**CRA Decision #124**

**December 2004**

November 3, 2004

Ms. Erin N. Maloney

Bond, Schoeneck & King, PLLC

One Lincoln Center

Syracuse, New York 13202-1355

Re: Application for Community Bank, National Association of Canton, New
York to purchase and assume the Dansville, New York Branch of HSBC Bank
USA

Control Number: 2004 NE 02 0042 Charter Number: 8351

Dear Ms. Maloney:

This is to inform you that today, the Office of the Comptroller of the
Currency (OCC) approved your proposal, filed on behalf of Community
Bank, National Association ("Community") to purchase and assume the
Dansville, New York Branch location of HSBC Bank USA.

This approval is granted based on a thorough review of all information
available, including commitments and representations made in the
application, the merger agreement and the bank's representatives.

The OCC reviewed the proposed transaction under the criteria of the Bank
Merger Act, 12 U.S.C.§ 1828 (c), the Community Reinvestment Act ("CRA"),
12 U.S.C. §2901, [et. sec.]{.underline}, and applicable OCC regulations
and policies. Among other matters, we found that the proposed
transaction would not have any anticompetitive effects.

The OCC considered the financial and managerial resources of the banks,
their future prospects, the convenience and needs of the communities to
be served. In addition, the Bank Merger Act requires the OCC to
consider, "...the effectiveness of any insured depository institution
involved in the proposed merger transaction in combating money
laundering activities, including in overseas branches," 12 U.S.C.§ 1828
(c) (11). We considered these factors and found them to be consistent
with statutory provision.

Ms. Erin N. Maloney

Community Bank, National Association

Page 2

With respect to the CRA, the OCC takes into account the applicants'
record of helping to meet the credit needs of their entire communities,
including low- and moderate-income neighborhoods, when evaluating
certain applications, including transactions subject to the Bank Merger
Act.[^1] Based on Community 's CRA record of performance, the OCC found
approval to be consistent with the CRA.

The OCC received one comment letter regarding this proposed transaction.
The commenter expressed concerns that Community Bank would close HSBC's
branch after acquisition. Community Bank confirmed that it plans to
consolidate the operations of an existing branch into HSBC's Dansville
branch since the locations are 60 feet from each other. While the branch
is located in a moderate-income census tract, the consolidation of these
two branches is not expected to have a significant impact on the
community due to their close proximity. In addition, Community Bank's
record of closing branches is not inconsistent with helping to meet the
credit needs of its community, including low- and moderate-income
persons. The OCC's last Performance Evaluation of Community Bank
indicated that the bank opened 18 branches and closed only one branch
during the evaluation period.[^2]

As a reminder, the district office must be advised in writing in 10 days
in advance of the desired effective date for the purchase and assumption
so that the OCC may issue the necessary certification letter. The
effective date must be after the expiration of the period during which
the Department of Justice may file an injunction to stop the purchase
and assumption, i.e., at least fifteen days after the date of this
letter for applications processes under normal procedures, and at lease
fifteen days after this date for applications processed under emergency
procedures and after all other regulatory approvals have been obtained.

The OCC will issue a letter certifying consummation of the transaction
when we receive:

1.  A Secretary's Certificate for each institution, certifying that a
    majority of the board of directors approved the transaction.

2.  An executed merger agreement, with Articles of Association, for the
    resulting bank attached.

3.  A Secretary's Certificate from each institution, certifying that the
    shareholder approvals have been obtained, if required.

If the merger is not consummated within one year from the approval date,
the approval shall automatically terminate, unless OCC grants an
extension of the time period.

Ms. Erin N. Maloney

Community Bank, National Association

Page 3

This approval and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United
States, any agency or entity of the United States, or any officer or
employee of the United States, and do not affect the ability of the OCC
to exercise its supervisory, regulatory and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the United States.

If you have any questions, please contact Wai-Fan Chang, Licensing
Analyst, at (212) 790-4055. Please include the control number on any
correspondence related to this filing.

Sincerely,

/s/ Anthony P. DosSantos

Anthony P. DosSantos

Licensing Manager

Cc: James Gouldie, ADC, Syracuse Field Office

[^1]: *See* 12 U.S.C. § 2903; 12 C.F.R. § 25.29(a).

[^2]: The OCC assigned an overall "Satisfactory" CRA rating to Community
    Bank in the CRA Performance Evaluation dated October 7, 2002.