<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
              OF 1934 For the Fiscal Year Ended December 31, 1999
                                       OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

 For the transaction period from ___________________ to ______________________



                       Commission File Number: 000-23601

                           PATHFINDER BANCORP, INC.
--------------------------------------------------------------------------------
            (Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
<S>                                                                           <C>
                           Delaware                                           16-1540137
(State or Other Jurisdiction of Incorporation or Organization)   (I.R.S. Employer Identification Number)
</TABLE>

    214 West First Street, Oswego, NY                              13126
----------------------------------------                         ------------
(Address of Principal Executive Office)                           (Zip Code)

                                 (315) 343-0057
              ---------------------------------------------------
              (Registrant's Telephone Number including area code)

          Securities Registered Pursuant to Section 12(b) of the Act:

                                     None
                                     ----

          Securities Registered Pursuant to Section 12(g) of the Act:

                    Common Stock, par value $.10 per share
                   ----------------------------------------
                               (Title of Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file reports) and (2) has been subject to such
requirements for the past 90 days.
YES     X         NO
     ------           ------

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K.   [X]

     As of February 28, 2000, there were 2,884,720 shares issued and 2,614,245
shares outstanding of the Registrant's Common Stock.  The aggregate value of the
voting stock held by non-affiliates of the Registrant, computed by reference to
the average bid and asked prices of the Common Stock as of February 28, 2000
($7.75) was $6,112,456.

                      DOCUMENTS INCORPORATED BY REFERENCE

1.   Sections of Annual Report to Stockholders for the fiscal year ended
     December 31, 1999 (Parts II and IV).
2.   Proxy Statement for the 2000 Annual Meeting of Stockholders (Parts I and
     III).
<PAGE>

                                    PART I
                                    ------

ITEM 1.   Business
------------------

General

Pathfinder Bancorp, Inc.

     Pathfinder Bancorp, Inc. (the "Company") is a Delaware corporation which
was organized in September 1997. The only significant asset of the Company is
its investment in Pathfinder Bank (the "Bank").  The Company is majority owned
by Pathfinder Bancorp, MHC, a New York-chartered mutual holding company (the
"Mutual Holding Company"). On December 30, 1997 the Company acquired all of the
issued and outstanding common stock of the Bank in connection with the Bank's
reorganization into the two-tier form of mutual holding company ownership.  At
that time, each share of outstanding  Bank common stock was automatically
converted into one share of Company common stock, par value $.l0 per share (the
"Common  Stock").  At February 28, 2000 the Mutual Holding Company held
1,552,500 shares of Common Stock and the public held 1,061,745 shares of Common
Stock (the "Minority Shareholders").

     The Company's executive office is located at 214 West First Street, Oswego,
New York and the telephone number at that address is (315) 343-0057.

Pathfinder Bank

     The Bank is a New York-chartered savings bank headquartered in Oswego, New
York.  The Bank has five full-service offices located in its market area
consisting of Oswego County and the contiguous counties.  The Bank's deposits
are insured by the Federal Deposit Insurance Corporation ("FDIC").  The Bank was
chartered as a New York savings bank in 1859 as Oswego City Savings Bank.  On
November 19, 1999, the Bank changed its name to Pathfinder Bank. The Bank is a
consumer-oriented institution dedicated to providing mortgage loans and other
traditional financial services to its customers.  The Bank is committed to
meeting the financial needs of its customers in Oswego County, New York, the
county in which it operates.  At December 31, 1999, the Bank had total assets of
$216.3 million, total deposits of $152.4 million, and shareholders' equity of
$20.1 million.

     The Bank is primarily engaged in the business of attracting deposits from
the general public in the Bank's market area, and investing such deposits,
together with other sources of funds, in loans secured by one- to four-family
residential real estate.  At December 31, 1999, $119.9 million, or 92% of the
Bank's total loan portfolio consisted of loans secured by real estate, of which
$87.8 million, or 73%, were loans secured by one- to four-family residences,
$20.1 million, or 17%, were secured by commercial real estate, $1.7 million, or
1%, were secured by multi-family properties and $9.5 million, or 8%, of total
real estate loans, were secured by second liens on residential properties.  The
Bank also originates consumer and other loans which totaled $12.1 million, or
9%, of the Bank's total loan portfolio.  The Bank invests a portion of its
assets in securities issued by the United States Government, state and municipal
obligations, corporate debt securities, mutual funds, and equity securities.
The Bank also invests in mortgage-backed securities primarily issued or
guaranteed by the United States Government or agencies thereof.  The Bank's
principal sources of funds are deposits, principal and interest payments on
loans and borrowings from correspondent financial institutions.  The principal
source of income is interest on loans and investment securities.  The Bank's
principal expenses are interest paid on deposits, and employee compensation and
benefits.

     The Bank's executive office is located at 214 West First Street, Oswego,
New York, and its telephone number at that address is (315) 343-0057.

     In April 1999 the Bank established Pathfinder REIT, Inc. as the Bank's
wholly-owned real estate investment trust subsidiary.  At December 31, 1999
Pathfinder REIT, Inc. held $29.7 million in mortgage and mortgage related
assets.  All disclosures in the Form 10-K relating to the Bank's loans and
investments includes loan and investments that are held by Pathfinder REIT, Inc.
<PAGE>

Market Area and Competition

     The economy in the Bank's market area is manufacturing-oriented and is also
significantly dependent upon the State University of New York College at Oswego.
The major manufacturing employers in the Bank's market area are Niagara Mohawk,
Alcan Aluminum, the New York Power Authority, Nestle and Sealright, a food
container manufacturer.  The Bank is the second largest financial institution
headquartered in Oswego County.  However, the Bank encounters competition from a
variety of sources.  The Bank's business and operating results are significantly
affected by the general economic conditions prevalent in its market areas.

     The Bank encounters strong competition both in attracting deposits and in
originating real estate and other loans. Its most direct competition for
deposits has historically come from commercial and savings banks, savings
associations and credit unions in its market area.  Competition for loans comes
from such financial institutions as well as mortgage banking companies.  The
Bank expects continued strong competition in the foreseeable future, including
increased competition from "super-regional" banks entering the market by
purchasing large banks and savings banks.  Many such institutions have greater
financial and marketing resources available to them than does the Bank.  The
Bank competes for savings deposits by offering depositors a high level of
personal service and a wide range of competitively priced financial services.
The Bank competes for real estate loans primarily through the interest rates and
loan fees it charges and advertising, as well as by originating and holding in
its portfolio mortgage loans which do not necessarily conform to secondary
market underwriting standards.

Lending Activities

     Loan Portfolio Composition.  The Bank's loan portfolio primarily consists
of one- to four-family mortgage loans secured by residential and investment
properties, as well as mortgage loans secured by multi-family residences and
commercial real estate.  To a lesser extent the Bank's loan portfolio also
includes consumer and business loans.  The Bank generally originates loans for
retention in its portfolio, although during 1999 the Bank originated and
securitized approximately $3.9 million of 30 year fixed rate mortgages, and sold
approximately $6.0 million into the secondary market.  The loan sales resulted
in approximately $52,000 in capitalized servicing rights.  At December 31, 1999,
$697,000 million, or 0.8% of the Bank's total one- to four-family real estate
portfolio consisted of loans held for sale. In recent years, the Bank has not
purchased loans originated by other lenders.

                                       2
<PAGE>

     Analysis of Loan Portfolio.  The following table sets forth the composition
of the Bank's loan portfolio in dollar amounts and in percentages of the
portfolio at the dates indicated.

<TABLE>
<CAPTION>

                                                                         Years Ended December 31,
                                                 --------------------------------------------------------------
                                                          1999                 1998                1997
                                                 -------------------   ------------------    ------------------
                                                  Amount     Percent    Amount    Percent     Amount    Percent
                                                 --------    ------    --------   -------     ------    -------
                                                                       (Dollars in Thousands)
<S>                                              <C>         <C>       <C>       <C>       <C>       <C>
Real estate loans:
 First mortgage loans/(1)//(3)/                  $110,374      84.4%   $109,372      85.3%   $102,403      84.2%
 Second mortgage loans/(2)/..                       9,492       7.3       9,631       7.5       9,561       7.9
                                                 --------     -----    --------     -----    --------     -----
Total real estate loans......                     119,866      91.7     119,003      92.8     111,964      92.1
                                                 --------     -----    --------     -----    --------     -----

Consumer loans and other
 loans:
 Consumer....................                       3,482       2.7       4,073       3.2       4,278       3.5
 Student.....................                          12        --          12        --          13        --
 Lease financing.............                         278       0.2         350       0.3         564       0.5
 Commercial business loans...                       8,357       6.4       5,900       4.6       5,908       4.9
                                                 --------     -----    --------     -----    --------     -----
  Total consumer and other
   loans.....................                      12,129       9.3      10,335       8.1      10,763       8.9
                                                 --------     -----    --------     -----    --------     -----
  Total loans receivable.....                     131,995     101.0     128,200     100.9     122,727     101.0

Less:
 Unearned discount and
  origination fees...........                         (84)     (0.1)       (199)     (0.2)       (314)     (0.3)
 Allowance for loan losses...                      (1,150)     (0.9)       (939)     (0.7)       (828)     (0.7)
                                                 --------     -----    --------     -----    --------     -----
  Total loans receivable, net                    $130,761     100.0%   $129,338     100.0%   $121,585     100.0%
                                                 ========     =====    ========     =====    ========     =====

<CAPTION>

                                                                         Years Ended December 31,
                                                                 --------------------------------------------
                                                                       1996                     1995
                                                                 ------------------     ---------------------
                                                                  Amount    Percent      Amount    Percent
                                                                  ------    -------      ------    -------
                                                                           (Dollars in Thousands)
<S>                                                            <C>        <C>       <C>         <C>
Real estate loans:
 First mortgage loans/(1)//(3)/                                  $ 90,761      83.5%   $ 83,325      83.2%
 Second mortgage loans/(2)/..                                       9,082       8.3       8,303       8.3
                                                                 --------    ------    --------      ----
Total real estate loans......                                      99,843      91.8      91,628      91.5
                                                                 --------    ------    --------      ----

Consumer loans and other
 loans:
 Consumer....................                                       3,481       3.2       3,286       3.2
 Student.....................                                          58       0.1          63       0.1
 Lease financing.............                                       1,153       1.1       2,013       2.0
 Commercial business loans...                                       5,482       5.0       3,860       3.9
                                                                 --------    ------    --------      ----
  Total consumer and other
   loans.....................                                      10,174       9.4       9,222       9.2
                                                                 --------    ------    --------      ----
  Total loans receivable.....                                     110,017     101.2     100,850     100.7

Less:
 Unearned discount and
  origination fees...........                                        (368)     (0.4)       (355)     (0.4)
 Allowance for loan losses...                                        (907)     (0.8)       (346)     (0.3)
                                                                 --------    ------    --------     -----
  Total loans receivable, net                                    $108,742    100.00%   $100,149     100.0%
                                                                 ========    ======    ========     =====
</TABLE>
--------------------------------------------------------------------------
/(1)/ Includes $87.1 million, $20.9 million and $1.7 million of one- to four-
      family residential loans, commercial real estate and multi-family loans,
      respectively, at December 31, 1999.
/(2)/ Includes $3.5 million and $6.0 million of home equity line of credit loans
      and home equity fixed rate, fixed term loans, respectively, at December
      31, 1999.
/(3)/ Includes $697,000 of mortgage loans held for sale at December 31, 1999.

