SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                      -------------------------------------
                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended March 31, 2008

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _______________________ to _____________________
                    Securities Exchange Act Number 000-25101

                             ONEIDA FINANCIAL CORP.
                           --------------------------
             (Exact name of registrant as specified in its charter)

           Federal                                            16-1561678
-----------------------------------                   --------------------------
(State or other jurisdiction of                             (IRS Employer)
incorporation or organization)                          Identification Number)

                     182 Main Street, Oneida, New York 13421

                    (Address of Principal Executive Offices)
                  --------------------------------------------

                                 (315) 363-2000
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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 by check mark whether the Registrant is a large accelerated file,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
One):

  [ ] Large accelerated filer [ ] Accelerated filer [_] Non-accelerated filer
                         [X] Smaller reporting company

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.). Yes [ ] No [X]

Indicate by check mark whether the Registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
    Indicate the number of shares outstanding of each of the issuer's classes
    of common stock, as of the latest practicable date: There were 7,762,710
     shares of the Registrant's common stock outstanding as of May 1, 2008.

<PAGE>

                             ONEIDA FINANCIAL CORP.
                                      INDEX

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
PART I. FINANCIAL INFORMATION
<S>          <C>                                                                      <C>
   Item 1.   Financial Statements                                                        1

             Consolidated Statements of Condition (unaudited)                            2
             As of March 31, 2008 and December 31, 2007

             Consolidated Statements of Operations (unaudited)                           3
             For the three months ended March 31, 2008 and 2007

             Consolidated Statements of Comprehensive Income (unaudited)                 4
             For the three months ended March 31, 2008 and 2007

             Consolidated Statements of Changes in Stockholders' Equity (unaudited)      5
             For the three months ended March 31, 2008

             Consolidated Statements of Cash Flows (unaudited)                           6
             For the three months ended March 31, 2008 and 2007

             Notes to Consolidated Financial Statements (unaudited)                      8

   Item 2.   Management's Discussion and Analysis of Financial Condition                17
             And Results of Operations

   Item 3.   Quantitative and Qualitative Disclosures about Market Risk                 25

   Item 4T.  Controls and Procedures                                                    25

PART II.     OTHER INFORMATION                                                          26

   Item 1.   Legal Proceedings                                                          26

   Item 1a.  Risk Factors                                                               26

   Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds                26

   Item 3.   Defaults Upon Senior Securities                                            27

   Item 4.   Submission of Matters to a Vote of Security Holders                        27

   Item 5.   Other Information                                                          27

   Item 6.   Exhibits                                                                   27
</TABLE>

<PAGE>

PART I.     FINANCIAL INFORMATION

                Item I.    Financial Statements

                                  Page 1 of 28

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
At March 31, 2008 and December 31, 2007

<TABLE>
<CAPTION>
                                                                     (unaudited)
                                                                     At March 31,    At December 31,
                                                                         2008              2007
                                                                   ---------------   ---------------
                                                                   (in thousands, except share data)
<S>                                                                <C>               <C>
ASSETS
      Cash and due from banks                                      $        12,234   $        14,744
      Federal funds sold                                                    12,081             1,717
                                                                   ----------------------------------
   TOTAL CASH AND CASH EQUIVALENTS                                          24,315            16,461

      Trading securities                                                    13,041                --
      Investment securities, at fair value                                  81,481            95,811
      Mortgage-backed securities, at fair value                             65,219            46,583

      Mortgage loans held for sale                                             510             3,593

      Loans receivable                                                     282,955           283,336
      Allowance for loan losses                                             (2,496)           (2,511)
                                                                   ----------------------------------
   LOANS RECEIVABLE, NET                                                   280,459           280,825

      Federal Home Loan Bank stock                                           3,549             3,404
      Bank premises and equipment, net                                      22,257            22,532
      Accrued interest receivable                                            2,418             2,658
      Other assets                                                           9,385            10,534
      Cash surrender value - life insurance                                 14,591            14,480
      Goodwill                                                              22,930            22,793
      Other intangible assets                                                2,500             2,641
      -----------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                 $       542,655   $       522,315
      ===============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
      Interest bearing deposits                                    $       358,232   $       334,444
      Non-interest bearing deposits                                         63,940            65,685
      Borrowings                                                            56,400            56,400
      Notes payable                                                            123               158
      Other liabilities                                                      5,185             6,288
                                                                   ----------------------------------
TOTAL LIABILITIES                                                          483,880           462,975
Stockholders' equity:
      Preferred stock, 1,000,000 shares authorized                              --                --
      Common stock ($.01 par value; 20,000,000 shares authorized;
        8,322,452 shares issued)                                                83                83
      Additional paid-in capital                                            19,097            19,053
      Retained earnings                                                     44,522            46,435
      Accumulated other comprehensive (loss)                                (1,857)           (3,161)
      Treasury stock (at cost, 537,256
        and 537,256 shares)                                                 (3,070)           (3,070)
      -----------------------------------------------------------------------------------------------
      TOTAL STOCKHOLDERS' EQUITY                                            58,775            59,340
      -----------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY                                         $       542,655   $       522,315
      ===============================================================================================
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                   statements

                                  Page 2 of 28

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2008 (unaudited) and 2007 (unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                             March 31,            March 31,
                                                               2008                 2007
                                                         -----------------   -----------------
                                                         (in thousands, except per share data)
<S>                                                      <C>                 <C>
INTEREST INCOME:
      Interest and fees on loans                         $           4,704   $           4,218
      Interest on investment and mortgage-backed
         securities                                                  1,680               1,129
      Dividends on equity securities                                   276                 203
      Interest on federal funds sold and
         interest-earning deposits                                      65                 166
-----------------------------------------------------------------------------------------------
   Total interest and dividend income                                6,725               5,716
-----------------------------------------------------------------------------------------------
INTEREST EXPENSE:
      Savings deposits                                                 145                 114
      Money market and interest-bearing checking                       488                 390
      Time deposits                                                  1,701               1,294
      Borrowings                                                       666                 814
      Notes payable                                                      2                  16
-----------------------------------------------------------------------------------------------
         Total interest expense                                      3,002               2,628
-----------------------------------------------------------------------------------------------
NET INTEREST INCOME                                                  3,723               3,088
      Less: Provision for loan losses                                   --                  --
-----------------------------------------------------------------------------------------------
   Net interest income after provision for loan losses               3,723               3,088
-----------------------------------------------------------------------------------------------
OTHER INCOME:
      Net (losses) gains on sale of securities, net                     (4)                  1
      Gain on sale of mortgages, net                                    45                  25
      Commissions and fees on sales of non-banking
         products                                                    3,500               3,312
      Other operating income                                         1,080                 910
      Changes in fair value                                           (604)                 --
-----------------------------------------------------------------------------------------------
   Total other income                                                4,017               4,248
-----------------------------------------------------------------------------------------------
OTHER EXPENSES:
      Compensation and employee benefits                             4,580               4,117
      Occupancy expenses, net                                        1,214               1,001
      Other operating expense                                        1,362               1,213
-----------------------------------------------------------------------------------------------
   Total other expenses                                              7,156               6,331
-----------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                             584               1,005
-----------------------------------------------------------------------------------------------
   Provision for income taxes                                          155                 257
-----------------------------------------------------------------------------------------------
NET INCOME                                               $             429   $             748
===============================================================================================
EARNINGS PER SHARE - BASIC                               $            0.06   $            0.10
===============================================================================================
EARNINGS PER SHARE - DILUTED                             $            0.06   $            0.10
===============================================================================================
</TABLE>

    The accompanying notes are an integral part of the consolidated financial
                                   statements.

                                  Page 3 of 28

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2008 (unaudited) and 2007 (unaudited)

                                                            Three Months Ended
                                                          March 31,   March 31,
                                                            2008        2007
                                                          ---------   ---------
                                                             (In thousands)

Net income                                                $     429   $     748
                                                          ---------   ---------

Other comprehensive income, net of tax:

   Unrealized (losses) gains on securities arising
      during period                                            (893)        119
      Less: reclassification adjustment for losses
         (gains) included in net income                         608          (1)
                                                          ---------   ---------
      Net unrealized (losses) gains                            (285)        118
   Change in unrealized loss on pension benefits                 42          --
                                                          ---------   ---------
Other comprehensive (loss) income before tax                   (243)        118
      Net income tax effect                                      97         (47)
                                                          ---------   ---------
Other comprehensive (loss) income, net of tax                  (146)         71

Comprehensive income                                      $     283   $     819
                                                          =========   =========

   The accompanying notes are an integral part of the consolidated financial
                                   statements.

                                  Page 4 of 28

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2008 (unaudited)

<TABLE>
<CAPTION>
                                                                                            Accumulated
                                                          Additional                           Other
                                          Common Stock     Paid-In         Retained         Comprehensive        Treasury
                                        Shares    Amount   Capital         Earnings         Income (Loss)         Stock     Total
                                                                      (in thousands, except number of shares)
<S>                                   <C>         <C>     <C>         <C>                <C>                    <C>        <C>
Balance as of December 31, 2007       8,322,452   $   83  $   19,053  $         46,435   $             (3,161)  $ (3,070)  $ 59,340
Net income                                                                         429                                          429
Other comprehensive income,
   net of tax                                                                                            (146)                 (146)
Shares earned under stock plans                                   44                                                             44
Common stock dividends: $0.24
   per share                                                                      (831)                                        (831)
Adjustment to initially apply
   SFAS No. 159 net of tax (Note J)                                             (1,519)                 1,519                    --
Adjustment to initially apply
   measurement provisions of
   SFAS No. 158 net of tax (Note I)                                                  8                    (69)                  (61)
                                      ----------------------------------------------------------------------------------------------

Balance as of March 31, 2008          8,322,452   $   83  $   19,097  $         44,522   $             (1,857)  $ (3,070)  $ 58,775
                                      ==============================================================================================
</TABLE>

    The accompanying notes are an integral part of the consolidated financial
                                   statements.

