits effected through
     September 30, 1997.

NOTE C:  OTHER EXPENSES

     The following represents the most significant categories of
     other expenses for the nine month period ended September 30,
     1997 and 1996:

                                       For the Nine Months Ended 
                                     September 30,  September 30,
                                          1997           1996    

     Advertising                      $  487,979     $  472,746
     EDP outsourcing and MAC fees        347,926        253,055
     Office Supplies and expense         434,827        265,422
     Foreclosed real estate expenses    (101,435)       229,406
     All other expenses                1,065,155        738,709
                                      $2,234,452     $1,959,338

Note D:  Reclassifications

     Certain items in the September 30, 1996 financial statements
     have been reclassified to conform to the September 30, 1997
     financial statement presentation format.  These
     reclassifications had no effect on net income.
<PAGE>
ITEM 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations

     The following discussion and analysis is intended to assist
in understanding and evaluating the major changes in the
financial condition and earnings performance of BCB Financial
Services Corporation (the "Company") with a primary focus on an
analysis of operating results.

                 FINANCIAL CONDITION HIGHLIGHTS

     Total assets increased to $440,890,220 at September 30,
1997, an increase of $116,367,918, or 35.86%, from $324,522,302
at December 31, 1996.  The increase in assets is the result of
higher levels of loans and securities, which were funded by the
increase in deposits for the first nine months.

     Loans, net of allowance for loan losses of $2,532,942 at
September 30, 1997 and $2,000,612 at December 31, 1996, increased
to $236,654,641 at September 30, 1997 from $192,147,673 at
December 31, 1996.  The increase of $44,506,968, or 23.16%, was
primarily from an increase in commercial loans of $24,358,855 to
$112,681,777 at September 30, 1997 from $88,322,922 at
December 31, 1996, and an increase in residential mortgage loans
of $16,757,474 to $106,267,384 at September 30, 1997 from
$89,509,910 at December 31, 1996.

     Securities increased to $174,366,327 at September 30, 1997
from $88,554,455 at December 31, 1996.  The increase of
$85,811,872, or 96.90%, was due primarily to the purchase of
approximately $84,000,000 in available for sale securities as
part of matched funding programs employed to increase earnings. 
These matched funding programs are further discussed under
"Analysis of Net Interest Income,"  Available for sale securities
increased $60,344,959 and held to maturity securities increased
$25,466,913 during the first nine months of 1997.

     Cash and due from banks, interest-bearing deposits (which
are held at the Federal Home Loan Bank, "FHLB"), and federal
funds sold are all liquid funds.  The aggregate amount in these
three categories decreased by $21,085,221 to $10,596,690 at
September 30, 1997 from $31,681,911 at December 31, 1996, because
the Company redeployed these funds into higher yielding loans and
securities.  See "Analysis of Net Interest Income" for a
discussion of the matched funding programs employed by the
Company.

     Amounts due from mortgage investors increased to $7,949,038
at September 30, 1997 from $3,478,353 at December 31, 1996. 
These amounts represent loans originated by the Bank for other
mortgage investors/lenders under standing commitments.  These
loans are temporarily funded for such investors for periods
ranging from three to forty-five days after origination.

     Bank premises and equipment, net of accumulated
depreciation, increased from $4,394,797 at year-end 1996 to
$6,354,642 at September 30, 1997.  The increase of $1,959,845 was
mainly attributable to the construction of the Muhlenberg and
Shillington offices.  Muhlenberg opened on March 29, 1997 and
Shillington opened on May 3, 1997.

     Foreclosed real estate decreased from $761,500 at
December 31, 1996 to $290,772 at September 30, 1997.  Foreclosed
real estate is comprised of property acquired through a
foreclosure proceeding or acceptance of a deed-in-lieu of
foreclosure.

     Total liabilities increased by $92,986,346, or 30.51%, from
$304,818,633 at year-end 1996 to $397,804,979 at September 30,
1997.  During this period, deposits, the Company's primary source
of funds, increased by 26.79%, from $264,323,331 at year-end 1996
to $335,141,436 at September 30, 1997.  The deposit mix changed
considerably during 1996 and that trend continued during the
first nine months of 1997.  The change in the deposit mix
occurred because the Bank placed greater emphasis upon the
generation of money market deposits, accomplished by offering an
above-market rate of 4.20% APY (annual percentage yield) for
balances above $1,000.  The Bank also changed its deposit mix by
offering no-fee, "free" personal and business checking while many
competitors charged fees for these products.  The aggregate
amount of demand and savings deposits, which are lower in rate
than time deposits, increased $55,575,405, or 39.13%, from
$142,018,033 at December 31, 1996 to $197,593,438 at
September 30, 1997.  As a percentage of total deposits, aggregate
demand and savings deposits increased from 53.73% at December 31,
1996 to 58.96 % at September 30, 1997.  Aggregate demand deposits
include non-interest bearing demand, interest checking (NOW) and
money market deposits.  Certificates of deposit increased
$15,242,700, or 12.46%, from $122,305,298 at year-end 1996 to
$137,547,998 at September 30, 1997.  As a percentage of total
deposits, certificates of deposit decreased from 46.27% at
December 31, 1996 to 41.04% at September 30, 1997.  The proceeds
from the net increase in deposits were used to fund new loans,
new securities purchases and increases in bank premises and
equipment.

     Other borrowed funds and long term debt increased
$20,170,395 from $35,718,399 at year-end 1996 to $55,888,794 at
September 30, 1997.  The increase was primarily used to fund new
loans and new security purchases.

