UNITED STATES

               SECURITIES AND EXCHANGE COMMISSION

                    Washington, D. C. 20549

                          FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d) of the 
Securities Exchange Act of 1934

For the quarterly period ended March 31, 1998

Commission file Number 2-94863

CANANDAIGUA NATIONAL CORPORATION
(Exact name of registrant as specified in its charter.)

          NEW YORK                          16-1234823
(State of other jurisdiction of         (I.R.S. Employer
 incorporation or organization)         Identification Number)

72 South Main Street, Canandaigua, New York        14424
(Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code (716) 394-4260

     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 12 months (or for such shorter 
period that the registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days.

                         YES [X]  NO [ ] 

     Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practical date:

     On March 31, 1998 there were 160,495 shares of the registrant's common 
stock outstanding.

<PAGE>
PART I FINANCIAL INFORMATION
<TABLE>
                   
           CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARIES
           CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
                      March 31, 1998 and 1997
           (Dollars in thousands, except per share amounts)

<CAPTION>
                                      March 31,       December 31,
                                       1998               1997
                                     ---------          ---------

<S>                                    <C>                <C>
ASSETS
Current assets
  Cash and due from banks              $23,818            $19,647
  Securities:
    Held to maturity -  
      U.S. Government                   31,806             31,413
      State & municipal obligations     34,102             34,273
      Other securities                   4,599              5,301
                                       -------            -------
                                        70,507             70,987
    Available-for-sale                     394                394
                                       -------            -------
Total securities                        70,901             71,381
                                       -------            -------
Loans:
  Commercial, financial & agricultural  39,412             37,610
  Residential mortgage                  85,105             94,593
  Commercial mortgage                   76,238             74,228
  Consumer-indirect                     72,715             71,317
  Consumer-other                        15,363             15,245
  Other loans                            5,911             12,138
  Loans held for sale                    2,050              2,119
                                       -------            -------
     Total loans                       296,794            307,250
     Less:  Allowance for loan losses   (3,168)            (3,153)
                                       -------            -------
Loans - net                            293,626            304,097
                                       -------            -------
Premises and equipment - net            11,131             11,184
Accrued interest receivable              2,593              2,372
FHLB and FRB stock                       3,548              3,118
Other assets                             7,415              7,143
                                       -------            -------
    TOTAL ASSETS                      $413,032           $418,942
                                       =======            =======
</TABLE>

<PAGE>
<TABLE>

<CAPTION>                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                   <C>                <C>
Deposits:
  Non-interest bearing                $ 59,308           $ 73,297
  Interest bearing                     265,231            251,464
                                       -------            -------       
     Total deposits                    324,539            324,761
                                       
Borrowing from FHLB                     45,061             50,667
Accrued interest payable and
   other liabilities                     2,397              2,582
                                       -------            -------
     TOTAL LIABILITIES                 371,997            378,010
                                       -------            -------
Stockholders' equity:
  Common stock, $50 par value; 
    240,000 shares authorized;, 
    162,208 issued:                      8,110              8,110
  Capital surplus                        8,489              8,489
  Retained earnings                     24,870             24,742
  Treasury stock at cost (1,713 and 
     1,642 shares, respectively)          (553)              (528)
  Accumulated other comprehensive
    income                                 119                119
                                       -------            -------
    TOTAL STOCKHOLDERS' EQUITY          41,035             40,932
                                       -------            -------
    TOTAL LIABILITIES &
    STOCKHOLDERS' EQUITY              $413,032           $418,942
                                       =======            =======
Fair value of securities              $ 71,302           $ 71,284
                                       =======            =======

<FN>
See notes to condensed consolidated financial statements
</TABLE>

<PAGE>
<TABLE>

        CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
      CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
     For the three month periods ended March 31, 1998 and 1997
        (Dollars in thousands, except per share amounts)

<CAPTION>
                                               Three months ended
                                                     March 31
                                               ------------------
                                                  1998       1997
                                                ------     ------
<S>                                            <C>        <C>
Interest income:
  Loans, including fees                        $ 6,828    $ 6,100
  Federal funds sold and others                     33          4
  Investment securities                            994        999
                                                ------     ------
    Total interest income                        7,855      7,103

