UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year end December 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________to____________
COMMISSION FILE NUMBER 0-12524
BANK OF HANOVER AND TRUST COMPANY
CASH OR DEFERRED PROFIT-SHARING PLAN
25 Carlisle Street
Hanover, PA 17331
(Full title of the Plan and the address of the Plan)
HANOVER BANCORP, INC
33 Carlisle Street
Hanover, PA 17331
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
1
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrators of the Bank of Hanover and Trust Company Cash or Deferred
Profit-Sharing Plan have duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
Bank of Hanover and Trust Company
Cash or Deferred Profit-Sharing Plan
Date: June 28,1999 /s/ Thomas J. Paholsky
Thomas J. Paholsky
Executive Vice President
Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PG
1 Audited financial statements for Bank of Hanover and Trust
Company Cash or Deferred Profit-Sharing Plan 4
2 Consent of Independent Public Accountants 25
3
<PAGE>
EXHIBIT 1
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL
SCHEDULES
Bank of Hanover and Trust Company Cash or
Deferred Profit-Sharing Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
4
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 1998 and 1997
Contents
PG
Report of Independent Auditors 6
Audited Financial Statements
Statements of Net Assets Available for Benefits 7
Statements of Changes in Net Assets Available for Benefits 11
Notes to Financial Statements 16
Supplemental Schedules
Line 27a-Schedule of Assets Held For Investment Purposes 22
Line 27d-Schedule of Reportable Transactions 23
5
<PAGE>
Report of Independent Auditors
Executive Committee
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
We have audited the accompanying statement of net assets available for benefits
of the Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan as
of December 31, 1998 and 1997, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
.Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,in all
material respects, the net assets available for benefits of the Plan at December
31, 1998 and 1997, and the changes in its net assets available for benefits for
the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998,and reportable transactions
for the year then ended, are presented for the purpose of additional analysis
and are not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The Fund Information in the statements of net assets available for
benefits and the statements of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund.The supplemental schedules and Fund Information have been subjected
to the auditing procedures applied in our audits of the financial statements
and,in our opinion, are fairly stated in all material respects in relation to
the financial statements taken as a whole.
Harrisburg, Pennsylvania
June 8, 1999
6
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Statements of Net Assets Available for Benefits, with Fund Information
December 31, 1998
<CAPTION>
Vanguard
Vanguard Life
Life Strategy
Vanguard Vanguard Vanguard Strategy Conservative
US Growth International F/I GNMA Growth Growth
Fund Growth Fund Fund Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Mutual funds $750,374 $ 76,980 $ 74,536 $415,506 $ 180,009
Temporary Money Market Fund - - - - -
Hanover Bancorp Fund - - - - -
750,374 76,980 74,536 415,506 180,009
Accrued investment income - - 390 - -
Accrued transfer 571 (32) (2) 381 33
Employer contribution receivable 11,339 2,580 949 16,608 4,374
Net assets available for benefits $762,284 $ 79,528 $ 75,873 $432,495 $ 184,416
<FN>
See accompanying notes.
</FN>
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Vanguard
Life
Strategy Temporary
Moderate Vanguard Vanguard Vanguard Hanover Money
Growth Index 500 Prime Cap Life Income Baron Asset Bancorp Market
Portfolio Fund Fund Fund Fund Fund Fund Total
<C> <C> <C> <C> <C> <C> <C> <C>
$515,190 $596,123 $309,975 $ 27,452 $105,075 $ - $ - $3,051,220
- - - - - - 72,947 72,947
- - - - - 550,289 - 550,289
515,190 596,123 309,975 27,452 105,075 550,289 72,947 3,674,456
- - - - - 2 310 702
8,989 (5,695) 214 (3,819) 168 (806) (2) -
12,917 10,413 10,999 1,587 4,510 8,493 6,076 90,845
$537,096 $600,841 $321,188 $ 25,220 $109,753 $557,978 $79,331 $3,766,003
</TABLE>
8
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Statements of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<CAPTION>
Federated Federated
Federated Managed Federated Managed Federated
Managed Growth/ Managed Aggressive Money
Income Income Growth Growth Market
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Mutual funds $54,982 $206,249 $ 584,932 $336,374 $ -
Federated Money Market Fund - - - - 105,747
Hanover Bancorp Fund - - - - -
54,982 206,249 584,932 336,374 105,747
Accrued investment income - - - - 450
Employer contribution receivable 1,044 4,411 12,455 17,979 26,805
Liabilities
Excess contributions payable - - - - -
Net assets available for benefits $56,026 $210,660 $ 597,387 $354,353 $133,002
<FN>
See accompanying notes.
