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 June 30, 2009

                                       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 has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted  and posted  pursuant to Rule 405 of  Regulation  S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes No

Indicate by check mark whether the  Registrant is a large  accelerated  file, an
accelerated filer, a non-accelerated  filer or a smaller reporting company.  See
the definitions of "accelerated  filer",  "large accelerated filer" and "smaller
reporting company" 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 7,790,352 shares
       of the Registrant's common stock outstanding as of August 1, 2009.

<PAGE>

                             ONEIDA FINANCIAL CORP.
                                      INDEX
<TABLE>
<CAPTION>
                                                                                    Page
                                                                                   -------
<S>                                                                                  <C>
PART I. FINANCIAL INFORMATION

  Item 1.    Financial Statements                                                     1

             Consolidated Statements of Condition (unaudited)                         2
             As of June 30, 2009 and December 31, 2008

             Consolidated Statements of Operations (unaudited)                        3
             For the three and six months ended June 30, 2009 and 2008

             Consolidated Statements of Comprehensive Income (unaudited)              4
             For the three and six months ended June 30, 2009 and 2008

             Consolidated Statements of Changes in Stockholders' Equity (unaudited)   5
             For the three and six months ended June 30, 2009 and 2008

             Consolidated Statements of Cash Flows (unaudited)                        6
             For the three and six months ended June 30, 2009 and 2008

             Notes to Consolidated Financial Statements (unaudited)                   8

  Item 2.    Management's Discussion and Analysis of Financial Condition             25
             And Results of Operations

  Item 3.    Quantitative and Qualitative Disclosures about Market Risk              34

  Item 4T.   Controls and Procedures                                                 34

PART II. OTHER INFORMATION                                                           35

  Item 1.    Legal Proceedings                                                       35

  Item 1a.   Risk Factors                                                            35

  Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds             35

  Item 3.    Defaults Upon Senior Securities                                         36

  Item 4.    Submission of Matters to a Vote of Security Holders                     36

  Item 5.    Other Information                                                       36

  Item 6.    Exhibits                                                                36
</TABLE>

<PAGE>

PART I.  FINANCIAL INFORMATION

         Item I.  Financial Statements


                                  Page 1 of 37
<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
At June 30, 2009 and December 31, 2008

<TABLE>
<CAPTION>
                                                              (unaudited)
                                                               At June 30,     At December 31,
                                                                 2009                2008
                                                                 ----                ----
ASSETS                                                       (in thousands, except share data)
<S>                                                              <C>               <C>
         Cash and due from banks                                 $  14,106         $  13,223
         Federal funds sold                                          7,037                71
                                                                -----------------------------
  TOTAL CASH AND CASH EQUIVALENTS                                   21,143            13,294

         Trading securities                                          6,491             5,941
         Securities available for sale                             129,198           134,763
         Securities held to maturity (fair value $23,621)           23,774                --

         Mortgage loans held for sale                                1,031               741

         Loans receivable                                          294,407           304,376
         Allowance for loan losses                                  (2,624)           (2,624)
                                                                -----------------------------
   LOANS RECEIVABLE, NET                                           291,783           301,752

         Federal Home Loan Bank stock                                2,787             3,784
         Bank premises and equipment, net                           21,455            21,790
         Accrued interest receivable                                 2,432             2,659
         Other assets                                               17,064            15,323
         Bank owned life insurance                                  15,310            15,020
         Goodwill                                                   23,183            22,963
         Other intangible assets                                     1,862             2,100
         ------------------------------------------------------------------------------------
         TOTAL ASSETS                                            $ 557,513         $ 540,130
         ====================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
         Interest bearing deposits                               $ 398,339         $ 364,911
         Non-interest bearing deposits                              62,186            60,787
         Borrowings                                                 32,000            52,825
         Notes payable                                                --                  12
         Other liabilities                                           9,367             6,766
                                                                -----------------------------
TOTAL LIABILITIES                                                  501,892           485,301
Oneida Financial Corp. 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                                 19,308            19,221
         Retained earnings                                          42,937            41,585
         Accumulated other comprehensive (loss)                     (6,218)           (5,562)
         Treasury stock (at cost, 496,510
                                    and 533,106 shares)             (3,048)           (3,058)
                                                                -----------------------------
 Total Oneida Financial Corp. stockholders' equity                  53,062            52,269
         Noncontrolling interest                                     2,559             2,560
                                                                -----------------------------
TOTAL STOCKHOLDERS' EQUITY                                          55,621            54,829
         ------------------------------------------------------------------------------------
         TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                                    $ 557,513         $ 540,130
         ====================================================================================
</TABLE>

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


                                  Page 2 of 37
<PAGE>

ONEIDA  FINANCIAL CORP. AND SUBSIDIARIES  CONSOLIDATED  STATEMENTS OF OPERATIONS

For the Three  Months and Six Months  Ended June 30, 2009  (unaudited)  and 2008
(unaudited)

<TABLE>
<CAPTION>
                                                             Three Months Ended    Six Months Ended
                                                              June 30,  June 30,   June 30,  June 30,
                                                               2009      2008       2009      2008
                                                               ----      ----       ----      ----
                                                         (in thousands, except share and per share data)
<S>                                                         <C>         <C>       <C>          <C>
INTEREST INCOME:
         Interest and fees on loans                         $ 4,410     $4,518    $  8,891     $ 9,223
         Interest on investment securities                    1,697      1,869       3,330       3,548
         Dividends on equity securities                         107        255         211         531
         Interest on federal funds sold and
              interest-earning deposits                          11         76          25         141
------------------------------------------------------------------------------------------------------
   Total interest and dividend income                         6,225      6,718      12,457      13,443
------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
         Core deposits                                          563        582       1,084       1,215
         Time deposits                                          963      1,625       2,059       3,326
         Borrowings                                             408        643         964       1,309
         Notes payable                                           --          1          --           3
------------------------------------------------------------------------------------------------------
                  Total interest expense                      1,934      2,851       4,107       5,853
------------------------------------------------------------------------------------------------------
NET INTEREST INCOME                                           4,291      3,867       8,350       7,590
         Less: Provision for loan losses                        160        150         160         150
------------------------------------------------------------------------------------------------------
   Net interest income after provision for loan losses        4,131      3,717       8,190       7,440
------------------------------------------------------------------------------------------------------
OTHER INCOME:
    Total other-than-temporary impairment losses             (1,624)        --      (1,624)         --
    Portion of loss recognized in OCI (before taxes)          1,170         --       1,170          --
    Net impairment losses                                      (454)        --        (454)         --
    Net gains on sale of securities, net                         --         22         238          18
      Changes in fair value of trading securities               998          5         569        (599)
      Commissions and fees on sales of
                   non-banking products                       3,906      3,373       8,055       6,873
         Other operating income                               1,095      1,101       2,503       2,226
------------------------------------------------------------------------------------------------------
   Total other income                                         5,545      4,501      10,911       8,518
------------------------------------------------------------------------------------------------------
OTHER EXPENSES:
         Compensation and employee benefits                   4,994      4,715       9,981       9,295
         Occupancy expenses, net                              1,178      1,070       2,407       2,283
         Other operating expense                              2,037      1,548       3,720       2,911
------------------------------------------------------------------------------------------------------
   Total other expenses                                       8,209      7,333      16,108      14,489
------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                    1,467        885       2,993       1,469
------------------------------------------------------------------------------------------------------
   Provision for income taxes                                   398        239         810         394
------------------------------------------------------------------------------------------------------
NET INCOME                                                  $ 1,069     $  646    $  2,183     $ 1,075
Less: net income attributable to noncontrolling interest         --         --          --          --
------------------------------------------------------------------------------------------------------

NET INCOME attributable
       to Oneida Financial Corp.                            $ 1,069     $  646    $  2,183     $ 1,075
======================================================================================================
EARNINGS PER SHARE - BASIC                                  $  0.14     $ 0.08    $   0.28     $  0.14
======================================================================================================
EARNINGS PER SHARE - DILUTED                                $  0.14     $ 0.08    $   0.28     $  0.14
======================================================================================================
</TABLE>

