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 SEPTEMBER 30, 1996
                             
                         COMMISSION FILE NO: 0-17411
        
                       PARKVALE FINANCIAL CORPORATION
                      --------------------------------
           (Exact name of registrant as specified in its charter)


      PENNSYLVANIA                                    25-1556590
  -----------------------                      ----------------------
  (State of incorporation)                       (I.R.S. Employer
                                               Identification Number)


         4220 William Penn Highway, Monroeville, Pennsylvania 15146
         ---------------------------------------------------------- 
            (Address of principal executive offices; zip code)             
                                                                    
     Registrant's telephone number, including area code:  (412) 373-7200


           Securities registered pursuant to Section 12(b) of the Act:
                               Not Applicable
                                      
         Securities registered pursuant to Section 12(g) of the Act:


                       Common Stock ($1.00 par value)
                      --------------------------------
                               Title of Class


  Indicate by check mark whether the registrant (1) has filed all reports
  required by Section 13 or 15(d) of the Securities Exchange Act of 1934
  during the preceding 12 months and (2) has been subject to such filing
  requirements for the past 90 days.  Yes  X  No    
                                          ---    ---

  The closing sales price of the Registrant's Common Stock on October 28,
  1996 was $24.50 per share.                                               
                                                
  Number of shares of Common Stock outstanding as of October 28, 1996 was
  4,041,607.

                                      <PAGE>









  PARKVALE FINANCIAL CORPORATION

  INDEX

  Part I.     Financial Information                          Page
  ---------------------------------                         -----

  Consolidated Statements of Financial Condition as
  of September 30, 1996 and June 30, 1996                       3

  Consolidated Statements of Operations (Unaudited)
  for the Three Months ended September 30, 1996 and 1995        4

  Consolidated Statements of Cash Flows (Unaudited)
  for the Three Months ended September 30, 1996 and 1995      5-6

  Consolidated Statements of Shareholders' Equity as
  of September 30, 1996                                         6

  Notes to Unaudited Interim Consolidated Financial
  Statements                                                  7-9

  Management's Discussion and Analysis of Financial
  Condition and Results of Operations                       10-13

  Part II - Other Information                                  14

  Signatures                                                   14





















                       
                                      2<PAGE>


                       PARKVALE FINANCIAL CORPORATION
               CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
               (Dollar Amounts in Thousands, except share data)
                                       
                                                September 30,  June 30,
                                     ASSETS          1996        1996    
                                                 ----------     --------
  Cash and noninterest-earning deposits             $7,400      $10,905
  Federal funds sold                               103,130       66,557
  Interest-earning deposits in other banks             382          173
  Investment securities available for sale
    (cost of $6,804 at September 30 and June 30)    11,102       10,493
  Investment securities held to maturity
    (fair value of $169,732 at September 30 
    and $194,061 at June 30)                       169,670      194,393
  Loans, net of allowance of $14,158 at
    September 30 and $13,990 at June 30            620,710      625,452
  Foreclosed real estate, net of allowance
    of $14 at September 30 and $19 at June 30          166          240
  Office properties and equipment, net               1,925        2,005
  Intangible assets and deferred charges               237          276
  Prepaid expenses and other assets                  9,643        8,748
                                                   --------     --------
                                   Total Assets   $924,365     $919,242
                                                  ========     ========
     LIABILITIES AND SHAREHOLDERS' EQUITY                 
  LIABILITIES                                             
  Savings deposits                                $819,657     $807,087
  Advances from Federal Home Loan Bank              15,691       20,693
  Escrow for taxes and insurance                     5,604       10,828
  Other liabilities                                  9,774        4,651
  Other debt                                         5,079        6,218
                                                  --------     --------
                              Total Liabilities    855,805      849,477
                                                  --------     --------
  SHAREHOLDERS' EQUITY                                    
  Preferred Stock ($1.00 par value; 5,000,000             
    shares authorized; 0 shares issued)                -            -  
  Common Stock ($1.00 par value; 10,000,000
    shares authorized; September-4,310,679*
    shares issued, June - 3,448,736 shares issued)   4,311        3,449
  Additional Paid in Capital                         8,175        9,138
  Treasury Stock at cost (269,072* shares in 
    September and 266,366* shares in June)         (3,206)      (3,028)
  Employee Stock Ownership Plan debt                  (96)        (104)
  Unrealized gains on securities available for
    sale                                             2,729        2,342
  Retained earnings                                 56,647       57,968
                                                  --------      -------
                     Total Shareholders' Equity     68,560       69,765
                                                  --------      -------
     Total Liabilities and Shareholders' Equity   $924,365     $919,242
                                                  ========     ========