                                       3
<PAGE>

     Loan Maturity Schedule.  The following table sets forth certain information
as of December 31, 1999, regarding the dollar amount of loans maturing in the
Bank's portfolio based on their contractual terms to maturity. Demand loans
having no stated schedule of repayments and no stated maturity, and overdrafts
are reported as due in one year or less.  Adjustable and floating rate loans are
included in the period in which interest rates are next scheduled to adjust
rather than the period in which they contractually mature, and fixed rate loans
are included in the period in which the final contractual repayment is due.
<TABLE>
<CAPTION>


                                             One         Three         Five         Ten        Beyond
                               Within      Through      Through      Through      Through      Twenty
                              One Year   Three Years   Five Years   Ten Years   Twenty Years   Years     Total
                              --------   -----------   ----------   ---------   ------------   ------   --------
                                                                (In Thousands)
<S>                         <C>        <C>           <C>          <C>         <C>            <C>      <C>
Real estate loans:
 First mortgage loans......    $31,219       $17,217      $23,695     $ 9,162        $25,290   $3,791   $110,374
 Second mortgage loans.....      3,570           395        1,149       3,990            388       --      9,492
Consumer and other loans...      6,805         2,228        1,764         729            603       --     12,129
                               -------       -------      -------     -------        -------   ------   --------
  Total loans..............    $41,594       $19,840      $26,608     $13,881        $26,281   $3,791   $131,995
                               =======       =======      =======     =======        =======   ======   ========
</TABLE>

     The following table sets forth at December 31, 1999, the dollar amount of
all fixed rate and adjustable rate loans due or repricing after December 31,
2000.
<TABLE>
<CAPTION>

                               Fixed    Adjustable    Total
                              -------   ----------   -------
                                      (In Thousands)
<S>                           <C>       <C>          <C>
Real estate loans:
 First mortgage loans......   $39,039      $40,116   $79,155
 Second mortgage loans.....        --        5,922     5,922
Consumer and other loans...     5,324           --     5,324
                              -------      -------   -------
  Total loans..............   $44,363      $46,038   $90,401
                              =======      =======   =======
</TABLE>

     One- to Four-Family Residential Mortgage Loans.  The Bank's primary lending
activity is the origination of first mortgage loans secured by one- to four-
family residential properties.  A portion of one- to four-family mortgage loans
originated by the Bank are secured by non-owner occupied homes which are
primarily used to furnish housing to students attending the SUNY College at
Oswego.  The Bank generally retains in its portfolio all ARM loans that it
originates.  However, the Bank generally underwrites its loans so as to be
eligible for resale in the secondary mortgage market.  At December 31, 1999,
approximately 91.2% of the Bank's one- to four-family residential real estate
loans were secured by owner-occupied properties.

     Fixed-rate one- to four-family residential mortgage loans originated by the
Bank are originated with terms of up to 30 years (although fixed rate loans held
in portfolio are generally limited to terms of 20 years or less), amortize on a
monthly basis, and have principal and interest due each month.  Such real estate
loans often remain outstanding for significantly shorter periods than their
contractual terms to maturity, particularly in a declining interest rate
environment. Borrowers may refinance or prepay loans at their option.  One- to
four-family residential mortgage loans originated by the Bank customarily
contain "due-on-sale" clauses which permit the Bank to accelerate the
indebtedness of the loan upon transfer of ownership of the mortgaged property.
Due-on-sale clauses are an important means of increasing the interest rate on
existing mortgage loans during periods of rising interest rates.  An origination
fee of up to 3% is charged on fixed-rate mortgage loans.  As a result of the low
interest rate environment that has existed in recent years, many of the Bank's
borrowers have refinanced their mortgage loans with the Bank at lower interest
rates.  During years ended December 31, 1999  and 1998, 43.9% and 36.1%,
respectively, of the Bank's one- to four-family mortgage loan originations
consisted of fixed-rate loans.

     The Bank also originates ARM loans which serve to reduce interest rate
risk.  The Bank currently originates one-year ARM loans which adjust each year
at 275 basis points (100 basis points equal 1%) above the adjusted six month
moving average of the six-month Treasury bill auction discount rate.  The Bank
also offers a loan product whereby the interest is fixed for the first five
years and adjusts annually thereafter.  This loan product typically is
originated with terms

                                       4
<PAGE>

up to 30 years. ARM loans are originated with terms ranging from 5 to 30 years.
ARM loans originated by the Bank provide for maximum periodic interest rate
adjustment of 2 percent per year and an overall maximum interest rate increase
which is determined at the time the loan is originated. However, ARM loans may
not adjust to a level below the initial rate. ARMs may be offered at an initial
rate below the prevailing market rate. The Bank's one- to four-family ARM loan
originations totaled $9.0, $11.6 million and $13.2 million, during the years
1999, 1998, and 1997, respectively. The Bank requires that borrowers qualify for
ARM loans based upon the loan's fully indexed rate.

     At December 31, 1999, $53.5 million, or 61.0%, of the Bank's one- to four-
family loan portfolio consisted of ARM loans.  ARM loans generally pose a credit
risk in that as interest rates rise, the amount of a borrower's monthly loan
payment also rises, thereby increasing the potential for delinquencies and loan
losses.  At the same time, the marketability of such loans may be adversely
affected by higher rates.

     The Bank also originates loans to finance the construction of one- to four-
family owner-occupied residences. Funds are disbursed as construction
progresses.  Loans to finance one- to four-family construction typically provide
for a six-month construction phase during which interest accrues and which is
deducted from the funds disbursed.  Upon completion of the construction phase
the loan automatically converts to permanent financing.  At December 31, 1999,
the Bank held $1.4 million of one- to four-family construction loans.

     The Bank's lending policies require private mortgage insurance for loan to
value ratios in excess of 80%.

     Commercial Real Estate Loans.  Loans secured by commercial real estate
constituted approximately $20.9 million, or 17%, of the Bank's total loan
portfolio at December 31, 1999.  At December 31, 1999, substantially all of the
Bank's commercial real estate loans were secured by properties located within
the Bank's market area.  At December 31, 1999, the Bank's commercial real estate
loans had an average principal balance of $133.8.  At that date, the largest
commercial real estate loan had a principal balance of $1.1 million, and was
secured by a facility for a private, non-profit human services agency located in
Oswego, New York.  This loan is currently performing in accordance with the
original terms.  Commercial real estate loans are generally offered with
adjustable interest rates tied to a market index which currently is the adjusted
six month moving average of the six month Treasury bill auction discount rate,
with an overall interest rate cap which is determined at the time the loan is
originated.  Commercial real estate loans may not adjust to a level below the
initial rate.  The Bank generally offers commercial real estate loans with from
one to five year adjustment periods.  The Bank generally makes commercial real
estate loans up to 75% of the appraised value of the property securing the loan.
An origination fee of up to 2% of the principal balance of the loan is typically
charged on commercial real estate loans.  Commercial real estate loans
originated by the Bank generally are underwritten to mature between 5 and 20
years with an amortization schedule of between 10 and 30 years.  The Bank has in
the past sold loan participations to other financial institutions and expects to
do so in the future as opportunities arise.

     In underwriting commercial real estate loans the Bank reviews the expected
net operating income generated by the real estate to support debt service, the
age and condition of the collateral, the financial resources and income level of
the borrower and the borrower's experience in owning or managing similar
properties.  The Bank generally obtains personal guarantees from all commercial
borrowers.  Loans secured by commercial real estate generally involve a greater
degree of risk than one- to four-family residential mortgage loans and carry
larger loan balances.  This increased credit risk is a result of several
factors, including the concentration of principal in a limited number of loans
and borrowers, the effects of general economic conditions on income producing
properties, and the increased difficulty of evaluating and monitoring these
types of loans.  Furthermore, the repayment of loans secured by commercial real
estate is typically dependent upon the successful operation of the related real
estate.  If the cash flow from the property is reduced, the borrower's ability
to repay the loan may be impaired.

     Multi-Family Real Estate Loans.  Loans secured by multi-family real estate
(real estate containing five or more dwellings) constituted approximately $1.7
million, or 1.3%, of the Bank's total loan portfolio at December 31, 1999. At
December 31, 1999, the Bank had a total of 13 loans secured by multi-family real
estate properties. The Bank's multi-family real estate loans are secured by
multi-family rental properties (primarily townhouses and walk-up apartments). At
December 31, 1999, substantially all of the Bank's multi-family real estate

                                       5
<PAGE>

loans were secured by properties located within the Bank's market area. At
December 31, 1999, the Bank's multi-family real estate loans had an average
principal balance of approximately $139,800 and the largest multi-family real
estate loan had a principal balance of $358,400, and was performing in
accordance with its terms. Multi-family real estate loans generally are offered
with adjustable interest rates tied to the adjusted six month moving average of
the six month Treasury Bill auction discount rate index with an overall interest
rate cap which is determined at the time the loan is originated. Multi-family
real estate loans may not adjust below the initial rate. Multi-family real
estate loans are underwritten to mature between 5 and 20 years, and to amortize
over 10 to 30 years. An origination fee of 1% is generally charged on multi-
family real estate loans.

     In underwriting multi-family real estate loans, the Bank reviews the
expected net operating income generated by the real estate to support the debt
service, the age and condition of the collateral, the financial resources and
income level of the borrower and the borrower's experience in owning or managing
similar properties.  The Bank generally requires a debt service coverage ratio
of at least 120% (net of operating expenses) of the monthly loan payment.  The
Bank makes multi-family real estate loans up to 75% of the appraised value of
the property securing the loan.  The Bank generally obtains personal guarantees
from all multi-family real estate borrowers.

     Loans secured by multi-family real estate generally involve a greater
degree of credit risk than one- to four-family residential mortgage loans and
carry larger loan balances.  This increased credit risk is a result of several
factors, including the concentration of principal in a limited number of loans
and borrowers, the effects of general economic conditions on income producing
properties, and the increased difficulty of evaluating and monitoring these
types of loans.  Furthermore, the repayment of loans secured by multi-family
real estate and commercial real estate is typically dependent upon the
successful operation of the related real estate property.  If the cash flow from
the project is reduced, the borrower's ability to repay the loan may be
impaired.

     Second Mortgage Loans.  The Bank also offers home equity loans and equity
lines of credit collateralized by a second mortgage on the borrower's principal
residence.  The Bank's home equity lines of credit are secured by the borrower's
principal residence with a maximum loan-to-value ratio, including the principal
balances of both the first and second mortgage loans of 80%, or up to 90% where
the Bank has made the first mortgage loan.  At December 31, 1999, the disbursed
portion of home equity lines of credit totaled $3.5 million.  Home equity lines
of credit are offered on an adjustable rate basis with interest rates tied to
the prime rate as published in The Wall Street Journal, plus up to 50 basis
points and with terms of up to 15 years.

     Home equity loans are fixed rate loans with terms generally up to 10 years,
although on occasion the Bank may originate a home equity loan with a term of up
to 15 years.

     Consumer Loans.  As of December 31, 1999, consumer loans totaled $3.5
million, or 2.7%, of the Bank's total loan portfolio.  The principal types of
consumer loans offered by the Bank are unsecured personal loans, and loans
secured by deposit accounts.  Other consumer loans are offered on a fixed rate
basis with maturities generally of less than five years.

     The underwriting standards employed by the Bank for consumer loans include
a determination of the applicant's credit history and an assessment of ability
to meet existing obligations and payments on the proposed loan.  The stability
of the applicant's monthly income may be determined by verification of gross
monthly income from primary employment, and additionally from any verifiable
secondary income.  Creditworthiness and the employment history of the applicant
are of primary consideration in originating consumer loans, and in the case of
home equity lines of credit, the Bank obtains a title guarantee, title search,
or an opinion as to the validity of title.

     Commercial Business Loans.  The Bank currently offers commercial business
loans to businesses in its market area and to deposit account holders.  At
December 31, 1999, the Bank had commercial business loans outstanding with an
aggregate balance of $8.6 million, of which $4.9 million consisted of commercial
lines of credit and $278,000 were lease financing arrangements.  The average
commercial business loan balance was approximately $52,000.  Commercial business
loans generally have fixed rates of interest.  The loans are generally of short
duration with average terms of five years, but which may range up to 15 years.
Lease financing arrangements are loans which

                                       6
<PAGE>

are secured by pools of leases for medical or dental equipment or leases to
finance the acquisition of business equipment.

     Underwriting standards employed by the Bank for commercial business loans
include a determination of the applicant's ability to meet existing obligations
and payments on the proposed loan from normal cash flows generated by the
applicant's business.  The financial strength of each applicant also is assessed
through a review of financial statements provided by the applicant.

     Commercial business loans generally bear higher interest rates than
residential loans, but they also may involve a higher risk of default since
their repayment is generally dependent on the successful operation of the
borrower's business.  The Bank generally obtains guarantees from the borrower, a
third party, or the Small Business Administration, as a condition to originating
its commercial business loans.