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


                                  Page 3 of 37
<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Three  Months and Six Months  Ended June 30, 2009  (unaudited)  and 2008
(unaudited)

<TABLE>
<CAPTION>
                                                              Three Months Ended      Six Months Ended
                                                              June 30,  June 30,    June 30,     June 30,
                                                               2009      2008        2009          2008
                                                               ----      ----        ----          ----
<S>                                                          <C>         <C>         <C>         <C>
   Net income                                                $ 1,069     $   646     $ 2,183     $ 1,075
                                                             -------     -------     -------     -------
   Other comprehensive income, net of tax:

   Net change in unrealized gains (losses):
     Other-than-temporary impaired securities
          Available for sale:
          Unrealized gains (losses) on securities
              arising during period                              633          --       1,320)         --
            Less: reclassification adjustment for
              losses included in net income                      454          --         454          --
                                                             -------     -------     -------     -------
                  Net unrealized gains (losses)                  179          --        (866)         --
                    Income tax effect                           (72)         --         346          --
                                                             -------     -------     -------     -------
                                                                 107          --        (520)         --
     Securities available for sale:
          Unrealized gains (losses) on securities
              arising during period                            2,357      (4,245)        (63)     (4,534)
            Less: reclassification adjustment for
              gains included in net income                        --         (22)       (238)        (18)
                                                             -------     -------     -------     -------
                  Net unrealized gains (losses)                2,357      (4,267)       (301)     (4,552)
                    Income tax effect                           (943)      1,707         120       1,821
                                                             -------     -------     -------     -------
                                                               1,414      (2,560)       (181)     (2,731)
                                                             -------     -------     -------     -------
   Unrealized holding gains (losses) on securities.
            net of tax                                         1,521      (2,560)       (701)     (2,731)
                                                             -------     -------     -------     -------
Change in unrealized loss on pension benefits                     37          42          74          84
                                                             -------     -------     -------     -------
Income tax effect                                                (14)        (17)        (29)        (34)
                                                             -------     -------     -------     -------
                                                                  23          25          45          50
                                                             -------     -------     -------     -------
   Other comprehensive gain (loss), net of tax                 1,544      (2,535)       (656)     (2,681)
   Comprehensive income (loss)                                 2,613      (1,889)      1,527      (1,606)
   Comprehensive income (loss) attributable to the
     Noncontrolling interest                                      --          --          --          --
                                                             -------     -------     -------     -------
   Comprehensive income (loss) attributable to
     Oneida Financial Corp.                                  $ 2,613     $(1,889)    $ 1,527     $(1,606)
                                                             =======     =======     =======     =======
</TABLE>

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

                                  Page 4 of 37

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months and Six Months Ended June 30, 2009 (unaudited)

<TABLE>
<CAPTION>
                                                                                     Accumulated
                                                              Additional               Other
                                               Common Stock    Paid-In    Retained  Comprehensive  Treasury Noncontrolling   Total
                                            Shares    Amount   Capital    Earnings       Loss        Stock     Interest
                                                                   (in thousands, except number of shares)
<S>                                       <C>          <C>     <C>        <C>         <C>          <C>         <C>         <C>
Balance as of December 31, 2008           8,322,452    $83     $19,221    $41,585     $(5,562)     $(3,058)    $2,560      $ 54,829
Net income                                                                  1,114                                             1,114
Other comprehensive loss,
     net of tax                                                                        (2,200)                               (2,200)
Shares earned under stock plans                                     38                                                           38
Common stock dividends: $0.24 per share                                      (831)                                             (831)
Treasury stock reissued                                                                                  9                        9
Tax benefit from stock plans                                        12                                                           12
                                          -----------------------------------------------------------------------------------------
Balance as of March 31, 2009              8,322,452    $83     $19,271    $41,868     $(7,762)     $(3,049)    $2,560      $ 52,971
Net income                                                                  1,069                                             1,069
Other comprehensive loss,
     net of tax                                                                         1,544                                 1,544
Shares earned under stock plans                                     38                                                           38
Common stock dividends: $0.24 per share                                                                                          --
Stock repurchased                                                                                                  (1)           (1)
Treasury stock reissued                                             (1)                                  1                       --
                                          -----------------------------------------------------------------------------------------
Balance as of June 30, 2009               8,322,452    $83     $19,308    $42,937     $(6,218)     $(3,048)    $2,559       $55,621
                                          =========================================================================================
</TABLE>

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

                                  Page 5 of 37

<PAGE>


ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three  Months and Six Months  Ended June 30, 2009  (unaudited)  and 2008
(unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended          Six Months Ended
                                                                    June 30,   June 30,       June 30,     June 30,
                                                                      2009       2008          2009          2008
                                                                      ----       ----          ----          ----
         Operating Activities:                                           (in thousands)
<S>                                                               <C>          <C>          <C>            <C>
   Net income                                                     $  1,069     $    646     $ 2,183        $ 1,075
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                                    523          524       1,048          1,047
      Amortization of premiums/discounts on securities, net             76           25         116             50
      Net change in valuation of financial instruments carried
         at fair value                                                (998)          (5)       (569)           599
      Provision for loan losses                                        160          150         160            150
      Stock compensation earned                                         38           41          76             85
      Loss on sale of other real estate                                 --            6          --              6
      Net realized loss (gain) on sale of securities                   454          (22)        216            (18)
      Gain on sale of loans, net                                      (110)         (27)       (238)           (72)
      Income tax payable                                              (351)         (58)         58            108
      Accrued interest receivable                                     (232)        (262)        227            (22)
      Other assets                                                  (1,041)      (1,128)       (595)          (248)
      Other liabilities                                              2,671          (27)      2,663         (1,166)
      Origination of loans held for sale                           (19,496)      (4,852)    (37,396)        (6,741)
      Proceeds from sales of loans                                  19,271        5,012      37,344         10,029
------------------------------------------------------------------------------------------------------------------
          Net cash provided by operating activities                  2,034           23       5,293          4,882
------------------------------------------------------------------------------------------------------------------
Investing Activities:
  Purchase of investment securities                                (19,859)      (4,177)    (34,580)       (17,180)
  Principal collected on and proceeds of maturities
      sales or calls from investments                                2,933       10,156      16,592         23,164
  Purchase of mortgage-backed securities                            (4,043)     (18,998)    (24,007)       (40,020)
  Principal collected on and proceeds from sales
     of mortgage-backed securities                                   6,804        3,918      22,306          6,671
  Net decrease (increase) in loans                                   3,172      (10,082)      9,760         (9,792)
 Purchase of bank premises and equipment                              (127)        (295)       (475)          (401)
  Proceeds from sale of other real estate                               --           69          --             69
  Purchase of insurance agency                                         (84)         (73)        (84)           (73)
  Purchase of employee benefits company                                 --           --        (136)          (129)
  Purchase of bank                                                      --           --          --             (8)
------------------------------------------------------------------------------------------------------------------
          Net cash used in investing activities                    (11,204)     (19,482)    (10,624)       (37,699)
------------------------------------------------------------------------------------------------------------------
Financing Activities:
  Net increase in demand deposit, savings,
      money market, super now and escrow                            20,850       22,741      37,946         21,737
  Net (decrease) increase in time deposits                          (5,864)     (16,904)     (3,119)         6,143
  Proceeds from borrowings                                              --       16,000          --         36,000
  Repayment of borrowings                                          (12,000)     (13,500)    (20,825)       (33,500)
  Cash dividends                                                        --           --        (831)          (831)
  Exercise of stock options (using treasury stock)                      --           --           9             --
------------------------------------------------------------------------------------------------------------------
          Net cash provided by financing activities                  2,986        8,337      13,180         29,549
------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents                    (6,184)     (11,122)      7,849         (3,268)
  ----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period                    27,327       24,315      13,294         16,461
  ----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                        $ 21,143     $ 13,193     $21,143        $13,193
==================================================================================================================
</TABLE>

                                  Page 6 of 37
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                  <C>          <C>         <C>            <C>
Supplemental disclosures of cash flow information:
Cash paid for interest                                               2,069        2,876       4,253          5,901
Cash paid for income taxes                                             750          451         750            451


Supplemental noncash disclosures:
Transfer of loans to other real estate                                  49           28          49            104
Adoption of fair value option:
  Securities transferred from available for sale to trading             --           --          --         16,187
  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 37

<PAGE>

                             ONEIDA FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 2009
                         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 June 30, 2009 and  December  31, 2008 and for the three
and six month periods ended June 30, 2009 and 2008. 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, 2008 was derived
from the audited  financial  statements  included in the  Company's  2008 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 2008 consolidated  financial statements,  including
the notes thereto included in the Company's Annual Report on Form 10-K.