Interest expense:
  Deposits                                       2,437      2,282
  Borrowings                                       673        182 
                                                ------     ------
    Total interest expense                       3,110      2,464
                                                ------     ------
  Net interest income                            4,745      4,639
Provision for loan losses                          323        333
                                                ------     ------
  Net interest income after
  provision for loan losses                      4,422      4,306
                                                ------     ------
Other income:
  Service charges on
   deposit accounts                                311        399
  Trust                                            511        382
  Other                                            532        313
                                                ------     ------
        Total other income                       1,354      1,094
                                                ------     ------

Operating expenses:
  Salaries & employee benefits                   2,352      2,278
  Occupancy                                        683        547
  Stationery, supplies & postage                   159        167
  Other fees                                        52         52
  Other                                          1,110        763
                                                ------     ------
  Total operating expenses                       4,356      3,807
                                                ------     ------
Income before income taxes                       1,420      1,593
Provisions for income taxes                        409        570
                                                ------     ------
              NET INCOME                        $1,011     $1,023
                                                ======     ======
Basic earnings per share                        $ 6.30     $ 6.34 
                                                ======     ======
<FN>
See notes to condensed consolidated financial statements.
</TABLE>

<PAGE>


<TABLE>
          CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
   CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited)
      For the three month periods ended March 31, 1998 and 1997
               (Dollars in thousands, except per share amount)
<CAPTION>
                                                                                        Accumulated
                                                      Additional                              Other
                                               Common    Paid in  Undivided  Treasury Comprehensive
                                                Stock    Capital    Profits     Stock        Income     Total
                                               ------     ------    -------     -----        ------    ------
<S>                                           <C>        <C>       <C>         <C>            <C>    <C>
Balance at January 1, 1998                    $ 8,110      8,489     24,742      (528)          119    40,932
                                                -----      -----     ------       ---           ---    ------
 Comprehensive income:
  Net income                                                          1,011                             1,011
                                                -----      -----     ------       ---           ---    ------
  Comprehensive income                                                1,011                             1,011
                                                -----      -----      -----       ---           ---     -----
 Cash dividend - $5.50 per share                                       (883)                             (883)
 Purchase of 71 shares of treasury stock                                          (25)                    (25)
                                                -----       -----    ------       ---           ---    ------
Balance at March 31, 1998                     $ 8,110       8,489    24,870      (553)          119    41,035
                                                =====       =====    ======       ===           ===    ======

Balance at January 1, 1997                    $ 8,110      8,489     22,616      (174)           78    39,119
                                                -----      -----     ------       ---           ---    ------
 Comprehensive income:
  Net income                                      -          -        1,023        -             -      1,023
                                                -----      -----      -----       ---           ---     -----
  Comprehensive income                             -          -       1,023        -             -      1,023
                                                -----      -----      -----       ---           ---     -----
 Cash dividends - $4.75                           -          -         (768)       -                     (768)
 Purchase of 480 shares of treasury stock                                        (156)                   (156)
                                                -----      -----     ------       ---           ---    ------
Balance at March 31, 1997                     $ 8,110      8,489     22,871      (330)           78    39,218
                                                =====      =====     ======       ===           ===    ======


<FN>
See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>

<TABLE>
          CANANDAIGUA NATIONAL CORPORATION AND SUBSIDIARY
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
      For the three month periods ended March 31, 1998 and 1997
                      (Dollars in thousands)
 

                                           
<CAPTION>
                                               
                                               Three months ended
                                                     March 31,
                                             ---------------------
                                               1998           1997
                                             ------         ------
<S>                                         <C>            <C>
Cash flow from operating activities:
Net income                                  $ 1,011        $ 1,023
Adjustments to reconcile net income to
  net cash from operating activities:
 Depreciation                                   438            348
 Accretion and amortization                     (34)           (27)
 Provision for loan losses                      323            333
 Originations of loans held for sale         (8,023)        (1,023)
 Proceeds from sale of loans held for sale    8,092          1,064
(Increase) decrease in accrued interest
   receivable                                  (221)          (377)
(Increase) decrease in other assets          (1,067)          (438)
 Increase (decrease) in accrued interest 
   payable and other liabilities               (185)           159
                                            -------         ------
     Net cash from operating activities         334          1,062
                                            -------         ------