   * Reflect the effect of the 5 for 4 stock split on October 14,
  1996.                                                   
                      
                                      3<PAGE>


                       PARKVALE FINANCIAL CORPORATION
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
            (Dollar Amounts in Thousands, except per share data)
                                                                       
                                           Three months ended
                                              September 30,
                                             1996       1995   
                                             -----     -----
  Interest Income:                                       
     Loans                                 $12,520   $11,090
     Mortgage-backed securities              1,553     1,752
     Investments                             1,424     1,944
     Federal funds sold                      1,169     1,775
                                           -------   -------
       Total interest income                16,666    16,561
                                           -------   -------
  Interest Expense:
     Savings deposits                        9,414     9,680
     Borrowings                                323       393
                                           -------   -------
       Total interest expense                9,737    10,073
                                           -------   -------
  Net interest income                        6,929     6,488
  Provision for loan losses                    135       185
                                           -------   -------
  Net interest income after                                 
     provision for losses                    6,794     6,303
                                           -------   -------
  Noninterest Income:
     Service charges on deposit accounts       291       262
     Other fees and service charges            149       132
     Gain on sale of assets                     --        --
     Miscellaneous                              79       116
                                           -------   -------
       Total other income                      519       510
                                           -------   -------
  Noninterest Expenses:                                     
     Compensation and employee benefits      1,756     1,733
     Office occupancy                          512       498
     Marketing                                  80        60
     FDIC and other insurance                  498       490
     FDIC special assessment                 5,035        --
     Office supplies, telephone, and postage   201       190
     Miscellaneous                             483       550
                                           -------   -------
       Total other expenses                  8,565     3,521
                                           -------   -------
  Income (loss) before income taxes        (1,252)     3,292
  Income tax expense (benefit)               (464)     1,149
                                           -------   -------
  Net income (loss)                         ($788)    $2,143
                                           =======   =======
  Net income (loss) per share              ($0.19)     $0.51
  Dividends per share                        $0.13    $0.104
                                                            
  All share amounts reflect the effect of the 5 for 4 stock split on
  October 14, 1996.
                                    4<PAGE>


  Parkvale Financial Corporation
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  For Three Months Ended September 30, 1996 and 1995
  Increase (Decrease) in Cash and Cash Equivalents
  (Dollar Amounts in Thousands) 
                                                     1996         1995    
  Cash flows from operating activities:           --------     --------
     Interest received                              $17,727      $16,836
     Loan fees received                                  36           70
     Other fees and commissions received                489          480
     Interest paid                                  (9,739)     (10,045)
     Cash paid to suppliers and others              (3,600)      (3,065)
     Income taxes paid                              (1,499)      (1,113)
                                                   --------     --------
     Net cash provided by operating activities        3,414        3,163
                                                           
  Cash flows from investing activities:                                
     Proceeds from sales of investment
       securities available for sale                     --           --
     Proceeds from maturities of investments         21,500       27,700
     Purchase of investment securities available
       for sale                                          --         (69)
     Purchase of investment securities              (4,955)     (18,895)
     (Purchase) maturity of deposits in other banks   (209)           27
     Purchase of mortgage-backed securities              --     (13,100)
     Purchase of loans                                (131)     (15,296)
     Proceeds from sales of loans                     1,255          896
     Principal collected on mortgage-backed
       securities                                     8,139        5,173
     Principal collected on loans                    34,069       32,164
     Loans made to customers, net of loans in
       process                                     (30,518)     (35,391)
     Other                                               --         (49)
                                                   --------     --------
       Net cash (used in) investing activities      29,150     (16,840)
                                                           
  Cash flows from financing activities:                                
     Net decrease in checking and                                       
        savings accounts                            (4,044)        (200)
     Net increase in certificates of deposit         16,613        5,685
     Repayment of FHLB advances                     (5,003)          (2)
     Net (decrease) increase in other borrowings    (1,138)          688
     Decrease in borrowers' advances for tax &
       insurance                                    (5,224)      (5,430)
     Cash dividends paid                              (421)        (333)
     Allocation of treasury stock to retirement plans    41           11
     Acquisition of treasury stock                    (320)           --
                                                   --------     --------
     Net cash provided by financing activities          504          419
                                                   --------     --------
  Net increase (decrease) in cash and cash 
     equivalents                                     33,068     (13,258)
                                                           