</FN>
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Vanguard Vanguard Hanover
US Growth International Bancorp
Fund Growth Fund Fund Total
<C> <C> <C> <C>
$ 618,544 $ 102,527 $ - $1,903,608
15 105,762
- - 528,241 528,241
618,544 102,527 528,256 2,537,611
- - 3 453
10,506 1,917 6,745 81,862
140 863 - 1,003
$ 628,910 $ 103,581 $ 535,004 $2,618,923
</TABLE>
10
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Statements of Changes in Net Assets Available for Benefits,
with Fund Information
Year ended December 31, 1998
<CAPTION>
Federated Federated
Federated Managed Federated Managed Federated
Managed Growth/ Managed Aggressive Money
Income Income Growth Growth Market
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Additions to assets attributed to:
Employee contributions $ - $ - $ - $ - $ -
Employee rollovers-from previous
employers' plan - - - - -
Employer matching contributions - - - - -
Employer profit sharing contributions - - - - -
Investment income 421 - - - 452
Total additions 421 - - - 452
Deductions from assets attributed to:
Employee withdrawals - - - - -
Total deductions - - - - -
Interfund transfers (56,699) (215,181) (617,093) (368,816) (133,454)
Net realized and unrealized appreciation
(depreciation) in fair value of
investments 252 4,521 19,706 14,463 -
Net (decrease) increase (56,026) (210,660) (597,387) (354,353) (133,002)
Net assets available for benefits at
beginning of year 56,026 210,660 597,387 354,353 133,002
Net assets available for benefits at
end of year $ - $ - $ - $ - $ -
<FN>
See accompanying notes
</FN>
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Vanguard Vanguard
Vanguard Life Life
Life Strategy Strategy
Vanguard Vanguard Vanguard Strategy Conservative Moderate Vanguard Vanguard
US Growth International F/I GNMA Growth Growth Growth Index 500 Prime Cap
Fund Growth Fund Fund Portfolio Portfolio Portfolio Fund Fund
<C> <C> <C> <C> <C> <C> <C> <C>
$ 37,288 $ 7,612 $ 4,953 $ 45,285 $ 9,328 $ 31,770 $ 48,594 $ 38,722
23,144 3,743 29,828 35,341 31,379 73,284 73,608 22,770
11,380 3,278 1,322 25,822 2,914 11,553 16,150 16,611
11,339 2,580 949 16,608 4,374 12,917 10,413 10,999
45,090 1,409 4,050 13,462 8,161 20,416 6,868 10,747
128,241 18,622 41,102 136,518 56,156 149,940 155,633 99,849
14,848 628 51,431 19,294 2,984 12,781 18,744 725
14,848 628 51,431 19,294 2,984 12,781 18,744 725
(154,121) (53,247) 86,293 276,853 122,932 362,265 384,728 192,562
174,102 11,200 (91) 38,418 8,312 37,672 79,224 29,502
133,374 (24,053) 75,873 432,495 184,416 537,096 600,841 321,188
628,910 103,581 - - - - - -
$ 762,284 $ 79,528 $75,873 $ 432,495 $ 184,416 $ 537,096 $600,841 $321,188
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Temporary
Vanguard Hanover Money
Life Income Baron Asset Bancorp Market
Fund Fund Fund Fund Total
<C> <C> <C> <C> <C>
$ 3,980 $ 18,326 $ 31,397 $ 3,932 $ 281,187
2,624 14,688 11,430 516 322,355
896 6,028 22,451 1,536 119,941
1,587 4,510 8,493 6,076 90,845
1,806 (628) 11,686 3,580 127,520
10,893 42,924 85,457 15,640 941,848
14,907 269 52,254 8,206 197,071
14,907 269 52,254 8,206 197,071
28,518 62,102 10,461 71,897 -
716 4,996 (20,690) - 402,303
25,220 109,753 22,974 79,331 1,147,080
- - 535,004 - 2,618,923
$ 25,220 $ 109,753 $ 557,978 $ 79,331 $3,766,003
</TABLE>
13
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Statements of Changes in Net Assets Available for Benefits,
with Fund Information
Year ended December 31, 1997
<CAPTION>
Federated Federated
Federated Managed Federated Managed Federated
Managed Growth/ Managed Aggressive Money
Income Income Growth Growth Market
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Additions to assets attributed to:
Employee contributions $ 6,746 $ 10,893 $ 53,319 $ 56,745 $ 13,325
Employee rollovers-from previous
employers' plans 20,851 2,123 5,189 24,441 -
Employer matching contributions 1,925 4,166 24,496 26,285 6,245
Employer profit sharing contributions 1,044 4,411 12,455 17,979 26,823
Investment income 2,908 20,153 52,104 21,917 3,863
Total additions 33,474 41,746 147,563 147,367 50,256
Deductions from assets attributed to:
Employee withdrawals 460 192,940 46,875 64,995 21,156
Total deductions 460 192,940 46,875 64,995 21,156
Interfund transfers (985) (102,886) (224,037) (101,013) 2,210
Net realized and unrealized appreciation
(depreciation) in fair value of
investments 1,705 12,095 18,972 18,681 -
Net (decrease) increase 33,734 (241,985) (104,377) 40 31,310
Net assets available for benefits at
beginning of year 22,292 452,645 701,764 354,313 101,692
Net assets available for benefits at
end of year $ 56,026 $ 210,660 $ 597,387 $354,353 $133,002
<FN>
See accompanying notes.