Cash flows from investing activities:
 Proceeds from maturities of investments     10,522          9,442
 Investment purchases                        (9,991)       ( 9,514)
 Loans made, net of principal payments       10,079        (10,746)
 Fixed asset purchases, net                    (385)          (588)
 Purchase of FRB & FHLB stock                  (430)          (992)
 Proceeds from sale of other real estate        853             -
 Investment in minority owned subsidiary       ( 75)          (555)
                                            -------        -------
   Net cash provided (used)  
   by investing activities                   10,573        (12,953)
                                            -------        -------
Cash flows from financing activities:
 Net increase (decrease) in demand, savings
  and short term deposits                    (8,860)         4,702
 Proceeds from issuance of certificates of
  deposit net of matured certificates         8,638           (221)
 Dividends paid                                (883)          (768)
 Net advances from (repayments to) FHLB      (5,606)         6,962
 Purchase of treasury stock                     (25)          (156)
                                            -------        -------
  Net cash provided (used) by financing 
    activities                               (6,736)        10,519
                                            -------        -------
  Net increase (decrease) in cash &
    cash equivalents                          4,171         (1,372)
Cash & cash equivalents - beginning of
  period                                     19,647         19,173
                                            -------        -------
Cash & cash equivalents-end of period      $ 23,818       $ 17,801
                                            =======        =======

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest                                 $4,780         $2,464
                                            
    Income Taxes                             $  631         $  365
 
<FN>
See notes to condensed consolidated financial statements.  

</TABLE>

<PAGE>


                 CANANDAIGUA NATIONAL CORPORATION
                  AND CONSOLIDATED SUBSIDIARY

   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                           March 31, 1998

(1)     Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have 
been prepared in accordance with the instructions to Form 10-Q and Article 
10 of Regulation S-X and with generally accepted accounting principles for 
interim financial information. Such principles are applied on a basis 
consistent with those reflected in the December 31, 1997 Form 10-K Report 
of the Company filed with the Securities and Exchange Commission. 
Accordingly, they do not include all of the information and footnotes 
required by generally accepted accounting principles for complete financial 
statements.  Management has prepared the financial information included 
herein without audit by independent certified public accountants.  In the 
opinion of management, all adjustments (consisting of normal recurring 
accruals) considered necessary for a fair presentation have been included.  
Operating results for the three-month period ended March 31, 1998 are not 
necessarily indicative of the results that may be expected for the year 
ended December 31, 1998.  For further information, refer to the 
consolidated financial statements and footnotes thereto included in the 
Company's annual report on Form 10-K for the year ended December 31, 1997.

(2)     Comprehensive Income

On January 1, 1998, the Company adopted SFAS No. 130, "Reporting 
Comprehensive Income." This statement establishes standards for reporting 
and display of comprehensive income and its components (revenues, expenses, 
gains and losses) in a full set of general-purpose financial statements. 
Comprehensive income includes a company's reported net income adjusted for 
items that are currently accounted for as direct entries to stockholders' 
equity, such as the mark to market adjustment on securities available for 
sale. The Company's only sources of comprehensive income are net income and 
changes in unrealized gains (losses), net of taxes, on available-for-sale 
securities.  Accumulated other comprehensive income represents the net 
unrealized gains or losses on securities available for sale as of the 
balance sheet date. The adoption of this statement resulted in no 
reclassification of prior period amounts, because the Company has not 
realized any gains on the sale of its available-for-sale securities.

(3)     New Accounting Pronouncements

FASB Statement No. 131 entitled "Disclosures about Segments of an 
Enterprise and Related Information" was issued in June 1997.  This 
Statement is effective for the Company beginning with its year end December 
31, 1998 financial statements.  The statement establishes standards for the 
way public companies report information about operating segments in their 
annual financial statements and requires that those companies report 
selected information about operating segments in interim financial reports 
issued to shareholders.  It also establishes standards for related 
disclosures about products, services, geographic areas and major customers.  
This statement may increase the Company's financial disclosures but will 
have no impact on operating results.