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

Note B - Earnings per Share

The Company has stock compensation awards with non-forfeitable  rights which are
considered  participating  securities.  As such,  earnings per share is computed
using the two-class method as required by FASB Staff Position EITF 03-6-1. Basic
earnings per share is computed by dividing net income  allocated to common stock
by the weighted  average number of common shares  outstanding  during the period
which excludes the participating securities. Diluted earnings per share includes
the dilutive  effect of  additional  potential  common  shares from  stock-based
compensation plans, but excludes awards considered participating securities.

The  Company  adopted  FASB Staff  Position  EITF  03-6-1,  Determining  Whether
Instruments  Granted  in  Share-Based  Payment  Transactions  are  Participating
Securities,  (the "FSP") effective  January 1, 2009. The FSP requires the use of
the two-class  method for computing  earnings per share when stock  compensation
awards with non-forfeitable  dividend rights are present. The effect of adopting
this FSP has no effect on the basic and diluted earnings per share for the three
months and six months ended June 30, 2008.

The factors used in the earnings  per share  computation  are as follows for the
three and six months ended June 30, 2009 and June 30, 2008:

<TABLE>
<CAPTION>
                                                                       Three Months Ended            Six Months Ended
                                                                       June 30,   June 30,         June 30,     June 30,
                                                                         2009       2008            2009          2008
                                                                         ----       ----            ----          ----
<S>                                                                   <C>           <C>          <C>             <C>
Basic
     Distributed earnings allocated to common stock                   $   824,546   $  824,546   $   824,546     $  824,546
     Undistributed earnings allocated to common stock                     236,238     (188,302)    1,346,529        238,539
                                                                      -----------   ----------    ----------     ----------
     Net earnings allocated to common stock                           $ 1,060,784   $  636,244   $ 2,171,075     $1,063,085
                                                                      ===========   ==========   ===========     ==========
          Weighted average common shares outstanding
           including shares considered participating securities         7,792,672    7,771,140     7,783,556      7,771,124
           Less:  Average participating securities                        (28,800)     (44,400)      (28,800)       (44,400)
                                                                      -----------   ----------    ----------     ----------
     Weighted average shares                                            7,763,872    7,726,740     7,754,756      7,726,724
                                                                      ===========   ==========   ===========     ==========
Basic earnings per share                                              $      0.14   $     0.08   $      0.28     $     0.14
                                                                      ===========   ==========   ===========     ==========
</TABLE>

                                  Page 8 of 37
<PAGE>

Note B - Earnings per Share (Continued)

<TABLE>
<CAPTION>

Diluted
<S>                                                                   <C>           <C>          <C>             <C>
     Net earnings allocated to common stock                           $ 1,060,784   $  636,244   $ 2,171,075     $1,063,085
                                                                      ===========   ==========   ===========     ==========
          Weighted average common shares outstanding
           for basic earnings per common share                          7,763,872    7,726,740     7,754,756      7,726,724
           Add: Dilutive effects of assumed
           exercise of stock options                                       36,377       57,931        39,735         57,821
                                                                      -----------   ----------    ----------     ----------
     Weighted average shares and dilutive
      potential common shares                                           7,800,249    7,784,671     7,794,491      7,784,545
                                                                      -----------   ----------    ----------     ----------
Diluted earnings per common share                                     $      0.14   $     0.08   $      0.28     $     0.14
                                                                      ===========   ==========   ===========     ==========
</TABLE>

Stock options for 81,013 and 51,362  shares of common stock were not  considered
in computing  diluted earnings per common share for the three months ending June
30, 2009 and June 30, 2008 respectively because they were antidilutive.  For the
six months ending June 30, 2009 and June 30, 2008,  stock options for 81,013 and
51,362  shares,  respectively,  were not  considered.  Dividends  of $6,912  and
$10,944 as of June 30, 2009 and 2008  respectively  were paid on unvested shares
with  non-forfeitable  dividend rights, none of which was included in net income
as compensation expense because all the awards are expected to vest.

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 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 June 30, 2009
and 2008.

The fair value of each option  award is  estimated  on the date of grant using a
closed form option  valuation  (Black-Scholes)  model that uses the  assumptions
noted  in  the  table  below.   Expected  volatilities  are  based  on  historic
volatilities of the Company's  common stock. The Company uses historical data to
estimate option exercise and  post-vesting  termination  behavior.  The expected
term of options granted is based on historical data and represents the period of
time that  options  granted  are  expected to be  outstanding,  which takes into
account that options are not transferable.  The risk-free  interest rate for the
expected term of the option is based on the U.S.  Treasury yield curve in effect
at the time of the grant. The fair value of options granted was determined using
the following weighted-average assumptions as of the grant date.

                                              2009            2008
                                              ----            ----
Risk-free interest rate                       0.50%           N/A
Expected stock price volatility              62.09%           N/A
Expected dividend rate                        3.00%           N/A
Expected life                               0.94 years        N/A

Information related to the stock option plan during each year follows:

                                                      2009          2008
                                                    -------         ----
Intrinsic value of options exercised                $397,285        N/A
Cash received from option exercises                 $  8,411        N/A
Tax benefit realized from option exercises                --        N/A
Weighted average fair value of options granted         1.788        N/A

As of June 30, 2009, there was no unrecognized  compensation  cost for this plan
as all  shares are  vested  under the terms of the plan.  New grants are for the
reload option feature which are expensed at the date of grant.


                                  Page 9 of 37

<PAGE>

Note C - Stock-Based Compensation (Continued)

Activity in the plan for 2009 was as follows:

<TABLE>
<CAPTION>
                                                            Range of
                                                ------------------------------  Weighted Average
                                                            Option Exercise     Exercise Price
                                                Options         Price           for Options           Intrinsic
                                              Outstanding     Per Share         Outstanding           Value
                                              -------------------------------------------------------------
<S>                                              <C>        <C>                 <C>                  <C>
Outstanding at December 31, 2008                 168,967     $4.722 - $18.167   $ 7.707              $315,434
Granted                                           25,186          $11.25
Exercised                                        (61,782)         $4.722
Forfeited                                             --
                                                 -------
Outstanding at June 30, 2009                      132,371    $4.722 - $18.167   $ 9.744              $232,549
                    === ====                     =======
</TABLE>

At  June  30,  2009,  the  weighted  average  information  for  outstanding  and
exercisable shares is as follows:

                              Shares outstanding and Exercisable
                  ----------------------------------------------------------
                  Range of                         Average           Average
                  Exercise                         Exercise      Remaining Life
                  Prices                Shares     Price            (Years)
                  ----------------------------------------------------------
                  $3.63 - $5.45         51,358      $4.722          0.82
                  $9.09 - $10.90         4,465      $9.419          0.82
                  $10.91 - $12.72       40,957     $11.532          0.82
                  $12.73 - $14.53       18,689     $14.000          0.82
                  $14.54 - $16.35        6,600     $14.794          0.82
                  $16.36 - $18.17       10,302     $17.247          0.82
                                        ------     -------          ----
                      Total            132,371     $ 9.774          0.82
                                       =======     =======          ====

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 $38,208
and $41,413 for the three months ended June 30, 2009 and 2008  respectively  and
$76,416  and  $85,114  for the six month  period  ending June 30, 2009 and 2008,
respectively.  Shares  unallocated  under the plans  available for future awards
were 15,286 and 12,886 at June 30, 2009 and June 30, 2008 respectively.  At June
30, 2009 and  December  31,  2008,  there were  nonvested  shares of 28,800 with
unrecognized compensation cost of $396,344 and $500,216 respectively.