     Stockholders' equity increased $23,381,572, or 118.67%, to
$43,085,241 at September 30, 1997 compared to $19,703,669 at
December 31, 1996.  The increase in stockholders' equity is
primarily attributable to the completion of the Company's
secondary public offering in which the Company sold 1,380,000
shares at $16.375 per share.  Net proceeds to the Company, after
deducting expenses of $1,732,769, were $20,864,731.  Also,
contributing to the increase was the retention of earnings of
$2,180,058, net of cash dividends declared of $567,892, and the
change in net unrealized appreciation (depreciation) on
securities available for sale, net of taxes. The change in net
unrealized appreciation (depreciation) on securities available
for sale, net of taxes, was $638,715, from ($49,408) depreciation
at December 31, 1996 compared to $589,307 appreciation at
September 30, 1997.  This increase was caused by the general
decrease in interest rates during the period.  When interest
rates fall, the fair value of debt securities generally
increases, thereby increasing equity.

                      RESULTS OF OPERATIONS
                            Overview

     The Company's net income for the third quarter of 1997 was
$983,521, an increase of $444,755, or 82.55%, from $538,766 for
the third quarter of 1996.  Net income for the nine months ended
September 30, 1997 was $2,180,058, 65.44% more than the
$1,317,697 reported for the same period in 1996.  The earnings
for the third quarter and nine months of 1997 increased from the
corresponding prior year periods primarily due to an increase in
net interest income.

                 Analysis of Net Interest Income

     Historically, the Company's earnings have depended primarily
upon the Bank's net interest income, which is the difference
between interest earned on interest-earning assets and interest
paid on interest-bearing liabilities.  The Company's net interest
income, calculated on a tax-equivalent basis, increased
$1,135,000, or 48.17%, to $3,491,000 during the third quarter of
1997 from $2,356,000 during the third quarter of 1996.  For the
first nine months of 1997, net interest income, calculated on a
tax-equivalent basis, increased $2,918,000, or 46.58%, to
$9,182,000 from $6,264,000 during the first nine months of 1996.
The increase in net interest income was primarily due to an
increase in average interest-earning assets.  Interest income, on
a tax equivalent basis, increased $2,667,000, or 55.05%, from
$4,845,000 for the third quarter of 1996 to $7,512,000 for the
third quarter of 1997, while interest expense increased
$1,532,000, or 61.55%, from $2,489,000 for the third quarter of
1996 to $4,021,000 for the third quarter of 1997.  For the first
nine months of 1997, interest income, on a tax equivalent basis,
increased $6,971,000, or 53.24%, to $20,064,000 from $13,093,000
for the first nine months of 1996, while interest expense
increased $4,053,000, or 59.35%, from $6,829,000 for the first
nine months of 1996 to $10,882,000 for the first nine months of
1997.

     Net interest margin decreased 25 basis points from 3.89% in
the third quarter of 1996 to 3.64% in the third quarter of 1997,
calculated on a tax-equivalent basis.  Net interest margin
decreased 19 basis points from 3.80% for the first nine months of
1996 versus 3.61% for the nine months ended September 30, 1997,
calculated on a tax-equivalent basis.  Net interest margin is the
difference between interest earned and interest paid, divided by
average total interest-earning assets.  Net interest margin
decreased primarily due to a decrease in the yield on average
securities and to an increase in the average rate paid on average
interest-bearing liabilities.  For the third quarter of 1997, the
average rate paid on average interest-bearing liabilities,
increased 10 basis points to 4.83% from 4.73% for the quarter-
ended September 30, 1996.  For the first nine months of 1997, the
average rate paid on average interest-bearing liabilities
increased 9 basis points to 4.85% from 4.76% for the first nine
months of 1996.  The decrease in yield on average securities was
due to the purchase of $30,000,000 of one year CMT, adjustable
rate mortgage (ARM) government agencies currently earning low
teaser rates that should reprice up 100 or more basis points in
1998. The increase in the average rate paid on average interest-
bearing liabilities was caused primarily by the increase in the
volume and rate from other borrowed funds and long-term debt for
both periods.

     To the extent that the Company chooses to invest in tax-free
securities or extend tax-free loans, the Company's tax expense
can be reduced from the statutory rate of 34% to an effective
rate below that level.  The amount of tax that is saved by the
acquisition of tax-free assets is included in interest income for
purposes of calculating the tax-equivalent yield on earning
assets.  During 1996, the Company significantly increased its
investments in State and Municipal Securities, which are
substantially tax-free, except for the disallowance of the
deduction of twenty percent of interest expense on deposits or
liabilities used to fund these investments, in accordance with
the Federal tax laws governing bank qualified securities.  The
bulk of these investments in State and Municipal Securities were
maintained in the portfolio during the first nine months of 1997.