FASB Statement No. 132 entitled "Employers' Disclosures about Pensions and 
Other Post Retirement Benefits" was issued in February 1998.  This 
statement revises employers' disclosures about pension and other post 
retirement benefit plans.  It does not change the measurement or 
recognition of these plans.  The statement is effective for the Company's 
December 31, 1998 year end financial reporting and will not impact the 
Company's financial position or results of operations as the Company does 
not sponsor any plans covered by this statement.

<PAGE>


                   CANANDAIGUA NATIONAL CORPORATION

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

                           March 31, 1998

The following is management's discussion and analysis of certain 
significant factors which have affected the Company's financial position 
and operating results during the periods included in the accompanying 
condensed consolidated financial statements. Management's discussion and 
analysis supplements management's discussion and analysis for the year 
ended December 31, 1997 contained in the Company's Form 10-K and includes 
certain known trends, events and uncertainties that are reasonably expected 
to have a material effect on the Company's financial position or operating 
results.

Overview

Total assets decreased $5.9 million or 1.4% in the first three months of 
1998.  Loans decreased $10.5 million or 3.4% while securities decreased $.5 
million or 0.7%.  During the same period, deposits decreased $.2 million or 
0.1% and borrowings (from the FHLB) decreased $5.6 million or 11.1%. Funds 
generated through loan paydowns and refinancings were used to reduce FHLB 
borrowings during the period.

Net income for the three-month period ended March 31, 1998 declined $.01 
million or 1.2% as compared to the same period in 1997.  Basic income per 
share decreased by $.04 or 0.6% over the same period. The decrease in net 
income was a result of increased operating costs outpacing increases in net 
interest and other operating income.  A substantial portion of the 
increased operating expenses was derived from one of the Company's mortgage 
banking subsidiaries, which was not acquired until late 1997.  For the 
quarter ended March 31, 1998, net interest income increased $.1 million or 
2.3% over the same quarter in 1997 and is reflective of the growth in 
interest income from the Company's indirect automobile loan portfolio 
offset by the growth in interest expense from FHLB borrowings during the 
same period.


Results of Operations

As of March 31, 1998, total assets of the Company were $413.0 million, down 
from $418.9 million at year end 1997.  Securities showed a minor decrease 
of $.5 million to $70.9 million.  Net loans decreased $10.5 million to 
$293.6 million, other assets rose $.3 million to $7.4 million, and cash and 
due from banks increased $4.2 million to $23.8 million. The decline in 
loans is primarily related to payoffs and refinancings of mortgage loans 
held in portfolio and is a reaction to the continued low interest rate 
environment for residential mortgage loans. 

Total deposits at March 31, 1998 were $324.5 million and were down $.2 
million from December 31, 1997. For the same period borrowings from FHLB 
were down $5.6 million to $45.0 million.  Other liabilities declined by $.2 
million to $2.4 million. The decline in borrowings is a direct result of 
the decline in loans.

For the first three months ending March 31, 1998, average interest earning 
assets, increased $19.7 million to $375.3 million from $355.6 million at 
December 31, 1997.  The yields on these assets were 8.37% and 8.39%, 
respectively.  For the same period, average interest bearing liabilities 
increased $23.7 million to $308.7 million from $285.0 at December 31, 1997.  
Rates paid on these liabilities were 4.03% and 3.94%, respectively.  This 
11 basis point drop in interest spread had a negative impact on net 
interest income.  Combined with this drop in spread and a $4.0 million 
increase in interest bearing liabilities (FHLB borrowings) over interest 
earning assets, the Company's net interest margin declined to 5.06% for the 
three months ended March 31, 1998 versus 5.23% for the year ended December 
31, 1997.

Other income for the quarter ended March 31, 1998 was $1.4 million, an 
increase of $.3 million or 23.8% over the same quarter in 1997.  The 
increase was reflected both in trust income, due to growth in assets under 
management, and other operating income attributed to the Company's mortgage 
banking subsidiaries.  

Operating expenses increased $.5 million for the quarter ended March 31, 
1998 to $4.3 million versus $3.8 million for the 1997 first quarter, 
reflected mostly in other operating expenses.  The increase in this 
category for the period was due to the Company's acquisition of Home Town 
Funding in late 1997, a net recovery on nonperforming assets in 1997 of $.1 
million and increases in legal fees of $.1 million in 1998.