     Cash and equivalents at beginning of period     77,462      126,584
                                                   --------     --------
     Cash and equivalents at end of period         $110,530     $113,326
                                                   ========     ========
                                        5<PAGE>
Reconciliation of net income to net cash
     provided by operating activities:                Three months ended
                                                        September 30,
                                                     1996         1995    
                                                    -------      -------
  Net income                                        ($788)       $2,143
  Adjustments to reconcile net income to net
       cash provided by operating activities:                          
     Depreciation and amortization                     119          139
     Accretion and amortization of loan fees
       and discounts                                     8         (23)
     Loan fees collected and deferred                   36           70
     Provision for loan losses                         135          185
     Decrease in accrued interest receivable           967          218
     Increase in other assets                         (58)        (115)
     (Decrease) increase in accrued interest payable   (2)           28
     Increase in other liabilities                   2,997          518
                                                    ------       ------
     Total adjustments                               4,202        1,020
                                                    ------       ------
  Net cash provided by operating activities         $3,414       $3,163
                                                    ======       ======
  For purposes of reporting cash flows, cash and cash equivalents include
  cash and noninterest-earning deposits, and federal funds sold. 
  Generally, federal funds are purchased and sold for one-day periods. 
  Loans transferred to foreclosed assets aggregated $3,000 and $46,000 in
  the three months ended September 30, 1996 and 1995, respectively.
  <TABLE>
                              PARKVALE FINANCIAL CORPORATION
                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                         (Dollars in thousands, except share data)
   <CAPTION>                                                                          Employee                                   
                                                                               Stock    Unrealized                  Total
                                       Common       Paid-in     Treasury     Ownership    Security     Retained  Shareholders'
                                        Stock       Capital       Stock      Plan Debt     Gains       Earnings       Equity  
                                      ---------    --------     --------     ---------   ----------    --------  -------------
    <S>                                 <C>          <C>         <C>            <C>          <C>        <C>           <C>
    Balance, June 30, 1996              $3,449       $9,138      ($3,028)       ($104)       $2,342     $57,968       $69,765
                                                                                                                              
    Net income (loss), three months 
      ended September 30, 1996                                                                            (788)         (788)
                                                                                                               
    Dividends on common stock at 
      $.13 per share                                                                                      (533)         (533)
                                                                                                               
    Principal payments on employee 
      stock ownership plan debt                                                      8                                      8

    Transfer to reflect 5 for 4 split      862        (862)                                                                 0

    Treasury stock purchased                                        (320)                                               (320)
                                                                                                               
    Unrealized security gains                                                                   387                       387
                                                                                                               
    Exercise of stock options                         (101)           142                                                  41
                                       -------       -------    ---------       -------     -------     -------      --------
    Balance, September 30, 1996         $4,311       $8,175      ($3,206)        ($96)       $2,729     $56,647       $68,560
                                       =======       =======    =========       =======     =======     =======      ========
    </TABLE>                                    
                                        6<PAGE>
   
  NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  --------------------------------------------------------------------
  1.  STATEMENTS OF OPERATIONS
     The  statements of operations for the three months ended September 30,
  1996  and  1995 are unaudited, but in the opinion of management, reflect
  all adjustments (consisting of only normal recurring accruals) necessary
  for  a fair presentation of the results of operations for those periods.
  The  results of operations for the three months ended September 30, 1996
  are  not necessarily indicative of the results which may be expected for
  fiscal 1997.  The Annual Report on Form 10-K for the year ended June 30,
  1996  contains  additional information and should be read in conjunction
  with this report.

  2.  STOCK SPLIT
     On  September 17, 1996 the Board of Directors declared a 5-for-4 stock
  split  of  Parkvale's  common stock.  The additional shares were paid on
  October  14,  1996 to stockholders of record at the close of business on
  September  30,  1996.  This increased the outstanding shares by 808,129.
  No fractional shares were issued.  All share amounts in this report have
  been restated to reflect this stock split. 