Note D - Dividend Restrictions

Oneida  Financial MHC, which owns 4,309,750 or 55.18% of the outstanding  shares
as of June 30,  2009 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.

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

<TABLE>
<CAPTION>
                                                              Three Months Ended      Six Months Ended
                                                             June 30,   June 30,   June 30,     June 30,
                                                               2009       2008      2009          2008
                                                               ----       ----      ----          ----
<S>                                                          <C>        <C>        <C>          <C>
Service cost                                                 $   --   $     --   $    --      $     --
Interest cost                                                41,000     55,000     82,000       110,000
Expected return on plan assets                              (49,000)   (72,000)   (98,000)     (144,000)
Net amortization and deferral                                37,000     42,000     74,000        84,000
                                                            -------   --------   --------     ---------
         Net periodic pension cost                          $29,000   $ 25,000   $ 58,000     $  50,000
</TABLE>


                                  Page 10 of 37
<PAGE>

Note E - Pension Plan (Continued)

<TABLE>
<CAPTION>
<S>                                                         <C>           <C>           <C>          <C>
Net gain                                                    (22,200)   (25,200)   (44,400)      (50,400)
Prior service cost                                               --         --         --            --
                                                           --------   --------   --------       -------
         Total recognized in other comprehensive income     (22,200)   (25,200)   (44,400)      (50,400)
                                                           ========   ========   ========       =======

Total recognized in net periodic benefit cost and
         Other comprehensive income                        $  6,800   $   (200)  $ 13,600      $   (400)
                                                           ========   ========   ========       =======

Weighted-average assumptions as of December 31:                2009                 2008
                                                               ----                 ----
         Discount rate                                        5.390%                5.465%
         Expected return on plan assets                       7.500%                7.500%
</TABLE>

As of June 30, 2009, contributions to the pension for 2009 plan totaled $50,000.
The Bank anticipates contributing $200,000 in 2009 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 uses a December 31
measurement date for its pension plan.

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:

<TABLE>
<CAPTION>
                                                               Three Months Ended          Six Months Ended
                                                             June 30,      June 30,     June 30,      June 30,
                                                              2009          2008          2009          2008
                                                              ----          ----          ----          ----
<S>                                                        <C>           <C>           <C>          <C>
Service cost                                               $  6,500      $  6,800      $ 13,000     $  13,600
Interest cost                                                34,000        33,700        68,000        67,400
Expected return on plan assets                              (34,500)      (52,000)      (69,000)     (104,000)
Net amortization and deferral                                14,000            --        28,000            --
                                                           --------      --------      --------     ---------
         Net periodic pension cost (benefit)               $ 20,000      $(11,500)     $ 40,000     $ (23,000)

Net loss                                                         --            --            --            --
Prior service cost                                               --            --            --
                                                           --------      --------      --------     ---------

         Total recognized in other comprehensive income          --            --            --
                                                           --------      --------      --------     ---------

Total recognized in net periodic benefit cost and
         Other comprehensive income                        $ 20,000      $(11,500)     $ 40,000     $ (23,000)
                                                           ========      ========      ========     =========

Weighted-average assumptions as of December 31:                2009         2008
-----------------------------------------------                ----         ----
         Discount rate                                         6.25%        6.25%
         Expected return on plan assets                        7.50%        7.50%
</TABLE>


As of June 30, 2009,  there were no contributions to the plan. The Bank does not
anticipate contributing in 2009 to fund its pension plan.

                                  Page 11 of 37

<PAGE>

Note F - Investment Securities and Mortgage-Backed Securities

The amortized cost, gross unrealized gains and losses and approximate fair value
of available  for sale  securities at June 30, 2009 and December 31, 2008 are as
follows:

<TABLE>
<CAPTION>
                                                              June 30, 2009
                                         ------------------------------------------------------------------
                                               Amortized           Gross Unrealized                   Fair
                                                Cost             Gains          Losses                Value
                                         ------------------------------------------------------------------
Available for sale portfolio:                           (in thousands)
<S>                                       <C>              <C>              <C>              <C>
Debt securities:
    U. S. Agencies                        $       14,790   $          115   $          102   $       14,803
    Corporate                                     16,728               34            1,845           14,917
    Trust preferred securities                    11,286               --            5,086            6,200
    State and municipals                          20,926              311              300           20,937
                                          --------------   --------------   --------------   --------------
                                                  63,730              460            7,333           56,857
                                          --------------   --------------   --------------   --------------
Residential mortgage-backed securities:
    Fannie Mae                                    20,321              503               15           20,809
    Freddie Mac                                   19,390              487                1           19,876
    Ginnie Mae                                    24,529              533               59           25,003
    Small Business Administration                     12               --               --               12
    Collateralized Mortgage Obligations            7,715                3            1,077            6,641
                                          --------------   --------------   --------------   --------------
                                                  71,967            1,526            1,152           72,341
                                          --------------   --------------   --------------   --------------
    Total available for sale              $      135,697   $        1,986   $        8,485   $      129,198
                                          ==============   ==============   ==============   ==============
</TABLE>

<TABLE>
<CAPTION>
                                                             December 31, 2008
                                         ------------------------------------------------------------------
                                             Amortized               Gross Unrealized                 Fair
                                               Cost              Gains            Losses              Value
                                         ------------------------------------------------------------------
  Available for sale portfolio:                                     (in thousands)
Debt securities:
<S>                                       <C>              <C>              <C>              <C>
    U. S. Agencies                        $       21,002   $          216   $           13   $       21,205
    Corporate                                     16,051               --            3,378           12,673
    Trust preferred securities                    11,750               --            2,542            9,208
    State and municipals                          17,274              223              150           17,347
                                          --------------   --------------   --------------   --------------
                                                  66,077              439            6,083           60,433
                                          --------------   --------------   --------------   --------------
Residential mortgage-backed securities
    Fannie Mae                                    19,640              283               83           19,840
    Freddie Mac                                   22,858              416               83           23,191
    Ginnie Mae                                    23,938              533               24           24,447
    Small Business Administration                     13               --               --               13
    Collateralized Mortgage Obligations            7,569               --              730            6,839
                                          --------------   --------------   --------------   --------------
                                                  74,018            1,232              920           74,330
                                          --------------   --------------   --------------   --------------
    Total available for sale              $      140,095   $        1,671   $        7,003   $      134,763
                                          ==============   ==============   ==============   ==============
</TABLE>

The amortized cost,  unrecognized gains and losses, and fair value of securities
held to maturity were as follows:

<TABLE>
<CAPTION>
                                                              June 30, 2009
                                         ------------------------------------------------------------------
                                             Amortized               Gross Unrealized                  Fair
                                               Cost             Gains             Losses              Value
                                         -----------------------------------------------------------------
<S>                                      <C>              <C>              <C>              <C>
Debt securities:
    U. S. Agencies                       $       11,992   $           --   $           98   $       11,894
    State and municipals                          7,866               --               35            7,831
                                         --------------   --------------   --------------   --------------
                                                 19,858               --              133           19,725
                                         --------------   --------------   --------------   --------------
Residential mortgage-backed securities
    Ginnie Mae                                    2,989               --                6            2,983
    Small Business Administration                   927               --               14              913
                                         --------------   --------------   --------------   --------------
                                                  3,916               --               20            3,896
                                         --------------   --------------   --------------   --------------
    Total held to maturity               $       23,774   $           --   $          153   $       23,621
                                         ==============   ==============   ==============   ==============
</TABLE>

                                  Page 12 of 37
<PAGE>

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

There were no held to maturity  securities  at December 31, 2008. As of June 30,
2009 and  December  31,  2008,  mortgage-backed  securities  were  comprised  of
pass-through  securities  backed  by  conventional   residential  mortgages  and
guaranteed  by  Fannie  Mae,  Freddie  Mac or  Ginnie  Mae,  which in turn,  are
supported  by the full  faith and credit of the United  States  Government.  The
collateralized mortgage obligations are non-agency issued obligations.

