FORM 10 - QSB

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                For Quarter Ended      September 30, 1996
                                  -------------------------

                    Commission File Number      0-16587
                                             -----------

                       South Branch Valley Bancorp, Inc.
             ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

              West Virginia                          55-0672148
            -------------------------------------------------------
            (State or other jurisdiction          (IRS Employer 
             incorporation or organization)       Identification No.)

                             310 North Main Street
                           Moorefield, West Virginia       26836
            -------------------------------------------------------    
            (Address of principal executive offices)     (Zip Code)

                            (304)   538-2353
            -------------------------------------------------------
             (Registrant's telephone number, including area code)

Check whether the issuer: (1) has filed all reports required by Section 13 or
15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been 
subject to such filing requirements for the past 90 days.      Yes X      No
                                                                  ----       ---

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

378,510 common shares were outstanding as of November 12, 1996.

Transitional Small Business Disclosure Format (check one): Yes      No   X
                                                              -----    -----

                                       1

               SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY

                                     INDEX

                                                               Page

      I.    FINANCIAL INFORMATION

            Item 1.  Financial Statements

            Consolidated balance sheets
            September 30, 1996 (unaudited) and
            December 31, 1995                                    3

            Consolidated statements of
            income for the three months and nine
            months ended September 30, 1996, and
            1995 (unaudited)                                     4

            Consolidated statements of
            cash flows for the nine months ended
            September 30, 1996 and 1995 (unaudit               5-6

            Consolidated statements of
            shareholders' equity for the three
            months and nine months ended September 30,
            1996 and 1995 (unaudited)                            7

            Notes to consolidated financial
            statements (unaudited)                               8

            Item 2. Management's Discussion and
            Analysis of Financial Condition and Results
            of Operations                                     9-15

      II.   OTHER INFORMATION

            Item 6.  Exhibits and Reports on Form 8-K           16

            Signatures                                          17

                                       2

                      SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                             September 30,        December 31,
                                                                  1996                1995
ASSETS                                                         (Unaudited)              *
                                                               -----------         -----------
                                                                                     
Cash and due from banks                                         $2,790,957          $2,191,647
Interest bearing deposits with other banks                       1,653,000           2,134,919
Federal funds sold                                                 805,825           2,161,745
Securities available for sale                                   30,806,727          31,480,580
Loans, net                                                      79,582,795          70,598,398
Bank premises and equipment, net                                 3,118,623           3,180,351
Accrued interest receivable                                        933,488             983,841
Other assets                                                       295,548             386,377
                                                               -----------         -----------
          Total Assets                                        $119,986,963        $113,117,858
                                                               ===========         ===========

LIABILITIES
Non-interest bearing deposits                                   $8,938,172          $7,832,774
Interest bearing deposits                                       94,486,675          92,213,562
                                                               -----------         -----------
    Total deposits                                             103,424,847         100,046,336

Securities sold w/agreement to repurchase                        1,862,466                  --
Long-term borrowings                                             1,706,595             750,000
Other liabilities                                                  937,704             992,862
                                                               -----------         -----------
          Total Liabilities                                    107,931,612         101,789,198
                                                               -----------         -----------

SHAREHOLDERS' EQUITY
Common stock, $2.50 par value, authorized
   600,000 shares, issued 382,625 shares                           956,562             956,562
Surplus                                                            685,534             685,534
Net unrealized gain (loss) on securities                           182,978             340,650
Retained earnings                                               10,397,247           9,512,884
Less cost of shares acquired for the
   treasury 1996, 4,115; and 1995, 4,115                          (166,970)           (166,970)
                                                               -----------         -----------
          Total Shareholders' Equity                            12,055,351          11,328,660
                                                               -----------         -----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY                                      $119,986,963        $113,117,858
                                                               ===========         ===========

  December  31, 1995  financial  information  has been  extracted  from  audited
financial statements.