  3.  EARNINGS PER SHARE
     Primary  earnings per share are based upon the weighted average number
  of  issued  and  outstanding  common  shares including shares subject to
  stock options, which are deemed common stock equivalents.  For the three
  months  ended September 30, 1996, earnings (loss) per share were ($0.19)
  based  upon  4,206,799 average shares outstanding, respectively assuming
  all  283,993  option  shares  outstanding were exercised.  For the three
  months  ended  September  30,  1995, the restated earnings per share was
  $0.51  per  share  based  upon  4,195,508  average  shares  outstanding,
  respectively  assuming  all  321,047 option shares then outstanding were
  exercised.

  4. CHANGE IN METHOD OF ACCOUNTING
     In  October 1995, the FASB issued FAS 123, "Accounting for Stock-Based
  Compensation."   FAS 123 defines a fair value-based method of accounting
  for stock-based employee compensation plans.  Under the fair value-based
  method,  compensation  cost is measured at the grant date based upon the
  value  of  the  award  and  is  recognized over the service period.  The
  standard  encourages all entities to adopt this method of accounting for
  all  employee  stock  compensation  plans.    However, it also allows an
  entity  to  continue  to  measure  compensation  costs  for its plans as
  prescribed  in  APB  Opinion  No.  25,  "Accounting  for Stock Issued to
  Employees."    If  an entity elects to continue to use the accounting in
  Opinion  25,  pro forma disclosures of net income and earnings per share
  must  be  made  as if the fair value method of accounting, as defined by
  FAS  123 had been applied.  Management has evaluated the adoption of FAS
  123  for  fiscal  1997  and  determined  that Parkvale will continue its
  accounting  in  accordance  with  APB  Opinion  25.  If Parkvale were to
  present pro forma disclosures as if FAS 123 were adopted, there would be
  minimal  impact  to the results of operations for the three months ended
  September 30, 1996 and 1995 for those awards granted on or after July 1,
  1995.   

     In  June  1996, the FASB issued FAS 125, "Accounting for Transfers and
  Servicing  of  Financial  Assets  and  Extinguishment  of Liabilities." 
  Under  the  FASB's  "financial components" approach, both the transferor
  and  transferee would recognize the asset and liabilities (or components
  thereof)  that  it  controls  in  a physical sense and "derecognize" the
  assets  and  liabilities  that  were  surrendered or extinguished in the<PAGE>


  transfer.    Prior  rules  emphasize  the  economic  risks or rewards of
  ownership  of  the assets.  This Statement is effective for transactions
  occurring  after  December  31,  1996.  Parkvale does not anticipate any
  impact  on  results  of  operations  and  financial  condition  from the
  adoption of this Statement. 

                                     7

  5.  FDIC SPECIAL ASSESSMENT
     On  September  30,  1996,  the Deposit Insurance Funds Act of 1996 was
  enacted  to  recapitalize the Savings Association Insurance Fund (SAIF).
  As  part of the legislation, a one-time assessment of $0.657 per $100 of
  insured  deposits ($5,035,012 before tax) is mandated to restore SAIF to
  its required statutory level of $1.25 per $100 of insured deposits.  The
  one-time  assessment,  required  to  be  expensed  in the September 1996
  quarter,  is  tax deductible and payable on November 27, 1996.  As such,
  Parkvale reported a net loss for the quarter ended September 30, 1996 of
  $788,000  or  $0.19  per  share  as a direct result of this $5.0 million
  ($3.2 million, net of tax) assessment.  Earnings (loss) per share impact
  of this one-time assessment is ($0.75).   

     Without  the FDIC special assessment, net income for the September 30,
  1996  quarter  would have been $2.4 million or $0.57 per share, up 11.1%
  from  net  income  (10.8% on a per share basis) of $2.1 million or $0.51
  per share for the quarter ended September 30, 1995.  

     Despite  the  magnitude  of  the  assessment,  management believes the
  legislation  will  have  positive  ramifications for Parkvale as it will
  significantly  reduce  deposit  insurance  premiums  and the competitive
  disadvantage  that  SAIF-insured  institutions have suffered relative to
  Bank   Insurance  Fund  (BIF)-insured  institutions.    Sharing  in  the
  Financing Corporation (FICO) obligation begins January 1, 1997  when the
  FICO  premium  to  SAIF-insured  institutions  will be 6.4 basis points.
  FICO  bonds  were  originally  issued to finance part of the savings and
  loan  crisis  of  the 1980s.  Total premiums will then be the sum of the
  FICO premium and any regular insurance assessment, currently nothing for
  the  lowest risk category institutions.  Since Parkvale is considered to
  be  in  the lowest risk category, the total premium beginning January 1,
  1997  will only be for the FICO premium of 6.4 basis points.  Parkvale's
  insurance  cost  will  be  reduced  by 16.6 basis points or $1.3 million
  annually.    Net  earnings  are expected to increase $0.05 per share per
  quarter for the remaining quarters in the 1997 fiscal year. 