The effective income tax rate for the quarter ended March 31, 1998 was 
28.8% versus 35.7% for the quarter ended March 31, 1997.  This reduction in 
rate is due to the Company's ability to use net operating losses generated 
by its non-banking subsidiaries.


Allowance for Loan Losses and Non-Performing Assets 

Allowance for Loan Losses:

Changes in the allowance for loan losses for the three months ended March 
31, 1998 and 1997 are as follows:

                                                  1998          1997
                                                 -----         -----
Balance at beginning of period                 $ 3,153       $ 2,675
Provision for loan losses                          323           333
Loans charged off                                 (419)         (266)
Recoveries on loan previously charged off          111            73
                                                 -----         -----
Balance at end of period                       $ 3,168       $ 2,815
                                                 =====         =====
Allowance as a percentage of 
 total period end loans                           1.07%         1.03%
                                                 =====         =====
Allowance as a percentage of 
 non performing loans                            83.90%        37.77%
                                                 =====         =====

At March 31, 1998, the recorded investment in loans that are considered 
impaired totaled $3.2 million as compared to $3.1 million at December 31, 
1997 and $7.5 million at March 31, 1997.  The average recorded investments 
in impaired loans during the periods then ended was approximately $3.1 
million and $9.4 million, respectively.  For the three months ended March 
31, 1998 and 1997 interest income recognized on the impaired loans was not 
material. 

Total non-performing loans decreased by $3.7 million to $3.8 million at 
March 31, 1998 as compared to $7.5 million at March 31, 1997.  A major 
portion of the decrease was contributed by a $3.4 million reduction in non 
accrual commercial real estate through the Company's successful workout in 
mid 1997 of one large credit. Loans 90 days or more past due and accruing 
have increased to $.5 million at March 31, 1998 from March 31, 1997.  
However, since these loans continue to accrue interest, because management 
considers principal and interest on these loans fully collectible, 
management considers this trend positive in light of the reduction in total 
non-performing loans. 

Other real estate owned consists of eight parcels of property: one 
residence for $7,000 and seven commercial properties for $1.7 million. The 
growth in other real estate owned from the same period in 1997 is a result 
of the Company's foreclosure on $ 2.1 million in real estate assets in May 
1997.  Since that time, the Company has reduced its exposure to this asset 
by $1 million through a combination of sales and writedowns.  The remaining 
parcels and property have a carrying value of less than $.11 million each. 
All properties have been recently appraised at values higher than their 
carrying amount.


                       NON-PERFORMING ASSETS
                           (in thousands)
                                                   March 31,
                                                1998       1997  
                                               -----      -----


Loans past due 90 days or more and accruing:
  Commercial, financial & agricultural        $  272           0
  Real estate-commercial                          18           0
  Real estate-residential                        203           0
  Consumer                                        44          10
                                               -----       -----
    Total past due 90 days or more 
    and accruing                              $  537          10
                                               -----       -----
Loans in non-accrual status:
  Commercial, financial & agricultural       $ 1,151     $ 1,579
  Real estate-commercial                       1,390       4,812
  Real estate-residential                        698         988
  Consumer                                         0          74
                                              ------      ------
     Total non-accrual loans                   3,239       7,453
                                              ------      ------
     Total non-performing loans                3,776       7,463
                                              ------      ------
Other real estate owned
  Commercial                                   1,652         852
  Residential                                      7         275
                                              ------      ------
Total other real estate owned                  1,659       1,127
                                              ------      ------
      Total non-performing assets            $ 5,435     $ 8,590
                                              ======      ======
Non performing loans to total period
  end loans                                     1.27%       2.43%
                                              ======      ======
Non performing assets to total period
  end loans and other real estate               1.82%       2.72%
                                              ======      ======

                        
The Company has no restructured loans.


Liquidity 

Liquidity is defined as the ability to generate adequate amounts of cash to 
meet the demand for cash from depositors who wish to withdraw funds, 
borrowers who require funds, and capital expansion.  Liquidity is produced 
by cash flows from operating, investing, and financing activities of the 
Company.