See Notes to Condensed Consolidated Financial Statements
                                       3

SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months ended September 30, 1996 and 1995
                                     (Unaudited)

                                       Three Months Ended            Nine Months Ended
                                     September 30, September 30,   September 30, September 30,
                                                                           
                                         1996           1995           1996           1995
                                     -------------   ----------     -----------   -----------
Interest income:
   Interest and fees on loans           $1,912,956   $1,688,555      $5,546,873    $4,841,827
   Interest on securities:
     Taxable                               466,236      457,647       1,419,388     1,316,430
     Tax-exempt                             70,454       40,948         179,672       118,539
   Interest on federal funds sold            5,293        8,368          41,084        40,308
                                     -------------   ----------     -----------   -----------  
     Total interest income               2,454,939    2,195,518       7,187,017     6,317,104
                                     -------------   ----------     -----------   -----------
Interest expense:
   Interest on deposits                  1,158,061    1,044,353       3,458,129     2,910,256
   Interest on federal funds purchased
      and securities sold under
      repo agmt                             23,470        1,737          25,066         2,875
  Interest on other borrowings              32,810        7,115          79,695        34,479
                                     -------------   ----------     -----------   -----------
     Total interest expense              1,214,341    1,053,205       3,562,890     2,947,610
                                     -------------   ----------     -----------   -----------
       Net interest income               1,240,598    1,142,313       3,624,127     3,369,494
   Provision for loan losses                15,000        5,000          40,000        55,000
     Net interest income after
       provision for loan losses         1,225,598    1,137,313       3,584,127     3,314,494
                                     -------------   ----------      ----------   -----------
Non-interest income:
   Insurance commissions                    30,741       31,543          79,465        78,808
   Trust department income                     501          ---             493           508
   Service fee income                       58,490       53,430         167,635       156,648
   Securities gains (losses)                (3,912)     (17,292)         30,000       (19,147)
   Other income                             17,326       11,083          43,394        34,854
                                     -------------   ----------     -----------   ----------- 
    Total other income                    103,146       78,764         320,987       251,671
                                     -------------   ----------     -----------   -----------
Non-interest expense:
   Salaries and employee benefits          428,579      382,356       1,294,552     1,164,266
   Net occupancy expense of premises        46,458       30,077         147,045        87,750
   Equipment expense                        47,198       39,359         147,240       120,681
   FDIC insurance premiums                     500       (5,692)          2,000        91,269
   Other expenses                          243,340      211,177         775,449       654,721
                                     -------------   ----------     -----------   -----------
      Total other expense                  766,075      657,277       2,366,286     2,118,687
                                     -------------   ----------     -----------   -----------

Income before income tax expense           562,669      558,800       1,538,828     1,447,478

   Income tax expense                      181,825      186,203         510,630       508,417
                                     -------------   ----------     -----------   -----------

Net Income                                $380,844     $372,597      $1,028,198      $939,061
                                     =============   ==========     ===========   ===========

Earnings per common share (Note 2)           $1.01        $0.98           $2.72         $2.48
                                     =============   ==========     ===========   ===========
Dividends per common share                    $---         $---           $0.38         $0.33
                                     =============   ==========     ===========   ===========

     See Notes to Condensed Consolidated Financial Statements
                                       4

CONDENSED  CONSOLIDATED  STATEMENTS  OF CASH  FLOWS
  For the Nine  Months  Ended
  September 30, 1996 and 1995 (Unaudited)

                                                             Nine Months Ended
                                                      September 30,      September 30,
                                                                        
                                                           1996              1995
                                                       -----------        ----------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                         $1,028,198          $939,061
     Adjustments to reconcile net earnings to net
     cash provided by operating activities:
       Depreciation                                        167,528           111,275
       Provision for loan losses                            40,000            55,000
       Securities (gains) losses                           (30,000)           19,147
       Provision for deferred income tax expense             3,682            21,648
       (Increase) decrease in accrued income receivable     50,353          (116,084)
       Amortization of security premiums and
         (accretion of discounts), net                      42,472            73,115
       (Increase) decrease in other assets                  74,465           (89,031)
        Increase in other liabilities                       43,547           104,092
       (Gain) on sale of other assets                       (6,318)               --
                                                       -----------        ----------
       Net cash provided by operating activities         1,413,927         1,118,223
                                                       -----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES
       Proceeds from maturities of securities
           held to maturity                                     --           100,000
       Purchases of securities held to maturity                 --          (615,567)
       Proceeds from sales of securities
           available for sale                            6,235,258         2,030,688
       Proceeds from maturities of securities
           available for sale                            3,425,000         2,075,000
       Purchases of securities available for sale       (9,708,744)       (5,724,686)
       Principal payments received on securities held
           to maturity                                          --           254,883
       Principal payments received on securities
           available for sale                              453,490            99,518
       (Increase) decrease in Federal funds sold, net    1,355,920          (184,047)
       Principal collected on (loans to customers), net (9,024,397)       (4,025,598)
       (Purchase of) proceeds from interest bearing
           deposits with other banks                       481,919          (491,163)
       Purchase of Bank premises and equipment            (105,800)         (958,147)
       Proceeds sales of other assets                       19,000                --
                                                       -----------        ----------
         Net cash provided by (used in) investing
           activities                                   (6,868,354)       (7,439,119)
                                                       -----------        ----------