</FN>
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Vanguard Vanguard Hanover
US Growth International Bancorp
Fund Growth Fund Fund Total
<C> <C> <C> <C>
$ 56,126 $ 16,348 $ 22,119 $ 235,621
74,353 10,426 12,635 150,018
23,634 2,874 14,476 104,101
10,506 1,917 6,745 81,880
23,853 4,326 10,294 139,418
188,472 35,891 66,269 711,038
1,140 35 10,237 337,838
1,140 35 10,237 337,838
377,852 71,414 (22,555) -
63,726 (3,689) 111,319 222,809
628,910 103,581 144,796 596,009
- - 390,208 2,022,914
$ 628,910 $ 103,581 $ 535,004 $2,618,923
</TABLE>
15
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Notes to Financial Statements
December 31, 1998
1. Significant Accounting Policies
Basis of Accounting
The accounting records of the Bank of Hanover and Trust Company Cash or Deferred
Profit-Sharing Plan (the Plan) are maintained on the accrual basis of
accounting.
Contributions
Each year, participants may contribute up to 15% of pretax annual compensation,
as defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. The Bank of Hanover and Trust Company (the Company) contributes 50% of
amounts deferred up to 8% of compensation to the Plan. Additional amounts may
be contributed at the option of the Company's Board of Directors.
Plan Expenses
All general and administrative expenses are paid by the Company.
Net Appreciation (Depreciation) in Fair Value of Investments
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of investments as
determined by quoted market prices as of the last business day of the Plan year.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
effect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
16
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan
The Plan is a defined contribution plan which covers substantially all employees
of the Bank of Hanover and Trust Company (the Company). Under the Plan,
participants are permitted to defer generally the lesser of 15% of annual
compensation from the Company or the maximum amount allowable under current IRS
regulations. The Company has agreed to contribute 50% of the first 8% of base
compensation that the participant contributes to the Plan and may make
discretionary, profit sharing contributions to all eligible employees.
The participant's interest in deferred salary contributions, qualified matching
contributions, employer profit sharing contributions, and rollover contributions
is, at all times, fully vested and nonforfeitable.
In accordance with the Plan, participants may elect to invest their specified
contributions in a series of funds. Prior to January 1, 1998, participants could
elect to invest their contributions in six mutual funds (Federated Managed
Income, Federated Managed Growth/Income, Federated Managed Growth, Federated
Managed Aggressive Growth, Vanguard US Growth, and Vanguard International
Growth), Hanover Bancorp Fund, or, Federated Money Market. Effective January 1,
1998 participants may elect to invest in eight additional mutual funds, Vanguard
F/I GNMA, Vanguard Life Strategy Growth Portfolio, Vanguard Life Strategy
Conservative Growth Portfolio, Vanguard Life Strategy Moderate Growth Portfolio,
Vanguard Index 500, Vanguard Prime Cap, Vanguard Life Income and Baron Asset
Fund. Also effective January 1, 1998 four mutual funds (Federated Managed
Income, Federated Managed Growth/Income, Federated Managed Growth, Federated
Managed Aggressive Growth) and the Federated Money Market Fund were eliminated
as investment options under the Plan and all net assets in these funds were
transferred to newly elected options. Participant contributions may be allocated
between the funds in multiples of 5%. Participants also choose the allocation
percentages between the funds for employer matching and profit sharing
contributions. On each biweekly pay date, contributions are allocated to the
investment funds according to the participant's specifications. Participants
have the opportunity to change their investment options on a quarterly basis.