                                  Page 5 of 28

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2008 (unaudited) and 2007 (unaudited)

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                           March 31,     March 31,
                                                                              2008          2007
                                                                           ----------    ----------
<S>                                                                        <C>           <C>
Operating Activities:                                                           (in thousands)
   Net income                                                              $      429    $     748
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization                                              522          366
       Amortization of premiums/discounts on securities, net                       25           40
       Net change in valuation of financial instruments carried
          at fair value                                                           604           --
       Stock compensation earned                                                   44           44
       Net realized loss (gain) on sale of securities                               4           (1)
       Gain on sale of loans, net                                                 (45)         (25)
       Income tax payable                                                         166          193
       Accrued interest receivable                                                240          216
       Other assets                                                               880      (10,624)
       Other liabilities                                                       (1,138)        (989)
       Origination of loans held for sale                                      (1,889)      (5,312)
       Proceeds from sales of loans                                             5,017        4,589
---------------------------------------------------------------------------------------------------
         Net cash provided (used in) by operating activities                    4,859      (10,755)
---------------------------------------------------------------------------------------------------
Investing Activities:
   Purchase of investment securities                                          (13,003)      (1,635)
   Principal collected on and proceeds of maturities
      sales or calls from investments                                          13,008        9,273
   Purchase of mortgage-backed securities                                     (21,022)          --
   Principal collected on and proceeds from sales
      of mortgage-backed securities                                             2,753        1,371
   Net decrease in loans                                                          290        4,087
   Purchase of bank premises and equipment                                       (106)      (1,640)
   Purchase of bank                                                                (8)          --
   Purchase of employee benefits company                                         (129)        (132)
---------------------------------------------------------------------------------------------------
         Net cash (used in) provided by investing activities                  (18,217)      11,324
---------------------------------------------------------------------------------------------------
Financing Activities:
   Net (decrease) increase in demand deposit, savings,
      money market, super now and escrow                                       (1,004)       2,866
   Net increase in time deposits                                               23,047        3,658
   Proceeds from borrowings                                                    20,000       28,180
   Repayment of borrowings                                                    (20,000)     (21,750)
   Cash dividends                                                                (831)        (832)
   Exercise of stock options (using treasury stock)                                --           29
---------------------------------------------------------------------------------------------------
         Net cash provided by financing activities                             21,212       12,151
---------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                           7,854       12,720
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period                               16,461       18,710
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                 $   24,315    $  31,430
===================================================================================================
</TABLE>

                                  Page 6 of 28

<PAGE>

<TABLE>
<S>                                                                            <C>           <C>
Supplemental disclosures of cash flow information:
Cash paid for interest                                                          2,998        2,631
Cash paid for income taxes                                                         --           --

Supplemental noncash disclosures:
Transfer of loans to other real estate                                             76           --
Adoption of fair value option:
   Securities transferred from available for sale to trading                   16,178           --
   Deferred tax asset related to fair value adjustments                         1,255           --
===================================================================================================
</TABLE>

    The accompanying notes are an integral part of the consolidated financial
                                   statements.

                                  Page 7 of 28

<PAGE>

                             ONEIDA FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)
                                 MARCH 31, 2008

Note A - Basis of Presentation

The accompanying  unaudited  consolidated  financial  statements  include Oneida
Financial Corp. (the "Company") and its wholly owned subsidiary,  Oneida Savings
Bank (the  "Bank") as of March 31, 2008 and  December 31, 2007 and for the three
month  periods  ended March 31, 2008 and 2007.  All  inter-company  accounts and
transactions have been eliminated in consolidation.  The accompanying  unaudited
consolidated   financial   statements have  been  prepared  in  accordance  with
accounting  principles  generally  accepted in the United  States of America for
interim   financial   information  and  with  the  instructions  to  Form  10-Q.
Accordingly,  they do not include all of the information and footnotes  required
by accounting  principles generally accepted in the United States of America for
complete  financial  statements.  The  preparation  of financial  statements  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make estimates and assumptions  that affect the
reported amounts of assets and liabilities and disclosures of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could differ
from those estimates.  In the opinion of management,  the unaudited consolidated
financial  statements  include all necessary  adjustments,  consisting of normal
recurring accruals, necessary for a fair presentation for the periods presented.

The Company  believes that the  disclosures are adequate to make the information
presented  not  misleading;  however,  results  of  operations  and  other  data
presented  are not  necessarily  indicative  of results to be  expected  for the
entire year.

The data in the  consolidated  balance  sheet for  December 31, 2007 was derived
from the Company's  2007 Annual Report on Form 10-K.  That data,  along with the
interim  financial  information  presented  in  the  consolidated  statement  of
condition,   statements  of  operations,   comprehensive   income,   changes  in
stockholders'  equity and cash flows should be read in conjunction with the 2007
consolidated  financial statements,  including the notes thereto included in the
Company's Annual Report on Form 10-K.

Amounts in the prior period's consolidated financial statements are reclassified
when necessary to conform with the current period's presentation.

Note B - Earnings per Share

Basic earnings per share is net income divided by the weighted average number of
common  shares  outstanding  during  the  period.  ESOP  shares  are  considered
outstanding for the calculation unless unearned. Diluted earnings per share give
effect to weighted  average  shares,  which would be  outstanding  assuming  the
exercise of issued options and awards using the treasury stock method.  Earnings
per common share have been computed  based on the following for the three months
ended March 31:

                                              Income      Shares      Per Share
March 31, 2008:
---------------
Net income (Three Months Ended)               $ 429,197
                                              ---------

Basic Earnings Per Share:                     $ 429,197   7,726,710   $    0.06
                                                                      ---------
Effect of dilutive securities:
   Stock options and awards                          --      58,977
                                              ---------------------
Diluted Earnings Per Share                    $ 429,197   7,785,687   $    0.06
                                                                      ---------
March 31, 2007:
---------------
Net income (Three Months Ended)               $ 747,957
                                              ---------

Basic Earnings Per Share:                     $ 747,957   7,681,118   $    0.10
                                                                      ---------
Effect of dilutive securities:
   Stock options and awards                          --      74,144
                                              ---------------------
Diluted Earnings Per Share                    $ 747,957   7,755,262   $    0.10
                                                                      ---------

Stock options for 54,362 and 52,368  shares of common stock were not  considered
in computing diluted earnings per common share for the three months ending March
31, 2008 and March 31, 2007 respectively because they were antidilutive.

                                  Page 8 of 28

<PAGE>

Note C - Stock-Based Compensation

The Company's 2000 Stock Option Plan, which is shareholder approved, permits the
granting of share options to its directors, officers and key employees for up to
374,568 shares of common stock. The exercise price of options granted is equal
to the market value of the Company's shares at the date of grant. All options
granted expire by April 2010 and options vest and become exercisable ratably
over a one to five-year period. The plan also has a reload feature which
entitles the option holder, who has delivered common stock as payment of the
exercise price for option stock, to a new option to acquire additional shares in
the amount equal to the shares traded in. The option period during which the
reload option may be exercised expires at the same time as that of the original
option that the holder has exercised. The Company has a policy of using shares
held as treasury stock to satisfy share option exercises. There were 9,243
shares available for future grants under the plan described above as of March
31, 2008 and 2007. There was no unrecognized compensation cost for this plan as
of March 31, 2008 as all shares vested under the terms of the plan. There were
no new grants during the year.

Activity in the plan for 2008 was as follows:

<TABLE>
<CAPTION>
                                              Range of
                                   ------------------------------   Weighted Average
                                                  Option Exercise   Exercise Price
                                     Options          Price         Shares           Intrinsic
                                   Outstanding        Per Share     Outstanding      Value
                                   -----------------------------------------------------------
<S>                                <C>           <C>                <C>              <C>
Outstanding at December 31, 2007       179,267   $4.722 - $18.167   $    7.676       $ 587,508
Granted                                     --
Exercised                                   --
Forfeited                                 (450)      $  12.00
                                   -----------
Outstanding at March 31, 2008          178,817    $4.722-$18.167    $    7.665       $ 543,315
                                   ===========
</TABLE>

At March 31, 2008, the weighted average information for outstanding and
exercisable shares is as follows:

                     Shares outstanding and Exercisable
         ----------------------------------------------------------
         Range of                         Average        Average
         Exercise                         Exercise   Remaining Life
         Price                  Shares    Price          (Years)
         ----------------------------------------------------------
         $3.633 - $5.45         119,990   $  4.722        2.32
         $9.094 - $10.90          4,465   $  9.419        2.32
         $10.900 - $12.717       18,771   $ 11.985        2.32
         $12.717 - $14.534       18,689   $ 14.000        2.32
         $14.534 - $16.350        6,600   $ 14.794        2.32
         $16.350 - $18.167       10,302   $ 17.247        2.32
                                -------   --------        ----
               Total            178,817   $  7.665        2.32
                                =======   ========        ====

The Management Recognition and Retention Plans provide for the issuance of
shares of restricted stock to directors, officers and key employees.
Compensation expense equal to the market value of Oneida Financial Corp.'s stock
on the grant date is recognized ratably over the five year vesting period for
shares of restricted stock granted that will be fully vested at December 31,
2010. Compensation expense recorded in conjunction with these plans was $43,701
and $43,701 for the three months ended March 31, 2008 and 2007 respectively.
Shares unallocated under the plans available for future awards were 12,886 and
12,886 at March 31, 2008 and March 31, 2007 respectively. At March 31, 2008 and
December 31, 2007, there were nonvested shares of 45,600 with unrecognized
compensation cost of $594,713 and $638,414 respectively.