     Loan Originations, Solicitation, Processing, and Commitments.  Loan
originations are derived from a number of sources such as existing customers,
developers, walk-in customers, real estate broker referrals, and commissioned
mortgage loan originators.  Upon receiving a loan application, the Bank obtains
a credit report and employment verification to verify specific information
relating to the applicant's employment, income, and credit standing.  In the
case of a real estate loan, an independent appraiser approved by the Bank
appraises the real estate intended to secure the proposed loan.  A loan
processor in the Bank's loan department checks the loan application file for
accuracy and completeness, and verifies the information provided.  Mortgage
loans of up to $200,000 may be approved by any designated loan officer; mortgage
loans in excess of $200,000 must be approved by the Board of Directors.
Commercial loans of up to $35,000 unsecured, or $50,000 (if secured by other
than real estate) may be approved by the Bank's President or either of the two
lending Vice Presidents.  These individuals may join their limits to a total
approval amount of $105,000 unsecured, and $150,000 secured.  Loans in excess of
these limits must be approved by either the entire Board of Directors, or a
subcommittee of the Board of Directors.  The Board of Directors, at their
monthly meeting, will review and verify that management's approvals of loans are
made within the scope of management's authority.  Fire and casualty insurance is
required at the time the loan  is made and throughout the term of the loan, and
upon request of the Bank, flood insurance may be required.  After the loan is
approved, a loan commitment letter is promptly issued to the borrower.  At
December 31, 1999, the Bank had commitments to originate $9.0 million of loans.

     If the loan is approved, the commitment letter specifies the terms and
conditions of the proposed loan including the amount of the loan, interest rate,
amortization term, a brief description of the required collateral, and required
insurance coverage.  The borrower must provide proof of fire and casualty
insurance on the property (and, as required, flood insurance) serving as
collateral, which insurance must be maintained during the full term of the loan.
Title insurance, title search, or an opinion of counsel as to the validity of
title are required on all loans secured by real property.  In recent years, the
Bank has not purchased loans originated by other lenders.

                                       7
<PAGE>

     Origination, Purchase and Sale of Loans.  The table below shows the Bank's
loan origination, purchase and sales activity for the periods indicated.
<TABLE>
<CAPTION>

                                                             Year Ended December 31,
                                               ----------------------------------------------------
                                                 1999       1998       1997       1996       1995
                                               --------   --------   --------   --------   --------
                                                                     (In Thousands)
<S>                                            <C>        <C>        <C>        <C>        <C>
Loan receivable, beginning of period........   $129,338   $122,727   $110,017   $100,850   $ 90,412

Originations:
 Real estate:
  First mortgage/(1)//(3)/..................     26,987     34,908     26,281   $ 23,496     18,219
  Second mortgage/(2)/......................      1,408      1,516      2,178      1,912        643
 Consumer and other loans:
  Consumer loans............................      1,299      2,412      2,306      3,442      2,747
  Student...................................         --         --         --         --        438
  Lease financing...........................         --         --        300         --      1,177
  Commercial................................      5,210      6,849      3,525      1,850      2,756
                                               --------   --------   --------   --------   --------
    Total originations......................     34,904     45,685     34,590     30,700     25,980

 Transfer of mortgage loans to foreclosed
   real estate..............................         93        563        374        445        645
 Repayments.................................     26,201     29,969     21,506     21,088     13,774
 Loan sales.................................      5,993      8,542         --         --      1,123
                                               --------   --------   --------   --------   --------
Net loan activity...........................      2,617      6,611     12,710      9,167     10,438
                                               --------   --------   --------   --------   --------
  Total loans receivable at end of period...   $131,995   $129,338   $122,727   $110,017   $100,850
                                               ========   ========   ========   ========   ========
---------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Includes $23.1 million, and $3.9 million in one- to four-family
      residential loans and commercial real estate loans, respectively, for the
      year ended December 31, 1999.
/(2)/ Includes $1.7 million in home equity loans and a net change of $278,000 in
      home equity lines of credit for the year ended December 31, 1999.
/(3)/ Includes $3.8 million of mortgage loans held for sale originated during
      the year ended December 31, 1999.

     Loan Origination Fees and Other Income.  In addition to interest earned on
loans, the Bank generally receives loan origination fees.  To the extent that
loans are originated or acquired for the Bank's portfolio, SFAS 91 requires that
the Bank defer loan origination fees and costs and amortize such amounts as an
adjustment of yield over the life of the loan by use of the level yield method.
ARM loans originated below the fully indexed interest rate will have a
substantial portion of the deferred amount recognized as income in the initial
adjustment period.  Fees deferred under SFAS 91 are recognized into income
immediately upon prepayment or the sale of the related loan.  At December 31,
1999, the Bank had $84,000 of net deferred loan origination fees.  Loan
origination fees vary with the volume and type of loans and commitments made and
purchased, principal repayments, and competitive conditions in the mortgage
markets, which in turn respond to the demand for and availability of money.

     In addition to loan origination fees, the Bank also receives other fees,
service charges, and other income that consist primarily of deposit transaction
account service charges, late charges and income from REO operations.  The Bank
recognized fees and service charges of $993,000, $775,000 and $856,000, for the
fiscal years ended December 31, 1999, 1998, and 1997, respectively.

     Loans-to-One Borrower.  With certain limited exceptions, a New York
chartered savings bank may not make unsecured loans or extend unsecured credit
for commercial, corporate or business purposes (including lease financing) to a
single borrower, which in the aggregate exceed 15% of the Bank's net worth.  At
December 31, 1999, the Bank's largest lending relationship totaled $2.6 million
and consisted of loans secured by retail businesses and properties.  The Bank's
second largest lending relationship totaled $2.0 million and consisted of loans
secured by commercial retail businesses and properties.  The Bank's third
largest lending relationship totaled $2.0 million and consisted of loans secured
by retail businesses and properties.  The Bank's fourth largest lending
relationship totaled $1.9 million and was secured by a retail office plaza,
retail business property and residence.  The Bank's fifth largest lending
relationship totaled $1.4 million and consisted of loans secured by multi-family
residential housing and residence.  At December 31, 1999 all of the
aforementioned loans were performing in accordance with their terms.

                                       8
<PAGE>

Delinquencies and Classified Assets

     Delinquencies.  The Bank's collection procedures provide that when a loan
is 15 days past due, a computer-generated late notice is sent to the borrower
requesting payment.  If the delinquency continues, at 30 days a delinquent
notice is sent and personal contact efforts are attempted, either in person or
by telephone, to strengthen the collection process and obtain reasons for the
delinquency.  Also, plans to arrange a repayment plan are made.  If a loan
becomes 60 days past due, and no progress has been made in resolving the
delinquency, the Bank will send a 10-day demand letter and personal contact is
attempted, and the loan becomes subject to possible legal action if suitable
arrangements to repay have not been made.  When a loan continues in a delinquent
status for 90 days or more, and a repayment schedule has not been made or kept
by the borrower, generally a notice of intent to foreclose is sent to the
borrower for mortgage loans, and a final demand letter is presented to the
borrower of non-real estate loans, giving 30 days to repay all outstanding
interest and principal.  If not cured, foreclosure proceedings or other
appropriate legal actions are initiated to minimize any potential loss.

     Non-Performing Assets.  Loans are reviewed on a regular basis and are
placed on a non-accrual status when, in the opinion of management, the
collection of additional interest is doubtful.  Loans are placed on non-accrual
status when either principal or interest is 90 days or more past due or less
than 90 days, in the event the loan has been referred to the Bank's legal
counsel for foreclosure.  Interest accrued and unpaid at the time a loan is
placed on non-accrual status is charged against interest income.  At December
31, 1999, the Bank had non-performing assets of $3.2 million, and a ratio of
non-performing loans and real estate owned ("REO") of 1.5% total assets.  Non-
performing assets increased $621,000, or 24%, from $2.8 million in 1998.  While
the changes in non-performing assets tend to be cyclical, the increase can be
attributed to longer workout or liquidation time lines, due primarily to a
larger volume of real estate foreclosures as well as a generally soft local
economy.

     Real estate acquired by the Bank as a result of foreclosure or by the deed
in lieu of foreclosure is classified as REO until such time as it is sold.
These properties are carried at the lower of their recorded amount or estimated
fair value less estimated costs to sell the property.  REO totaled $641,000,
$742,000 and $767,000 at December 31, 1999, 1998,and 1997, respectively.

     The largest component of REO consists of a real estate development project
which had a net book value of $510,000 at December 31, 1999.  The Bank
originally entered into a $570,000 commercial real estate loan in 1988 for the
development of 49 single family residences.  This loan was made under the
"leeway provision" of the New York State Banking Law.  Under this provision of
the Banking Law the lending relationship was originally structured so that the
Bank held title to the property securing the loan subject to the fulfillment of
the borrower's obligations under the loan. In 1990, the developer became
insolvent, was unable to satisfy the terms of the loan and the Bank assumed
control of the project.  In 1998, the Bank established a wholly-owned
subsidiary, whose sole business is the ownership and final development of the
Whispering Oaks real estate subdivision in Baldwinsville, New York.  This
subsidiary was initially capitalized with $50,000 in cash.  It is anticipated
that this capitalization, together with interim financing to be provided by the
Bank, will be sufficient to complete and liquidate this asset.  At December 31,
1999, the Bank had 16 lots remaining to be sold.  The proceeds from the sale of
the lots are used to reduce the outstanding balance of REO.  The Bank believes
it will fully recover its investment in this property.

                                       9
<PAGE>

Delinquent Loans and Non-Performing Assets

     The following table sets forth information regarding the Bank's loans
delinquent 90 days or  more, and real estate acquired or deemed acquired by
foreclosure at the dates indicated.  When a loan is delinquent 90 days or more,
the Bank reverses all accrued interest thereon and ceases to accrue interest
thereafter.  For all the dates indicated, the Bank did not have any material
restructured loans within the meaning of SFAS 15 and SFAS 114.
<TABLE>
<CAPTION>

                                                                                 At December 31,
                                                            ---------------------------------------------------------
                                                              1999        1998        1997        1996        1995
                                                            ---------   ---------   ---------   ---------   ---------
                                                                                (Dollars In Thousands)
<S>                                                         <C>         <C>         <C>         <C>         <C>
Loans delinquent 90 days or more:
Real estate loans........................................   $  2,284    $  1,298    $  1,207    $  1,953    $    849
Consumer loans...........................................        270         534         283          45          70
                                                            --------    --------    --------    --------    --------
 Total delinquent loans..................................      2,554       1,832       1,490       1,998         919
Total REO................................................        641         742         767         700         586
                                                            --------    --------    --------    --------    --------
   Total nonperforming assets/(1)/.......................   $  3,195    $  2,574    $  2,257    $  2,698    $  1,505
                                                            ========    ========    ========    --------    ========

Total loans delinquent 90 days or more
to total loans receivable/(2)/...........................        2.0%        1.4%        1.2%        1.8%        0.9%
Total loans delinquent 90 days or more to total assets...        1.2%        0.9%        0.8%        1.1%        0.5%
Total nonperforming assets to total assets...............        1.5%        1.3%        1.2%        1.4%        0.8%

Net loans receivable/(3)/................................    130,761     128,200     121,585     108,742     100,149
                                                            --------    --------    --------    --------    --------
Total assets.............................................   $216,324    $203,252    $196,770    $189,937    $180,752
                                                            ========    ========    ========    ========    ========
</TABLE>
-----------------------------
/(1)/ Net of specific valuation allowances.
/(2)/ Net of unearned discount, and the allowance for loan losses.
/(3)/ Includes $697,000 of mortgage loans held for sale at December 31, 1999.


     During the year ended December 31, 1999, and year ended December 31, 1998,
respectively, additional gross interest income of $84,000 and $24,000 would have
been recorded on loans accounted for on a non-accrual basis if the loans had
been current throughout the period.  No interest income on non-accrual loans was
included in income during the same periods.

     The following table sets forth information with respect to loans past due
30-89 days in the Bank's portfolio at the dates indicated.
<TABLE>
<CAPTION>

                                             At December 31,
                                ------------------------------------------
                                 1999     1998     1997     1996     1995
                                ------   ------   ------   ------   ------
                                              (In Thousands)
<S>                             <C>      <C>      <C>      <C>      <C>
Loans past due 30-89 days:
Real estate loans............   $1,619   $2,010   $2,232   $1,867   $2,465
Consumer and other loans.....      161      126      296      249      133
                                ------   ------   ------   ------   ------
 Total past due 30-89 days...   $1,780   $2,136   $2,528   $2,116   $2,598
                                ======   ======   ======   ======   ======
</TABLE>

                                       10
<PAGE>

     The following table sets forth information regarding the Bank's delinquent
loans 60 days and greater and REO at December 31, 1999.
<TABLE>
<CAPTION>

                                                                                  At December 31, 1999
                                                                             ------------------------------
                                                                                 Balance         Number
                                                                             -------------      -----------
                                                                                  (Dollars In Thousands)
<S>                                                                          <C>          <C>
Residential real estate:
   Loans 60 to 89 days delinquent...................................         $  429                 10
   Loans more than 90 days delinquent...............................          2,284                 59
Consumer and commercial business loans 60 days or more delinquent...            299                 25
Real estate owned...................................................            641                  5
                                                                             ------                 --
      Total.........................................................         $3,653                 99
                                                                             ======                 ==

</TABLE>

     Classification of Assets.  Federal regulations provide for the
classification of loans and other assets such as debt and equity securities
considered to be of lesser quality as "substandard," "doubtful," or "loss"
assets.  An asset is considered "substandard" if it is inadequately protected by
the current net worth and paying capacity of the obligor or of the collateral
pledged, if any.  "Substandard" assets include those characterized by the
"distinct possibility" that the savings institution will sustain "some loss" if
the deficiencies are not corrected.  Assets classified as "doubtful" have all of
the weaknesses inherent in those classified "substandard," with the added
characteristic that the weaknesses present make "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets classified as "loss" are those considered
"uncollectible" and of such little value that their continuance as assets
without the establishment of a specific loss reserve is not warranted.  Assets
that do not expose the savings institution to risk sufficient to warrant
classification in one of the aforementioned categories, but which possess some
weaknesses, are required to be designated "special mention" by management.