     Net interest income is affected by changes in the mix of the
volume and rates of interest-earning assets and interest-bearing
liabilities.  The following tables provide an analysis of net
interest income on a tax-equivalent basis, setting forth for the
periods (i) average assets, liabilities and stockholders' equity,
(ii) interest income earned on interest-earning assets and
interest expense paid on interest-bearing liabilities,
(iii) average yields earned on interest-earning assets and
average rates paid on interest-bearing liabilities, and (iv) the
Bank's net interest margin (net interest income as a percentage
of average total interest-earning assets).
<PAGE>
    Average Balances, Average Rates, and Net Interest Margin

<TABLE>
<CAPTION>
                                                                        Three Months Ended                 Three Months Ended
                                                                        September 30, 1997                 September 30, 1996       
                                                                              Interest                           Interest
(Dollars in thousands)                                            Average      Income/     Yield/    Average      Income      Yield
                                                                  Balance    Expense(1)   Rate(2)    Balance    Expense(1)   Rate(2)
<S>                                                              <C>           <C>         <C>      <C>          <C>          <C>
INTEREST-EARNING ASSETS:
  Interest-bearing deposits at banks                             $    920      $   15      6.46%    $  5,591      $   85      6.05%
  U.S. Treasury                                                     2,104          38      7.17        3,862          61      6.28
  U.S. Government agencies                                        107,202       1,844      6.82       27,892         500      7.13
  State and municipal (3)                                          31,679         627      7.85       24,566         497      8.05
  Other bonds and securities                                        6,289          90      5.68        1,685          23      5.43
    Total securities                                              147,274       2,599      7.00       58,005       1,081      7.41
  Federal funds sold                                                  468           7      5.93        1,324          21      6.31
  Commercial loans (3)                                            108,173       2,374      8.71       78,743       1,838      9.29
  Mortgage loans                                                  103,520       2,058      7.89       82,257       1,469      7.10
  Installment loans                                                20,026         459      9.09       14,937         351      9.35
    Total loans(4)                                                231,719       4,891      8.37      175,937       3,658      8.27
    Total interest-earning assets                                 380,381       7,512      7.83      240,857       4,845      8.00
Unrealized depreciation on available for sale securities             (285)                              (458)
Allowance for loan losses                                          (2,355)                            (1,921)
Non-interest earning assets                                        24,565                             15,482
    Total assets                                                 $402,306                           $253,960
                                                                 ========                           ========
INTEREST-BEARING LIABILITIES:
  Demand deposits, interest-bearing                              $146,856       1,439      3.89       74,112         698      3.75
  Savings deposits                                                  9,430          63      2.65       11,018          85      3.07
  Other time deposits                                             138,033       1,999      5.75      112,742       1,558      5.50
    Total deposits                                                294,319       3,501      4.72      197,872       2,341      4.71
  Other borrowed funds                                             23,711         344      5.76        6,625          88      5.28
  Long-term borrowings                                             12,000         176      5.82        4,652          60      5.13
    Total interest-bearing liabilities                            330,030       4,021      4.83      209,149       2,489      4.73
Demand deposits, non-interest bearing                              33,636                             23,117
Other non-interest bearing liabilities                              4,363                              2,962
    Total liabilities                                             368,029                            235,228

Stockholders' equity                                               34,277                             18,732
Total liabilities, redeemable common stock and
  stockholders' equity                                           $402,306                           $253,960
                                                                 ========                           ========
Net interest income                                                            $3,491                             $2,356
                                                                               ======                             ======
Net interest margin (5)                                                                    3.64%                              3.89%
                                                                                           ====                               ====
</TABLE>
(1)  Includes loan fee income.

(2)  Yields on investments are calculated on amortized cost; all
     yields are annualized.

(3)  Taxable, equivalent basis, using a 34% statutory tax rate,
     and adjusted for the disallowance of the deduction for
     interest expense to carry bank eligible tax-exempt
     securities and loans.

(4)  Loans outstanding include non-accruing loans.

(5)  Represents the difference between interest earned and
     interest paid, divided by average total interest-earning
     assets.
<PAGE>
    Average Balances, Average Rates, and Net Interest Margin

<TABLE>
<CAPTION>
                                                                         Nine Months Ended                  Nine Months Ended
                                                                        September 30, 1997                 September 30, 1996       
                                                                              Interest                           Interest
(Dollars in thousands)                                            Average      Income/     Yield/    Average      Income      Yield
                                                                  Balance    Expense(1)   Rate(2)    Balance    Expense(1)   Rate(2)
<S>                                                              <C>           <C>         <C>      <C>           <C>         <C>
INTEREST-EARNING ASSETS:
  Interest-bearing deposits at banks                             $  4,802      $   201     5.60%    $  9,084      $   373     5.48%
  U.S. Treasury                                                     2,734          143     6.99        4,406          199     6.03
  U.S. Government agencies                                         78,964        4,131     6.99       18,310          959     7.00
  State and municipal (3)                                          32,711        1,921     7.88       20,617        1,238     8.00
  Other bonds and securities                                        4,747          208     5.86        1,383           61     5.89
    Total securities                                              119,156        6,403     7.18       44,716        2,457     7.34
  Federal funds sold                                                  690           28     5.43        2,689          106     5.27
  Commercial loans (3)                                            100,416        6,560     8.73       73,273        5,184     9.45
  Mortgage loans                                                   97,288        5,622     7.73       75,501        4,020     7.11
  Installment loans                                                18,156        1,250     9.20       14,946          953     8.52
    Total loans(4)                                                215,860       13,432     8.32      163,720       10,157     8.29
    Total interest-earning assets                                 340,508       20,064     7.88      220,209       13,093     7.94
Unrealized depreciation on available for sale securities             (444)                              (209)
Allowance for loan losses                                          (2,196)                            (1,819)
Non-interest earning assets                                        21,186                             14,756
    Total assets                                                 $359,054                           $232,937
                                                                 ========                           ========
INTEREST-BEARING LIABILITIES:
  Demand deposits, interest bearing                              $123,085      $ 3,578     3.89     $ 63,108      $ 1,764     3.73
  Savings deposits                                                 13,469          341     3.38       10,221          226     2.95
  Other time deposits                                             132,553        5,673     5.72      110,712        4,552     5.49
    Total deposits                                                269,107        9,592     4.77      184,041        6,542     4.75
  Other borrowed funds                                             15,583          653     5.60        3,424          127     4.95
  Long-term borrowings                                             15,113          637     5.64        4,219          160     5.07
    Total interest-bearing liabilities                            299,803       10,882     4.85      191,684        6,829     4.76
Demand deposits, non-interest bearing                              30,091                             20,118
Other non-interest bearing liabilities                              4,532                              2,576
    Total liabilities                                             334,426                            214,378
Redeemable common stock                                               ---                                 14
Stockholders' equity                                               24,628                             18,545
Total liabilities, redeemable common stock and
  stockholders' equity                                           $359,054                           $232,937
                                                                 ========                           ========
Net interest income                                                            $ 9,182                            $ 6,264
                                                                               =======                            =======
Net interest margin                                                                        3.61%                              3.80%
                                                                                           ====                               ====
</TABLE>
(1)  Includes loan fee income.