Note D - Dividend Restrictions

Oneida Financial MHC, which owns 4,309,750 or 55.45% of the outstanding shares
as of March 31, 2008 of Oneida Financial Corp., filed a notice with the OTS
regarding its intent to waive its right to receive cash dividends declared by
Oneida Financial Corp. The OTS did not object to the notice.

Note E - Pension Plan

The Bank provides a noncontributory defined benefit retirement accumulation plan
covering substantially all employees. Under the plan, retirement benefits are
primarily a function of the employee's years of service and level of
compensation. As of June 15, 2004, the Bank had a plan amendment to freeze the
plan benefits for plan participants. The Bank uses a December 31 measurement
date for its pension plan.

                                  Page 9 of 28

<PAGE>

Note E - Pension Plan (Continued)

Net pension and postretirement cost (benefit), which is recorded within
compensation and employee benefits expenses in the condensed statements of
income, is comprised of the following:

                                                      Three Months Ended
                                                    March 31,   March 31,
                                                       2008       2007
                                                    ---------   ---------
Service cost                                        $      --   $      --
Interest cost                                          55,000      55,000
Expected return on plan assets                        (72,000)    (87,000)
Net amortization and deferral                          42,000      14,000
                                                    ---------   ---------
   Net periodic pension cost (benefit)              $  25,000   $ (18,000)

Net loss (gain)                                       (25,200)         --
Prior service cost (credit)                                --          --
                                                    ---------   ---------
   Total recognized in other comprehensive income     (25,200)         --
                                                    ---------   ---------
Total recognized in net periodic benefit cost and
   Other comprehensive income                       $     200   $ (18,000)
                                                    =========   =========

Weighted-average assumptions as of December 31:        2008        2007
                                                    ---------   ---------
   Discount rate                                        5.465%      5.080%
   Expected return on plan assets                       7.500%      9.000%

As of March 31, 2008, contributions to the plan totaled $0. The Bank anticipates
contributing $55,988 in 2008 to fund its pension plan.

State Bank of Chittenango participated in the New York State Bankers Retirement
System plan which was a noncontributory defined benefit plan covering
substantially all employees. Under the plan, retirement benefits were primarily
a function of the employee's years of service and level of compensation. The
plan was frozen as of May 31, 2002. State Bank of Chittenango used a September
30 measurement date for its pension plan and has transitioned to a December 31
measurement date effective January 1, 2008. See Note I for the impact on the
change in measurement date.

Net pension and postretirement cost (benefit), which is recorded within
compensation and employee benefits expenses in the condensed statements of
income, is comprised of the following:

                                                    Three Months Ended
                                                    March 31,   March 31,
                                                       2008       2007
                                                    ---------   ---------

Service cost                                        $   6,800   $   6,100
Interest cost                                          33,700      33,400
Expected return on plan assets                        (52,000)    (51,000)
                                                    ---------   ---------
   Net periodic pension cost (benefit)              $ (11,500)  $ (11,500)

Net loss (gain)                                            --          --
Prior service cost (credit)                                --          --
                                                    ---------   ---------
   Total recognized in other comprehensive income          --          --
                                                    ---------   ---------
Total recognized in net periodic benefit cost and
   Other comprehensive income                       $ (11,500)  $ (11,500)
                                                    =========   =========

Weighted-average assumptions as of December 31:        2008       2007
                                                    ---------   ---------
   Discount rate                                         6.25%       6.25%
   Expected return on plan assets                        7.50%       7.50%

As of March 31, 2008, contributions to the plan totaled $0. The Bank does not
anticipate contributing in 2008 to fund its pension plan.

                                  Page 10 of 28

<PAGE>

Note F - Investment Securities and Mortgage-Backed Securities

Investment securities and mortgage-backed securities consist of the following at
March 31, 2008 and December 31, 2007:

                                                          March 31, 2008
                                                  ------------------------------
                                                               Gross Unrealized
                                                  Fair Value     Gains    Losses
                                                  ------------------------------
                                                          (in thousands)
Investment Securities

Available for sale portfolio:
----------------------------
     Debt securities:
       U. S. Agencies                             $   35,321   $   547   $     4
       Corporate                                      24,311        49     3,019
       State and municipals                           21,849       517         2
                                                  ----------   -------   -------
                                                  $   81,481   $ 1,113   $ 3,025
                                                  ==========   =======   =======
Mortgage-Backed Securities
   Available for sale portfolio:
   -----------------------------
     Fannie Mae                                   $   20,493   $   300   $    54
     Freddie Mac                                      25,742       302        21
     Ginnie Mae                                        3,207        31         7
     Small Business Administration                        14        --        --
     Collateralized Mortgage Obligations              15,763        27       241
                                                  ----------   -------   -------
                                                  $   65,219   $   660   $   323
                                                  ==========   =======   =======

                                                         December 31, 2007
                                                  ------------------------------
                                                               Gross Unrealized
                                                  Fair Value     Gains    Losses
                                                  ------------------------------
                                                          (in thousands)
Investment Securities

   Available for sale portfolio:
   -----------------------------
     Debt securities:
       U. S. Agencies                             $   37,949   $   146   $   202
       Corporate                                      24,955        45     1,381
       State and municipals                           19,252       148        17
                                                  ----------   -------   -------
                                                      82,156       339     1,600
     Equity investments:
       Preferred and other equity stocks              10,459        --     2,196
       Mutual fund                                     3,196        --       336
                                                  ----------   -------   -------
                                                  $   95,811   $   339   $ 4,132
                                                  ==========   =======   =======
Mortgage-Backed Securities
   Available for sale portfolio:
   -----------------------------
     Fannie Mae                                   $   15,481   $    98   $    98
     Freddie Mac                                      21,826        47       111
     Ginnie Mae                                        2,467        26        --
     Small Business Administration                        14        --        --
     Collateralized Mortgage Obligations               6,795        32        24
                                                  ----------   -------   -------
                                                  $   46,583   $   203   $   233
                                                  ==========   =======   =======

The Company evaluates securities for other-than-temporary impairment at least on
a quarterly basis, and more frequently when economic or market concerns warrant
such evaluation. Consideration is given to the length of time and the extent to
which fair value has been less than cost, the financial condition and near-term
prospects of the issuer, and the intent and ability of the Company to retain its
investments in the issuer for a period of time sufficient to allow for any
anticipated recovery in fair value. In analyzing an issuer's financial
condition, the Company may consider whether the securities are issued by the
federal government or its agencies, whether downgrades by bond rating agencies
have occurred, and the results of reviews of the issuer's financial condition.

Unrealized losses on other investments have not been recognized into income
because the issuer(s) securities are of investment grade (except for General
Motors Acceptance Corp. bond), management has the intent and ability to hold
these securities for the foreseeable future and the decline in fair value is
largely due to declines in market interest rates since the securities were
purchased. The Company currently has a $2.0 million General Motors Acceptance
Corp. (GMAC) bond,

                                  Page 11 of 28

<PAGE>

Note F - Investment Securities and Mortgage-Backed Securities (Continued)

maturing October 15, 2010 which has a rating below investment grade. The
unrealized loss of $414,000 and $264,000 at March 31, 2008 and December 31, 2007
respectively has not been considered other than temporary in that the Company
has the intent and ability to retain the investment for a period of time
sufficient to allow for recovery in the market value, and management believes
that the repayment of the investment is probable at maturity.

The Company currently has a $2.5 million SLMA bond, maturing May 1, 2012 which
is rated investment grade. The unrealized loss at March 31, 2008 and December
31, 2007 of $700,000 and $431,000 respectively has not been considered
other-than-temporary in that the Company has the intent and ability to retain
the investment for a period of time sufficient to allow for recovery in the
market value and that based on credit ratings and assessment of likelihood of
default the Company has concluded that it is probable that payment will be made
at maturity.

Note G - Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred
credit losses. Loan losses are charged against the allowance when management
believes the uncollectibility of a loan balance is confirmed. Subsequent
recoveries, if any, are credited to the allowance. Management estimates the
allowance required by using past loan loss experience, the nature and volume of
the portfolio, information about specific borrower situations and estimated
collateral values, economic conditions, and other factors. Allocation of the
allowance may be made for specific loans, but the entire allowance is available
for any loan that, in management's judgment, should be charged off. Quarterly,
management evaluates the adequacy of the allowance and determines the
appropriate provision for loan losses by applying a range of estimated loss
percentages to each category of performing loans and classified loans. The
allowance adjustment is based upon the net change in each portfolio category, as
well as adjustments related to impaired loans, since the prior quarter.
Management monitors and modifies the level of the allowance for loan losses to
maintain it at a level which it considers adequate to provide for probable
incurred loan losses.

A loan is considered impaired, based on current information and events, if it is
probable that the Bank will be unable to collect the scheduled payments of
principal and interest when due according to the contractual terms of the loan
agreement. Factors considered by management in determining impairment include
payment status, collateral value, and the probability of collecting scheduled
principal and interest payments when due. The measurement of impaired loans is
generally based on the present value of expected future cash flows discounted at
the historical effective interest rate, except that all collateral-dependent
loans are measured for impairment based on the estimated fair value of the
collateral. At March 31, 2008 the allowance for loan losses as a percentage of
net loans receivable was 0.89% as compared to 0.88% at December 31, 2007.