For the three months ended March 31, 1998, net cash from operating 
activities was $.3 million as compared to $1.1 million for the same period 
in 1997.  The decrease of $.8 million was primarily caused by an increase 
in other assets related to the Company's growing indirect automobile 
portfolio.

Cash flows provided by investing activities were $10.6 million versus cash 
flows used of $12.9 million for the three months ended March 31, 1998 and 
1997, respectively.  The loan portfolio decreased by $10.1 million for the 
first three months of 1998 as compared to an increase of $10.7 million for 
the same period in 1997.  The investment portfolio had a net increase of 
$.5 million for the first three months of 1998 as compared to a net 
increase of $.07 million for the first three months of 1997.

Cash flows used by financing activities were $6.7 million in 1998 versus 
cash flow provided of $10.5 million in 1997.  Major components contributing 
to this change were a net decrease of $8.9 million in demand deposits, 
savings and short-term deposits, an increase in time deposits of $8.6 
million and a decrease in borrowings from FHLB of $5.6 million. The Company 
has been actively pricing some of its liabilities in an attempt to grow 
deposit levels in certain maturity ranges.

<PAGE>

Interest Rate Sensitivity and Asset / Liability Management Review

As of March 31, 1998, the Company's three-month gap is a negative $154.8 
million, which is $40 million higher than one year ago.  While loans in 
this bucket have declined $11 million, interest bearing liabilities have 
risen $30 million.  FHLB borrowings are up $23 million and short term 
certificates of deposit rose $13 million.

The 12 month gap is a negative $157.4 million up from a year ago's negative 
$119.2 million, again due primarily to the FHLB borrowings.

Gap continues to be positive in the 1 - 5 year range at $146.3 million, as 
a major portion of the loan portfolio falls into that bucket, while only 
10% of interest bearing liabilities are in the bucket.

In continuing the Company's active asset liability management, we have 
identified a program of certificate of deposit sales and are pursuing its 
establishment.  The Company is also considering pursuing a means to market 
a subordinated debenture issuance.

<PAGE>

                   Interest Rate Sensitivity Gap
                       As of March 31, 1998
                      (dollars in thousands)

                                 0-3     4-12    1-5     Over 5
                                Months  Months   Years   Years
                               -------  ------  -------  ------
Loans                         $ 88,068   4,453  146,272  58,001

Investment portfolio             5,594  19,336   35,766  13,753
                               -------  ------  -------  ------
Interest-earning assets         93,662  23,789  182,038  71,754
                               -------  ------  -------  ------

Certificate of deposits         65,247  26,395   30,584      --

Savings                         61,629      --       --      --

Royal blue money market         17,313      --       --      --

Now & Super Now                 37,464      --       --      --

Money Market                    26,599      --       --      --

Borrowing from FHLB             40,200      --    4,861      --
                               -------  ------  -------  ------
Interest-bearing liabilities   248,452  26,395   35,715       0
                               -------  ------  -------  ------
Interest sensitivity gap      (154,790) (2,606) 146,323  71,754
                               =======  ======  =======  ======

Rate Sensitive Assets to
  Rate Sensitive 
  Liabilities                     0.38     .90     5.10
                                  ====    ====     ====
<PAGE>
Capital Adequacy

Total stockholders' equity was $41.0 million at March 31, 1998, which 
represents an increase of $.1 million or .2% from $40.9 million at December 
31, 1997.  Stockholders' equity increased by $1.0 million due to net 
income, but was offset by dividends of $.9 million and purchases of 
treasury stock of $.03 million for the three month period ended March 31, 
1998.
    
At March 31, 1998 the Company and its banking subsidiary exceeded the 
minimum regulatory guidelines for all capital ratios (Tier 1 - 4% and Total 
Risk-Based Capital - 8%).  The Company and Bank also exceeded the minimum 
regulatory guideline for leverage ratio of 5% for "well-capitalized" 
institutions.  The table below illustrates the Corporation's regulatory 
capital ratios at March 31, 1998, under current requirements.  (The Bank's 
ratios do not differ materially from the Company's):

                                        March 31, 1998
                                    (dollars in thousands)
                                     --------------------
Tier 1 Capital                            $ 40,703
Tier 2 Capital                            $  3,168
Total Qualifying Capital                  $ 43,871
Total Risk Adjusted Total Assets          $297,701
Tier 1 Risk Based Capital Ratio             13.67%
Total Risk Based Capital Ratio              14.74%
Leverage Ratio (Tier 1 capital divided
 by Total Assets less Goodwill)              9.94%

The ratios above are indicative of the Corporation's strong capital 
position.  