Continued
See Notes to Condensed Consolidated Financial Statements

                                       5

SOUTH  BRANCH  VALLEY  BANCORP,  INC.,  AND  SUBSIDIARY 
CONDENSED  CONSOLIDATED STATEMENTS  OF CASH FLOWS - Continued 
For the Nine Months Ended  September  30, 1996 and 1995
(Unaudited)

                                                             Nine Months Ended
                                                         September 30,  September 30,
                                                                       
                                                              1996          1995
                                                       ---------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
      Net increase  in demand deposits, NOW and
          savings accounts                                   1,214,514     3,123,228
      Proceeds from sales of  time deposits, net             2,163,998     3,990,680
      Increase in securities sold with agreement to
          repurchase                                         1,862,465            --
      Net increase (decrease) in other borrowings              956,595      (700,000)
      Dividends Paid                                          (143,835)     (124,908)
                                                       ---------------  ------------

      Net cash provided by (used in) financing
          activities                                         6,053,737     6,289,000
                                                       ---------------  ------------

      Increase (decrease) in cash and due from banks           599,310       (31,896)

      Cash and due from banks:
            Beginning                                        2,191,647     2,152,919
                                                       ---------------  ------------

            Ending                                          $2,790,957    $2,121,023
                                                       ===============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
       Cash payments for:
          Interest paid to depositors                       $3,412,237    $2,824,075
                                                       ===============  ============

          Income taxes                                        $435,313      $559,222
                                                       ===============  ============

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
        AND FINANCING ACTIVITIES
       Other real estate acquired in settlement
          of loans                                                  $0        $8,400
                                                       ===============  ============

See Notes to Condensed Consolidated Financial Statements

                                        6

                 SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY

              CONDENSED CONSOLIDATED  STATEMENTS OF SHAREHOLDERS' EQUITY
               For the Nine Months ended September 30, 1996 and 1995
                                     (Unaudited)

                                                          Three Months Ended
                                                  -----------------------------------
                                                     September 30,      September 30,
                                                                       
                                                         1996               1995
                                                  ----------------      -------------

Balance, beginning of period                           $11,300,153        $10,512,831

   Net income                                              380,844            372,597

   Change in net unrealized gain (loss)
     on securities available for sale                      374,354            (19,742)
                                                  ----------------      -------------

Balance, September 30                                  $12,055,351        $10,865,686
                                                  ================      =============

                                                           Nine Months Ended
                                                  -----------------------------------
                                                     September 30,      September 30,
                                                         1996               1995
                                                  ----------------      -------------

Balance, beginning of period                           $11,328,660         $9,378,140

   Net income                                            1,028,198            939,061

   Cash dividends declared                                (143,834)          (124,908)

   Change in net unrealized gain (loss)
     on securities available for sale                     (157,673)           673,393
                                                  ----------------      -------------

Balance, September 30                                  $12,055,351        $10,865,686
                                                  ================      =============

                   See Notes to Condensed Consolidated Financial Statements

                                        7

                SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Note 1.     Basis of Presentation

            The financial  information  included  herein is unaudited;  however,
            such  information  reflects all  adjustments  (consisting  solely of
            normal  recurring   adjustments)   which  are,  in  the  opinion  of
            management,  necessary  for a fair  statement  of  results  for  the
            interim periods.