The following table sets forth the analysis of the allowance for loan losses for
the periods indicated:

                                             Three Months Ended
                                           March 31,   March 31,
                                              2008        2007
                                           ---------   ---------
                                               (in thousands)
Balance at beginning of period:            $   2,511   $   2,081
   Charge-offs                                   (46)        (40)
   Recoveries                                     31          44
   Provision for loan losses                      --          --
                                           ---------   ---------
Balance at end of period                   $   2,496   $   2,085
                                           =========   =========

There were no impaired loans as of March 31, 2008 or December 31, 2007.

Note H - Segment Information

The Company has determined that it has four primary business segments, its
banking franchise, its insurance activities, its benefit consulting activities
and risk management activities. For the three months ended March 31, 2008 and
2007, the Company's insurance activities consisted of those conducted through
its wholly owned subsidiary, Bailey & Haskell Associates, Inc. The Company's
benefit consulting activities consisted of those conducted through its wholly
owned

                                  Page 12 of 28

<PAGE>

Note H - Segment Information (Continued)

subsidiary Benefit Consulting Group, Inc which was acquired June 2006. The risk
management activities consisted of those conducted through its wholly owned
subsidiary Workplace Health Solutions Inc. which was formed in February 2008.
Information about the Company's segments is presented in the following table for
the periods indicated:

<TABLE>
<CAPTION>
                                                              Three Months Ended March 31, 2008
                                         --------------------------------------------------------------------------
                                           Banking     Insurance   Benefit Consulting   Risk Management     Total
                                         Activities   Activities       Activities         Activities
                                                                       (in thousands)
<S>                                      <C>          <C>          <C>                  <C>               <C>
Net interest income                      $    3,723   $       --       $        --        $       --      $   3,723
Provision for loan losses                        --           --                --                --             --
                                         ----------   ----------       -----------        ----------      ---------
   Net interest income after provision
     for loan losses                          3,723           --                --                --          3,723
Other income                                    517        2,336             1,164                --          4,017
Other expenses                                3,671        1,943               967                53          6,634
Depreciation and amortization                   413           63                46                --            522
                                         ----------   ----------       -----------        ----------      ---------
     Income (loss) before income taxes          156          330               151               (53)           584
Income tax (benefit) expense                    (57)         159                73               (20)           155
                                         ----------   ----------       -----------        ----------      ---------
       Net income (loss)                 $      213   $      171       $        78        $      (33)     $     429
                                         ==========   ==========       ===========        ==========      =========

Total Assets                             $  526,872   $   18,905       $     4,387        $        6      $ 550,170
                                         ==========   ==========       ===========        ==========      =========
</TABLE>

<TABLE>
<CAPTION>
                                                     Three Months Ended March 31, 2007
                                         --------------------------------------------------------
                                         Banking       Insurance   Benefit Consulting    Total
                                         Activities   Activities      Activities
                                                              (in thousands)
<S>                                      <C>          <C>          <C>                       <C>
Net interest income                      $    3,088   $       --      $       --        $  3,088
Provision for loan losses                        --           --              --              --
                                         ----------   ----------      ----------        --------
   Net interest income after provision
     for loan losses                          3,088           --              --           3,088
Other income                                    936        2,611             701           4,248
Other expenses                                3,173        2,131             661           5,965
Depreciation and amortization                   252           58              56             366
                                         ----------   ----------      ----------        --------
       Income before income taxes               599          422             (16)          1,005
Income tax expense (benefit)                    122          140              (5)            257
                                         ----------   ----------      ----------        --------
       Net income (loss)                 $      477   $      282      $      (11)       $    748
                                         ==========   ==========      ==========        ========

Total Assets                             $  443,387   $   12,967      $    3,993        $460,347
                                         ==========   ==========      ==========        ========
</TABLE>

The following represents a reconciliation of the Company's reported segment
assets to consolidated assets as of March 31:

                                               2008        2007
                                            ---------   ---------
               Assets

Total assets for reportable segments        $ 550,170   $ 460,347
Elimination of intercompany cash balances      (7,515)     (5,323)
                                            ---------   ---------

Consolidated Total                          $ 542,655   $ 455,024
                                            =========   =========

                                  Page 13 of 28

<PAGE>

Note I - Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS
No. 158, Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans - an amendment of FASB statement No. 87, 88, 106 and 132
(R). Effective for fiscal years ending after December 15, 2008, defined benefit
plan assets and obligations are to be measured as of the date of the employer's
fiscal year-end. The Company has elected to use the remeasurement method for
adjusting from a September measurement date to the December measurement date.
Under this method, the plan assets and benefit obligations are remeasured as of
the beginning of the fiscal year that the measurement date provisions are
applied. The Company then uses those new measurements to determine the effects
of the measurement date change as of the beginning of the fiscal year that the
measurement date provisions are applied. Adoption of this FASB resulted in
$13,691, net of tax of $5,476 being recognized as an adjustment to retained
earnings for the net periodic benefit cost for the period October 1, 2007 to
December 31, 2007. In addition, the change in fair value of plan assets and the
benefit obligations for the period between October 1, 2007 to December 31, 2007
of $116,423, net of tax of $46,569 was recognized as a separate adjustment of
the opening balance of accumulated other comprehensive income as of January 1,
2008.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements.
This Statement defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements. This Statement
establishes a fair value hierarchy about the assumptions used to measure fair
value and clarifies assumptions about risk and the effect of a restriction on
the sale or use of an asset. The standard is effective for fiscal years
beginning after November 15, 2007. In February 2008, the FASB issued Staff
Position (FSP) 157-2, Effective Date of FASB Statement No. 157. This FSP delays
the effective date of FAS 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value on a
recurring basis (at least annually) to fiscal years beginning after November 15,
2008 and interim periods within those fiscal years. The impact of adoption was
not material.

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. The standard provides companies with
an option to report selected financial assets and liabilities at fair value and
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. The new standard is effective for the
Company on January 1, 2008. As of January 1, 2008, the Company elected the fair
value option for certain preferred and common equity securities. The effect of
the adoption is described in Note J below.

Note J - Fair Value

Fair Value Option

The following table summarizes the impact of adopting the fair value option for
preferred and common equity securities on January 1, 2008. The Company has
elected to adopt this standard for these securities as they do not have stated
maturity values and the fair value fluctuates with market changes and using fair
value appears to be an appropriate measure. Amounts shown represent the carrying
value of the affected instruments before and after the changes in accounting
resulting from the adoption of Statement 159

<TABLE>
<CAPTION>
                                                                                 Balance Sheet
                                               Balance Sheet       Net Gain/     1/1/08 after
                                               1/1/08              (Loss) upon   Adoption of
                                               Prior to Adoption   Adoption      Fair Value Option
                                               ---------------------------------------------------
                                                                 (in thousands)
<S>                                            <C>                 <C>           <C>
Assets:
        Investment securities                  $11,123             $    (2,532)  $11,123

Cumulative effect of adoption (pre-tax)                                 (2,532)
Tax impact                                                               1,013
Cumulative effect adjustment (net of tax),
        Decrease to retained earnings                              $     1,519
</TABLE>

Fair Value Measurement

Statement 157 defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. Statement 157 also
establishes a fair value hierarchy which requires an entity to maximize the use
of observable inputs and minimize the use of unobservable inputs when measuring
fair value. The standard describes three levels of inputs that may be used to
measure fair value:

                                  Page 14 of 28

<PAGE>

Note J - Fair Value (Continued)

         Level 1: Quoted prices (unadjusted) for identical assets or liabilities
         in active markets that the entity has the ability to access as of the
         measurement date.

         Level 2: Significant other observable inputs other than Level 1 prices
         such as quoted prices for similar assets or liabilities; quoted prices
         in markets that are not active; or other inputs that are observable or
         can be corroborated by observable market data.

         Level 3: Significant unobservable inputs that reflect a company's own
         assumptions about the assumptions that market participants would use in
         pricing an asset or liability.

The Company used the following methods and significant assumptions used to
estimate the fair value of items:

         Securities: The fair values of trading securities and securities
         available for sale are determined by obtaining quoted prices on
         nationally recognized securities exchanges (Level 1 inputs), matrix
         pricing, which is a mathematical technique widely used in the industry
         to value debt securities without relying exclusively on quoted prices
         for the specific securities, but rather by relying on the securities
         relationship to other benchmark quoted securities (Level 2 inputs) or
         unobservable inputs that represents assumptions such as financial
         forecasts or projected earnings (Level 3).

Assets and liabilities measured at fair value on a recurring basis, including
financial liabilities for which the Company has elected the fair value option,
are summarized below:

<TABLE>
<CAPTION>
                                                 Fair Value Measurements at March 31, 2008 Using
                                                 -----------------------------------------------
                                                                      Significant
                                                 Quoted Prices in     Other         Significant
                                                 Active Markets for   Observable    Unobservable
                                     March 31,   Identical Assets     Inputs        Inputs
                                     2008        (Level 1)            (Level 2)     (Level 3)
                                     -----------------------------------------------------------
                                                            (in thousands)
<S>                                  <C>         <C>                  <C>           <C>
Assets:
Trading securities                   $  13,041          --             $  11,213     $  1,828
Available for sale securities           81,481          --                73,905        7,576
</TABLE>

The Level 3 assets  include trust  preferred  securities  and corporate debt and
equity securities which are all rated investment grade.