Securities  with  unrealized  losses at June 30,  2009 and  December  31,  2008,
aggregated by investment category and length of time that individual  securities
have been in a continuous unrealized loss position, are as follows:

<TABLE>
<CAPTION>
June 30, 2009                              Less than 12 Months          More than 12 Months           Total
                                          Fair         Unrealized      Fair      Unrealized     Fair       Unrealized
Description of Securities                Value            Loss         Value        Loss        Value         Loss
---------------------------------------------------------------------------------------------------------------------
                                                                    (In thousands)
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
U.S. Agency                              $    7,275   $      101   $      141   $        1   $    7,416   $      102
Corporate                                       947          103        8,888        1,742        9,835        1,845
Trust preferred securities                       --           --        6,200        5,086        6,200        5,086
State and municipals                          3,225           94        2,861          206        6,086          300
Fannie Mae                                    1,956           13          243            2        2,199           15
Freddie Mac                                     392            1           --           --          392            1
Ginnie Mae                                    4,544           59           --           --        4,544           59
Collateralized mortgage obligations             944            7        3,971        1,070        4,915        1,077
                                         ----------   ----------   ----------   ----------   ----------   ----------

Total securities available for sale in
     an unrealized loss position         $   19,283   $      378   $   22,304   $    8,107   $   41,587   $    8,485
                                         ==========   ==========   ==========   ==========   ==========   ==========

U.S. Agency                              $    3,901   $       98   $       --   $       --   $    3,901   $       98
State and municipals                          2,625           35           --           --        2,625           35
Ginnie Mae                                      922            6           --           --          922            6
Small business administration                   913           14           --           --          913           14
                                         ----------   ----------   ----------   ----------   ----------   ----------
Total securities held to maturity in
     an unrealized loss position         $    8,361   $      153   $       --   $       --   $    8,361   $      153
                                         ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

<TABLE>
<CAPTION>
December 31, 2008                           Less than 12 Months        More than 12 Months             Total
                                          Fair         Unrealized     Fair      Unrealized       Fair      Unrealized
Description of Securities                Value            Loss        Value         Loss         Value          Loss
---------------------------------------------------------------------------------------------------------------------
                                                                 (In thousands)
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
U.S. Agency                              $    1,589   $       13   $       --   $       --   $    1,589   $       13
Corporate                                     5,248          414        4,025        2,964        9,273        3,378
Trust preferred securities                    1,955          262        7,253        2,280        9,208        2,542
State and municipals                          4,347          150           --           --        4,347          150
Fannie Mae                                    4,482           61        1,192           22        5,674           83
Freddie Mac                                   3,919           80          120            3        4,039           83
Ginnie Mae                                    1,116           24           --           --        1,116           24
Small Business Administration                    13           --           --           --           13           --
Collateralized mortgage obligations           6,838          730            1           --        6,839          730
                                         ----------   ----------   ----------   ----------   ----------   ----------
Total securities available for sale in
     an unrealized loss position         $   29,507   $    1,734   $   12,591   $    5,269   $   42,098   $    7,003
                                         ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

U.S. Agency and Agency Mortgage-Backed Securities

Fannie  Mae,  Freddie  Mac,  Ginnie  Mae and the Small  Business  Administration
guarantees  the  contractual  cash  flows  of  our  agency  and  mortgage-backed
securities. Fannie Mae and Freddie Mac are government sponsored enterprises that
were placed under the  conservatorship  of the U.S.  Government  on September 7,
2008. Our Ginnie Mae mortgage-backed securities are backed by the full faith and
credit of the U.S. Government.


                                  Page 13 of 37
<PAGE>

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

At June 30, 2009,  of the 18 U.S.  Government  sponsored  enterprise  agency and
mortgage-backed  securities in an unrealized  loss position in our available for
sale portfolio, 2 were in a continuous unrealized loss position for 12 months or
more. The  unrealized  losses at June 30, 2009 were primarily due to the changes
in interest rates and continued illiquidity and uncertainty in the market. We do
not  consider  these  securities  other  than  temporarily  impaired  due to the
guarantee provided as to the full payment of principal and interest and the fact
that we do not intend to sell these  securities  and it is not more  likely than
not that we will be required  to sell these  securities  before the  recovery of
their cost basis, which may be at maturity.

Non-Agency Collateralized mortgage obligations.

All of our non-agency  collateralized mortgage obligations carry various amounts
of credit  enhancement and none are  collateralized  with subprime loans.  These
securities were purchased based on the underlying loan  characteristics  such as
loan to value ratio,  credit scores,  property  type,  location and the level of
credit  enhancement.  Current  characteristics  of each  security  are  reviewed
regularly by management.  If the level of credit loss coverage is sufficient, it
indicates that we will receive all of the originally scheduled cash flows.

At June 30, 2009, of the 5 non-agency  collateralized mortgage obligations in an
unrealized loss position, 4 were in a continuous  unrealized loss position of 12
months or more. We have assessed these securities in an unrealized loss position
at June 30, 2009 and determined that the decline in fair value was temporary. We
believe  the  decline in fair value was caused by the  significant  widening  in
liquidity  spreads  across  sectors  related to the  continued  illiquidity  and
uncertainty in the markets and not the credit  quality of the individual  issuer
or underlying assets. In making this determination,  we considered the period of
time  the  securities  were  in a  loss  position,  the  percentage  decline  in
comparison to the  securities'  amortized  cost, the financial  condition of the
issuer,  and the delinquency or default rates of the underlying  collateral.  In
addition,  we do not intend to sell these  securities  and it is not more likely
than not that we will be required to sell these  securities  before the recovery
of  their  cost  basis,  which  may be at  maturity.  It is  possible  that  the
underlying  loan  collateral  on  these   securities  will  perform  worse  than
expectations,  which  may  lead to  adverse  changes  in  cash  flows  on  these
securities and potential future other than temporary impairment losses.

Corporate Debt and Municipal Securities

At June 30,  2009,  of the 26  corporate  debt and  municipal  securities  in an
unrealized loss position, 8 were in a continuous  unrealized loss position of 12
months or more.  We have  assessed  these  securities  and  determined  that the
decline in fair value was temporary. In making this determination, we considered
the  period  of time the  securities  were in a loss  position,  the  percentage
decline  in  comparison  with the  securities'  amortized  cost,  the  financial
condition  of the  issuer,  and the  delinquency  or default  rates based on the
applicable  bond ratings.  In addition,  we do not have the intent to sell these
securities  and it is not more  likely than not that we will be required to sell
these  securities  before  the  recovery  of their cost  basis,  which may be at
maturity. Included in the 8 securities whose unrealized loss position exceeds 12
months was a $2.0 million General Motors Acceptance Corp. (GMAC) bond,  maturing
October 15, 2010 which has a rating below investment  grade.  This is a variable
rate note based on the three month  Treasury bill whose  unrealized was $375,000
and $1.1  million  at June 30,  2009 and  December  31,  2008  respectively.  In
addition, also included was a $2.5 million SLMA bond, maturing May 1, 2012 which
is rated  investment  grade.  This is a variable rate note based on the consumer
price  index.  The  unrealized  loss at June 30, 2009 and  December 31, 2008 was
$762,000 and $875,000.

Trust preferred securities

The  Company  currently  has  $6.2  million  invested  in nine  different  trust
preferred  securities  as of June 30, 2009 whose  unrealized  loss has been in a
continuous loss position exceeding 12 months or more. Of the $6.2 million,  $2.3
million have variable rates of interest.  The  unrealized  loss at June 30, 2009
and  December  31, 2008 on the nine  securities  totaled  $5.1  million and $2.5
million respectively.  All of the securities are rated below investment grade as
of June 30, 2009.  Through review of the current and expected cash flow analysis
based on the credit quality of the underlying collateral,  default probabilities
and anticipated losses given the default  assumptions and stress tests performed
on these securities,  two of the trust preferred securities have been considered
other-than-temporarily impaired as of June 30, 2009.