     Beginning  January  1,  2000  the  deposit  insurance  premium will be
  further  reduced  so that there is full pro-rata FICO sharing with other
  institutions. This amount has not been determined at this point in time.










  
                                      8<PAGE>
                                 
  6.  LOANS:
  Loans are summarized as follows:
                                                 September 30,    June 30,
                                                     1996         1996    
                                                  -----------   ---------
                          (Dollar Amounts in Thousands)             
     
  First mortgage loans:                                             
     Residential:                                                       
      1-4 Family                                   $509,886     $517,082
      Multi-family                                   17,156       17,375
     Commercial                                      19,173       19,516
     Other                                            2,413        2,387
                                                   --------     --------
                                                    548,628      556,360
  Consumer loans                                     79,746       76,224
  Commercial business loans                           8,858        8,925
  Loans on savings accounts                           3,233        3,285
                                                   --------     --------
                                                    640,465      644,794
  Less: Loans in process                              4,642        4,386
      Allowance for loan losses                      14,158       13,990
      Unamortized discount and deferred loan fees       955          966
                                                   --------     --------
  Loans, net                                       $620,710     $625,452
                                                   ========     ========

  Nonaccrual loans                                  $2,208       $1,008
     as a percent of total assets                     0.34%        0.16%
                                                           
  The  accrual  of  interest  on  impaired  loans is discontinued when, in
  management's  opinion,  the  borrower  may be unable to meet payments as
  they  become  due  or  when the loan becomes more than 90 days past due.
  The amount of additional interest income that had not been recognized in
  interest  income  was  $188  at  September 30, 1996 and $137 at June 30,
  1996.    The  following summary sets forth the activity in the allowance
  for loan losses for the three months ended September 30: 

                                                     1996         1995    
                                                   -------     --------
  Beginning balance                                $13,990      $13,136
  Provision for losses - mortgage loans                 26          195
  Provision for losses - consumer loans                109         (10)
  Provision for losses - commercial loans               --           --
  Loans recovered                                       60           81
  Loans charged off                                   (27)         (44)
                                                    -------      -------
  Ending balance                                   $14,158      $13,358
                                                    =======      =======

  Non-accrual,  substandard  and doubtful commercial and other real estate
  loans  are  evaluated for impairment under the provisions of FAS 114 and
  118.  At September 30, 1996, management has determined that $1.0 million
  of  loans  were  considered  to  be  impaired  in  conformity with these
  Statements.    The  average recorded investment in impaired loans during
  the  September  1996  quarter  was  $800.   The total allowance for loan
  losses related to these loans was $154.
                                 
                                      9<PAGE>


                       PARKVALE FINANCIAL CORPORATION
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
                          AND RESULTS OF OPERATIONS
                                                                        
            (Dollar Amounts in Thousands, except per share data)

  Balance Sheet Data:                           September 30,
                                                1996      1995    
                                               ------    ------
  Total assets                               $924,365  $899,575
  Loans, net                                  620,710   541,913
  Interest-earning deposits and federal 
     funds sold                               103,512   103,699
  Total investments                           180,772   232,692
  Savings deposits                            819,657   799,930
  FHLB Advances                                15,691    20,605
  Other borrowings                              5,079     4,686
  Shareholders' Equity                         68,560    62,852
  Book value per share                         $16.96    $15.69
                                                                
  Statistical Profile:
                                                 Three Months Ended
                                                 September 30,  (1)
                                                   1996     1995   
                                                  ------   ------
  Average yield earned on all
   interest-earning assets                        7.41%    7.52%
  Average rate paid on all 
   interest-bearing liabilities                   4.66%    4.89%
  Average interest rate spread                    2.75%    2.63%
  Net yield on average
   interest-earning assets                        3.08%    2.94%
  Other expenses to average assets                3.71%    1.57%
  Other expenses to average assets without
   special assessment                             1.53%    1.57%
  Taxes to pre-tax income                        37.06%   34.90%
  Return on average assets                       -0.34%    0.95%
  Return on average assets without 
    special assessment                            1.03%    0.95%
  Return on average equity                       -4.66%   14.16%
  Return on average equity without
    special assessment                           13.89%   14.16%
  Average equity to average total assets          7.33%    6.72%
                                                         