     When a savings institution classifies problem assets as either substandard
or doubtful, it is required to establish general allowances for loan losses in
an amount deemed prudent by management.  General allowances represent loss
allowances that have been established to recognize the inherent risk associated
with lending activities, but which, unlike specific allowances, have not been
allocated to particular problem assets.  When a savings institution classifies
problem assets as "loss," it is required either to establish a specific
allowance for losses equal to 100% of the amount of the assets so classified, or
to charge off such amount.  A savings institution's determination as to the
classification of its assets and the amount of its valuation allowances is
subject to review by federal and state regulatory authorities, which can order
the establishment of additional general or specific loss allowances.  The Bank
regularly reviews the problem loans in its portfolio to determine whether any
loans require classification in accordance with applicable regulations.

     The following table sets forth the aggregate amount of the Bank's
internally classified assets at the dates indicated.
<TABLE>
<CAPTION>

                                           At December 31,
                              ------------------------------------------
                               1999     1998     1997     1996     1995
                              ------   ------   ------   ------   ------
                                             (In Thousands)
<S>                           <C>      <C>      <C>      <C>      <C>
Substandard assets/(1)/....   $2,668   $2,482   $1,719   $1,980   $1,163
Doubtful assets............      110      103       55       59       34
Loss assets................        7       90       16        6        5
                              ------   ------   ------   ------   ------
 Total classified assets...    2,785   $2,675   $1,790   $2,045   $1,202
                              ======   ======   ======   ======   ======
</TABLE>
---------------
/(1)/ Includes $510,000, $638,000, $483,000, $250,000 and 292,000 for a real
      estate development project classified as REO at December 31, 1999, 1998,
      1997, 1996 and 1995, respectively.

     Allowance for Loan Losses.  Management's policy is to provide for estimated
losses on the Bank's loan portfolio based on management's evaluation of the
potential losses that may be incurred.  The Bank reviews on a quarterly basis
the loans in its portfolio which have demonstrated delinquencies, including
problem loans, to

                                       11
<PAGE>

determine whether any loans require classification or the establishment of
appropriate reserves or allowances for losses. Such evaluation, which includes a
review of all loans of which full collectibility of interest and principal may
not be reasonably assured, considers, among other matters, past loss experience,
present economic conditions and other factors deemed relevant by management.
Management calculates the general allowance for loan losses on past experience
as well as current delinquencies and the composition of the Bank's loan
portfolio. While both general and specific loss allowances are charged against
earnings, general loan loss allowances are included, subject to certain
limitations, as capital in computing risk-based capital under federal
regulations.

     In accordance with SFAS 114, a loan is considered impaired when each of the
following criteria are met: the loan is of a material size, the loan is
considered to be non-performing, and a loss is probable.  The measurement of
impaired loans is generally based upon the present value of expected future cash
flows discounted at the historic effective interest rate, except that all
collateral-dependent loans are measured for impairment based on the fair value
of the collateral.

     Management will continue to review the entire loan portfolio to determine
the extent, if any, to which further additional loan loss provisions may be
deemed necessary.  Management believes that the Bank's current allowance for
loan losses is adequate, however, there can be no assurance that the allowance
for loan losses will be adequate to cover losses that may in fact be realized in
the future or that additional provisions for loan losses will not be required.

     Analysis of the Allowance for Loan Losses.  The following table sets forth
the analysis of the allowance for loan losses at or for the periods indicated.
<TABLE>
<CAPTION>

                                                                        At or for the Period Ended December 31,
                                                               ---------------------------------------------------------
                                                                 1999        1998        1997        1996        1995
                                                               ---------   ---------   ---------   ---------   ---------
                                                                                (Dollars In Thousands)
<S>                                                            <C>         <C>         <C>         <C>         <C>

Total loans receivable, net.................................   $130,761    $128,200    $121,585    $108,742    $100,149
Average loans outstanding...................................    130,728     126,931     113,651     104,354      95,979
Allowance balance (at beginning of period)..................        939         828         907         346         315
Provision for losses:
Real estate.................................................        135          83         121          90          53
Consumer and other loans....................................        238         298         140         547          50
Charge-offs:
Real estate.................................................         --         141          --          --          17
Consumer and other loans....................................        190         140         358          93          64
Recoveries:
Real estate.................................................         --          --          --          --          --
Consumer and other loans....................................         28          11          18          17           9
                                                               --------    --------    --------    --------    --------
Allowance balance (at end of period)........................   $  1,150    $    939    $    828    $    907    $    346
                                                               ========    ========    ========    ========    ========

Allowance for loan losses as a percent of net loans
receivable at end of period.................................        0.9%        0.7%        0.7%        0.8%        0.3%
Loans charged off as a percent of average loans
outstanding.................................................        0.2%        0.1%        0.3%        0.1%        0.1%
Ratio of allowance for loan losses to total nonperforming
loans at end of period/(1)/.................................       45.0%       51.3%       55.6%       45.3%       37.6%
Ratio of allowance for loan losses to total nonperforming
 assets at end of period/(1)/...............................       36.0%       36.5%       36.7%       33.6%       23.0%
</TABLE>
-------------------------------------------
/(1)/  Net of specific reserves.

                                       12
<PAGE>

     Allocation of Allowance for Loan Losses.  The following table sets forth
the allocation of allowance for loan losses by loan category for the periods
indicated. The allocation of the allowance by category is not necessarily
indicative of future losses and does not restrict the use of the allowance to
absorb losses in any category.

<TABLE>
<CAPTION>

                                                            At December 31,
                                ---------------------------------------------------------------------
                                        1999                    1998                  1997
                                ----------------------   --------------------   -------------------
                                          % of Loans              % of Loans            % of Loans
                                            In Each                 In Each               In Each
                                          Category to             Category to           Category to
                                  Amount  Total Loans     Amount  Total Loans   Amount  Total Loans
                                --------  -----------    -------  -----------   ------  -----------
                                                        (Dollars in Thousands)
<S>                           <C>        <C>           <C>       <C>          <C>      <C>
Balance at end of period
 applicable to:
 Real estate loans...........     $  440      90.81%       $380      92.01%      $ 462     91.23%
 Consumer and other loans....        710       9.19         559       7.99         366      8.77
                                  ------     ------        ----     ------       -----    ------

  Total allowance for loan
   losses /(1)/..............     $1,150     100.00%       $939     100.00%      $ 828    100.00%
                                  ======     ======        ====     ======       =====    ======

<CAPTION>

                                                                      At December 31,
                                                        ------------------------------------------
                                                                  1996              1995
                                                        --------------------  --------------------

                                                                 % of Loans           % of Loans
                                                                   In Each             In Each
                                                                 Category to          Category to
                                                         Amount  Total Loans  Amount  Total Loans
                                                         ------  -----------  ------  -----------
                                                                     (Dollars in Thousands)
<S>                                                          <C>       <C>         <C>     <C>


Balance at end of period
 applicable to:
 Real estate loans...........                              $ 340    90.75%    $ 250    90.86%
 Consumer and other loans....                                567     9.25        96     9.14
                                                           -----   ------     -----   ------

  Total allowance for loan
   losses /(1)/.............                              $ 907   100.00%    $ 346   100.00%
                                                           =====   ======     =====   ======
</TABLE>
------------------------
/(1)/ Percentages include unearned discount and origination fees.

                                       13
<PAGE>

Investment Activities

     The investment policy of the Bank established by the Board of Directors
attempts to provide and maintain liquidity, maintain a high quality diversified
investment portfolio in order to obtain a favorable return on investment without
incurring undue interest rate and credit risk, provide collateral for pledging
requirements, and to complement the Bank's lending activities.  At December 31,
1999, the Bank had investment securities with an aggregate amortized cost of
$67.8 million and a market value of $66.4 million.  At December 31, 1999, the
Bank's amortized cost value of investment securities consisted of $21.2 million
of corporate debt issues and $17.9 million of securities issued or guaranteed by
the United States Government or agencies thereof and state and municipal
obligations.  The corporate debt issues primarily consist of financial
corporation debt and industrial debentures (the largest single issue was $1.0
million). These issues generally have maturities ranging up to 20 years.  All
corporate debt investments have been rated as investment grade by either Moody's
or Standard & Poor's.  Typically, such investments yield 30-50 basis points more
than Treasury securities with comparable maturities.  To a lesser extent, the
Bank also invests in mutual funds and equity securities.  At December 31, 1999,
the Bank held $2.0 million in common stock and $2.7 million in an equity mutual
fund.  At December 31, 1999, the Bank had invested $23.3 million in mortgage-
backed securities, net.  Mortgage-backed securities, like mortgage loans,
amortize over the life of the security as the underlying mortgages are paid
down.  The speed at which principal payments above normally scheduled
amortization occurs, is generally unpredictable. Historically, the securities
have paid down more rapidly in a falling interest rate environment, thereby
shortening the life of the security.  Likewise, in a rising interest rate
environment, the life of the mortgage-backed security tends to extend. The
result is that, generally, the Bank will receive more investable funds in lower
interest rate environments and less investable funds during periods of higher
interest rates.  The embedded option on the part of the underlying mortgagee to
prepay the loan, therefore, tends to impact the value of the security and can
adversely impact the Bank's net interest margin.  The Bank's investments are,
generally, liquid, and therefore allow the Bank to respond more readily to
changing market conditions.  The investment portfolio is accounted for in
accordance with FASB Statement 115.  At December 31, 1999, the Bank's available-
for-sale and held-to-maturity portfolios had amortized cost of $67.8 million and
$113,000, respectively, and market values of $66.4 million and $113,000,
respectively.

     The Bank generally has maintained a portfolio of liquid assets that exceeds
regulatory requirements.  Liquidity levels may be increased or decreased
depending upon the yields on investment alternatives and upon management's
judgment as to the attractiveness of the yields then available in relation to
other opportunities and its expectation of the yield that will be available in
the future, as well as management's projections as to the short term demand for
funds to be used in the Bank's loan origination and other activities.  For
further information regarding the Bank's investments see Note 2 to the Notes to
Financial Statements.