The significant inputs utilized in the cash flow analysis are as follows:

                                          Significant inputs at June 30, 2009
                                          -----------------------------------

Annual prepayment                           0% Annually, 100% at maturity
Projected specific defaults/deferrals             15.90%  -  37.35%

                                  Page 14 of 37

<PAGE>

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

Projected severity of loss on specific
     defaults/deferrals                                 85% - 100%
Projected additional defaults:
          QTR 2 - 2009                                  4% (not annualized)
          QTR 3 - 2009                                  3% (not annualized)
          QTR 4 - 2009                                  2% (not annualized)
          QTR 1 - 2010                                  1% (not annualized)
          Thereafter                                    0.50% applied annually
Projected severity of loss on additional defaults       85% - 100%
Present value discount rates                            2.91% - 9.66%

Based on the assumptions  utilized, an other than temporary impairment charge of
$454,000 was  recorded in the second  quarter of 2009.  It is possible  that the
underlying  collateral of these securities will perform worse than  expectations
including an increase in deferrals/defaults above projections, which may lead to
adverse  changes in cash flows on these  securities  and potential  future other
than temporary  impairment losses.  Events that may trigger material declines in
fair value for these securities in the future would include, but not limited to,
deterioration  of  credit  metrics,  such  as  significantly  higher  levels  of
defaults,  and  severity  of  loss  on the  underlying  collateral  and  further
illiquidity.

A roll-forward of the  other-than-temporary  impairment amount related to credit
losses for the three months ended June 30, 2009 is as follows (in thousands):

<TABLE>
<CAPTION>
<S>                                                                                     <C>
Balance  of  credit   losses  on  debt   securities   for  which  a  portion  of
      other-than-temporary  impairment  was  recognized  in other  comprehensive
      income,  beginning  of period (as  measured  effective  April 1, 2009 upon
      adoption of FSP FAS 115-2 and FAS 124-2                                          $   --

Additional  credit  loss  for  which  other-than-temporary  impairment  was  not
      previously recognized                                                               454

Balance  of  credit   losses  on  debt   securities   for  which  a  portion  of
      other-than-temporary  impairment  was  recognized  in other  comprehensive
      income, end of period                                                             $ 454
                                                                                        =====
</TABLE>

Scheduled  contractual  maturities of our investment securities at June 30, 2009
are as follows.  Expected  maturities  will differ from  contractual  maturities
because  borrowers  may have the  right to call or  prepay  obligations  with or
without call or prepayment  penalties.  Securities not due at a single  maturity
date, primarily mortgage-backed securities, are shown separately.

<TABLE>
<CAPTION>
                                               Available for Sale                Held to Maturity
                                          ----------------------------   ---------------------------
                                             Amortized        Fair         Amortized          Fair
                                               Cost           Value           Cost            Value
                                               ----           -----           ----            -----
<S>                                        <C>            <C>            <C>            <C>
Debt securities:
     Within one year                       $      2,574   $      2,584   $         --   $         --
     After one year through five years           17,013         15,824          5,160          5,160
     After five years through ten years          24,235         24,035         10,744         10,623
     After ten years                             19,908         14,414          3,954          3,942
                                           ------------   ------------   ------------  -------------
                   Total debt securities         63,730         56,857         19,858         19,725
      Mortgage-backed securities                 71,967         72,341          3,916          3,896
                                           ------------   ------------   ------------  -------------
                     Total                 $    135,697   $    129,198   $     23,774   $     23,621
                                           ============   ============   ============   ============
</TABLE>

Sales and  write-downs of available for sale  securities were as follows for the
six months ended:

                                 June 30, 2009   June 30, 2008
                                 -------------   -------------
 Proceeds                         $ 10,886,797   $  6,246,831
 Gross Gains                      $    237,649   $     70,058
 Gross Losses                     $    453,626   $     52,002


                                  Page 15 of 37
<PAGE>

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 June 30, 2009 the  allowance  for loan losses as a percentage of
net loans receivable was 0.90% as compared to 0.87% at December 31, 2008.

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

<TABLE>
<CAPTION>
                                        Three Months Ended                  Six Months Ended
                                     June 30,         June 30,          June 30,        June 30,
                                       2009             2008              2009            2008
                                       ----             ----              ----            ----
                                                         (In thousands)
<S>                                       <C>             <C>             <C>             <C>
Balance at beginning of period:   $      2,554    $      2,496    $      2,624    $      2,511
     Charge-offs                          (120)           (143)           (261)           (188)
     Recoveries                             30              25             101              55
     Provision for loan losses             160             150             160             150
                                  ------------    ------------    ------------    ------------
     Balance at end of period     $      2,624    $      2,528    $      2,624    $      2,528
                                  ============    ============    ============    ============
</TABLE>

There were no impaired loans as of June 30, 2009 or December 31, 2008.

Note H - Segment Information

The Bank 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 and six months ended June 30, 2009
and 2008, the Bank's insurance  activities  consisted of those conducted through
its  wholly  owned  subsidiary,  Bailey & Haskell  Associates,  Inc.  The Bank's
benefit  consulting  activities  consisted of those conducted through its wholly
owned subsidiary,  Benefit Consulting Group, Inc. 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
Bank's segments is presented in the following table for the periods indicated:

<TABLE>
<CAPTION>
                                                             Three Months Ended June 30, 2009
                                         -------------------------------------------------------------------------
                                                                       Benefit            Risk
                                           Banking       Insurance    Consulting       Management
                                         Activities      Activities   Activities       Activities           Total
                                                                  (In thousands)
<S>                                      <C>            <C>            <C>            <C>             <C>
Net interest income                      $      4,291   $         --   $         --   $         --    $      4,291
Provision for loan losses                         160             --             --             --             160
                                         ------------   ------------   ------------   ------------    ------------
  Net interest income after provision
         for loan losses                        4,131             --             --             --           4,131
Other income                                    1,639          2,119          1,647            140           5,545
Other expenses                                  4,331          2,061          1,113            181           7,686
Depreciation and amortization                     427             57             38              1             523
                                         ------------   ------------   ------------   ------------    ------------
     Income (loss) before income taxes          1,012              1            496            (42)          1,467
</TABLE>


                                  Page 16 of 37
<PAGE>

Note H - Segment Information (Continued)

<TABLE>
<CAPTION>
<S>                                      <C>            <C>             <C>            <C>             <C>
Income tax (benefit) expense                      175              2             238            (17)            398
                                         ------------   ------------    ------------   ------------    ------------
         Net income (loss)               $        837   $         (1)   $        258   $        (25)   $      1,069
                                         ============   ============    ============   ============    ============

Total Assets                             $    539,422   $     17,277    $      4,522   $         86    $    561,307
                                         ============   ============    ============   ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                            Three Months Ended June 30, 2008
                                         --------------------------------------------------------------------------
                                                                          Benefit         Risk
                                           Banking      Insurance       Consulting     Management
                                         Activities     Activities        Activities   Activities          Total
                                                                  (In thousands)
<S>                                      <C>            <C>             <C>            <C>             <C>
Net interest income                      $      3,867   $         --    $         --   $         --    $      3,867
Provision for loan losses                         150             --              --             --             150
                                         ------------   ------------    ------------   ------------    ------------
  Net interest income after provision
         for loan losses                        3,717             --              --             --           3,717

Other income                                    1,128          2,006           1,354             13           4,501
Other expenses                                  3,715          1,957           1,040             97           6,809
Depreciation and amortization                     414             64              46             --             524
                                         ------------   ------------    ------------   ------------    ------------
     Income (loss) before income taxes            716            (15)            268            (84)            885
Income tax (benefit) expense                      143             --             128            (32)            239
                                         ------------   ------------    ------------   ------------    ------------
         Net income (loss)               $        573   $        (15)   $        140   $        (52)   $        646
                                         ============   ============    ============   ============    ============