                                                 At September 30,
                                                  1996     1995    
                                                  -----    -----
  One year gap to total assets                    0.39%    6.69%
  Intangibles to total equity                     0.35%    0.63%
  Capital to assets ratio                         7.42%    6.99%
  Ratio of nonperforming assets to total assets   0.26%    0.25%
  Number of full-service offices                    28       28
      
(1)    The applicable income and expense figures have been annualized in
  calculating the percentages.                               
                                   

                                      10<PAGE>

  Results  of  Operations - Comparison of Three Months Ended September 30,
  1996 and 1995
  ------------------------------------------------------------------------

  For  the  three months ended September 30, 1996, Parkvale reported a net
  loss  of  $788,000  or  ($0.19) per share as a direct result of the $5.0
  million  ($3.2 million, net of tax) FDIC special assessment as discussed
  a b o ve  under  "Notes  to  Unaudited  Interim  Consolidated  Financial
  Statements"  under  Note  5.   "FDIC Special Assessment".  This one-time
  assessment was required to be recorded upon enactment of the legislation
  in  the  September  1996  quarter.  Without such special assessment, net
  income  for the quarter would have been $2.4 million or $0.57 per share,
  up 11.1% from net income (10.8% on a per share basis) of $2.1 million or
  $0.51  per share for the quarter ended September 30, 1995.  The $238,000
  increase  in  net  income  excluding  the  assessment primarily reflects
  increased  net interest income of $441,000.  Net interest income for the
  quarter  ended  September  30,  1996 increased to $6.9 million from $6.5
  million for the quarter ended September 30, 1995.  

  INTEREST INCOME:
  ----------------
  Parkvale  had  interest  income of $16.7 million during the three months
  ended  September  30,  1996  versus  $16.6 million during the comparable
  period  in  1995.   This slight increase of $105,000 is the result of an
  $18.4  million  or  2.1%  increase  in  the average balance of interest-
  earning  assets,  offset  by  an  11 basis point decrease in the average
  yield  from  7.52% in 1995 to 7.41% in 1996.  Interest income from loans
  increased  $1.4  million  or  12.9%  resulting  from  an increase in the
  average  outstanding loan balances of  $89.8 million or 16.9%, offset by
  a  28  basis  point  decrease in the average yield from 8.32% in 1995 to
  8.04%  in 1996.  Interest income on mortgage-backed securities decreased
  $199,000 from the 1995 quarter due to a decrease of $9.6 million or 9.3%
  in  the  average balance, compounded by a 16 basis point decrease in the
  average  yield  from  6.78%  in  1995  to  6.62%  in  1996.   Investment
  securities  interest income decreased by $520,000 or 26.8% from the 1995
  quarter  due  to  a  decrease  of  $29.0 million or 23.2% in the average
  balance,  compounded  by  a 29 basis point decrease in the average yield
  from  6.22% in 1995 to 5.93% in 1996.  Interest income earned on federal
  funds  sold  decreased  $606,000 or 34.1% from the 1995 quarter due to a
  decrease in the average balance of $32.8 million or 27.4%, compounded by
  a  56 basis point decrease in the average yield from 5.93% to 5.37%.  At
  September  30,  1996, the weighted average yield on all interest earning
  assets was 7.45% compared to 7.52% at September 30, 1995.

  INTEREST EXPENSE:
  -----------------
  Interest  expense  slightly  decreased $336,000 or 3.3% from the 1995 to
  the  1996 quarter.  The decrease was due to a 23 basis point decrease in
  the  average  rate paid on deposits and borrowings from 4.89% in 1995 to
  4.66%  in  1996,  offset  by  an  increase  in  the average deposits and
  borrowings  of  $12.3  million.  At September 30, 1996, the average rate
  payable  on liabilities was 4.60% for deposits, 6.01% for borrowings and
  4.64% for combined deposits and borrowings.