     At December 31, 1999, the Company holds the following investments which
exceed 10% of total capital.
<TABLE>
<CAPTION>


              Issuer           Book Value   Fair Market Value
          ---------------      ----------   -----------------
        <S>                    <C>          <C>

          Lehman Brothers      $2,999,000          $2,705,000
          CNA Financial        $3,503,000          $3,339,000
</TABLE>

                                       14
<PAGE>

     Investment Portfolio.  The following table sets forth the carrying value of
the Bank's investment portfolio at the dates indicated.  At December 31, 1999,
the market value of the Bank's investments was approximately $66.4 million. The
market value of investments includes interest-earning deposits, and mortgage-
backed securities.
<TABLE>
<CAPTION>

                                                                  At December 31,
                                                            ----------------------------
                                                              1999      1998      1997
                                                            --------   -------   -------
<S>                                                       <C>        <C>       <C>
                                                                    (In Thousands)
Investment securities:
 U.S. Government and agency obligations..................   $11,167    $ 1,471   $ 4,856
 State and municipal obligations.........................     6,695      5,906     6,636
 Corporate debt issues...................................    21,302     20,347    18,121
 Equity securities.......................................     2,015      1,230     1,139
 Mutual funds............................................     2,656      2,298     1,785
                                                            -------    -------   -------
                                                             43,835     31,252    32,537

Unrealized gain (loss) on available for sale portfolio...      (786)     1,413     1,126
                                                            -------    -------   -------
  Total investment securities............................    43,049     32,665    33,663
                                                            -------    -------   -------
Interest-earning deposits in other institutions..........        --         --        --
Federal funds sold.......................................                1,800        --
                                                                       -------   -------
   Total investments.....................................   $43,048    $34,465   $33,663
                                                            =======    =======   =======

Mortgage-backed securities, net:
 Adjustable rate.........................................     1,602      2,505     3,823
 Fixed rate..............................................    22,453     17,976    19,200
                                                            -------    -------   -------
                                                             24,055     20,481    23,023
Unrealized gain (loss) on available for sale portfolio...      (707)       297       135
                                                            -------    -------   -------
   Total mortgage-backed securities, net.................   $23,348    $20,778   $23,158
                                                            =======    =======   =======
</TABLE>

     Investment Portfolio Maturities.  The following table sets forth the
amortized cost, market value, average life in years, and annualized weighted
average yield of the Bank's investment portfolio at December 31, 1999.
<TABLE>
<CAPTION>

                                                                                     Annualized
                                                                             Average  Weighted
                                                      Amortized     Market     Life    Average
                                                         Cost        Value     Years    Yield
                                                      ----------   ---------   -----   --------
                                                               (Dollars in Thousands)
<S>                                                   <C>          <C>         <C>     <C>

Investment securities:
 U.S. Government treasury..........................      $ 2,012    $ 1,993     1.50      5.55%
 U.S. Government agency............................        9,155      8,892     5.95      6.54
 State and municipal obligations...................        6,695      6,751     6.96      5.55
 Corporate debt issues.............................       21,302     20,195     9.93      6.60
 Marketable equity securities......................        4,671      5,218       --        --
                                                         -------    -------     ----      ----

  Total............................................      $43,835    $43,049
                                                         -------    =======
 Unrealized loss on available for sale portfolio...         (786)
                                                         -------
Carrying value of investment securities............      $43,049
                                                         =======
Investment securities held to maturity: /(1)/
 Corporate debt obligations........................      $   113        113       --      9.52
                                                         =======    =======     ====      ====
</TABLE>
--------------------------------
/(1)/ The information is included above as a component of corporate debt issues.

                                       15
<PAGE>

     Securities Portfolio Maturities.  The following table sets forth the
scheduled maturities, carrying values, market values and average yields for the
Bank's investment securities at December 31, 1999.  Yield is calculated on the
amortized cost to maturity.

<TABLE>
<CAPTION>
                                                                               At December 31, 1999
                                                 --------------------------------------------------------------------------
                                                      One Year or Less         One to Five Years         Five to Ten Years
                                                 ------------------------   ------------------------   ---------------------
                                                               Annualized                Annualized               Annualized
                                                                Weighted                  Weighted                 Weighted
                                                  Carrying      Average      Carrying      Average      Carrying    Average
                                                   Value         Yield        Value         Yield        Value       Yield
                                                 ----------   -----------   ----------   -----------   ----------   --------
                                                                           (Dollars in Thousands)
<S>                                             <C>         <C>           <C>          <C>           <C>          <C>
Debt investment securities:
 U.S. Agency securities................              $   --           --%      $ 3,250        6.317%      $ 5,881     6.659%
 U.S. Government securities............                  --           --         1,993        5.500            19    10.927
 State and municipal obligations.......                 276        6.372         3,641        5.664         1,399     5.604
 Corporate debt issues.................                  --           --         2,804        6.618        11,602     6.617
                                                     ------        -----       -------        -----       -------    ------
   Total...............................              $  276        6.372%      $11,688        6.141%      $18,901     6.546%
                                                     ======        =====       =======        =====       =======    ======
Equity and mortgage-backed
 securities:
 Mutual funds..........................              $2,656        0.600%      $    --           --%      $    --        --%
 Mortgage-backed securities............                 134        6.476           747        6,705         5,723     6.684
 Common stock..........................               2,015        5.374            --           --            --        --
                                                     ------        -----       -------        -----       -------    ------
   Total...............................              $4,805        2.774%      $   747        6.705%      $ 5,723     6.684%
                                                     ======        =====       =======        =====       =======    ======

   Total investment
    securities.........................              $5,081        2.970%      $12,435        6.169%      $24,624     6.581%
                                                     ======        =====       =======        =====       =======    ======

Unrealized gain on available for
 sale portfolio.......................
   Total carrying value...............


Investment securities held
 to maturity:/(1)/
 Corporate debt obligations............              $   --           --%      $    --           --%      $    --        --%
                                                     ------        -----       -------        -----       -------    ------
  Total securities.....................              $   --           --%      $    --           --%      $    --        --%
                                                     ======        =====       =======        =====       =======    ======

<CAPTION>
                                                                         At December 31, 1999
                                                          ---------------------------------------------------

                                                           More than Ten Years    Total Investment Securities
                                                          ---------------------  -----------------------------
                                                                     Annualized                     Annualized
                                                                      Weighted                       Weighted
                                                           Carrying   Average    Carrying   Market    Average
                                                            Value      Yield      Value      Value     Yield
                                                          ---------   --------   --------   -------   --------
                                                                          (Dollars in thousands)
<S>                                                       <C>        <C>        <C>        <C>       <C>

Debt investment securities:
 U.S. Agency securities................                     $    24    10.126%    $ 9,155   $ 8,892     6.546%
 U.S. Government securities............                          --        --       2,012     1,993     5.552
 State and municipal obligations.......                       1,379     4.990       6,695     6,751     5.553
 Corporate debt issues.................                       6,783     6.561      21,189    20,082     6.601
                                                            -------    ------     -------   -------    ------
   Total...............................                     $ 8,186     6.325%    $39,051   $37,718     6.354%
                                                            =======    ======     =======   =======    ======
Equity and mortgage-backed
 securities:
 Mutual funds..........................                     $    --        --%    $ 2,656   $ 3,203     0.600%
 Mortgage-backed securities............                      17,451     6.702      24,055    23,348     6.698
 Common stock..........................                          --        --       2,015     2,015     5.374
                                                            -------    ------     -------   -------    ------
   Total...............................                     $17,451     6.702%    $28,566   $28,566     6.041%
                                                            =======    ======     =======   =======    ======

   Total investment
    securities.........................                     $25,637     6.582%    $67,777   $66,397     6.222%
                                                            =======    ======     =======   =======    ======

Unrealized gain on available for
 sale portfolio........................                                            (1,493)
                                                                                   ------
   Total carrying value................                                           $66,284   $66,397     6.362%
                                                                                  =======   =======    ======

Investment securities held
 to maturity:/(1)/
 Corporate debt obligations............                     $   113     7.161%    $   113   $   113     7.161%
                                                            -------    ------     -------   -------    ------
  Total securities.....................                     $   113     7.161%    $66,397   $65,851     6.351%
                                                            =======    ======     =======   =======    ======
</TABLE>
-----------------------------------------
/(1)/ The information is included as a component of debt investment securities.

                                       16
<PAGE>

Sources of Funds

     General.  Deposits are the primary source of the Bank's funds for lending
and other investment purposes.  In addition to deposits, the Bank derives funds
from the amortization and prepayment of loans and mortgage-backed securities,
the maturity of investment securities and operations and from other borrowings.
Scheduled loan principal repayments are a relatively stable source of funds,
while deposit inflows and outflows and loan prepayments are influenced
significantly by general interest rates and market conditions.  Borrowings may
be used on a short-term basis to compensate for reductions in the availability
of funds from other sources or on a longer term basis for general business
purposes.

     Deposits.  Consumer and commercial deposits are attracted principally from
within the Bank's market area through the offering of a broad selection of
deposit instruments including noninterest-bearing demand accounts, NOW accounts,
passbook and club accounts, money market deposit, term certificate accounts and
individual retirement accounts.  While the Bank accepts deposits of $100,000 or
more, it generally does not currently offer premium rates for such deposits.
Deposit account terms vary according to the minimum balance required, the period
of time during which the funds must remain on deposit, and the interest rate,
among other factors.  The Bank has a committee which meets weekly to evaluate
the Bank's internal cost of funds, surveys rates offered by competing
institutions, reviews the Bank's cash flow requirements for lending and
liquidity and the number of certificates of deposit maturing in the upcoming
week.  This committee executes rate changes when deemed appropriate.  The Bank
does not obtain funds through brokers, nor does it solicit funds outside its
market area.

     Deposit Portfolio.  The following table sets forth information regarding
interest rates, terms, minimum amounts and balances of the Bank's savings and
other deposits as of December 31, 1999:
<TABLE>
<CAPTION>

  Weighted                                                                                                   Percentage
  Average                                                                         Minimum                     of Total
Interest Rate       Minimum Term                Checking and Savings Deposits     Amount     Balances         Deposits
-------------      --------------               -----------------------------   ----------   ---------        ---------
                                                                                           (In Thousands)
<C>                <S>                          <C>                             <C>          <C>              <C>
  0.000%            None                        Non-interest demand account         $   50    $ 9,746            6.43%
  2.000             None                        NOW accounts                           500     13,996            9.24
  2.150             None                        Savings Accounts - Fixed Rate          100     45,541           30.05
  2.970             None                        Savings Account- Tiered Rate           100     13,889            9.17
  3.546             None                        Money market accounts                2,500        418            .028

                                                Certificates of Deposit
                                                --------------------------
  4.900             6 months                    Fixed term, fixed rate               2,500      6,135            4.05
  5.692             9 months                    Fixed term, fixed rate               1,000        110            0.07
  5.179             12 months                   Fixed term, fixed rate               1,000     23,641           15.60
  5.144             15 months                   Fixed term, fixed rate               1,000      6,091            4.02
  5.442             18 months                   Fixed term, variable rate            1,000      1,398            0.92
  5.272             18 months                   Fixed term, fixed rate               1,000      4,579            3.02
  5.380             24 months                   Fixed term, fixed rate               1,000      4,668            3.08
  5.691             30 months                   Fixed term, fixed rate               1,000      3,253            2.15
  5.853             36 months                   Fixed term, fixed rate/(1)/          1,000      6,169            4.07
  5.781             48 months                   Fixed term, fixed rate/(1)/          1,000      3,855            2.54
  5.909             60 months                   Fixed term, fixed rate               1,000      1,840            1.21
  6.076             84 months                   Fixed term, fixed rate               1,000      6,160            4.07
  2.858             60 through 120 months       Fixed term, fixed rate               1,000         47            0.03
                                                                                              -------           ------
                    TOTAL                                                                    $151,536 /(2)/     100.00%
                                                                                             ========           ======
</TABLE>
---------------------------
/(1)/ This deposit product allows the depositor to elect to adjust the interest
      rate paid once during the initial term of the deposit to the then
      prevailing rate.
/(2)/ Tables excludes escrow accounts totalling $901,000 of December 31, 1999.

                                       17
<PAGE>

      The following table sets forth the change in dollar amount of savings
deposits in the various types of savings accounts offered by the Bank between
the dates indicated.

S<TABLE>
<CAPTION>
                                 Balance     Percent                Balance     Percent                Balance    Percent
                                   at          of        Incr.         at         of        Incr.        at         of
                                 12/31/99   Deposits    (Decr)     12/31/98    Deposits    (Decr)     12/31/97    Deposits
                                ---------   --------    -------    ---------   --------    -------    ---------   --------
                                                                   (In Thousands)
<S>                             <C>         <C>         <C>        <C>         <C>         <C>        <C>         <C>

Club accounts................   $   1,002        .66%   $    94    $     908       0.57%   $   115    $     792       0.52%
Noninterest accounts.........       9,746       6.43        273        9,473       5.94      1,829        7,644       5.03
NOW accounts.................      13,996       9.24     (2,331)      16,327      10.23      3,021       13,306       8.75
Passbooks....................      58,429      38.56     (4,893)      63,322      39.70        177       63,145      41.53
Money market deposit accounts         418        .28        343           75       0.05        (38)         113       0.07
Time deposits which mature:
 Within 12 months............      45,670      30.14     (6,059)      51,729      32.43     12,869       38,860      25.56
 Within 12-36 months.........      16,190      10.68      2,799       13,391       8.40     (9,220)      22,611      14.87
 Beyond 36 months............       6,085       4.02      1,801        4,284       2.68      1,303        5,588       3.67
                                ---------     ------    -------    ---------     ------    -------    ---------     ------

  Total......................   $ 151,536     100.00%   $(7,973)   $ 159,509     100.00%   $ 7,450    $ 152,059     100.00%
                                =========     ======    =======    =========     ======    =======    =========     ======

<CAPTION>
                                                      Balance    Percent                 Balance
                                           Incr.        at          of        Incr.        at
                                          (Decr)      12/31/96   Deposits    (Decr)      12/31/95
                                         --------    ---------   --------    -------    ---------
                                                             (In Thousands)
<S>                                      <C>         <C>         <C>         <C>        <C>

Club accounts................             $    131    $     661       0.42%   $   110    $     551
Noninterest accounts.........                  303        7,341       4.63        129        7,212
NOW accounts.................                  224       13,082       8.24        917       12,165
Passbooks....................               (1,828)      64,973      40.94     (5,495)      70,468
Money market deposit accounts                  (61)         174       0.11        (78)         252
Time deposits which mature:
 Within 12 months............              (14,075)      52,935      33.36     15,011       37,924
 Within 12-36 months.........                7,679       14,933       9.41     (5,968)      20,901
 Beyond 36 months............                  990        4,598       2.90     (3,914)       8,512
                                          --------    ---------      -----    -------    ---------

  Total......................             $ (6,637)   $ 158,697      100.0%   $   712    $ 157,985
                                          ========    =========      =====    =======    =========
</TABLE>
-----------------------------
/(1)/ Excludes escrow accounts totalling $901,000 of December 31, 1999.