The table below presents a reconciliation and income statement classification of
gains and losses for all assets measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) for the quarter ended March 31,
2008:

<TABLE>
<CAPTION>
                                                Fair Value Measurements Using Significant
                                                           Unobservable Inputs
                                                                (Level 3)
                                                -----------------------------------------
                                                              Securities
                                                Trading       Available for
                                                Securities    Sale                 Total
                                                -----------------------------------------
                                                              (in thousands)
<S>                                             <C>           <C>               <C>
Beginning balance January 1, 2008               $  1,996      $  8,455          $ 10,451
Total gains or losses (realized/unrealized)
   Included in earnings
      Interest income on securities                  (10)           (6)              (16)
      Other changes in fair value                   (158)           --              (158)
   Included in other comprehensive income             --          (873)             (873)
                                                -----------------------------------------

Ending balance March 31, 2008                   $  1,828      $  7,576          $  9,404
                                                =========================================
</TABLE>

For items for which the fair value option has been elected, interest income is
recorded within the consolidated statements of income based on the contractual
amount of interest income earned on financial assets (except any that are in
nonaccrual status). Dividend income is recorded based on cash dividends. Cash
flows from the purchase and sale of securities for which the fair value option
has been elected are shown as investing activities within the consolidated
statement of cash flows.

The following table presents the amount of gains and losses from fair value
changes included in income before income taxes for financial assets and
liabilities carried at fair value for the three months ended March 31, 2008:

                                  Page 15 of 28

<PAGE>

Note J - Fair Value (Continued)

<TABLE>
<CAPTION>
                                  Changes in Fair Values for the Period ended March 31, 2008, for items
                                  Measured at Fair Value Pursuant to Election of the Fair Value Option
                                  ---------------------------------------------------------------------
                                                                    Total Changes
                                                                    In Fair Values
                                  Other                             Included in
                                  Gains and   Interest   Interest   Current Period
                                  Losses      Income     Expense    Earnings
                                  ------------------------------------------------
                                                   (in thousands)
<S>                               <C>         <C>        <C>        <C>
Assets:
         Trading securities       $ 604             --         --   $ 604
</TABLE>

                                  Page 16 of 28

<PAGE>

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

                                  Page 17 of 28

<PAGE>

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

      This section presents Management's  discussion and analysis of and changes
to the Company's  consolidated financial results of operations and condition and
should be read in conjunction with the Company's financial  statements and notes
thereto included herein.

      When used in this  quarterly  report  the words or  phrases  "will  likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements  are  subject  to  certain  risks and  uncertainties,
including,  among other things,  changes in economic conditions in the Company's
market  area,  changes in  policies  by  regulatory  agencies,  fluctuations  in
interest rates,  demand for loans in the Company's  market area and competition,
that could cause actual results to differ  materially from  historical  earnings
and those  presently  anticipated  or projected.  The Company  wishes to caution
readers not to place  undue  reliance  on any such  forward-looking  statements,
which speak only as of the date made.  The Company wishes to advise readers that
the factors listed above could affect the Company's  financial  performance  and
could cause the Company's actual results for future periods to differ materially
from any opinions or statements  expressed with respect to future periods in any
current statements.

      The Company does not undertake,  and specifically declines any obligation,
to  publicly  release  the  result  of any  revisions  which  may be made to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

GENERAL

      Oneida  Financial Corp. is the parent company of Oneida Savings Bank ("the
Bank").  The Company conducts no business other than holding the common stock of
the Bank and general investment  activities resulting from the capital it holds.
Consequently,  the net  income  of the  Company  is  primary  derived  from  its
investment in the Bank. The Bank's results of operations are primarily dependent
on its net interest  income,  which is the difference  between  interest  income
earned on its investments in loans,  investment  securities and  mortgage-backed
securities  and its cost of funds  consisting  of interest  paid on deposits and
borrowings.  The Bank's net income is also  affected by its  provision  for loan
losses, as well as by the amount of other income, including income from fees and
service charges,  revenue derived from the insurance agency and employee benefit
services  provided by subsidiaries of the Bank, net gains and losses on sales of
investments and loans, and operating expenses such as employee  compensation and
benefits,  occupancy and equipment costs and income taxes.  Earnings of the Bank
are also affected significantly by general economic and competitive  conditions,
particularly changes in market interest rates, which tend to be highly cyclical,
and government policies and actions of regulatory authorities,  which events are
beyond the control of the Bank. The Company has four primary business  segments;
it's banking franchise,  insurance activities, benefit consulting activities and
risk  management  activities.  However,  only the  banking  franchise  is deemed
material  to  the  Bank's   financial   condition  and  results  of  operations.
Consequently,   segment  disclosures  are  not  presented  in  the  Management's
Discussion  and  Analysis.  At both  December  31,  2007 and March 31,  2008 the
Company had 7,726,710 shares  outstanding of which 4,309,750 were held by Oneida
Financial MHC, the Company's mutual holding company parent.

RECENT DEVELOPMENTS

      The Company  announced a semi-annual  cash dividend as of January 29, 2008
of $0.24 per share  which was paid to its  shareholders  on February  12,  2008.
Oneida Financial MHC waived its receipt of dividends.

      On April 2,  2007,  the Bank  completed  its  acquisition  of Vernon  Bank
Corporation,  the stock holding  company of the National  Bank of Vernon.  Under
terms of the agreement, Oneida Savings Bank paid $11.4 million or $54.00 in cash
for each of the  210,447  outstanding  shares  of common  stock of  Vernon  Bank
Corporation.  The  results  of  Vernon  Bank  Corporation  are  included  in the
consolidated financial statements since April 2, 2007.

      Assets acquired as a result of the  acquisition  totaled $66.9 million and
resulted in additional  goodwill and core deposit  intangibles of  approximately
$5.9 million.  Amortization  expense of the core deposit  intangible was $66,000
for the three months ended March 31, 2008. The core deposit  intangible is being
amortized using a 10-year accelerated method amortization term.

                                  Page 18 of 28

<PAGE>

      Effective  January 1, 2008,  the Company  adopted  FASB No. 157 Fair Value
Measurements  and FASB No. 159, The Fair Value Option for  Financial  Assets and
Financial Liabilities.  FASB No. 157 defines fair value, establishes a framework
for measuring fair value and expands  disclosures about fair value measurements.
Footnote J to the  consolidated  financial  statements sets forth the fair value
measurements  using  Level 1,  Level 2 or Level 3 as  defined  in the FASB as of
March 31, 2008.  Level 3 assets  totaled  $9.4  million and $10.5  million as of
March 31, 2008 and December 31, 2007  respectively  and  represented 2% of total
assets.  The assets  include trust  preferred  securities and corporate debt and
equity  securities  which are all rated investment  grade.  There were no assets
transferred  into or from the Level 3 category during the quarter.  In addition,
for the level 3 assets,  $1.8 million represents trading securities whose change
in fair value of $158,000 loss was recognized in the  consolidated  statement of
operations for the quarter ended March 31, 2008. The remaining level 3 assets of
$7.6 million had an unrealized loss at March 31, 2008 of $870,000.

      FASB No.  159  provides  companies  with the  option  to  report  selected
financial  assets  and  liabilities  at fair  value and  establishes  disclosure
requirements. Footnote J to the consolidated financial statements sets forth the
assets  which  management  has  elected  to fair  value.  As of January 1, 2008,
Management  has  elected  to  apply  FASB 159 to  preferred  and  common  equity
securities  currently  in the  portfolio.  These  securities  do not have stated
market values and whose fair value  fluctuates with market changes.  As of March
31,  2008,  a change  in fair  value of  $604,000  loss  was  recognized  in the
consolidated statement of operations.

      During the first  quarter  2008 we  renamed  MacDonald/Yando  Agency  Inc.
subsidiary to Workplace Health Solutions, Inc.("WHS") WHS is designed to develop
a series of proactive medical services to help mitigate and prevent work related
injuries. This subsidiary was designed to compliment our other subsidiaries with
an overall philosophy of innovative risk management services.

FINANCIAL CONDITION

      ASSETS. Total assets at March 31, 2008 were $542.7 million, an increase of
$20.4  million  from  $522.3  million  at  December  31,  2007.  Mortgage-backed
securities  increased  $18.6  million  reflecting  purchases of $21.0 million of
mortgage-backed  securities  partially offset by the principal  collected on and
proceeds from sales and maturities of  mortgaged-backed  securities.  Investment
securities  decreased  $1.3 million due to purchases of $13.0 million  offset by
the principal  collected on and proceeds from sales and maturities of investment
securities.  Market  rate  fluctuations  during the  quarter  have  resulted  in
mortgage-backed  securities being more attractive to invest proceeds from called
securities and excess cash and cash equivalents in. Loans receivable,  including
loans held for sale,  decreased $3.4 million to $281.0 million at March 31, 2008
compared  with $284.4  million at December  31, 2007.  At March 31, 2008,  total
commercial real estate loans decreased by $1.3 million while commercial business
loans  increased by $220,000  from  December  31, 2007.  At March 31, 2008 total
consumer  loans  decreased by $1.6 million from  December 31, 2007.  Residential
loans increased by $2.3 million since December 31, 2007,  after the sale of $5.0
million of  fixed-rate  residential  real estate loans in the  secondary  market
during the three month  period.  Goodwill and other  intangibles  totaled  $25.4
million as of March 31, 2008 and December 31, 2007.  Additional  goodwill in the
amount of $129,000  was  recorded for the  contingent  purchase  payment made to
Benefit  Consulting  Group  LLC.  Under the terms of the  agreement,  contingent
purchase  payments  based  on  future  performance  levels  may be  made  over a
five-year period starting with the year ended December 31, 2006. Offsetting this
payment was the amortization expense recorded on a monthly basis.