(2)  Yields on investments are calculated on amortized cost; all
     yields are annualized.

(3)  Taxable, equivalent basis, using a 34% statutory tax rate,
     and adjusted for the disallowance of the deduction for
     interest expense to carry bank eligible tax-exempt
     securities and loans.

(4)  Loans outstanding include non-accruing loans.

(5)  Represents the difference between interest earned and
     interest paid, divided by average total interest-earning
     assets.
<PAGE>
     The Company's total interest income on a tax-equivalent
basis increased by $2,667,000 during the third quarter of 1997
over the third quarter of 1996, from $4,845,000 in 1996 to
$7,512,000 in 1997.  Interest and fees on loans, on a tax-
equivalent basis, increased $1,233,000 from $3,658,000 during the
third quarter of 1996 to $4,891,000 at September 30, 1997, which
was as a result of an increase in average loan balances, from
$175,937,000 at September 30, 1996 to $231,719,000 at
September 30, 1997.  Also contributing to the increase in total
interest income was an increase in interest and dividend income
on securities of $1,518,000, from $1,081,000 for the third
quarter of 1996, to $2,599,000 for the third quarter of 1997,
calculated on a tax-equivalent basis.  This increase in
investment income was the result of an increase in the average
balance of securities owned for the third quarter of 1997 versus
the third quarter of 1996, from $58,005,000 to $147,274,000.

     Total interest income on a tax-equivalent basis increased by
$6,971,000 for the first nine months of 1997 to $20,064,000
versus $13,093,000 for the first nine months of 1996.  Interest
and fees on loans, on a tax-equivalent basis, increased
$3,275,000, from $10,157,000 for the first nine months of 1996,
to $13,432,000 for the first nine months of 1997.  Total interest
and dividend income on securities also increased significantly
from $2,457,000 for the first nine months of 1996 to $6,403,000
for the first nine months of 1997, calculated on a tax-equivalent
basis.  The average balance of securities increased from
$44,716,000 for the first nine months ended September 30, 1996 to
$119,156,000 for the first nine months of 1997.

     The increase in the average balance of securities is the
result of matched funding programs employed by the Company that
use FHLB advances and the significant deposit inflows at existing
and new branches to fund loan originations and securities
purchases.  The purpose of these programs is to target earnings
growth and net interest margin increases while managing
liquidity, credit, market and interest rate risk.  From time to
time, a specific matched funding program may attempt to achieve
current earnings benefits from future growth in deposits that
management is reasonably confident will occur by funding current
loan and security portfolio increases partially with short-term
FHLB advances.  For example, management may elect to use short-
term FHLB advances during the quarter prior to the opening of a
new branch.  Once the new branch opens, management then may elect
to pay off these short-term FHLB advances with lower cost deposit
growth, or convert short-term FHLB debt to long-term debt or
rollover short-term debt if market conditions are favorable.

     The Company's total interest expense increased $1,532,000,
or 61.55%, to $4,021,000 during the third quarter of 1997
compared to $2,489,000 during the third quarter of 1996.  Total
interest expense for the nine months of 1997 increased
$4,053,000, or 59.35%, to $10,882,000 compared to $6,829,000 for
the first nine months of 1996.  This increase in interest expense
was due to an increase in the volume of average interest-bearing
liabilities of $120,881,000, or 57.80% to $330,030,000 for the
quarter ended September 30, 1997 versus $209,149,000 for the
quarter ended September 30, 1996.  The volume of average
interest-bearing liabilities increased $108,119,000, or 56.40%,
to $299,803,000 for the first nine months of 1997 versus
$191,684,000 for the first nine months of 1996.  The average rate
paid on interest-bearing liabilities increased 10 basis points
from 4.73% for the third quarter of 1996 compared to 4.83% for
the third quarter of 1997.  The average rate paid on interest-
bearing liabilities increased 9 basis points from 4.76% for the
first nine months of 1996 to 4.85% for the first nine months of
1997.

      In September of 1996 the Company elected to increase the
annual percentage yield on money market savings deposits to
4.20%.  The Company currently guarantees this minimum yield
through June 30, 1998 for all new money market savings accounts
opened having balances of $1,000 or more. The Bank's total
balance in money market savings deposits increased $50,456,733
during the first nine months of 1997, or 55.70%, from $90,586,393
at December 31, 1996 to $141,043,126 at September 30, 1997. This
strategy contributed to the increase in the Company's interest
expense during the first nine months of 1997 versus the first
nine months of 1996.  However, the Company believes the higher
rate is justified because the Company has historically had
comparatively low money market deposit balances compared to many
banks and instead relied more heavily on higher rate time
deposits as a funding source.  The above market yield on the
money market account was a conscious strategy designed to change
the Company's deposit composition by significantly increasing
money market account balances while at the same time attracting
funds at a yield lower than that which would have been paid on
time deposits.  At December 31, 1996, total money market savings
deposits were 34.3% of total deposits and 38.5% of total
interest-bearing deposits.  At September 30, 1997, the percentage
that total money market savings deposits were of total deposits
and total interest-bearing deposits, increased to 42.1% and
47.1%, respectively.