Dividends Per Share and Earnings Per Share

The semi-annual dividend payable February 1, 1998 was $5.50 versus $4.75 
for the same period in 1997.

Basic earnings per common share is based upon the weighted average number 
of common shares and equivalents (stock options) outstanding during the 
period.  Since there are no potentially dilutive securities outstanding at 
March 31, 1998, diluted earnings per share is not presented.  The weighted 
average number of common shares outstanding for the three month periods 
ended March 31, 1998 and 1997 were 160,565 and 161,303, respectively.  Net 
income used in the calculation of basic earnings per share is net income 
shown on the condensed consolidated statements of income for the respective 
periods.

<PAGE>



                                 INDEX

                       CANANDAIGUA NATIONAL CORPORATION
                          AND CONSOLIDATED SUBSIDIARY

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

     Condensed consolidated balance sheets at March 31, 1998 and
     December 31, 1997.

     Condensed consolidated statements of income for the three month
     periods ended March 31, 1998 and 1997.

     Condensed consolidated statements of stockholders' equity for the
     three month periods ended March 31, 1998 and 1997.

     Condensed consolidated statements of cash flows for the three
     month periods ended March 31, 1998, and 1997.

     Notes to condensed consolidated financial statements at
     March 31, 1998.

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

Item 3.  Qualitative and Quantitative Disclosures about Market Risk
     This information is incorporated by reference in Part I, Item 2, 
     Liquidity section.


PART II.  OTHER INFORMATION

Item 1.  Legal proceedings
Item 2.  Changes in securities
Item 3.  Defaults upon senior securities
Item 4.  Submission of matters to a Vote of security holders
Item 5.  Other information
Item 6.  Exhibits and reports on form 8-K

SIGNATURES

                     CANANADIAGUA NATIONAL CORPORATION
                          AND CONSOLIDATED SUBSIDIARY

PART II.  OTHER INFORMATION

Item 1.  Legal proceedings - None

Item 2.  Changes in securities

Item 3.  Defaults upon senior securities - None

Item 4.  Submission of matters to a vote of security holders
         (a) The annual meeting of stockholders of Canandaigua National 
          Corporation was held on March 11, 1998 for the following purpose:

         (1) Three directors were elected for a three-year term and
          votes were cast as follows:

<TABLE>
<CAPTION>
                                  Votes                    
Name                     For     Withheld    Abstain   Against   
____                   -------   --------    -------   ------- 
<S>                       <C>      <C>         <C>       <C>        
Robert G. Sheridan     108,361     460         0         0                   

Patricia A. Boland     108,331     490         0         0 
 
Alan J. Stone.         108,361     460         0         0
</TABLE>

        (2) Shareholders approved the adoption of the Canandaigua National 
Corporation Stock Option Plan. Votes were cast as follows:

<TABLE>
<CAPTION>
                                  Votes                    
                         For     Withheld    Abstain   Against   
                        -------  --------    ------   -------- 
<S>                      <C>       <C>         <C>       <C>        
                        100,339      0        4,854     3,628
</TABLE>

Item 5.  Other information - None

Item 6.  Exhibits and reports on Form 8-K
         (a) Exhibits - None
(b)  Reports on Form 8-K - None

<PAGE>


                CANANDAIGUA NATIONAL CORPORATION
                  AND CONSOLIDATED SUBSIDIARY

                          SIGNATURE

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

                          CANANDAIGUA NATIONAL CORPORATION
                          (Registrant)


May 15, 1998                 George W. Hamlin, IV
Date                              George W. Hamlin, IV 
                                  President


May 15, 1998                 Gregory S. MacKay
Date                              Gregory S. MacKay
                                  Treasurer

<PAGE>