      The  allowance  for loan  losses was $2.5  million  at March 31,  2008 and
December 31, 2007.  The allowance  for loan losses is a valuation  allowance for
probable  incurred credit losses.  Loan losses are charged against the allowance
when management  believes the  uncollectibility  of a loan balance is confirmed.
Subsequent  recoveries,  if  any,  are  credited  to the  allowance.  Management
estimates the allowance required by using past loan loss experience,  the nature
and volume of the portfolio,  information about specific borrower situations and
estimated collateral values, economic conditions, and other factors.  Allocation
of the allowance  may be made for specific  loans,  but the entire  allowance is
available for any loan that, in  management's  judgment,  should be charged off.
Quarterly, management evaluates the adequacy of the allowance and determines the
appropriate  provision  for loan  losses by applying a range of  estimated  loss
percentages  to each  category of performing  loans and  classified  loans.  The
allowance adjustment is based upon the net change in each portfolio category, as
well as  adjustments  related  to  impaired  loans,  since  the  prior  quarter.
Management  monitors and modifies the level of the  allowance for loan losses to
maintain it at a level  which it  considers  adequate  to provide  for  probable
incurred  loan  losses.  A  loan  is  considered  impaired,   based  on  current
information  and  events,  if it is  probable  that the Bank  will be  unable to
collect the  scheduled  payments of principal and interest when due according to
the contractual terms of the loan agreement. Factors considered by management in
determining  impairment  include  payment  status,  collateral  value,  and  the
probability of collecting  scheduled  principal and interest  payments when due.
The  measurement  of impaired  loans is generally  based on the present value of
expected future cash flows discounted at the historical effective interest rate,
except that all collateral-dependent  loans are measured for impairment based on
the estimated fair value of the collateral.  At March 31, 2008 the allowance for
loan losses as a  percentage  of net loans  receivable  was 0.89% as compared to
0.88% as of December 31, 2007.

                                  Page 19 of 28

<PAGE>

      LIABILITIES.  Total  liabilities  increased  by $20.9  million  to  $483.9
million at March 31, 2008 from $463.0 million at December 31, 2007. The increase
is  primarily  the result of an increase in  interest-bearing  deposits of $23.8
million offset by a decrease in non-interest  bearing  deposits of $1.7 million.
Certificates of deposit  increased $23.0 million from December 31, 2007 to March
31, 2008 due to growth of the municipal banking subsidiary.

      STOCKHOLDERS'  EQUITY. Total stockholders' equity decreased by $565,000 to
$58.8 million at March 31, 2008 as compared  $59.3 million at December 31, 2007.
Stockholders' equity decreased by $831,000 due to the payment of semiannual cash
dividends of $0.24  partially  offset by the addition of after-tax net income of
$429,000 for the three  months  ended March 31,  2008.

ANALYSIS OF NET INTEREST INCOME

      Net  interest   income   represents  the  difference   between  income  on
interest-earning  assets  and  expense  on  interest-bearing   liabilities.  Net
interest income also depends on the relative amounts of interest-earning  assets
and  interest-bearing  liabilities  and the interest rates earned or paid on the
assets or liabilities.

      AVERAGE BALANCE SHEET. The following tables set forth certain  information
relating to the Company for the three  months  ended March 31, 2008 and 2007 and
for the year ended  December 31,  2007.  For the periods  indicated,  the dollar
amount of interest income from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing  liabilities
is  expressed  in  thousands  of  dollars  and  percentages.  No tax  equivalent
adjustments  were made.  The average  balance is computed  based upon an average
daily balance.

         TABLE 1.  Average Balance Sheet.

<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,                      Twelve Months Ended Dec. 31,
                                    ---------------------------------------------------------------  ------------------------------
                                                   2008                             2007                            2007
                                      Average    Interest             Average     Interest             Average    Interest
                                    Outstanding  Earned/   Yield/   Outstanding   Earned/   Yield/   Outstanding  Earned/   Yield/
                                      Balance      Paid     Rate      Balance       Paid     Rate      Balance      Paid     Rate
                                    -----------  --------  ------   -----------  ---------  ------   -----------  --------  ------
                                                       (Dollars in Thousands)
<S>                                 <C>          <C>        <C>     <C>          <C>         <C>     <C>          <C>       <C>
Assets
------
Interest-earning Assets:
------------------------
Loans Receivable                    $   285,590  $  4,704    6.59%  $   248,554  $  4,218     6.79%  $   271,789  $ 18,552    6.83%
Investment and Mortgage-Backed
   Securities                           129,210     1,680    5.20%       95,241     1,129     4.74%      107,120     5,442    5.08%
Federal Funds                             7,711        65    3.37%       11,078       166     5.99%       15,814       829    5.24%
Equity Securities                        18,674       276    5.91%       15,392       203     5.28%       13,648       850    6.23%
                                    -----------  --------   -----   -----------  --------    -----   -----------  --------  ------
Total Interest-earning Assets           441,185     6,725    6.10%      370,265     5,716     6.18%      408,371    25,673    6.29%
                                    -----------  --------   -----   -----------  --------    -----   -----------  --------  ------
Non interest-earning Assets:
----------------------------
Cash and due from banks                  12,850                          11,783                           14,771
Other assets                             74,219                          60,988                           71,107
                                    -----------                     -----------                      -----------
   Total assets                     $   528,254                     $   443,036                      $   494,249
                                    ===========                     ===========                      ===========
Liabilities and Stockholders'
Equity
-----------------------------
Interest-bearing Liabilities:
-----------------------------
Money Market Deposits               $    71,077  $    431    2.44%  $    45,195  $    335     3.01%  $    58,370  $  1,831    3.14%
Savings Accounts                         74,264       145    0.79%       66,633       114     0.69%       74,332       570    0.77%
Interest-bearing Checking                39,577        57    0.58%       31,559        55     0.71%       36,024       265    0.74%
Time Deposits                           156,483     1,701    4.37%      118,283     1,294     4.44%      138,651     6,372    4.60%
Borrowings                               56,609       666    4.73%       65,519       814     5.04%       59,710     2,948    4.94%
Notes Payable                               142         2    5.66%        1,303        16     4.87%          836        42    5.02%
                                    -----------  --------   -----   -----------  --------    -----   -----------  --------  ------
Total Interest-bearing Liabilities      398,152     3,002    3.03%      328,492     2,628     3.24%      367,923    12,028    3.27%
                                    -----------  --------   -----   -----------  --------    -----   -----------  --------  ------
Non-interest-bearing Liabilities:
---------------------------------
Demand deposits                          62,549                          50,475                           61,187
Other liabilities                         8,285                           5,697                            6,661
                                    -----------                     -----------                      -----------
   Total liabilities                $   468,986                     $   384,664                      $   435,771
                                    -----------                     -----------                      -----------
Stockholders' equity                     59,268                          58,372                           58,478
                                    -----------                     -----------                      -----------
Total liabilities and stockholders'
   equity                           $   528,254                     $   443,036                      $   494,249
                                    ===========                     ===========                      ===========

   Net Interest Income                           $  3,723                        $  3,088                         $ 13,645
                                                 ========                        ========                         ========
   Net Interest Spread                                       3.07%                            2.94%                           3.02%
                                                            =====                            =====                          ======
   Net Earning Assets               $    43,033                      $   41,773                      $    40,448
                                    ===========                      ==========                      ===========
   Net yield on average
     Interest-earning assets                         3.38%                           3.34%                            3.34%
                                                 ========                        ========                         ========
   Average interest-earning
      assets to average
      Interest-bearing liabilities       110.81%                         112.72%                                    110.99%
                                    ===========                     ===========                                   ========
</TABLE>

<PAGE>

RESULTS OF OPERATIONS

      GENERAL.  Net  income  for the  three  months  ended  March  31,  2008 was
$429,000,  a decrease of $319,000 or 42.6% from  $748,000  for the three  months
ended March 31, 2007.  The decrease in net income was  primarily the result of a
decrease in other income and an increase in other expenses offset by an increase
in net interest  income and a decrease in the provision  for income  taxes.  Net
income from operations for the first quarter, which excludes the FASB 159 change
in fair value of $604,000,  net of $163,000 income taxes,  was $870,000 or $0.11
per diluted  share.  This  compares to net income from  operations  for the 2007
first  quarter of  $748,000,  or $0.10 per diluted  share.  The  increase in net
income from operations was primarily due to an increase in net interest  income,
an increase in  non-interest  income and a decrease in the  provision for income
taxes,  partially offset by an increase in non-interest expense. The acquisition
of The  National  Bank of Vernon and the  opening of a  banking,  insurance  and
retail center in the Griffiss  Business and  Technology  Park in Rome,  New York
both  completed  in the second  quarter of 2007  contributed  to the increase in
non-interest expense.

      INTEREST INCOME. Interest and dividend income increased by $1.0 million or
17.7%,  to $6.7  million  for the three  months  ended  March 31, 2008 from $5.7
million for three months ended March 31, 2007.  The increase in interest  income
was the result of an increase in the average balances of interest-earning assets
during the current period of $70.9 million.  This increase was partially  offset
by a decrease in the yield of 8 basis  points on interest  earning  assets.  The
increase in  interest-earning  assets is  primarily  due to the  acquisition  of
Vernon Bank Corporation on April 2, 2007.

      Interest on loans increased  $486,000 to $4.7 million for the three months
ended March 31,  2008 from $4.2  million  for the three  months  ended March 31,
2007.  The  increase in  interest  income on loans is a result of an increase of
$37.0 million in the average  balance of loans  receivable  for the three months
ended  March 31,  2008 as  compared  with the same  period  in 2007  offset by a
decrease of 20 basis  points in the average  yield to 6.59% for the three months
ended March 31, 2008 from 6.79% for the three months  ended March 31, 2007.  The
average  balance of commercial  loans  increased  $4.9 million at March 31, 2008
from March 31, 2007 while  commercial real estate loans increased $11.7 million.
The average balance of residential real estate loans increased $20.2 million for
the same time period,  after  recording  the sale of $18.3 million in fixed rate
one-to-four family residential real estate loans over the last 12 months.