     Interest expense on certificates of deposit increased
$441,000, or 28.31%, from $1,558,000 during the third quarter of
1996 to $1,999,000 during the third quarter of 1997.  Interest
expense on certificates of deposit increased $1,121,000, or
24.63%, from $4,552,000 during the first nine month of 1996 to
$5,673,000 during the first nine months of 1997.  This increase
was due to an increase in the average volume of certificates of
deposit in the amount of $25,291,000, or 22.43%, from
$112,742,000 for the quarter ended September 30, 1996 to
$138,033,000 for the quarter ended September 30, 1997.  For the
nine months ended September 30, 1997, the average volume of
certificates of deposits increased $21,841,000, or 19.73%, to
$132,553,000 versus $110,712,000 for the first nine months of
1996.

     Interest expense on other borrowed funds and long-term debt
increased for the third quarter of 1997 to $520,000 from $148,000
for the third quarter of 1996 because the average balance of
borrowed funds and long-term debt increased to $35,711,000 for
the third quarter of 1997 from $11,277,000 for the third quarter
of 1996.  For the first nine months of 1997, interest expense on
other borrowed funds and long-term debt increased to $1,290,000
from $287,000 for the first nine months of 1996. The average
balance of borrowed funds and long-term debt increased to
$30,696,000 for the first nine months of 1997 versus $7,643,000
for the first nine months of 1996.  The increase, along with the
increase in deposits, funded purchases of securities and loans as
part of an on-going matched-funding program that's designed for
the primary purpose of increasing earnings while also managing
interest rate risk and liquidity. Another integral part of this
strategy is to aggressively promote "free" non-interest bearing
business and personal demand (checking) accounts.  This strategy
will continue throughout 1997 in an on-going effort by the
Company to lower its overall cost of funds.

                    Provision For Loan Losses

     The provision for loan losses is charged to operations to
bring the total allowance for loan losses to a level considered
appropriate by management.  The level of the allowance for loan
losses is determined by management of the Bank based upon its
evaluation of the known as well as inherent risks within the
Bank's loan portfolio.  Management's periodic evaluation is based
upon an examination of the portfolio, past loss experience,
current economic conditions, the results of the most recent
regulatory examinations and other relevant factors (See
discussion under "Asset Quality").  The provision for loan losses
was $270,000 for the third quarter of 1997 compared to $160,000
for the third quarter 1996.  For the first nine months of 1997,
the loan loss provision was $771,500 compared to $485,000 for the
first nine months of 1996.  The reason for the increase in the
third quarter of 1997 versus 1996 was to replace that portion of
the allowance for loan losses used to fund loan charge-offs, as
well as to build the allowance for loan losses to a level deemed
to be satisfactory given the growth in the size of the loan
portfolio during the first nine months of 1997.  Non-performing
assets were 1.01% of total assets at September 30, 1997, compared
to 1.12% at December 31, 1996. Delinquencies were 1.9% of total
loans at September 30, 1997, compared to 2.7% at December 31,
1996.

                          Other Income

     Total other income increased $181,224, or 52.89%, from
$342,620 during the third quarter 1996 to $523,844 during the
third quarter 1997.  The increase was due primarily to a $70,650
increase in customer service fees for services such as merchant
card fee income, overdraft and NSF (non-sufficient funds)
charges, safe deposit box rentals, and other miscellaneous fees
which are primarily deposit driven and a $107,021 increase in
income from mortgage banking activities.

     For the first nine months of 1997, other income increased
$414,847, or 44.96%, to $1,337,571 from $922,724 for the same
period in 1996.  The primary reasons for the increase were an
increase in customer service fees of $211,442, an increase in
fees from mortgage banking activities of $191,782 and a slight
increase in other income of $15,406.

                         Other Expenses

     Total other expenses increased $595,759, or 34.68%, during
the third quarter of 1997 versus the same period in 1996, to
$2,313,614 from $1,717,855.  Total other expenses also increased
during the first nine months of 1997 versus the first nine months
of 1996, by $1,748,489, or 37.28%, to $6,438,548 from $4,690,059. 
The increases in total other expenses reflect the growth of the
bank, especially from the opening of the Muhlenberg and
Shillington offices on March 29, 1997 and May 3, 1997,
respectively, and compares favorably with the 55.61% increase in
total assets, from $283,332,121 at September 30, 1996 to
$440,890,220 at September 30, 1997.

     Salaries, wages and employee benefits increased from
$725,805 for the quarter ended September 30, 1996 to $1,271,390
for the same period in 1997.  For the first nine months of 1997,
salaries, wages and benefits increased $1,322,491, or 66.82%, to
$3,301,595 versus $1,979,104 for the same period in 1996. 
Salaries, wages and employee benefits increased due to the growth
of the bank, especially from the opening of the new Muhlenberg
and Shillington branches.