            The   presentation  of  financial   statements  in  conformity  with
            generally accepted accounting procedures requires management to make
            estimates and assumptions  that effect the reported amount of assets
            and liabilities and disclosure of contingent  assets and liabilities
            at the date of the financial  statements and the reported amounts of
            revenues and expenses  during the reporting  period.  Actual results
            could differ from the estimates.

            The results of operations for the nine month period ended  September
            30,  1996  are  not  necessarily  indicative  of the  results  to be
            expected for the full year.  The  Condensed  Consolidated  Financial
            Statements and notes  included  herein should be read in conjunction
            with the Company's 1995 audited financial statements and Form 10-K.

Note 2.     Earnings Per Share

            Earnings  per common  share are  computed  based  upon the  weighted
            average shares outstanding.  The weighted average shares outstanding
            were 378,510 at September 30, 1996 and 1995.

                                       8

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

                            INTRODUCTION AND SUMMARY

      The  following is  Management's  discussion  and analysis of the financial
condition and financial  results of operations for South Branch Valley  Bancorp,
Inc. and its wholly owned  subsidiary,  South Branch Valley National Bank, as of
September 30, 1996. Since the primary business activities of South Branch Valley
Bancorp,  Inc. are conducted through the Bank, this discussion focuses primarily
on the financial condition and operations of the Bank.

      Net income for the third  quarter of 1996 was  $381,000,  a 2.1%  increase
from the third quarter earnings of 1995 which totaled $373,000.  This translated
to $1.01  earned per share  during the third  quarter of 1996  compared  to $.98
during the third quarter of 1995.

      Net  income  for  the  nine  months  ended   September  30,  1996  totaled
$1,028,000, which is an $89,000 or 9.5% increase from the $939,000 earned in the
first nine  months of 1995.  Annualized  return on  average  assets for 1996 was
1.19% as compared to 1.25% at September 30, 1995.  Earnings per share  increased
from $2.48 for the first nine  months of 1995 to $2.72 for the first nine months
of 1996.

                              RESULTS OF OPERATIONS

Net Interest Income
- -------------------

      For purposes of this discussion, the "taxable equivalent basis" adjustment
has been  included in interest  income to reflect the level of income had income
on state and municipal  obligations exempt from Federal income tax been taxable,
assuming  a Federal  tax rate of 34% in both 1996 and 1995.  The  amounts of tax
equivalent adjustments were $39,000 in 1996 and $28,000 in 1995.

      For the nine months ended  September 30, 1996,  the Company's net interest
income, as adjusted,  increased  $266,000 or 7.8% to $3,663,000 as compared with
$3,397,000  for the nine months ended  September  30, 1995.  The  Company's  net
interest  yield on  earning  assets  decreased  25 basis  points  from  4.70% at
September  30,  1995 to 4.45% for the nine  months  ended  September  30,  1996.
Management  feels that this  decrease is due  primarily to a  competitive  local
market for loans and  deposits  which has caused a general  lowering of rates on
loans while deposit rates have remained steady.  A detailed  analysis of the net
interest yield is shown on Table I.

                                       9

South Branch Valley Bancorp, Inc. and Subsidiary
- ---------------------------------------------------------------------------------------------
Table I - Average Distribution of Assets, Liabilities and Shareholders'
  Equity, Interest Earnings & Expenses, and Average Rates

                               September 30, 1996                    September 30, 1995
                         ------------------------------         -----------------------------
(In thousands of dollars)Average    Earnings/    Yield/          Average   Earnings/   Yield/
                         Balances    Expense       Rate          Balances    Expense     Rate
                         -------- ---------- ----------         -----------------------------
         ASSETS
Interest earning assets:
  Loans, net of unearned
                                                                        
    interest              $74,964     $5,547      9.87%           $64,993     $4,842    9.93%
  Securities
    Taxable                27,293      1,320      6.45%            25,745      1,216    6.30%
    Tax-exempt              4,494        219      6.50%             2,756        147    7.11%
Interest bearing
deposits
  with other banks          1,967         99      6.71%             1,943        100    6.86%
Federal funds sold            993         41      5.51%               842         40    6.33%
                         --------   --------     ------         ---------  ---------   ------
Total interest earning
  assets                  109,711      7,226      8.78%            96,279      6,345    8.79%