Total Assets                             $    532,584   $     19,075    $      4,654   $         10    $    556,323
                                         ============   ============    ============   ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                                 Six Months Ended June 30, 2009
                                         -------------------------------------------------------------------------
                                                                         Benefit         Risk
                                         Banking           Insurance    Consulting    Management
                                         Activities       Activities    Activities    Activities            Total
                                                                   (In thousands)
<S>                                      <C>            <C>            <C>            <C>       <C>
Net interest income                      $      8,350   $         --   $         --   $         --         $ 8,350
Provision for loan losses                         160             --             --             --             160
                                         ------------   ------------   ------------   ------------    ------------
  Net interest income after provision
         for loan losses                        8,190             --             --             --           8,190
Other income                                    2,856          5,148          2,707            200          10,911
Other expenses                                  8,284          4,235          2,219            322          15,060
Depreciation and amortization                     856            115             76              1           1,048
                                         ------------   ------------   ------------   ------------    ------------
     Income (loss) before income taxes          1,906            798            412           (123)          2,993
Income tax (benefit) expense                      324            335            198            (47)            810
                                         ------------   ------------   ------------   ------------    ------------
         Net income (loss)               $      1,582   $        463   $        214   $        (76)   $      2,183
                                         ============   ============    ============   ============    ===========

Total Assets                             $    539,422   $     17,277   $      4,522   $         86    $    561,307
                                         ============   ============    ============   ============    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                  Six Months Ended June 30, 2008
                                         -------------------------------------------------------------------------
                                                                        Benefit           Risk
                                           Banking      Insurance     Consulting       Management
                                           Activities     Activities  Activities       Activities       Total
                                                                    (In thousands)
<S>                                      <C>            <C>            <C>            <C>            <C>
Net interest income                      $      7,590   $         --   $         --   $         --   $      7,590
Provision for loan losses                         150             --             --             --            150
                                         ------------   ------------   ------------   ------------   ------------
</TABLE>

                                  Page 17 of 37
<PAGE>

Note H - Segment Information (Continued)

<TABLE>
<CAPTION>

<S>                                      <C>            <C>            <C>            <C>            <C>
Net interest income after provision
         for loan losses                        7,440             --             --             --           7,440
Other income                                    1,645          4,342          2,518             13           8,518
Other expenses                                  7,385          3,900          2,007            150          13,442
Depreciation and amortization                     828            127             92             --           1,047
                                         ------------   ------------   ------------   ------------    ------------
     Income (loss) before income taxes            872            315            419           (137)          1,469
Income tax (benefit) expense                       86            159            201            (52)            394
                                         ------------   ------------   ------------   ------------    ------------
         Net income (loss)               $        786   $        156   $        218   $        (85)   $      1,075
                                         ============   ============   ============   ============    ============

Total Assets                             $    532,584   $     19,075   $      4,654   $         10    $    556,323
                                         ============   ============   ============   ============    ============
</TABLE>


The following  represents a  reconciliation  of the Company's  reported  segment
assets to consolidated assets as of June 30:

<TABLE>
<CAPTION>
                   Assets                      2009                 2008
                                               ----                 ----
                                                     (In thousands)
<S>                                         <C>             <C>
Total assets for reportable segments        $    561,307    $    556,323
Elimination of intercompany cash balances         (3,794)         (7,207)
                                            ------------    ------------

Consolidated Total                          $    557,513    $    549,116
                                            ============    ============
</TABLE>

Note I - Accounting Pronouncements

In  December  2007,  the  FASB  issued  FAS No.  141  (revised  2007),  Business
Combinations ("FAS 141(R)"),  which establishes  principles and requirements for
how an  acquirer  recognizes  and  measures  in  its  financial  statements  the
identifiable assets acquired,  the liabilities  assumed,  and any noncontrolling
interest in an acquiree,  including the  recognition and measurement of goodwill
acquired  in a business  combination.  FAS No. 141 (R) is  effective  for fiscal
years beginning on or after December 31, 2008.  Earlier  adoption is prohibited.
The adoption of this standard did not have an impact on the Company's results of
operations or financial position.

In  December  2007,  the FASB issued FAS No.  160,  "Noncontrolling  Interest in
Consolidated Financial Statements,  an amendment of ARB No. 51" ("FAS No. 160"),
which will change the  accounting  and reporting for minority  interests,  which
will  be  recharacterized  as  noncontrolling  interests  and  classified  as  a
component of equity within the consolidated balance sheets but separate from the
parent's  equity.  FAS No.160 is effective for fiscal years and interim  periods
within those fiscal years, beginning on or after December 15, 2008. The adoption
of this  standard  resulted in a  reclassification  of $2.6  million  from other
liabilities  to equity as of December  31,  2008.  The  noncontrolling  interest
represents  the  preferred  shareholder  minority  interest in Oneida  Preferred
Funding Corp, a real estate investment trust.

In April 2009, the FASB issued FSP FAS 157-4,  "Determining  Fair Value When the
Volume  and Level of  Activity  for the Asset or  Liability  Have  Significantly
Decreased and Identifying  Transactions  That Are Not Orderly." The FSP provides
additional guidance for determining fair value based on observable transactions.
The FSP provides that if evidence  suggests that an observable  transaction  was
not executed in an orderly way that little, if any, weight should be assigned to
this indication of an asset or liabilities' fair value. Conversely,  if evidence
suggests  that the  observable  transaction  was executed in an orderly way, the
transaction  price of the  observable  transaction  may be appropriate to use in
determining the fair value of the asset/liability in question,  with appropriate
weighting given to this indication based on facts and circumstances. Finally, if
there is no way for the entity to determine  whether the observable  transaction
was executed in an orderly  way,  relatively  less weight  should be ascribed to
this  indictor  of fair  value.  The FSP is  effective  for  interim  and annual
reporting  periods  ending  after June 15,  2009.  The  adoption  did not have a
material impact on the Company's  consolidated  financial  position,  results of
operations or cash flows.

In April  2009,  the FASB issued FSP FAS 115-2 and FAS 124-2;  "Recognition  and
Presentation of Other-Than-Temporary  Impairments," which is intended to provide
greater  clarity to  investors  about the credit and  noncredit  component of an
other  than  temporary  impairment  charge  ("OTTI")  and  to  more  effectively
communicate when an OTTI event has occurred. This FSP applies to debt securities
and requires that the total OTTI be presented in the  consolidated  statement of
income  with an  offset  for the  amount  of  impairment  that is the  noncredit
component recognized in other comprehensive  income.  Noncredit component losses
are to be recorded in other comprehensive  income if an investor can assess that
it does not have the intent to


                                  Page 18 of 37
<PAGE>

Note I - Accounting Pronouncements (Continued)

sell the  security  or it is more  likely than not that it will not have to sell
the security prior to its anticipated recovery.  Also in accordance with FSP FAS
115-2 and  124-2,  prior  periods'  noncredit  component  other  than  temporary
impairment  charges are  reclassified  as  additions  to retained  earnings  and
reductions in accumulated other comprehensive income.  Effective for our interim
financial  statements as of June 30, 2009, the  implementation  of this guidance
did not have a material impact on our Consolidated  Financial  Statements.  As a
result  of   implementing   FSP  FAS  115-2  and  FAS   124-2,   the  amount  of
other-than-temporary  impairment recognized in income for the three months ended
June 30, 2009 was  $454,000.  Had the standard  not been  issued,  the amount of
other-than-temporary  impairment  that would have been  recognized in income for
the period would have been $1.6 million.

In May  2009,  the  FASB  released  SFAS No.  165,  "Subsequent  Events,"  which
establishes  general  standards of accounting for and disclosures of events that
occur after the balance sheet date but before financial statements are issued or
are  available to be issued.  Specifically,  Statement 165 sets forth the period
after the  balance  sheet date during  which  management  of a reporting  entity
should evaluate events or transactions that may occur for potential  recognition
or disclosure  in the financial  statements;  the  circumstances  under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements; and the disclosures that an entity should make
about events and  transactions  that occurred  after the balance sheet date. The
adoption did not have a material impact on the Company's  consolidated financial
position,  results of operations or cash flows. The Company evaluated subsequent
events through August 14, 2009, the date the financial statements were issued.

In June 2009,  the FASB  issued  SFAS No.  166,  "Accounting  for  Transfers  of
Financial  Assets -- an Amendment of FASB Statement No. 140," Statement 166 will
require  more  information  about  transfers  of  financial  assets,   including
securitization transactions,  and where entities have continuing exposure to the
risks related to  transferred  financial  assets.  It eliminates  the concept of
"qualifying  special-purpose entity," changes the requirements for derecognizing
financial assets, and requires additional disclosures. SFAS No. 166 is effective
for fiscal years, and interim periods within those fiscal years, beginning after
November 15,  2009.  The Company does not expect the adoption to have a material
impact on the Company's consolidated  financial position,  results of operations
or cash flows.