     Occupancy expense increased $24,457, or 14.97%, to $187,831
for the quarter ended September 30, 1997 versus $163,374 for the
quarter ended September 30, 1996.  For the first nine months of
1997, occupancy expense was $510,701 versus $437,678 for the same
period in 1996, an increase of $73,023, or 16.68%.  These
increases reflect step-up rates in lease contracts, due to
inflation escalators, and to building, lease, and other occupancy
expenses related to the operation of the new Muhlenberg and
Shillington offices for the third quarter of 1997.

     Equipment depreciation and maintenance expenses increased
$29,230, or 26.80%, from $109,048 for the third quarter of 1996
to $138,278 for the third quarter of 1997.  For the first nine
months of 1997, equipment depreciation and maintenance expenses
increased $76,861, or 24.48%, to $390,800 from $313,939 for the
same period in 1996.  Equipment depreciation and maintenance
increased due primarily to the depreciation on the new Muhlenberg
and Shillington branches.

     Other operating expenses decreased slightly in the third
quarter of 1997 versus the third quarter of 1996, from $719,628
to $716,115, a decrease of $3,513, or .49%.  For the first nine
months of 1997, other expenses increased $276,114, or 14.09%, to
$2,235,452 compared to $1,959,338 for the first nine months of
1996.  Significant changes for the first nine months of 1997
compared to the first nine months of 1996 occurred in EDP
outsourcing and MAC Fees, office supplies and expense, foreclosed
real estate expenses and other loan expenses.  EDP outsourcing
and MAC fees increased $94,871, or 37.49%, to $347,926 for the
first nine months of 1997 versus $253,055 for the first nine
months of 1996.  The increase was a result of expenses relating
to the Bank's Visa Checkcard associated with volume increases in
cards outstanding.   Office supplies and expenses increased
$169,405, or 63.82%, to $434,827 for the first nine months of
1997 compared to $265,422 for the first nine months of 1996.  The
increase was due to the growth of the Bank and the need to stock
the two new branches.  Foreclosed real estate expenses decreased
$330,841, or 144.22%, to $(101,435) for the first nine months of
1997 from $229,406 for the first nine months of 1996.  The large
decrease was due to the recognition of a $150,000 gain on the
sale of one of the properties during the third quarter of 1997. 
Other loan expenses increased $96,987, or 96.09%, to $197,924 for
the first nine months of 1997 compared to $100,937 for the first
nine months of 1996.  The increase was due to a home equity
promotion in 1997 whereby all costs were absorbed by the Company.

                   Provision For Income Taxes

     The provision for income taxes was $246,426 for the third
quarter of 1997 versus $117,601 for the third quarter of 1996. 
The provision for income taxes was $515,186 for the first nine
months of 1997 versus $298,652 for the first nine months of 1996. 
For the first nine months of 1997, the Company's effective tax
rate was 19.11% versus an effective tax rate of 18.48% for the
same period in 1996.  The significant decrease in 1997's and
1996's effective tax rate from the statutory tax rate of 34% was
due to the significant amount of tax-exempt interest income
earned on bank-qualified municipal securities and tax-free loans. 
This increased $485,196, or 56.69%, during the first nine months
of 1997 to $1,341,056 from $855,860 during the same period of
1996.

                          Asset Quality

     Non-performing assets as a percentage of total assets
decreased from 1.12% at December 31, 1996 to 1.01% at
September 30, 1997.  Non-performing assets increased 22.68%, from
$3,630,587 at December 31, 1996 to $4,453,929 at September 30,
1997.  The ratio of the allowance for loan losses to non-
performing assets was 55.10% at December 31, 1996 compared to
56.87% at September 30, 1997.  Non-performing assets are
comprised of non-accrual loans, accruing loans that are 90 days
or more past due which are insured for credit loss, foreclosed
real estate (assets acquired in foreclosures), and restructured
loans.  It is the Bank's policy to classify a loan, other than a
loan insured for credit loss, as non-accrual within ten days
after the month end in which the loan becomes 90 days past due
for either principal or interest.

     The balance in the allowance for loan losses was $2,532,932,
or 1.06% of total loans at September 30, 1997 compared with
$2,000,612, or 1.03%, of total loans at December 31, 1996.  The
balance in the allowance for loan losses was 1.91% of total loans
excluding residential mortgages at September 30, 1997, compared
to 1.83% at December 31, 1996.  It has been the Bank's experience
that the percentage of loan losses have been substantially less
in its residential mortgage portfolio than its commercial loan
portfolio.  At September 30, 1997, 44.4% of the Bank's loan
portfolio was in residential mortgage loans, compared to 43.7% at
December 31, 1996.

     As a financial institution which assumes lending and credit
risks as a principal element of its business, the Company
anticipates that credit losses will be experienced in the normal
course of business.  Accordingly, management of the Company makes
a quarterly determination as to an appropriate provision from
earnings necessary to maintain an allowance for loan losses that
is adequate for potential yet undetermined losses.  The amount
charged against earnings is based upon several factors including,
at a minimum, each of the following:

     - a continuing review of delinquent, classified and non-
accrual loans, large loans, and overall portfolio quality.  This
continuous review assesses the risk characteristics of both
individual loans and the total loan portfolio;

     - analytical review of loan charge-off experience,
delinquency rates and other relevant historical and peer
statistical ratios;

     - management's judgment with respect to local and general
economic conditions and their impact on the existing loan
portfolio;

     - regular examinations and reviews of the loan portfolio by
the bank regulators.

     When it is determined that the prospect for recovery of the
principal of a loan has significantly diminished, that portion of
the loan is immediately charged against the allowance account. 
Subsequent recoveries, if any, are credited to the allowance
account.  In addition, non-accrual and large delinquent loans are
reviewed monthly to determine potential losses.