Noninterest earning
assets                      5,974                                   3,928
                         --------                               ---------

    Total assets         $115,685                                $100,207
                         ========                               =========

 LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities:
  Interest bearing
    demand deposits       $19,625       $505      3.43%           $17,267       $465    3.59%
  Regular savings          15,507        410      3.53%            13,123        330    3.35%
  Time savings             57,480      2,543      5.90%            50,531      2,116    5.58%
  Federal funds purchased
    and Sec sold w/agmt to
    repurchase                791         25      4.21%                60          3    6.67%
  Other borrowings          1,790         80      5.96%               855         34    5.30%
                         --------   --------     ------         ---------  ---------   ------

                           95,193      3,563      4.99%            81,836      2,948    4.80%
Noninterest bearing liabilities:

  Demand deposits           8,257                                   7,649
  Other liabilities           889                                     660
                         --------                               ---------
    Total liabilities     104,339                                  90,145

Shareholders' equity       11,346                                  10,062
                         --------                               ---------
  Total liabilities and
    shareholders' equity $115,685                                $100,207
                         ========                              ==========

NET INTEREST EARNINGS                 $3,663                                $3,397
                                    ========                               =========

NET INTEREST YIELD ON EARNING ASSETS              4.45%                                4.70%
                                                 ======                                =====

                                       10

Provision for Loan Losses and Loan Quality
- -----------------------------------------

      An allowance  for loan losses is  maintained  by the Company and is funded
through  the  provision  for loan  losses as a charge to current  earnings.  The
allowance  for loan  losses is reviewed by  management  on a quarterly  basis to
determine  that  it is  maintained  at  levels  considered  necessary  to  cover
potential  losses  associated  with  the  Bank's  current  loan  portfolio.  The
Company's  provision  for loan  losses  for the first  nine  months of this year
totaled  $40,000  compared to $55,000 for the nine months  ended  September  30,
1995. At September 30, 1996 the reserve for loan losses totaled $849,000 or 1.1%
of net loans compared to $860,000 or 1.2% of net loans at December 31, 1995.

       Net loan  charge-offs  for the first nine months of 1996 were  $50,000 as
compared  to  $188,000  for the  first  nine  months  of  1995.  Expressed  as a
percentage of average loans (net of unearned  interest),  net  charge-offs  were
 .07% for the first  nine  months  of 1996  compared  to .28% for the  comparable
period of 1995.

              Summary of Past Due Loans and Non-Performing Assets

                                            September 30        December 31
                                          ----------------      ------------
                                           1996       1995              1995
                                          -----       ----              ----
Loans contractually past due
90 days or more and still
accruing interest                          $238       $280              $260
                                           ====       ====              ====

Non-performing assets:
  Non-accruing Loans                       $384       $625              $538

  Other Real Estate Owned                    30         40                40
                                           ----       ----              ----

                                           $414       $665              $578
                                           ====       ====              ====

      The level of non-performing  assets has decreased during the past year due
to  management's  continuing  efforts to improve  the  quality of the  Company's
assets.  Total  loans past due 90 days or more plus  non-performing  assets have
decreased   approximately   31.0%  from  the  same  period   last  year.   Loans
contractually  past  due 90  days or  more  and  still  accruing  interest  have
decreased approximately 8.5% or $22,000 since December 31, 1995.

                                       11

Non-interest Income
- -------------------

      Total other  income  increased  approximately  $69,000 or 27.4% during the
first nine months of 1996, as compared to the first nine months of 1995.

      Service fee income increased  approximately $11,000 or 7.0%. Management is
presently  studying  ways of  improving  the  Company's  service  fee income and
believes  the  Company  will be able to  maintain  levels of service  fee income
similar to third quarter  level  throughout  the  remainder of 1996.  Management
plans to initiate a new service fee structure for commercial accounts during the
first quarter of 1997.

      Securities gains (losses) increased from a loss of ($19,000) for the first
nine months of 1995 to a gain of $30,000 for the first nine months of 1996. This
$49,000  increase in securities  gains  represents a 257.9%  improvement for the
nine months  ending  September  30,  1996 as compared to the nine months  ending
September 30, 1995 due to sales to improve rates and GAP.