17
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Eligibility
All full time employees of the Company who have completed 1,000 hours of service
and attained age 21 may participate in the Plan.
Benefit Payments
Benefit payments are restricted to retirement, early retirement, termination of
employment, death, or disability.
The Company reserves the right by action of its Board of Directors to change,
modify, or terminate the Plan, in part or in its entirety, at any time. If the
Plan is terminated, the value of the participant's account shall be distributed
to the affected participant as a lump sum distribution.
The foregoing description of the Plan provides only general information. For a
more complete description of the Plan's provisions, participants should refer to
the Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Summary Description, which may be obtained from the plan administrator.
18
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments
Under the Cash or Deferred Profit-Sharing Plan and Trust Agreements, the Bank of
Hanover and Trust Company serves as trustee for the Plan's assets.
The Plan's investments (including investments bought, sold, as well as held
during the year) appreciated in fair value by $402,303 and $222,809 during 1998
and 1997, respectively, as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
Net Net
Appreciation Appreciation
(Depreciation) Fair Value (Depreciation) Fair Value
in Fair Value at End of in Fair Value at End of
During Year Year During Year Year
<S> <C> <C> <C> <C>
Federated Managed Income Fund $ 252 $ - $ 1,705 $ 54,982
Federated Managed Growth/Income 4,521 - 12,095 206,249
Federated Managed Growth Fund 19,706 - 18,972 584,932
Federated Managed Aggressive Gro 14,463 - 18,681 336,374
Federated Money Market Fund - - - 105,747
Vanguard US Growth Fund 174,102 750,374 63,726 618,544
Vanguard International Growth Fu 11,200 76,980 (3,689) 102,527
Vanguard F/I GNMA Fund (91) 74,536 - -
Vanguard Life Strategy Growth Po 38,418 415,506 - -
Vanguard Life Strategy Conservat 8,312 180,009 - -
Portfolio -
Vanguard Life Strategy Moderate 37,672 515,190 - -
Portfolio -
Vanguard Index 500 Fund 79,224 596,123 - -
Vanguard Prime Cap Fund 29,502 309,975 - -
Vanguard Life Income Fund 716 27,452 - -
Baron Asset Fund 4,996 105,075 - -
Hanover Bancorp Fund (20,690) 550,289 111,319 528,256
Temporary Money Market Fund - 72,947 - -
Total $ 402,303 $3,674,456 $ 222,809 $2,537,611
<FN>
* Represents individual investments that represent 5% or more of the Plan's net assets at December 31.
</FN>
</TABLE>
19
<PAGE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated December 11, 1997, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
5. Transactions with Parties-in-Interest
The Plan's assets include 32,369 shares and 22,725 shares of Hanover Bancorp,
Inc., the parent company of the bank, common stock as of December 31, 1998 and
1997, respectively.
During 1998 and 1997, the Plan received $12,770 and $10,255, respectively, in
common stock dividends from Hanover Bancorp, Inc.
6. Year 2000 (unaudited)
The Plan Sponsor has determined that it will be necessary to take certain steps
in order to ensure that the Plan's information systems are prepared to handle
the year 2000 dates. The Plan Sponsor is taking a two phase approach. The first
phase addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Plan Sponsor anticipates substantially
completing this phase of the project by June 1999. Costs associated with
modifying software and equipment are not estimated to be significant and will be
paid by the Plan Sponsor.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that they
have developed plans to address their own year 2000 problems as they relate to
the Plan's operations. All third party service providers have indicated that
they will be year 2000 compliant by mid 1999. If modifications of data
processing systems of either the Plan, the Plan Sponsor, or its service
providers are not completed timely, the year 2000 problem could have a material
impact on the operations of the Plan. Plan management has not developed a
contingency plan, because they are confident that all systems will be year 2000
ready.