      Interest on investments and mortgage-backed  securities increased $551,000
as a result of an increase in the average  balance of investment  securities and
mortgage-backed  securities  of $34.0 million for the three months period ending
March 31, 2008 as  compared  with the same  period in 2007.  The  average  yield
increased  46 basis  points to 5.20% for the three  months  ended March 31, 2008
from 4.74% for the three months ended March 31, 2007.

      Interest income from federal funds decreased during the three months ended
March 31, 2008 to $65,000 as compared  with  $166,000 for the 2007  period.  The
decrease  in  interest  income is  primarily  due to a decrease  in the  average
balance of $3.4 million as well as a decrease of 262 basis points in the average
yield.  The decrease in the average balance of federal funds sold was due to the
liquidity needed in 2007 to provide for the cash consideration  required for the
acquisition of Vernon Bank Corporation.

      INTEREST  EXPENSE.  Interest expense was $3.0 million for the three months
ended March 31,  2008,  an increase of $374,000 or 14.2% from the same period in
2007. The increase in interest expense is due to an increase in interest paid on
deposit  accounts  partially  offset by a decrease in interest  paid on borrowed
funds. Interest expense on borrowed funds totaled $666,000 for the first quarter
of 2008  compared  with  $814,000  for the 2007 period.  The average  balance of
borrowings  decreased  $8.9 million for the three months period ending March 31,
2008 as  compared  with the same  period  in 2007.  The cost of  borrowed  funds
decreased  31 basis  points to 4.73% for the three  months  ended March 31, 2008
from  5.04% for the three  months  ended  March 31,  2007.  Interest  expense on
deposits  increased $536,000 and totaled $2.3 million for the three months ended
March 31, 2008 as compared to $1.8  million for the three month  period in 2007.
The average cost of deposits  was 2.75% for the three month period  ending March
31, 2008  compared  with 2.79% for the three month period in 2007.  In addition,
the average balance of deposit accounts  increased $79.7 million from March 2007
to March 2008.

      PROVISION  FOR LOAN LOSSES.  There were no  provisions  for possible  loan
losses made during the first  quarters of 2008 and 2007.  The allowance for loan
losses was $2.5 million for the three  months ended March 31, 2008,  an increase
of $411,000 from $2.1 million at March 31, 2007.  The ratio of the net loan loss
allowance  to loans  receivable  is 0.89% at March 31, 2008 as  compared  with a
ratio of 0.85% of loans  receivable at March 31, 2007.  Management  continues to
monitor changes in the loan portfolio mix in response to the redirection of loan
asset  origination and retention toward consumer and commercial  business loans.
The method utilized to evaluate the adequacy of the allowance level accounts for
the higher

                                  Page 21 of 28

<PAGE>

relative  degree of credit risk  associated  with this activity as compared with
traditional  residential  real estate  lending.  Provisions to the allowance are
made as  management  assesses  the level of  allowance to maintain it at a level
which is considers adequate to provide for probable incurred loan losses.

      OTHER INCOME. Other operating income decreased by $231,000 for the
three-month period ending March 31, 2008 compared with the same period in 2007
to $4.0 million from $4.2 million. The decrease in other income was primarily
due to a change in fair value of $604,000 that was recognized in connection with
the adoption of FAS 159 for certain preferred and common equity securities.
During the first quarter 2008, the change in fair value of these securities as
determined by market trading prices ranged from an unrealized gain of $164,000
to an unrealized loss of $604,000 which was recognized at March 2008. The
Company intends to hold these securities due to the dividend and other features
of the securities and therefore does not expect to realize the loss recorded.
The decrease was offset by increases in commissions and fees on the sale of
non-banking products through the Company's subsidiaries for the three months
ended March 31, 2008 as compared with the same period during 2007. Commissions
and fees on sales of non-banking products was $3.5 million for the three months
ended March 31, 2008 as compared to $3.3 million for the same period in 2007. In
addition, service charges on deposit accounts increased $132,000 or 20.2% for
the three months ended March 31, 2008 compared with the three months ended March
31, 2007.

      OTHER EXPENSES.  Other operating  expenses increased by $825,000 or 13.0%,
to $7.2  million for the three months ended March 31, 2008 from $6.3 million for
the same period in 2007. The increase in non-interest  expense  primarily is the
result of an increase in equipment and other operating expenses  associated with
the expansion of our banking  franchise  resulting  from the  acquisition of the
Vernon Bank Corporation and the completion of our banking,  insurance and retail
center  at the  Griffiss  Business  and  Technology  Park  in  Rome,  New  York.
Compensation  expense  increased  $463,000 or 11.2% largely  associated with the
revenue  growth of the insurance and consulting  subsidiaries  as well as due to
the acquisition of Vernon Bank Corporation.

      INCOME TAX. Income tax expense  decreased to $155,000 for the three months
ended March 31, 2008 as compared to $257,000  for the first  quarter  2007.  Net
income  decreased from $748,000 to $429,000 for the three month period while the
effective  tax rate  increased  to 26.5% for the three months of 2008 from 25.6%
for the three  months of 2007 to reflect the overall tax rate  expected to be in
effect for 2008.

      LIQUIDITY  AND CAPITAL  RESOURCES.  In addition to the  Company's  primary
funding sources of cash flow from banking and insurance operations, deposits and
borrowings,  funding  is  provided  from the  principal  and  interest  payments
received on loans and  investment  securities,  proceeds from the maturities and
sale of investment  securities,  as well as proceeds from the sale of fixed rate
mortgage  loans in the  secondary  market  and fees from the sales of  insurance
products.  While  maturities and scheduled  amortization of loans and securities
are predictable sources of funds,  deposit balances and mortgage prepayments are
greatly influenced by general interest rates, the economic environment and local
competitive conditions.

      The primary  investing  activities of the Company are the  origination  of
residential  mortgages,  commercial  loans and  consumer  loans,  as well as the
purchase of mortgage-backed and other debt securities.  During the first quarter
of 2008,  loan  originations  totaled  $22.8  million  compared to $17.5 million
during the first quarter of 2007.  The purchases of  mortgage-backed  securities
totaled $21.0 million  during the first quarter of 2008 as compared to $0 during
the first  quarter of 2007.  The increase in the  purchases  of  mortgage-backed
securities is due to additional liquidity provided by increased deposits.

      Cash flow from operations,  deposit growth, as well as the sales, maturity
and principal payments received on loans and investment  securities were used to
fund the investing  activities  described above.  Additionally,  the Company has
lines of credit with the Federal  Home Loan Bank,  Federal  Reserve Bank and two
commercial  banks that provide funding sources for lending,  liquidity and asset
and liability management as needed.  During the first quarter of 2008 cash flows
provided by the sale,  principal  payments and maturity of securities  available
for sale were $15.8  million  compared  to $10.6  million for the same period in
2007.

      In the ordinary  course of business,  the Company  extends  commitments to
originate residential and commercial loans and other consumer loans. Commitments
to extend  credit are  agreements  to lend to a customer  as long as there is no
violation of any condition  established in the contract.  Commitments  generally
have fixed expiration dates or other termination clauses and may require payment
of a fee. Since the Company does not expect all of the commitments to be funded,
the  total  commitment   amounts  do  not  necessarily   represent  future  cash
requirements.  The  Company  evaluates  each  customer's  creditworthiness  on a
case-by-case   basis.   Collateral  may  be  obtained  based  upon  management's
assessment of the customers' creditworthiness.  Commitments to extend credit may
be written on a fixed rate basis  exposing  the  Company to  interest  rate risk
given the  possibility  that market rates may change between the commitment date
and the actual extension of credit. As of

                                  Page 22 of 28

<PAGE>

March 31, 2008 the Company had  outstanding  commitments  to originate  loans of
approximately  $6.4 million,  which generally have an expiration  period of less
than 120  days.  Commitments  to sell  residential  mortgages  amounted  to $6.2
million at March 31, 2008.

      The Company extends credit to consumer and commercial  customers,  up to a
specified amount, through lines of credit. The borrower is able to draw on these
lines as needed,  thus the funding  requirements  are  generally  unpredictable.
Unused lines of credit amounted to $53.3 million at March 31, 2008 and generally
have an expiration  period of less than one year. It is  anticipated  that there
will be  sufficient  funds  available to meet the current loan  commitments  and
other obligations  through the sources described above. The credit risk involved
in  issuing  these  commitments  is  essentially  the same as that  involved  in
extending loans to customers and is limited to the  contractual  notional amount
of those instruments.

      Cash, interest-earning demand accounts at correspondent banks, federal
funds sold, and other short-term investments are the Company's most liquid
assets. The level of these assets are monitored daily and are dependent on
operating, financing, lending and investing activities during any given period.
Excess short-term liquidity is usually invested in overnight federal funds sold.
In the event that funds beyond those generated internally are required due to
higher expected loan commitment fundings, deposit outflows or the amount of debt
being called, additional sources of funds are available through the use of
repurchase agreements, the sale of loans or investments or the Company's various
lines of credit. As of March 31, 2008 the total of cash, interest-earnings
demand accounts and federal funds sold was $24.3 million.

At March 31, 2008, the Bank exceeded all regulatory  capital  requirements.  The
current  requirements  and the actual  levels for the Bank are  detailed  in the
following table.