                                       18
<PAGE>

     The following table sets forth the certificates of deposit in the Bank
classified by rates as of the dates indicated:

s<TABLE>
<CAPTION>
                                                At December 31,
                                      -----------------------------------
                                       1999          1998          1997
                                      -------   ---------------   -------
                                                (In Thousands)
<S>                                   <C>       <C>               <C>
Rate
----

3.00% or less...................      $    10       $     8       $   139
3.01 - 4.99%....................       20,466        10,824         7,253
5.00 - 6.99%....................       46,702        53,920        55,115
7.00 - 8.99%....................          767         4,652         4,552
9.00 - 10.99%...................           --            --            --
                                      -------       -------       -------
                                      $67,945       $69,404       $67,079
                                      =======       =======       =======

</TABLE>
     The following table sets forth the amount and maturities of certificates of
deposit at December 31, 1999.
<TABLE>
<CAPTION>

                                                        Amount Due
                       ------------------------------------------------------------------------
                       Less Than         1-2        2-3          3-4        4-5       After 5
                        One Year       Years      Years        Years      Years        Years       Total
                       ---------      -------     -----        -----      -----        -----       -----
                                                   (In Thousands)
<S>                  <C>             <C>        <C>          <C>        <C>           <C>       <C>
Rate
----

3.00% or less.....      $    10       $   --     $   --       $   --     $   --       $   --     $    10
3.01 - 3.99%......          469            6         --           --         --           --          57
4.00 - 4.99%......       19,096        1,022        161          130         --           --      20,409
5.00 - 5.99%......       24,152        7,855      5,438        1,167      1,595        2,351      43,058
6.00 - 6.99%......        2,361          240        701          176         60          106       3,644
7.00 - 7.99%......           --           --        767           --         --           --         767
8.00% and above...           --           --         --           --         --           --          --
                        -------       ------     ------       ------     ------       ------     -------
                        $46,088       $9,123     $7,067       $1,973     $1,655       $2,457     $67,945
                        =======       ======     ======       ======     ======       ======     =======

</TABLE>
     The following table indicates the amount of the Bank's certificates of
deposit of $100,000 or more by time remaining until maturity as of December 31,
1999.
<TABLE>
<CAPTION>

                                                                        Certificates
                                                                         of Deposit
                                                                        of $100,000
Remaining Maturity                                                        or More
------------------                                                    ---------------
                                                                       (In Thousands)
<S>                                                                  <C>

  Three months or less.......................................             $  1,673

  Three through six months...................................                2,431
  Six through twelve months..................................                2,239
  Over twelve months.........................................                2,386
                                                                          --------
   Total.....................................................             $  8,729
                                                                          ========

</TABLE>

   The following table sets forth the net changes in the deposit activities of
the Bank for the periods indicated:
<TABLE>
<CAPTION>                                                                      At December 31,
                                                                   ------------------------------------
                                                                      1999         1998          1997
                                                                    --------     --------      --------
                                                                              (In Thousands)
<S>                                                               <C>         <C>           <C>

Balance at beginning of period...................................   $159,509     $152,059      $158,696
Net deposits (withdrawals).......................................    (13,322)       1,367       (12,920)
Interest credited................................................      5,349        6,083         6,283
                                                                    --------     --------      --------
Ending balance...................................................    151,536      159,509       132,059
                                                                    --------     --------      --------
Net increase (decrease) in deposits..............................   $ (7,973)    $  7,450      $ (6,637)
                                                                    ========     ========      ========

</TABLE>
Borrowings

     Savings deposits are the primary source of funds of the Bank's lending and
investment activities and for its general business purposes.  At December 31,
1999, the Bank had $10.2 million in funds obtained from repurchase agreements
outstanding and $28.4 million in term advances.  The Bank is a member of the
Federal Home Loan Bank System.

                                       19
<PAGE>

     The following table summarizes the outstanding balance of short-term
borrowing of the Bank for the years indicated.

<TABLE>
<CAPTION>
                                                             At December 31,
                                                -------------------------------------
                                                    1999          1998       1997
                                                -------------------------------------
                                                             (In thousands)
<S>                                                  <C>        <C>        <C>

Overnight Line of Credit.................           $ 4,350        $    --    $ 5,750
Term borrowings (original
 term)
 90 days or less.........................             9,612          1,587      7,942
 1 year..................................            10,995          8,404      3,550
 2 year..................................             2,700          1,000      1,000
                                                    -------        -------    -------
  Balance at end of period...                       $27,657        $10,991    $18,242
                                                    =======        =======    =======

Daily average during the year                        18,148         15,077     10,212
Maximum month-end balance................            27,657         18,691     18,892
Weighted average rate during
 the year................................              5.42%          5.64%      5.92%
Year-end average rate....................              5.06%          5.32%      5.84%
</TABLE>

Personnel

     As of December 31, 1999, the Bank had 68 full-time and 21 part-time
employees.  None of the Bank's employees is represented by a collective
bargaining group.  The Bank believes its relationship with its employees to be
good.

REGULATION AND SUPERVISION

General

     The Bank is a New York State chartered stock savings bank and its deposit
accounts are insured up to applicable limits by the FDIC.  The Bank is subject
to extensive regulation by the State of New York Banking Department (the
"Department") as its chartering agency, and by the FDIC, as the deposit insurer.
The Bank must file reports with the Department and the FDIC concerning its
activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as establishing
branches and mergers with, or acquisitions of, other depository institutions.
There are periodic examinations by the Department and the FDIC to assess the
Bank's compliance with various regulatory requirements.  This regulation and
supervision establishes a comprehensive framework of activities in which a
savings bank may engage, and is intended primarily for the protection of the
insurance fund and depositors.  The regulatory structure also gives the
regulatory authorities extensive discretion in connection with their supervisory
and enforcement activities and examination policies, including policies with
respect to the classification of assets and the establishment of adequate loan
loss reserves for regulatory purposes.  Any change in such regulation, whether
by the Department, the FDIC or through legislation, could have a material
adverse impact on the Holding Company, the Bank, and their operations and
stockholders.  The Company is also required to file certain reports with, and
otherwise comply with the rules and regulations of, the FRB and the Department
and the FDIC which administers the provisions of the Securities Exchange Act of
1934.  Certain of the regulatory requirements applicable to the Bank and to the
Company are referred to below or elsewhere herein.

     The exercise by an FDIC-insured savings bank of the lending and investment
powers of a savings bank under the New York State Banking Law is limited by FDIC
regulations and other federal law and regulations.  In particular, the
applicable provisions of New York State Banking Law and regulations governing
the investment authority and activities of an FDIC insured state-chartered
savings bank have been substantially limited by the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA") and the FDIC regulations issued
pursuant thereto.

     The Bank derives its lending, investment and other authority primarily from
the applicable provisions of New York State Banking Law and the regulations of
the Banking Department, as limited by FDIC regulations.  Under these laws and
regulations, savings banks, including the Bank, may invest in real estate
mortgages, consumer and commercial loans, certain types of debt securities,
including certain corporate debt securities and obligations of federal, state
and local governments and agencies, certain types of corporate equity securities
and certain other assets.  Under the statutory

                                       20
<PAGE>

authority for investing in equity securities, a savings bank may invest up to
7.5% of its assets in corporate stock, with an overall limit of 5% of its assets
invested in common stock. Investment in the stock of a single corporation is
limited to the lesser of 2% of the outstanding stock of such corporation or 1%
of the savings bank's assets, except as set forth below. Such equity securities
must meet certain earnings ratios and other tests of financial performance. A
savings bank's lending powers are not subject to percentage of assets
limitations, although there are limits applicable to single borrowers. A savings
bank may also, pursuant to the "leeway" power, make investments not otherwise
permitted under the New York State Banking Law. This power permits investments
in otherwise impermissible investments of up to 1% of assets in any single
investment, subject to certain restrictions and to an aggregate limit for all
such investments of up to 5% of assets. Additionally, in lieu of investing in
such securities in accordance with and reliance upon the specific investment
authority set forth in the New York State Banking Law, savings banks are
authorized to elect to invest under a "prudent person" standard in a wider range
of debt and equity securities as compared to the types of investments
permissible under such specific investment authority. However, in the event a
savings bank elects to utilize the "prudent person" standard, it will be unable
to avail itself of the other provisions of the New York State Banking Law and
regulations which set forth specific investment authority. The Bank has not
elected to conduct its investment activities under the "prudent person"
standard. A savings bank may also exercise trust powers upon approval of the
Department.

     New York State chartered savings banks may also invest in subsidiaries
under their service corporation investment authority.  A savings bank may use
this power to invest in corporations that engage in various activities
authorized for savings banks, plus any additional activities which may be
authorized by the Banking Department. Investment by a savings bank in the stock,
capital notes and debentures of its service corporations is limited to 3% of the
bank's assets, and such investments, together with the bank's loans to its
service corporations, may not exceed 10% of the savings bank's assets.
Furthermore, New York banking regulations impose requirements on loans which a
bank may make to its executive officers and directors and to certain
corporations or partnerships in which such persons have equity interests.  These
requirements include, but are not limited to, requirements that (i) certain
loans must be approved in advance by a majority of the entire board of directors
and the interested party must abstain from participating directly or indirectly
in the voting on such loan, (ii) the loan must be on terms that are not more
favorable than those offered to unaffiliated third parties, and (iii) the loan
must not involve more than a normal risk of repayment or present other
unfavorable features.

     Under the New York State Banking Law, the Superintendent of Banks (the
"Superintendent") may issue an order to a New York State chartered banking
institution to appear and explain an apparent violation of law, to discontinue
unauthorized or unsafe practices and to keep prescribed books and accounts.
Upon a finding by the Department that any director, trustee or officer of any
banking organization has violated any law, or has continued unauthorized or
unsafe practices in conducting the business of the banking organization after
having been notified by the Superintendent to discontinue such practices, such
director, trustee or officer may be removed from office after notice and an
opportunity to be heard.  The Bank does not know of any past or current
practice, condition or violation that might lead to any proceeding by the
Superintendent or the Department against the Bank or any of its directors or
officers.

     Standards for Safety and Soundness.  FDICIA requires the federal bank
regulatory agencies to prescribe regulatory standards for all insured depository
institutions and depository institution holding companies relating to: (i)
internal controls, information systems and audit systems; (ii) loan
documentation; (iii) credit underwriting; (iv) interest rate risk exposure; (v)
asset growth; and (vi) compensation, fees and benefits.  The compensation
standards would prohibit employment contracts, compensation or benefit
arrangements, stock option plans, fee arrangements or other compensatory
arrangements that provide excessive compensation, fees or benefits or could lead
to material financial loss. In addition the federal banking regulatory agencies
are required to prescribe by regulation standards specifying:  (i) maximum
classified assets to capital ratios; (ii) minimum earnings sufficient to absorb
losses without impairing capital; and (iii) to the extent feasible, a minimum
ratio of market value to book value for publicly traded shares of depository
institutions and depository institution holding companies.  In November 1993,
the federal banking agencies, including the FDIC, proposed regulations regarding
the implementation of these standards.

     Other Deposit Insurance Reforms.  FDICIA amended the FDI Act to prohibit
insured depository institutions that are not well-capitalized from accepting
brokered deposits unless a waiver has been obtained from the FDIC.  Deposit
brokers are required to register with the FDIC.