      Other income  increased  approximately  $8,000 or 22.9% from September 30,
1995 to  September  30, 1996.  This  increase is  primarily  attributable  to an
increase in merchant fees on credit cards and profits realized on sales of other
real estate owned.

Non-interest Expense
- --------------------

      Total  non-interest  expense  increased  approximately  $248,000  or 11.7%
during the first nine  months of 1996 as  compared  to the first nine  months of
1995. A more detailed discussion of non-interest expense components follows:

      An increase of  approximately  $131,000 or 11.3% in salaries  and employee
benefits  can be  attributed  to a general  increase  in  salaries  and a slight
increase in insurance costs. Also contributing to this increase was the purchase
of the Petersburg  branch in November 1995. This new branch increased our number
of full time equivalent  employees by 9.6% from 52 employees before the purchase
to 57 employees after the purchase.

      Net occupancy expense increased approximately $59,000 to $147,000 or 67.0%
from September 30, 1995 to September 30, 1996.  Equipment expense also increased
21.5% from  approximately  $121,000 for the period ending  September  30,1995 to
$147,000 for the period ending September 30, 1996. These increases were expected
and planned for by  management  due to the  purchase  of the  Petersburg  branch
during the fourth  quarter of 1995 and the  recently  completed  renovation  and
addition to the Company's home office in Moorefield.

                                       12

      Due to the  decrease in the  semi-annual  rate of deposit  insurance  from
$.115 per hundred  dollars of deposits to a minimum  assessment of $1,000,  FDIC
insurance premiums decreased  approximately $89,000 for the first nine months of
1996 as compared to the first nine months of 1995.

      Other expenses increased  approximately $120,000 or 18.3% from $655,000 to
$775,000  during the first nine months of 1996 compared to the first nine months
of 1995. The major factors contributing to this increase are as follows:

      **    During  the  first  nine  months  of 1996 the  bank  did a  computer
            conversion and experienced  some one time expenses.  Data processing
            expense  increased  63.6%  from  approximately  $55,000  in  1995 to
            $90,000 in 1996.  ATM expense  increased  from $14,000 to $25,000 or
            78.6%.  Management does not expect these large increases in expenses
            to continue.

      **    Associated  with the  acquisition of the new branch in Petersburg as
            of  November  1995  was the  creation  of a new  expense,  amortized
            goodwill. This expense has totaled $28,000 thus far in 1996 and will
            continue at this rate through the end of 2000.

      **    Credit card expense  increased 29.6% from $27,000 in 1995 to $35,000
            in 1996.  This increase is the result of a decrease in the number of
            banks being serviced by the Company's  processor and thus increasing
            the share of each bank's cost.

      **    The bank's  strong loan demand  required  more credit  reports which
            increased  credit  reference fees from $14,000 in 1995 to $19,000 in
            1996, an increase of 35.7%.

      **   On September 7, 1996 the bank's main office located in Moorefield
           experienced a flood with water  approximately  eleven inches deep
           in the entire  building.  Flood clean up expenses through the end
           of September totaled  approximately $6,000. This does not include
           any  building  or  furniture  damage,  which is in the process of
           being  determined  by  the  insurance   company.   At  this  time
           management  is  uncertain as to the total  damages  caused by the
           flood,  but the  Bank's  insurance  deductible  appears to be the
           Bank's  only  significant  exposure  to loss.  The  Bank's  flood
           insurance deductible is $10,000.

                                       13

Liquidity
- ---------

      Liquidity in  commercial  banking can be defined as the ability to satisfy
customer loan demand and meet deposit  withdrawals while maximizing net interest
income.  The Company's  primary  sources of funds are deposits and principal and
interest  payments on loans.  Additional  funds are  provided by  maturities  of
securities.  The  Company  uses ratio  analysis  to monitor  the  changes in its
sources and uses of funds so that an adequate  liquidity position is maintained.
At September  30, 1996 the loan to deposit  ratio was 76.9% as compared to 73.0%
at September  30, 1995.  Cash and due from banks  totaled  $2,791,000 or 2.3% of
total assets. Additionally,  securities and interest bearing deposits with other
banks maturing within one year approximated  $3,878,000 or 3.2% of total assets.
Management  believes  that the liquidity of the Company is adequate and foresees
no demands or conditions that would adversely affect it.