20
<PAGE>
Supplemental Schedules
21
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
EIN: 23-0670980 Plan #002
Line 27a-Schedule of Assets Held For Investment Purposes
December 31, 1998
<CAPTION>
Principal
Amount or
Number of Current
Shares/Units Description Cost Value
<S> <C> <C> <C> <C>
20,015 Vanguard US Growth Fund $547,404 $750,374
4,101 Vanguard International Growth Fund 70,721 76,980
7,132 Vanguard F/I GNMA Fund 74,524 74,536
22,113 Vanguard Life Strategy Growth Portfolio 379,570 415,506
12,237 Vanguard Life Strategy Conservative Growth 171,831 180,009
Portfolio
30,557 Vanguard Strategy Moderate Growth Portfolio 479,876 515,190
5,231 Vanguard Index 500 Fund 517,742 596,123
6,503 Vanguard Prime Cap Fund 280,504 309,975
2,077 Vanguard Life Income Fund 26,924 27,452
2,079 Baron Asset Fund 100,563 105,075
32,369 Hanover Bancorp Common Stock* 477,791 550,289
72,947 Temporary Money Market Fund 72,947 72,947
$3,200,397 $3,674,456
<FN>
* Party in interest
</FN>
</TABLE>
22
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
EIN: 23-0670980 Plan #002
Line 27d-Schedule of Reportable Transactions
Year ended December 31, 1998
<CAPTION>
(g) Fair
Value of
(c) (d) Asset on (i) Net
(a) Identity of Party Purchase Selling Transaction (h) Cost Gain or
Involved (b) Description of Assets Price Price Date of Asset (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Category (i) - Individual transactions in excess of 5% of plan net assets:
Federated Securities CorFederated Managed Growth Fund #362 $604,711 $604,711 $555,576 $ 49,135
Federated Managed Growth/Income Fund #35 210,776 210,776 197,573 13,203
Federated Aggressive Growth Fund #377 320,167 320,167 287,622 32,545
Vanguard Group, Inc. Vanguard Life Moderate Growth 366,019 366,019 366,019 -
Vanguard Life Strategy Growth 246,293 246,293 246,293 -
Vanguard Prime Cap Fund 180,056 180,056 180,056 -
Vanguard Index 500 Fund 266,044 266,044 266,044 -
Category (iii) - Series of security transactions in excess of 5% of plan net assets:
Hanover Bancorp, Inc. Hanover Bancorp Common Stock 77,497 77,497 59,780 17,717
Hanover Bancorp Common Stock 108,897 108,897 108,897 -
Federated Securities CorFederated Managed Growth Fund 604,856 604,856 555,708 49,148
Federated Managed Aggressive Growth Fund 350,926 350,926 314,929 35,997
U.S. Treasury Cash Reserve 53,052 53,052 53,052 -
U.S. Treasury Cash Reserve 82,697 82,297 82,697
Vanguard Group, Inc. Vanguard Life Conservative Growth Fund 5,084 5,084 4,953 131
Vanguard Life Conservative Gr 168,320 168,320 168,320
</TABLE>
23
<PAGE>
<TABLE>
Bank of Hanover and Trust Company Cash or Deferred Profit-Sharing Plan
EIN: 23-0670980 Plan #001
Item 27d-Schedule of Reportable Transactions (continued)
Year ended December 31, 1998
<CAPTION>
(g) Fair
Value of
(c) (d) Asset on (i) Net
(a) Identity of Party Purchase Selling Transaction (h) Cost Gain or
Involved (b) Description of Assets Price Price Date of Asset (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Category (iii) - Series of security transactions in excess of 5% of plan net assets (continued):
Vanguard Group, InVanguard Life Moderate Growth Fund $53,264 $ 53,264 $ 50,904 $2,360
Vanguard Life Moderate Grow 509,435 509,435 509,435
Vanguard Life Strategy Growth Fund 48,180 48,180 45,699 2,481
Vanguard Life Strategy Grow 411,110 411,110 411,110
Vanguard US Growth Portfolio 176,177 176,177 142,777 33,400
Vanguard US Growth Portfoli 87,347 87,347 87,347
Vanguard Prime Cap Portfolio 1,424 1,424 1,394 30
Vanguard Prime Cap Portfoli 270,645 270,645 270,645
Vanguard Fixed Income GNMA Fund 51,589 51,589 51,692 (103)
Vanguard Fixed Income GNMA 122,397 122,397 122,397
Vanguard Index 500 Fund 19,887 19,887 19,042 845
Vanguard Index 500 Fund 529,011 529,011 529,011
<FN>
Columns (e) and (f) are not applicable.
There were no Category (ii) or (iv) reportable transactions during 1998.
</FN>
</TABLE>
24
<PAGE>
EXHIBIT 2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-73796) pertaining to the Cash or Deferred
Profit-Sharing Plan of the Bank of Hanover and Trust Company of our
report dated June 8, 1999, with respect to the financial statements and
supplemental schedules of the Bank of Hanover and Trust Company Cash or
Deferred Profit-Sharing Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Harrisburg, Pennsylvania
June 24, 1999
25