                                       21
<PAGE>

     Consumer Protection Provisions.  FDICIA enacted consumer oriented
provisions including a requirement of notice to regulators and customers for any
proposed branch closing and provisions intended to encourage the offering of
"lifeline" banking accounts and lending in distressed communities.  FDICIA also
requires depository institutions to make additional disclosures to depositors
with respect to the rate of interest and the terms of their deposit accounts.

     Uniform Lending Standard.  Under FDICIA, the federal banking agencies are
required to adopt uniform regulations prescribing standards for extensions of
credit that are secured by liens on interests in real estate or made for the
purpose of financing the construction of a building or other improvements to
real estate.  Insured depository institutions must adopt and maintain written
policies that establish appropriate limits and standards for extensions of
credit that are secured by liens or interests in real estate or are made for the
purpose of financing permanent improvements to real estate.  These policies must
establish loan portfolio diversification standards, prudent underwriting
standards (including loan-to-value limits) that are clear and measurable, loan
administration procedures, and documentation, approval and reporting
requirements.  The real estate lending policies must reflect consideration of
the Interagency Guidelines for Real Estate Lending Policies (the "Interagency
Guidelines") that have been adopted by the federal banking regulators.

     The Interagency Guidelines, among other things, require depository
institutions to establish internal loan-to-value limits for real estate loans
that are not in excess of the following supervisory limits: (i) for loans
secured by undeveloped land, the supervisory loan-to-value limit is 65% of the
value of the collateral; (ii) for land development loans, the supervisory limit
is 75%; (iii) for loans for the construction of commercial, multi-family or
other nonresidential property, the supervisory limit is 80%; (iv) for loans for
the construction of one- to four- family properties, the supervisory limit is
85%; and (v) for loans secured by other improved property (e.g. farmland,
commercial property and other income-producing property including non-owner-
occupied, one- to four- family property) the supervisory limit is 85%.

     The Interagency Guidelines indicate that on a case-by-case basis it may be
appropriate to originate or purchase loans with loan-to-value ratios in excess
of the supervisory loan-to-value limits, based on the support provided by other
credit factors.  The aggregate amount of loans in excess of the supervisory
loan-to-value limits, however, should not exceed 100% of total capital and the
total of such loans secured by commercial, agricultural, multi-family and other
non-one- to four- family residential properties should not exceed 30% of total
capital.

     The supervisory loan-to-value limits do not apply to certain categories of
loans including loans insured or guaranteed by the United States Government and
its agencies or by financially capable state, local or municipal governments or
agencies, loans backed by the full faith and credit of state governments, loans
that are to be sold promptly after origination without recourse to a financially
responsible party, loans that are renewed, refinanced or restructured in
connection with a workout, loans to facilitate sales of real estate acquired by
the institution in the ordinary course of collecting a debt previously
contracted and loans where the real estate is not the primary collateral.

Insurance of Deposit Accounts

     The Bank is a member of the Bank Insurance Fund ("BIF").  The BIF has
achieved the required reserve ratio of 1.25% of insured reserve deposits.  At
December 31, 1999 the Bank held $25.6 million in deposits which are insured by
the Savings Association Insurance Fund.  The Bank paid $31,000 in federal
deposit insurance premiums for the fiscal year ended December 31, 1999, as
compared to $35,000 in 1998.

     Under the FDI Act, insurance of deposits may be terminated by the FDIC upon
a finding that the institution has engaged in unsafe or unsound practices, is in
an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC.  The
management of the Bank does not know of any practice, condition or violation
that might lead to termination of deposit insurance.  At December 31, 1999, the
Bank's capital exceeded the capital requirements imposed by the FDIC.

                                       22
<PAGE>

Capital Maintenance

     The FDIC has issued regulations that require BIF-insured banks, such as the
Bank, to maintain minimum levels of capital.  The regulations establish a
minimum leverage capital ratio requirement of not less than 3.0% for banks in
the strongest financial and managerial condition, with a CAMEL Rating of 1 (the
highest examination rating of the FDIC for banks).  For all other banks, the
minimum leverage capital requirement is 3% plus additional capital of at least
100 to 200 basis points.  Core capital (also referred to as "Tier 1 capital") is
comprised of the sum of common stockholders' equity, non-cumulative perpetual
preferred stock (including any related surplus) and minority interests in
consolidated subsidiaries, minus all intangible assets (other than qualifying
servicing rights).

     The FDIC also requires that savings banks meet a risk-based capital
standard.  The risk-based capital standard requires the maintenance of total
capital (which is defined as core capital and supplementary capital) to risk-
weighted assets of at least 8% and core capital to risk-weighted assets of at
least 4%.  In determining the amount of risk-weighted assets, all assets, plus
certain off-balance sheet items, are multiplied by a risk-weight of 0% to 100%,
based on the risks the FDIC believes are inherent in the type of asset or off-
balance sheet item.  The components of core capital are equivalent to those
discussed above under the leverage capital ratio requirement.  The components of
supplementary capital currently include cumulative perpetual preferred stock,
perpetual preferred stock, mandatory convertible securities, subordinated debt,
intermediate preferred stock and allowance for possible loan and lease losses.
Allowance for possible loan and lease losses includable in supplementary capital
is limited to a maximum of 1.25% of risk-weighted assets.  Overall, the amount
of capital counted toward supplementary capital cannot exceed 100% of core
capital.

Loans-to-One-Borrower Limitations

     With certain limited exceptions, a New York State chartered savings bank
may not make unsecured loans or extend credit for commercial, corporate or
business purposes (including lease financing) to a single borrower, the
aggregate amount of which would be in excess of 15% of the bank's net worth.  In
addition, the Bank may make secured loans or extensions of credit to a single
borrower which aggregate 25% of the Bank's net worth provided that the
underlying collateral is valued in an amount equal to at least 10% of the Bank's
net worth.  The Bank currently complies with all applicable loans-to-one-
borrower limitations.

Community Reinvestment Act

     Federal Regulation.  Under the Community Reinvestment Act ("CRA"), as
implemented by FDIC regulations, a savings institution has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low and moderate income
neighborhoods.  The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA.  The CRA
requires the FDIC, in connection with its examination of a savings institution,
to assess the institution's record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain applications
by such institution.  The Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") amended the CRA to require, effective July 1,
1990, public disclosure of an institution's CRA rating and require the FDIC to
provide a written evaluation of an institution's CRA performance utilizing a
four-tiered descriptive rating system which replaced the five-tiered numerical
rating system.

     New York State Regulation.  The Bank is also subject to provisions of the
New York State Banking Law which impose continuing and affirmative obligations
upon banking institutions organized in New York State to serve the credit needs
of its local community ("NYCRA") which are substantially similar to those
imposed by the CRA.  Pursuant to the NYCRA, a bank must file an annual NYCRA
report and copies of all federal CRA reports with the Banking Department. The
NYCRA requires the Banking Department to make an annual written assessment of a
bank's compliance with the NYCRA, utilizing a four-tiered rating system, and
make such assessment available to the public.  The NYCRA also requires the
Superintendent to consider a bank's NYCRA rating when reviewing a bank's
application to engage in certain transactions, including mergers, asset
purchases and the establishment of branch offices or automated teller machines,

                                       23
<PAGE>

and provides that such assessment may serve as a basis for the denial of any
such application.  At December 31, 1999, the Bank complied with its NYCRA
requirements.

     The Bank's CRA rating as of its latest examination was satisfactory.

Federal Reserve System

     Under Federal Reserve Board regulations, the Bank is required to maintain
noninterest-earning reserves against its transaction accounts (primarily NOW and
regular checking accounts).  At December 31, 1999, the Bank complied with these
requirements.

Holding Company Regulation

     The Company is a registered bank holding company pursuant to the Bank
Holding Company Act of 1956, as amended (the "BHCA").  The Company is subject to
examination, regulation and periodic reporting under the BHCA, as administered
by the FRB.  The FRB has adopted capital adequacy guidelines for bank holding
companies (on a consolidated basis) substantially similar to those of the FDIC
for the Bank.  The Company's consolidated capital  exceeds these requirements.

     A bank holding company is generally prohibited from engaging in, or
acquiring direct or indirect control of any company engaged in, non-banking
activities.  One of the principal exceptions to this prohibition is for
activities found by the FRB to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.  Some of the principal
activities that the FRB has determined by regulation to be so closely related to
banking are: (i) making or servicing loans; (ii) performing certain data
processing services: (iii) providing securities brokerage services; (iv) acting
as fiduciary, investment or financial advisor; (v) leasing personal or real
property; (vi) making investments in corporations or projects designed primarily
to promote community welfare; and (vii) acquiring a savings and loan
association.

     Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the FRA on any extension of credit to the bank holding
company or its subsidiaries, and on the acceptance of stocks or securities of
such holding company or its subsidiaries as collateral, and on the acceptance of
such stocks or securities as collateral for loans. In addition, related
provisions of the FRA and FRB regulations limit the amount of, and establish
required procedures and credit standards with respect to, loans and other
extensions of credit to officers, directors and principal stockholders of the
Bank, the Company, any subsidiary of the Company and related interests of such
persons.  Moreover, subsidiaries of bank holding companies are prohibited from
engaging in certain tie-in arrangements (with the Company or any of its
subsidiaries) in connection with any extension of credit, lease or sale of
property or furnishing of services.

     The Company and the Bank will be affected by the monetary and fiscal
policies of various agencies of the United States Government, including the
Federal Reserve System.  In view of changing conditions in the national economy
and in the money markets, it is impossible for management of the Company to
accurately predict future changes in monetary policy or the effect of such
changes on the business or financial condition of the Company.

     New York State Bank Holding Company Regulation.  In addition to the federal
bank holding company regulations, a bank holding company organized or doing
business in New York State also may be subject to regulation under the New York
State Banking Law.  The term "bank holding company," for the purposes of the New
York State Banking Law, is defined generally to include any person, company or
trust that directly or indirectly either controls the election of a majority of
the directors or owns, controls or holds with power to vote more than 10% of the
voting stock of a bank holding company or, if the Company is a banking
institution, another banking institution, or 10% or more of the voting stock of
each of two or more banking institutions.  In general, a bank holding company
controlling, directly or indirectly, only one banking institution will not be
deemed to be a bank holding company for the purposes of the New York State
Banking Law.  Under New York State Banking Law, the prior approval of the
Banking Department is required before: (1) any action is taken that causes any
company to become a bank holding company; (2) any action is taken that causes
any banking institution to become or be merged or consolidated with a subsidiary
of a bank holding

                                       24
<PAGE>

company; (3) any bank holding company acquires direct or indirect ownership or
control of more than 5% of the voting stock of a banking institution; (4) any
bank holding company or subsidiary thereof acquires all or substantially all of
the assets of a banking institution; or (5) any action is taken that causes any
bank holding company to merge or consolidate with another bank holding company.
Additionally, certain restrictions apply to New York State bank holding
companies regarding the acquisition of banking institutions which have been
chartered five years or less and are located in smaller communities. Officers,
directors and employees of New York State bank holding companies are subject to
limitations regarding their affiliation with securities underwriting or
brokerage firms and other bank holding companies and limitations regarding loans
obtained from its subsidiaries. Although the Company will not be a bank holding
company for purposes of New York State law, any future acquisition of ownership,
control, or the power to vote 10% or more of the voting stock of another bank or
bank holding company would cause it to become such.

Gramm-Leach-Bliley Financial Services Modernization Act of 1999

     In November 1999, President Clinton signed into law the Gramm-Leach-Bliley
Financial Services Modernization Act of 1999, federal legislation intended to
modernize the financial services industry by establishing a comprehensive
framework to permit affiliations among commercial banks, insurance companies,
securities firms and other financial service providers.  To the extent the
legislation permits banks, securities firms and insurance companies to
affiliate, the financial services industry may experience further consolidation.
This could result in a growing number of larger financial institutions that
offer a wider variety of financial services than the Bank currently offers and
that can aggressively compete in the markets the Bank currently serves.

FEDERAL AND STATE TAXATION

     Federal Taxation.  The following discussion of federal taxation is intended
only to summarize certain pertinent federal income tax matters and is not a
comprehensive description of the tax rules applicable to the Company or the
Bank.

     Bad Debt Reserves.  Prior to the 1996 Act, the Bank was permitted to
establish a reserve for bad debts and to make annual additions to the reserve.
These additions could, within specified formula limits, be deducted in arriving
at the Bank's taxable income.  As a result of the 1996 Act, the Bank must use
the specific charge off method in computing its bad debt deduction beginning
with its 1996 Federal tax return.  In addition, the federal legislation requires
the recapture (over a six year period) of the excess of tax bad debt reserves at
December 31, 1995 over those established as of December 31, 1987.