                              FINANCIAL CONDITION

      The  Company's  total  assets have  increased  approximately  6.1% or $6.9
million from December 31, 1995. The overall  composition of the Company's assets
has not changed significantly since December of 1995.

      Total  loans have  increased  approximately  $9.0  million or 12.7%  since
December  31, 1995.  This has  increased  the loan to deposit  ratio to 77.0% as
compared  to 71.0% as of  December  1995.  This  increase in the loan to deposit
ratio was planned for and expected by management.

      Total  deposits have  increased  approximately  $3.4 million or 3.4% since
December  31,  1995.   Approximately  $1.1  million  of  this  increase  was  in
noninterest  bearing  deposits  and  approximately  $2.3 million was in interest
bearing accounts.  This growth is consistent with the Company's overall business
plan.

      In the Bank's never ending quest to provide  better service to all of it's
customer  base,  the Bank began a new service on June 30, 1996.  This service is
called securities sold under agreement to repurchase.  Federal law prohibits the
payment  of  interest  on  corporate  demand  accounts.  In  order  to  be  more
competitive and to better serve it's corporate  customers,  the Bank was pleased
to be able to offer  this new  service  to  corporate  customers  who  typically
maintain deposits in excess of $250,000. The Bank has set aside a group of U. S.
Agency securities for these repurchase  agreements.  These repurchase agreements
totaled $1.9 million on  September  30, 1996 with a yield of 4.13%.  These Repos
are reflected on the Condensed Consolidated Balance Sheet as borrowings.

                                       14

      The Bank  increased it's long term  borrowings  from the Federal Home Loan
Bank by  approximately  $957,000.  This  increase  was used to fund  some of the
Bank's loan growth.

      The  Company's  total  shareholders'  equity has  increased  approximately
$726,000 or 6.4% since  December 31, 1995.  This  increase is due to  internally
generated  undistributed net income.  The Company's equity to total assets ratio
was  10.0% at  September  30,  1996 and at  December  31,  1995.  The  Company's
subsidiary  bank's  risk  weighted  capital  ratio  was  approximately  16.1% at
September  30,  1996,  and is well within  Federal  regulatory  guidelines.  The
Company  is not aware of any  pending  Federal  regulation  which  would  have a
material negative impact on its operations at this point in time.

                                       15

                                    PART II

Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------

      No reports on Form 8-K were filed by the Company  during the quarter ended
September 30, 1996.

                                       16

                                  SIGNATURES

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

                                    South Branch Valley Bancorp, Inc.
                                  (registrant)

                                    By: /s/ H. Charles Maddy, III
                                       ----------------------------- 
                                        H. Charles Maddy, III, President
                                        and Chief Financial Officer

                                    By: /s/ Russell F. Ratliff, Jr.
                                       ------------------------------   
                                        Russell F. Ratliff, Jr.
                                        Treasurer

Date:      November 13, 1996
     -----------------------
                                       17

  

                                      9
                                 0000811808
   SOUTH BRANCH VALLEY NATIONAL BANK

                        9-MOS
                    DEC-31-1996
                       JAN-01-1996
                         SEP-30-1996
                                 2,790,957
                 1,653,000
                         805,825
                               0
           30,806,727
                         0
                           0
                               80,432,264
                             (849,469)
                       119,986,963
                           103,424,847
                                   0
                      937,704
                            1,706,595
                          0
                                    0
                                 956,562
                            11,098,789
       119,986,963
                        5,546,873
                      1,599,060
                          41,084
                       7,187,017
                     3,458,129
                     3,562,890
                  3,624,127
                             40,000
                        30,000
                        2,366,286
                        1,538,828
             1,028,198
                                0
                                      0
                           1,028,198
                               2.72
                               2.72
                              4.50
                              383,776
                             238,211
                          54,901
                        2,720,089
                         859,681
                             72,036
                              21,824
                        849,469
                     849,469
                            0
                        0