     Management believes the allowance for loan losses was
adequate to cover risks inherent in its loan portfolio at
September 30, 1997. However, there can be no assurance that the
Company will not have to increase its provision for loan losses
in the future as a result of changes in economic conditions or
for other reasons.  Any such increase could adversely affect the
Company's results of operations.

                  Interest-Rate Risk Management

     Interest-rate risk management involves managing the extent
to which interest-sensitive assets and interest-sensitive
liabilities are matched. The Bank typically defines interest-
sensitive assets and interest-sensitive liabilities as those that
reprice within one year or less.  Maintaining an appropriate
match is a method of avoiding wide fluctuations in net-interest
margin during periods of changing interest rates.

     The difference between interest-sensitive assets and
interest- sensitive liabilities is known as the "interest-
sensitivity gap" ("GAP").  A positive GAP occurs when interest-
sensitive assets exceed interest-sensitive liabilities repricing
in the same time periods, and, a negative GAP occurs when
interest-sensitive liabilities exceed interest-sensitive assets
repricing in the same time periods.  A negative GAP ratio
suggests that a financial institution may be better positioned to
take advantage of declining interest rates rather than increasing
interest rates, and a positive GAP ratio suggests the converse.

     The Bank attempts to manage its assets and liabilities in a
manner that stabilizes net interest income and net economic value
under a broad range of interest rate environments.  Adjustments
to the mix of assets and liabilities are made periodically in an
effort to give the Bank dependable and steady growth in net
interest income regardless of the behavior of interest rates in
the economy.

     Shortcomings are inherent in a simplified and static GAP
analysis that may result in an institution with a negative GAP
having interest rate behavior associated with an asset-sensitive
balance sheet.  For example, although certain assets and
liabilities may have similar maturities or periods to repricing,
they may react in different degrees to changes in market interest
rates.  Furthermore, repricing characteristics of certain assets
and liabilities may vary substantially within a given time
period.  In the event of a change in interest rates, prepayment
and early withdrawal levels could also deviate significantly from
those assumed in calculating GAP in the manner presented in the
table.

     The traditional static GAP analysis implicitly assumes that
the interest rates on all assets and liabilities that reprice
within a given repricing period change by the same amount as the
change in the market interest rate of the same duration.  For
example, if the Federal funds rate increased by 100 basis points,
a static GAP model assumes that the prime rate and the rate paid
on money-market deposits will each change by 100 basis points. 
However, experience suggests that such an analysis is not
accurate.  For example, if the Federal funds rate changes by
100 basis points, the prime rate may only change by 90 basis
points and the rate paid on money-market accounts may only change
by 40 basis points.

     More sophisticated asset/liability management models attempt
to adjust for this defect in the static GAP model.  Accordingly,
the Bank measures its interest-rate risk by conducting various
analyses in addition to the traditional static GAP report,
including repricing matrices, beta-adjusted GAP reports,
simulation modeling and duration analyses.

     Beta is the measure of the relative sensitivity of the
amount of change in the interest rate on a given asset or
liability with the amount of change in another independent
financial instrument.  For example, an asset or liability with a
beta of .75 means that a 100 basis point change in the
independent variable (e.g. Federal funds) will result in a
75 basis point change in the rate of the asset or liability.  A
beta is assigned to each key rate for each asset and liability
account; and, the volume of assets and liabilities that reprice
within a repricing period are adjusted by this beta factor.  The
result is a beta-adjusted GAP position.  This data is also
organized into a repricing matrix to give a graphical
presentation of the GAP position.  Results of these analyses as
of September 30, 1997 indicate that despite the negative GAP
balance, the Bank does not have material interest-rate risk in
the event that interest rates rise or fall as much as 200 basis
points over the next twelve months.

                             Capital

     The Company's Tier 1 capital to risk-weighted assets ratio
at September 30, 1997 was 16.98% compared to 10.39% at
December 31, 1996. These ratios far exceeded the Tier 1
regulatory capital requirement of 4.00%.  The Company's total
capital to risk-weighted assets ratio at September 30, 1997 was
17.99% compared to 11.44% at December 31, 1996. These ratios
exceeded the total risk-based capital regulatory requirement of
8.00%.  At September 30, 1997, the Company's leverage ratio was
10.58% versus 6.82% at December 31, 1996.  The Company is
categorized as "well capitalized" under applicable Federal
regulations.  The Company's capital performance, as measured by
its annualized return on average equity ratio (ROAE), decreased
slightly to 11.38% for the third quarter of 1997 from 11.44% for
the third quarter of 1996.  For the first nine months of 1997,
ROAE increased to 11.84%, from 9.49% for the first nine months of
1996.  This increase was primarily caused by the net proceeds
from the secondary stock offering completed in July of 1997.  The
Company sold 1,380,000 shares at $16.375 per share.  Net proceeds
after deducting expenses, was $20.8 million.

     Banking laws and regulations limit the amount of dividends
that may be paid.  Under current banking laws, the Bank would be
limited to approximately $2,900,000 of dividends in 1997 plus an
additional amount equal to the Bank's net profit for 1997, up to
the date of any such dividend declaration.  In September 1997,
the Company declared a $ .08 per share cash dividend to
stockholders of record on October 6, 1997, payable October 20,
1997.