     Taxable Distributions and Recapture.  Prior to the 1996 Act, bad debt
reserves created prior to January 1, 1988 were subject to recapture into taxable
income should the Bank fail to meet certain thrift asset and definitional tests.
New federal legislation eliminated these thrift related recapture rules.
However, under current law, pre-1988 reserves remain subject to recapture should
the Bank make certain non-dividend distributions.

     Minimum Tax.   The Code imposes an alternative minimum tax ("AMT") at a
rate of 20% on a base of regular taxable income plus certain tax preferences
("alternative minimum taxable income" or "AMTI").  The AMT is payable to the
extent such AMTI is in excess of an exemption amount.  Net operating losses can
offset no more than 90% of AMTI.  Certain payments of alternative minimum tax
may be used as credits against regular tax liabilities in future years. The Bank
has not been subject to the alternative minimum tax and has no such amounts
available as credits for carryover.

     Net Operating Loss Carryovers.  A financial institution may carry back net
operating losses to the preceding two taxable years and forward to the
succeeding 20 taxable years.  This provision applies to losses incurred in
taxable years beginning after August 5, 1997. At December 31, 1999, the Bank had
no net operating loss carryforwards for federal income tax purposes.

     The Internal Revenue Service has examined the federal income tax return for
the fiscal year ended 1992; the fiscal year-end tax returns for 1991, 1993, 1994
and 1995 remain open.  See Note 12 to the Financial Statements.

                                       25
<PAGE>

State Taxation

     New York Taxation.  The Bank is subject to the New York State Franchise Tax
on Banking Corporations in an annual amount equal to the greater of (i) 9% of
the Bank's "entire net income" allocable to New York State during the taxable
year, or (ii) the applicable alternative minimum tax.  The alternative minimum
tax is generally the greater of (a) 0.01% of the value of the Bank's assets
allocable to New York State with certain modifications, (b) 3% of the Bank's
"alternative entire net income" allocable to New York State, or (c) $250.
Entire net income is similar to federal taxable income, subject to certain
modifications (including the fact that net operating losses cannot be carried
back or carried forward) and alternative entire net income is equal to entire
net income without certain modifications.

     Delaware State Taxation.  As a Delaware holding company not earning income
in Delaware, the Company is exempt from Delaware corporate income tax but is
required to file an annual report with and pay an annual franchise tax to the
State of Delaware.

ITEM 2.   Properties
--------------------

     The Bank conducts its business through its main office located in Oswego,
New York, and four full service branch offices located in Oswego County.  The
following table sets forth certain information concerning the main office and
each branch office of the Bank at December 31, 1999.  The aggregate net book
value of the Bank's premises and equipment was $4.9 million at December 31,
1999.  For additional information regarding the Bank's properties, see Note 5 to
Notes to Financial Statements.
<TABLE>
<CAPTION>

LOCATION                     OPENING DATE   OWNED/LEASED    ANNUAL RENT
--------                     ------------   -------------   -----------
<S>                         <C>            <C>             <C>

Main Office                      1874          Owned            --
-----------
214 West First Street
Oswego, New York  13126

Plaza Branch                     1989          Owned /(1)/      --
------------
Route 104, Ames Plaza
Oswego, New York  13126

Mexico Branch                    1978          Owned            --
-------------
Norman & Main Streets
Mexico, New York  13114

Oswego East Branch               1994          Owned            --
------------------
34 East Bridge Street
Oswego, New York  13126

Fulton Branch                    1994          Owned            --
-------------
114 Oneida Street
</TABLE>

Fulton, New York  13068
---------------------------
/(1)/ The property is owned; the underlying land is leased.


ITEM 3.   Legal Proceedings
---------------------------

  There are various claims and lawsuits to which the Company is periodically
involved incident to the Company's business.  In the opinion of management, such
claims and lawsuits in the aggregate are immaterial to the Company's
consolidated financial condition and results of operations.

ITEM 4.   Submission of Matters to a Vote of Security Holders
-------------------------------------------------------------

  No matters were submitted to a vote of stockholders during the fourth quarter
of the year under report.

                                       26
<PAGE>

                                    PART II

ITEM 5.   Market for Company's Common Stock and Related Security Holder Matters
-------------------------------------------------------------------------------

  The "Market for Common Stock" section of the Company's Annual Report to
Stockholders is incorporated herein by reference.

ITEM 6.   Selected Financial Data
---------------------------------

  The selected financial information for the year ended December 31, 1999 is
filed as part of the Company's Annual Report to Stockholders and is incorporated
by reference.

ITEM 7.   Management's Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
          Results of Operations
          ---------------------

  The "Management's Discussion and Analysis of Financial Condition and Results
of Operations" section of the Company's Annual Report to Stockholders is
incorporated herein by reference.

ITEM 7A.  Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------

  The information required by this item is set forth under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report to Stockholders which is incorporated herein by
reference.

ITEM 8.   Financial Statements and Supplementary Data
-----------------------------------------------------

  The financial statements are contained in the Company's Annual Report to
Stockholders and are incorporated herein by reference.

ITEM 9.   Changes in and Disagreements with Accountants on Accounting and
-------------------------------------------------------------------------
          Financial Disclosure
          --------------------

  None.

                                       27
<PAGE>

                                   PART III
                                   --------

ITEM 10.  Directors and Executive Officers of the Company
---------------------------------------------------------

  (a) Information concerning the directors of the Company is incorporated by
reference hereunder in the Company's Proxy Materials for the Annual Meeting of
Stockholders.

  (b) Set forth below is information concerning the Principal Officers of the
Company at December 31, 1999.
<TABLE>
<CAPTION>

          Name                Age                   Positions Held With the Company
---------------------------   ---   --------------------------------------------------------------
<S>                           <C>   <C>

Chris C. Gagas                 69    Chairman of the Board, President and Chief Executive Officer

Anita J. Austin                50    Internal Auditor

Melissa A. Miller              42    Vice President, Secretary

James A. Dowd, CPA             32    Vice President--Controller

Edgar J. Manwaring             54    Vice President--Lending

Gregory L. Mills               39    Vice President, Director of Marketing, Branch Administrator

W. David Schermerhorn          39    Executive Vice President-Lending

Thomas W. Schneider/(1)/       38    Executive Vice President and Chief Financial Officer

Barry S. Thompson              45    Senior Vice President, Compliance Officer and Security Officer
-------------------
</TABLE>
/(1)/ Effective January 15, 2000, Mr. Schneider was named President and Chief
      Executive Officer of the Company.

ITEM 11.  Executive Compensation
------------------------------------

     Information with respect to management compensation and transactions
required under this item is incorporated by reference hereunder in the Company's
Proxy Materials for the Annual Meeting of Stockholders under the caption
"Compensation".

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

     The information contained under the sections captioned "Stock Ownership of
Management" is incorporated by reference to the Company's Proxy Materials for
its Annual Meeting of Stockholders.

ITEM 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

     The information required by this item is set forth under the caption
"Certain Transactions" in the Definitive Proxy Materials for the Annual Meeting
of Stockholders and is incorporated herein by reference.

                                       28
<PAGE>

                                    PART IV
                                    -------

ITEM 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
--------------------------------------------------------------------------

     (a)(1)  Financial Statements
             --------------------

 The exhibits and financial statement schedules filed as a part of this Form 10-
K are as follows:

             (A)  Independent Auditors' Report;

             (B) Consolidated Statements of Condition - December 31, 1999 and
                 1998.

             (C) Consolidated Statements of Income - years ended December 31,
                 1999, 1998 and 1997;

             (D) Consolidated Statements of Stockholders' Equity - years ended
                 December 31, 1999, 1998 and 1997

             (F) Consolidated Statements of Cash Flows - years ended December
                 31, 1999, 1998 and 1997; and

             (G) Notes to Consolidated Financial  Statements.

     (a)(2)  Financial Statement Schedules
             -----------------------------

     All financial statement schedules have been omitted as the required
information is inapplicable or has been included in the Notes to Consolidated
Financial Statements.

     (b)  Reports on Form 8-K
          -------------------

     The Company has not filed a Current Report on Form 8-K during the fourth
quarter of the fiscal year ended December 31, 1999.


     (c)  Exhibits
          --------

           3.1      Certificate of Incorporation of Pathfinder Bancorp, Inc.
                    Incorporated herein by reference to the Company's
                    Registration Statement on S-4, file no. 333-36051 (the "S-
                    4")

           3.2      Bylaws of Pathfinder Bancorp, Inc. (Incorporated herein by
                    reference to the Company's S-4

           4        Form of Stock Certificate of Pathfinder Bancorp, Inc.

           10.1     Form of Oswego City Savings Bank 1999 Stock Option Plan
                    Incorporated by reference to the Company's S-4

           10.2     Form of Oswego City Savings Bank 1999 Recognition and
                    Retention Plan Incorporated by reference to the Company's
                    S-4

                                       29
<PAGE>

           10.3     Employment Agreement between the Bank and Chris C. Gagas,
                    President and Chief Executive Officer Incorporated by
                    reference to the Company's S-4

           10.4     Employment Agreement between the Bank and Thomas W.
                    Schneider, Vice President and Chief Financial Officer
                    Incorporated by reference to the Company's S-4

           10.5     Employment Agreement between the Bank and W. David
                    Schermerhorn, Vice President - Loan Administration
                    Incorporated by reference to the Company's S-4

           13       Annual Report to Stockholders

           21       Subsidiaries of Company

           27       Financial Data Schedule

                                       30
<PAGE>

                                  Signatures

     Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


                                    Pathfinder Bancorp, Inc.


Date:     March 21, 2000            By: /S/ Thomas W. Schneider
                                        ---------------------------------
                                    Thomas W. Schneider
                                    President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

<S>                                              <C>
                                                    By: /S/ Chris C. Gagas
                                                    -------------------------------------
                                                    Chris C. Gagas, Chairman of the Board

                                                    Date: March 21, 2000


By:  /S/ Thomas W. Schneider                        By:  /S/ Chris R. Burritt
     ----------------------------------------           ---------------------------------
     Thomas W. Schneider, President and Chief           Chris R. Burritt, Director
     Executive Officer

Date: March 21, 2000                                Date: March 21, 2000


By:  /S/ James A. Dowd                              By:  /S/ Raymond W. Jung
     ----------------------------------------            --------------------------------
     James A. Dowd, Vice President and Controller        Raymond W. Jung, Director
     (Principal Accounting Officer)

Date: March 21, 2000                                Date: March 21, 2000


By:  /S/ Bruce E. Manwaring                         By:  /S/ Victor S. Oakes
     ----------------------------------------           ---------------------------------
     Bruce E. Manwaring., Director                       Victor S. Oakes,  Director


Date: March 21, 2000                                     Date: March 21, 2000


By:  /S/ L. William Nelson, Jr.                     By:  /S/ Corte J. Spencer
     ----------------------------------------            --------------------------------
     L. William Nelson, Jr., Director                    Corte J. Spencer, Director


Date: March 21, 2000                                Date: March 21, 2000


By:  /S/ Lawrence W. O'Brien
     ----------------------------------------
     Lawrence W. O'Brien, Director

Date:  March 21, 2000


By:  /S/ Janette Resnick
     ----------------------------------------
     Janette Resnick, Director

Date: March 21, 2000

</TABLE>

<PAGE>

                                 Exhibit Index
                                 -------------

     3.1    Certificate of Incorporation of Pathfinder Bancorp, Inc.
            Incorporated herein by reference to the Company's registration
            statement on S-4, file no. 333-36051 (the "S-4")

     3.2    Bylaws of Pathfinder Bancorp, Inc. (Incorporated herein by reference
            to the Company's S-4

     4      Form of Stock Certificate of Pathfinder Bancorp, Inc.

     10.1   Form of Oswego City Savings Bank 1999 Stock Option Plan Incorporated
            by reference to the Company's S-4

     10.2   Form of Oswego City Savings Bank 1999 Recognition and Retention Plan
            Incorporated by reference to the Company's S-4

     10.3   Employment Agreement between the Bank and Chris C. Gagas, President
            and Chief Executive Officer Incorporated by reference to the
            Company's S-4

     10.4   Employment Agreement between the Bank and Thomas W. Schneider, Vice
            President and Chief Financial Officer Incorporated by reference to
            the Company's S-4

     10.5   Employment Agreement between the Bank and W. David Schermerhorn,
            Vice President - Loan Administration Incorporated by reference to
            the Company's S-4

     13     Annual Report to Stockholders

     21     Subsidiaries of Company

     27     Financial Data Schedule