  PROVISION FOR LOAN LOSSES:
  -------------------------
  Parkvale's  provision for loan losses decreased by $50,000 or 27.0% from
  the  1995  to  the 1996 quarter.  Total reserves were 2.21% and 2.17% of
  gross loans at September 30, 1996 and June 30, 1996, respectively.<PAGE>
  
  Non-performing  loans  and  real  estate  owned  were $2.4 million, $1.2
  million  and  $2.2  million  at  September  30,  1996, June 30, 1996 and
  September  30, 1995, representing 0.26%, 0.14% and 0.25% of total assets
  at  the  respective  balance  sheet  dates.  Total loan loss reserves at
  September 30, 1996 
  
                                      11<PAGE>
  
  were  $14.2 million, which represents 2.21% of the gross loan portfolio.
  The increase of $1.1 million in non-performing assets from June 30, 1996
  is  due to a reclassification of a $359,000 shopping center from accrual
  to  non-accrual  status  and a $758,000 increase in non-accruing single-
  family dwellings.     

  Loans  are  placed  on  non-accrual  status  when  in  the  judgement of
  management,  the  probability  of collection of interest is deemed to be
  insufficient to warrant further accrual.  All loans which are 90 or more
  days delinquent are treated as non-accrual loans.

  OTHER INCOME:
  -------------
  Total  other income decreased slightly by $20,000 in 1996 primarily from
  a decrease of $37,000 in income from the tax deferred annuity and mutual
  fund products. 

  OTHER EXPENSE:
  --------------
  Total  other  expense  increased  by  $5.0 million from 1995 as a direct
  result  of  the  FDIC  special assessment discussed above.  Without this
  nonrecurring  charge,  other expenses would have increased only slightly
  by   $9,000  from  1995.    The  largest  component  of  other  expense,
  compensation  and  employee  benefits,  increased slightly by $23,000 or
  1.3%.    Annualized operating expenses as a percentage of average assets
  without  the  special  assessment would have been lower at 1.53% for the
  quarter ended September 30, 1996 versus 1.57% during the comparable 1995
  quarter.

  INCOME TAXES:
  -------------
  The  provision  for income taxes consists of the following for the three
  months  ended  September  30,  1996:    Current  tax  benefit  - Federal
  $335,000;  State  $79,000 and Deferred Federal Tax Benefit  $50,000 with
  the  total  aggregating  $464,000.    The prepaid and deferred tax asset
  increased by $1.8 million from June 30, 1996 to September 30, 1996 which
  reflects  a $1.6 million overpayment of estimated federal taxes remitted
  prior to the enactment of the Deposit Insurance Funds Act of 1996 signed
  into law September 30, 1996.  On September 15, 1996, additional taxes of
  $396,000  were  paid  due  to  the  elimination  of the special bad debt
  deduction  under  the reserve method which allowed Parkvale to deduct 8%
  from taxable income before the deduction.  The $396,000 was accrued as a
  deferred  tax  liability  for activity in the first half of the calendar
  year  prior to the enactment of the Small Business Job Protection Act of
  1996  which  contained  this provision to eliminate the special bad debt
  deduction  granted  solely  to  thrifts.  The effective tax rate for the
  three months ended September 30, 1996 was 37.1%, which is anticipated to
  be the effective tax rate for the 1997 fiscal year.   

  LIQUIDITY AND CAPITAL RESOURCES:
  --------------------------------
  Federal  funds  sold  increased  $36.6  million  from  June  30, 1996 to
  September  30,  1996  resulting  from the combination of funds available
  from  investment securities maturing and an increase in deposit balances
  of  $12.6  million.    Investment  securities held to maturity decreased
  $24.7 million from June 30, 1996 to September 30, 1996.

  Escrow  for  taxes and insurance decreased by $5.2 million or 48.3% as a
  result  of the payment of property taxes to the various taxing districts
  during the quarter.<PAGE>

  Stockholders'  equity  was  $68.6  million  or  7.42% of total assets at
  September  30,  1996.    The  Bank is required to maintain Tier I (Core)
  capital equal to at least 4% of the institution's adjusted total assets,

                                        12<PAGE>
   
  and  Tier  II (Supplementary) risk-based capital equal to at least 8% of
  the  risk-weighted  assets.    At  September  30,  1996, Parkvale was in
  compliance  with all applicable regulatory requirements, with Tier I and
  Tier II ratios of 6.97% and 14.78%, respectively.