                 Liquidity and Capital Resources

     Financial institutions must maintain liquidity to meet day-
to-day requirements of depositors and borrowers, take advantage
of market opportunities, and provide a cushion against unforeseen
needs.  Liquidity needs can be met by either reducing assets or
increasing liabilities.  Sources of asset liquidity are provided
by short-term investment securities, cash and amounts due from
banks, interest-bearing deposits with banks, and Federal funds
sold.  These liquid assets totaled $13.6 million at September 30,
1997 compared to $35.0 million at December 31, 1996.  Maturing
and repaying loans are another source of asset liquidity.  At
September 30, 1997, the Bank estimated that an additional
$17.1 million of loans will mature or repay in the next six-month
period ended March 31, 1998.

     Liability liquidity can be met by attracting deposits with
competitive rates, buying Federal funds or utilizing the
facilities of the Federal Reserve System or the Federal Home Loan
Bank System.  The Bank utilizes a variety of these methods of
liability liquidity.  At September 30,1997, the Bank had
approximately $144.7 million in unused lines of credit available
to it under informal arrangements with correspondent banks
compared to $98.5 million at December 31, 1996. These lines of
credit enable the Bank to purchase funds for short-term needs at
current market rates.  The bulk of these unused lines of credit
were with the FHLB.

     Liquidity can be further analyzed by reference to the
Unaudited Consolidated Statements of Cash Flows.  Net cash
provided by (used in) operating activities during the first nine
months of September 30, 1997 and 1996 was ($1,660,336) and
$3,614,606, respectively.  The decrease from 1996 to 1997 was due
primarily to an increase in proceeds due from mortgage investors. 
Proceeds due from mortgage investors increased due to the
increase in volume of mortgages originated for the secondary
market.  The Company's cash flows from financing activities
increased from $68,811,292 at September 30, 1996 to $111,704,466
at September 30, 1997, due primarily to the increase in deposits. 
The net increase in deposits was $70,818,105 at September 30,
1997 versus $55,335,794 at September 30, 1996.  The Company
utilized $108,722,541 in cash for investing activities through
September 30, 1997 versus $67,545,898 through September 30,1996. 
The increase in cash utilized for investing activities was
primarily due to an increase in purchases of securities. For the
nine months ended September 30, 1997, the Company purchased a
total of $114,302,165 in securities versus $45,758,996 for the
first nine months of 1996.  Other significant changes in cash
flows from investing activities include $21,437,154 in proceeds
from maturities of and principal repayments on securities
available for sale for the nine months ended September 30, 1997
versus $2,882,065 for the nine months ended September 30, 1996
and a $21,386,810 decrease in interest-bearing deposits with
banks at September 30, 1997 versus a $6,497,867 decrease at
September 30, 1996.  The changes in cash flows resulted in a net
increase of internally generated cash of $1,321,589 during the
nine months ended September 30, 1997 compared to a net increase
of $4,880,000 for the nine months ended September 30, 1996.

                      Effects of Inflation

     The Bank's asset and liability structure is primarily
monetary in nature.  As such, the Bank's assets and liabilities
tend to move in concert with inflation.  While changes in
interest rates may have a significant impact on financial
performance, interest rates do not necessarily move in the same
direction or in the same magnitude as prices of other goods and
services and may frequently reflect government policy initiatives
or economic factors not measured by a price index.
<PAGE>
                             PART II

Item 1.   Legal Proceedings - None

Item 2.   Changes in Securities - None

Item 3.   Defaults Upon Senior Securities - None

Item 4.   Submission of Matters to a Vote of Security Holders -
          None

Item 5.   Other Information

     On October 10, 1997, BCB Financial Services Corporation
entered into an agreement of sale to purchase the 150,000 square
foot Penn Square Center located at 601 Penn Street, Reading, PA. 
The building will become the Company's and the Bank's new
operation center.  The Company plans to occupy four floors of the
ten story building and lease out the remaining floors.

     The total purchase price for the building is $2,475,000 and
includes an ATM machine, and certain furniture, fixtures and
equipment.  The Company has a 45 day due diligence period to
review certain documentation relating to the purchase of this
building and may, if conditions are unsatisfactory, declare the
agreement to be null and void.

     The Company expects to reduce its occupancy expense by
approximately $50,000 in 1998 and $180,000 in 1999 through the
discontinuance of leases of space currently being occupied by the
bank for operations.  The Company expects lease income on the
Penn Square Center building to offset administrative expenses of
operating the building once the building is fully occupied.

Item 6.   Exhibits and Reports on Form 8 - K

          (a)  Exhibits

               10.30.    Agreement of Sale, dated October 10,
                         1997 by and between Meridian Properties,
                         Inc. and BCB Financial Services
                         Corporation.

               11.       Statement regarding computation of per
                         share earnings.

               27.       Financial Data Schedule.

          (b)  Reports on Form 8 - K

               None
<PAGE>
                           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.

November 12, 1997             BCB FINANCIAL SERVICES CORPORATION 

                              (Registrant)

                              By/s/ Robert D. McHugh, Jr.        
                                   Robert D. McHugh, Jr.,
                                   Senior Vice President and
                                   Treasurer
                                   (Principal Financial Officer)


                              By/s/ Donna L. Rickert             
                                   Donna L. Rickert, CPA,
                                   Vice President and Controller
                                   (Principal Accounting Officer)
<PAGE>
                          EXHIBIT INDEX

Exhibit No.    Description

   10.30       Agreement of Sale, dated
               October 10, 1997 by and between
               Meridian Properties, Inc. and BCB
               Financial Services Corporation.

   11          Statement regarding computation of
               per share earnings.

   27          Financial Data Schedule.