<TABLE>
<CAPTION>
                                                                                        To Be Well
                                                                                     Capitalized Under
                                                               For Capital           Prompt Corrective
                                          Actual             Adequacy Purposes       Action Provisions
                                  ---------------------   ----------------------   ---------------------
                                     Amount       Ratio      Amount       Ratio      Amount        Ratio
                                                          (Dollars in thousands)
<S>                               <C>             <C>     <C>             <C>      <C>             <C>
As of March 31, 2008:
   Total Capital
      (to Risk Weighted Assets)   $   36,643      10.48%  $  27,971          8%    $  34,964         10%
   Tier I Capital
      (to Risk Weighted Assets)   $   34,147       9.77%  $  13,986          4%    $  20,979          6%
   Tier I Capital
      (to Average Assets)         $   34,147       6.84%  $  19,957          4%    $  24,947          5%
</TABLE>

<TABLE>
<CAPTION>
                                                                                        To Be Well
                                                                                     Capitalized Under
                                                                For Capital          Prompt Corrective
                                          Actual             Adequacy Purposes       Action Provisions
                                  ---------------------   ----------------------   ---------------------
                                   Amount         Ratio      Amount       Ratio      Amount        Ratio
                                                         (Dollars in thousands)
<S>                               <C>             <C>     <C>             <C>      <C>             <C>
As of December 31, 2007:
   Total Capital
      (to Risk Weighted Assets)   $   35,221      10.18%  $  27,682         8%     $  34,602         10%
   Tier I Capital
      (to Risk Weighted Assets)   $   32,710       9.45%  $  13,841         4%     $  20,761          6%
   Tier I Capital
      (to Average Assets)         $   32,710       6.60%  $  19,830         4%     $  24,787          5%
</TABLE>

                                  Page 23 of 28

<PAGE>

ONEIDA FINANCIAL CORP.
SELECTED FINANCIAL RATIOS
At and for the Three Months Ended March 31, 2008 and 2007 (unaudited)

(Annualized where appropriate)                              Three Months Ending
                                                                 March 31,
                                                              2008         2007
                                                            ------     --------
Performance Ratios:

      Return on average assets                                0.32%        0.68%
      Return on average equity                                2.90%        5.13%
      Net interest margin                                     3.38%        3.34%
      Efficiency Ratio                                       90.63%       85.10%
   Ratio of operating expense to average total assets         5.42%        5.72%
   Ratio of average interest-earning assets
   to average interest-bearing liabilities                  110.81%      112.72%

Asset Quality Ratios:

      Non-performing assets to total assets                   0.09%        0.01%
      Allowance for loan losses to non-performing loans     577.78%    3,677.19%
      Allowance for loan losses to loans receivable, net      0.89%        0.85%

Capital Ratios:

      Total stockholders' equity to total assets             10.83%       12.84%
      Average equity to average assets                       11.22%       13.18%

                                  Page 24 of 28

<PAGE>

ITEM 3.     Quantitative and Qualitative Disclosure About Market Risk

      Various forms of market risk are inherent in the business of the Bank
including concentration risk, liquidity management, credit risk and collateral
risk among others. However, the Bank's most significant form of market risk is
interest rate risk, as the majority of the Bank's assets and liabilities are
sensitive to changes in interest rates. Ongoing monitoring and management of
this risk is an important component of the Company's asset and liability
management process. The Bank's interest rate risk management program focuses
primarily on evaluating and managing the composition of the Bank's assets and
liabilities in the context of various interest rate scenarios. Factors beyond
Management's control, such as market interest rates and competition, also have
an impact on interest income and expense. Based on the asset-liability
composition at March 31, 2008, in a rising interest rate environment, Management
would expect that the Company's cost of shorter-term deposits might rise faster
than its earnings on longer-term loans and investments. Conversely, as interest
rates decrease, the prepayment of principal on loans and investments tends to
increase, causing the Company to invest funds in a lower rate environment. To
mitigate the effect of interest rate changes, Management has taken steps to
emphasize core deposits, monitor certificate of deposit rates to better match
asset changes, and sell substantially all newly originated longer term fixed
rate loans in the secondary market without recourse. Management believes this
approach will help reduce the exposure to interest rate fluctuations and enhance
long-term profitability.

For a discussion of the Company's asset and liability management policies as
well as the potential impact of interest rate changes upon the earnings of the
Company, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's 2007 Annual Report to Stockholders.
There has been no material change in the Company's interest rate risk profile
since December 31, 2007.

ITEM 4T.    Controls and Procedures

      Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, the Company
has evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a- 15(3) and 15d - 15(e) under the
Exchange Act) as of the end of the period covered by this quarterly report.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the period covered by this quarterly report, the
Company's disclosure controls and procedures are effective to ensure that
information to be disclosed in the reports that the Company files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported, within the time periods or submits specified in the Securities and
Exchange Commission's rules and forms. There has been no change in the Company's
internal control over financial reporting during the most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                  Page 25 of 28

<PAGE>

                             ONEIDA FINANCIAL CORP.
                                AND SUBSIDIARIES

                           Part II - Other Information

Item 1      Legal Proceedings

      Much of the Bank's market area is included in the 270,000-acre land claim
of the Oneida Indian Nation ("Oneidas"). The land claim area is held primarily
by private persons. Over 15 years ago the United States Supreme Court ruled in
favor of the Oneidas in a lawsuit which management believes was intended to
encourage the State of New York to negotiate an equitable settlement in a land
dispute that has existed over 200 years.

      In June 1998, the United States Justice Department intervened in the
action on behalf of the Oneidas against Madison County and Oneida County in New
York State. In September 1998, an U.S. District Court removed a stay of
litigation, having been in place since the late 1980's pending settlement
negotiations. In December 1998, both the Oneidas and the U.S. Justice Department
filed motions to amend the long outstanding claim against the State of New York.
The motion attempts to include in the claim, various named and 20,000 unnamed
additional defendants, who own real property in parts of Madison and Oneida
counties, thereby including the additional defendants in the original suit. The
U.S. District Court granted the motions to add as a defendant the State of New
York, but denied the motions to add the private landowners. Neither the Bank nor
the Company is a named defendant in the motion. The Court further rejected as
not being viable the remedies of ejectment and/or of monetary damages against
private landowners. In January 2001, amended complaints were served by the
Oneidas and the United States which seek to eject the Counties of Madison and
Oneida from lands owned by the counties, and the Oneidas also seek a declaration
that they have the right to possess all land within the land claim area. In June
2001, the Court determined that certain land purchased by the Oneidas in 1997
and 1998 are exempt from real estate taxes, accepting the Oneidas argument that
the acquired parcels lie within the boundaries of the "reservation" established
in 1974 by the Federal Government.

      In February 2002, a joint statement was issued by the Oneidas, State of
New York, and the counties of Madison and Oneida, indicating that the framework
for a settlement had been agreed upon subject to the approval by the State
legislature and the Federal Government. The Oneidas of Wisconsin and the
Stockbridge-Munsee Band of the Mohican Indians have commenced separate actions
in the United State District Court for the Northern District of New York to
dispute and interrupt any settlement pending.

      In July 2003, the United States Court of Appeals affirmed the decision of
the lower court against the City of Sherrill but appeals continue relative to
the decision against the Counties of Madison and Oneida. In January 2005 the
United State Supreme Court heard the appeal brought forward by the City of
Sherrill against the Oneidas arguing that the acquisition of real property by
the Oneidas within the land claim area does not return the property to sovereign
status. Therefore, the City of Sherrill contends that the property is subject to
the payment of real property taxes or revert to the ownership of the taxing
authority if assessed property taxes are not paid. The United States Supreme
Court filed their decision in March 2005, ruling in favor of the City of
Sherrill.

      To date neither the original claim nor the motion to amend has had an
adverse impact on the local economy or real property values. In addition, title
insurance companies continue to underwrite policies in the land claim area with
no change in premiums or underwriting standards. The Bank requires title
insurance on all residential real estate loans, excluding home equity loans.
Both the State of New York and the Oneidas have indicated in their respective
communications that individual landowners will not be adversely affected by the
ongoing litigation. The Company continues to monitor the situation.

      The Company is not involved in any other pending legal proceedings other
than routine legal proceedings occurring in the ordinary course of business
which, in the aggregate, involve amounts which are believed by management to be
immaterial to the financial condition or operations of the Company.

Item 1a     Risk Factors

      There has not been any material change in the risk factors disclosure from
that contained in the Company's 2007 Form 10-K for the fiscal year ended
December 31, 2007.

Item 2      Unregistered Sales of Equity Securities and Use of Proceeds

      There was no repurchase activity during the three months ended March 31,
2008. Our current repurchase plan of 250,000 was announced on February 13, 2008
and represents 3.2% of the common stock outstanding. The plan has no expiration
date.

                                  Page 26 of 28

<PAGE>

Item 3      Defaults Upon Senior Securities

            Not applicable.

Item 4      Submission of Matters to a Vote of Security Holders

            Not applicable.

Item 5      Other Information

            None

Item 6      Exhibits

            (a)   All required exhibits are included in Part I under
                  Consolidated Financial Statements, Notes to Unaudited
                  Consolidated Financial Statements and Management's Discussion
                  and Analysis of Financial Condition and Results of Operations,
                  and are incorporated by reference, herein.

                  Exhibits

                  Exhibit 31.1 - Certification of Chief Executive Officer
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

                  Exhibit 31.2 - Certification of Chief Financial Officer
                  Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

                  Exhibit 32.1 - Certification pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002

                                  Page 27 of 28

<PAGE>

                                   SIGNATURES

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

                                          ONEIDA FINANCIAL CORP.

Date: May 14, 2008                        By: /s/ Michael R. Kallet
                                          ----------------------------------
                                          Michael R. Kallet
                                          President and Chief Executive Officer

Date: May 14, 2008                        By: /s/ Eric E. Stickels
                                          ----------------------------------
                                          Eric E. Stickels
                                          Executive Vice President and Chief
                                          Financial Officer

                                  Page 28 of 28