  The following table sets forth certain information concerning the Bank's
  regulatory capital at September 30, 1996:                  
     
                                          Tier I    Tier I      Tier II
                                           Core   Risk-Based  Risk-Based
                                          Capital   Capital    Capital   
                                         -------   -------      ------
  Equity Capital (1)                    $67,991    $67,991     $67,991
  Less non-allowable intangible assets    (237)      (237)       (237)
  Less unrealized securities gains      (2,589)    (2,589)     (2,589)
  Plus general valuation allowances (2)     --         --        6,125
                                        -------    -------     -------
     Total regulatory capital            65,165     65,165      71,290
  Minimum required capital               37,385     19,600      38,580
                                        -------    -------     -------
     Excess regulatory capital          $27,780    $45,564     $32,710
     Adjusted total assets             $934,615   $490,007    $482,249
                                                                      
  Regulatory capital as a percentage (3)   6.97%    13.30%      14.78%
  Minimum capital required as a 
     percentage                            4.00%     4.00%       8.00%
  Excess regulatory capital as a          ------    ------      ------
     percentage                            2.97%     9.30%       6.78%
                                          ======    ======      ======
  Well capitalized requirement             5.00%     6.00%      10.00%
                                          ======    ======      ======
  (1)    Represents equity capital of the consolidated Bank as reported to
  the  Pennsylvania  Department  of  Banking  and FDIC on Form 032 for the
  quarter ended September 30, 1996.
  (2)  Limited to 1.25% of risk adjusted total assets.

  Management  is not aware of any trends, events, uncertainties or current
  r e commendations  by  any  regulatory  authority  that  will  have  (if
  implemented), or that are reasonably likely to have, material effects on
  Parkvale's liquidity, capital resources or operations.

  IMPACT OF INFLATION AND CHANGING PRICES:
  ----------------------------------------
  The  financial  statements  and  related data presented herein have been
  prepared  in  accordance  with generally accepted accounting principles,
  which  require  the  measurement  of  financial  position  and operating
  results  in  terms  of historical dollars without considering changes in
  the  relative  purchasing  power  of  money  over time due to inflation.
  Unlike  most  industrial  companies, substantially all of the assets and
  liabilities  of  a  financial  institution are monetary in nature.  As a
  result,  interest  rates  have  a more significant impact on a financial
  institution's   performance  than  the  effects  of  general  levels  of
  inflation.  Interest rates do not necessarily move in the same direction
  or in the same magnitude as the prices of goods and services as measured
  by the consumer price index.

  
                                      13<PAGE>


  PART II - OTHER INFORMATION
  ----------------------------
  Item 1.  Legal Proceedings                                None
  Item 2.  Changes in Securities
  Refer  to  above  Part  I,  "Notes  to  Unaudited  Interim  Consolidated
  Financial Statements," under Note 2, "Stock Split".

  Item 3.  Defaults Upon Senior Securities                  N/A
  Item 4.  Submission of Matters to a Vote of Security 
      Holders                                               None
  (a)    The  1996  Annual  Meeting  of Shareholders of Parkvale Financial
  Corporation  was held on October 24, 1996.  Of 3,243,243 shares eligible
  to vote, 90.5% or 2,936,248 were voted by proxy.

  (b)    The  shareholders  voted  to  approve  the re-election of the two
  nominees  for  directors,  as  described  in the Proxy Statement for the
  Annual  Meeting.  The results for the re-election of Fred P. Burger as a
  director  were  2,911,832  shares  in  favor  and  24,416 withheld.  The
  results  for  the  re-election  of  Warren  R.  Wenner  as director were
  2,909,308 shares in favor and 26,940 shares withheld.

  (c)    The  recommendation  by  the  Board  of  Directors  to ratify the
  appointment  of  Ernst  &  Young  LLP  as  the Corporation's independent
  auditors,  as  described  in the Proxy Statement for the Annual Meeting,
  was  approved  with  2,906,247 shares in favor, 2,210 against and 27,791
  abstaining.
      
  Item 5.  Other Information                                None
  Item 6.  Exhibits and Reports on Form 8-K
      (a)  Exhibits                                         None
      (b)  Reports on Form 8-K                              None

                                 SIGNATURES

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

  DATE: October 29, 1996                     By:  Robert J. McCarthy, Jr.
                                                  -----------------------
                                             Robert J. McCarthy, Jr.
                                             President and 
                                             Chief Executive Officer

  DATE: October 29, 1996                     By:  Timothy G. Rubritz
                                                  -----------------------
                                             Timothy G. Rubritz
                                             Vice President, Treasurer and
                                             Chief Financial Officer


  
                                      14<PAGE>