In June 2009, the FASB issued SFAS No. 167,  "Amendments to FASB  Interpretation
No. 46(R)." Statement 167 is a revision of FASB  Interpretation  No. 46 (Revised
December 2003),  Consolidation of Variable Interest Entities,  and changes how a
reporting entity determines when an entity that is insufficiently capitalized or
is not controlled through voting (or similar rights) should be consolidated. The
determination of whether a reporting  entity is required to consolidate  another
entity is based on, among other things,  the other  entity's  purpose and design
and the reporting  entity's ability to direct the activities of the other entity
that most significantly impact the other entity's economic performance. SFAS No.
167 is  effective  for fiscal  years,  and interim  periods  within those fiscal
years,  beginning  after  November  15,  2009.The  Company  does not  expect the
adoption  to have a  material  impact on the  Company's  consolidated  financial
position, results of operations or cash flows.

SFAS No. 168, The FASE Accounting  Standards  Codification  and the Hierarchy of
Generally Accepted  Accounting  Principles,  a Replacement of FASB Statement No.
162,  replaces  SFAS No. 162, The  Hierarchy of  Generally  Accepted  Accounting
Principle,  and  establishes  the FASB Accounting  Standards  Codification  (the
"Codification") as the source of authoritative  accounting principles recognized
by the FASB to be applied by  nongovernmental  entities  in the  preparation  of
financial   statements  in  conformity   with  generally   accepted   accounting
principles.  Rules and  interpretive  releases of the  Securities  and  Exchange
Commission  ("SEC") under authority of federal  securities laws are also sources
of authoritative for SEC registrants. All guidance contained in the Codification
carries an equal level of authority.  All  nongrandfathered  non-SEC  accounting
literature   not  included  in  the   Codification   is  superseded  and  deemed
nonauthoritative.  SFAS No. 168 will be effective  for the  Company's  financial
statements  for period  ending after  September  15,  2009.  SFAS No. 168 is not
expected to have a significant impact on the Company's financial statements.

Note J - Fair Value

The Company adopted  Statement of Financial  Accounting  Standards  ("SFAS") No.
157,  "Fair Value  Measurements,"  and SFAS No. 159,  "The Fair Value Option for
Financial  Assets and Financial  Liabilities,"  on January 1, 2008. SFAS No. 159
permits, but does not require,  companies to measure many financial  instruments
and  certain  other items at fair  value.  The  decision to elect the fair value
option is made  individually  for each instrument and is irrevocable  once made.
Changes in fair value for the selected instruments are recorded in earnings.  As
of January 1, 2008,  the Company  has elected the fair value  option for certain
preferred and common equity securities.


                                  Page 19 of 37
<PAGE>

Note J - Fair Value (Continued)

Fair Value Option

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 six months ended June 30:

<TABLE>
<CAPTION>
                             Changes in Fair Values for the Period ended June 30, 2009, for items
                             Measured at Fair Value Pursuant to Election of the Fair Value Option
                             --------------------------------------------------------------------
                                                                                 Total Changes In
                             Other                                               Fair Values Included
                             Gains and        Interest          Interest         in Current Period
                             Losses           Income            Expense                Earnings
                             --------------------------------------------------------------------
                                                       (In thousands)
Assets:
<S>                          <C>                  <C>                                      <C>
         Trading securities  $549                 20                --                     $569

<CAPTION>
                             Changes in Fair Values for the Period ended June 30, 2008, for items
                             Measured at Fair Value Pursuant to Election of the Fair Value Option
                             --------------------------------------------------------------------
                                                                                 Total Changes In
                             Other                                               Fair Values Included
                             Gains and        Interest          Interest         in Current Period
                             Losses           Income            Expense                Earnings
                             --------------------------------------------------------------------
                                                       (In thousands)
Assets:
<S>                          <C>                                                           <C>
         Trading securities  $599                  --                --                    $599
</TABLE>

Fair Value Measurement

SFAS 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. SFAS 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:

      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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

      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 2inputs) or unobservable  inputs that
      represents  assumptions such as financial  forecasts or projected earnings
      (Level 3)

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

      Loans held-for-sale:  The fair value of loans held for sale is determined,
      when possible,  using quoted  secondary  market prices.  If no such quoted
      price exists,  the fair value of a loan is determined  using quoted prices
      for a similar  asset or assets,  adjusted for the specific  attributes  of
      that loan.

                                  Page 20 of 37
<PAGE>

Note J - Fair Value (Continued)

      Mortgage  Servicing Rights: The fair value of our MSRs was estimated using
      Level 3 inputs.  MSRs do not trade in an active,  open market with readily
      observable  prices. As such, we determine the fair value of our MSRs using
      a  projected  cash flow model  that  considers  loan  type,  loan rate and
      maturity,  discount  rate  assumptions,  estimated  fee income and cost to
      service, and estimated prepayment speeds.  During the three and six months
      ended June 30, 2009,  we recorded a $11,000 as a result of  adjusting  the
      carrying value and estimated fair value of our MSRs to $489,000.

      Real Estate  Owned:  The fair value of our real estate owned was estimated
      using Level 2 inputs based on  appraisals of similar  properties  obtained
      from a third party.

      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 June 30, 2009 Using
                                                     ----------------------------------------------
                                                                              Significant
                                                     Quoted Prices in         Other          Significant
                                                     Active Markets for       Observable     Unobservable
                                                     Identical Assets         Inputs         Inputs
Assets:                             June 30, 2009     (Level 1)               (Level 2)      (Level 3)
                                    -------------------------------------------------------------------
                                                              (In thousands)
<S>                                 <C>                                      <C>                <C>
Trading securities:
     Common and preferred equity    $    6,491              --               $   4,411          $  2,080
Available for sale securities:
      U.S. Agency                       14,803              --                  14,803                --
     Corporate                          14,917              --                  12,692             2,225
     Collateralized debt obligations     6,200              --                      --             6,200
     State and municipals               20,937              --                  20,937                --
     Residential mortgage-backed
          securities                    72,341              --                  72,341                --
                                    --------------------------------------------------------------------
              Total                 $  135,689              --               $ 125,184          $ 10,505
                                    ====================================================================
</TABLE>

<TABLE>
<CAPTION>

                                                     Fair Value Measurements at December 31, 2008 Using
                                                     --------------------------------------------------
                                                                              Significant
                                                       Quoted Prices in          Other       Significant
                                                       Active Markets for     Observable    Unobservable
                                                       Identical Assets          Inputs        Inputs
Assets:                             December 31, 2008     (Level 1)            (Level 2)      (Level 3)
                                    -------------------------------------------------------------------
                                                              (In thousands)
<S>                                 <C>                 <C>                  <C>              <C>
Trading securities:
     Common and preferred equity    $   5,941             --                $    3,921          $  2,020
Available for sale securities:
     U.S. Agency                       21,205             --                    21,205                --
     Corporate                         12,673             --                    11,173             1,500
     Collateralized debt obligations    9,208             --                        --             9,208
     State and municipals              17,347             --                    17,347                --
     Residential mortgage-backed
            securities                 74,330             --                    73,562               768
                                    --------------------------------------------------------------------
              Total                 $ 140,704             --                $  127,208          $ 13,496
                                    ====================================================================
</TABLE>

The Level 3 assets include trust preferred securities, corporate debt and equity
securities  and a  private  collateral  mortgage  obligation.  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 three months and six months
ended June 30, 2009. There were no sales of Level 3 assets during the six months
ended June 30, 2009 and 2008.

                                  Page 21 of 37
<PAGE>

Note J - Fair Value (Continued)
<TABLE>
<CAPTION>
                                                                    Fair Value Measurements Using Significant
                                                                                Unobservable Inputs
                                                                                (Level 3)
                                                              ------------------------------------------------
                                                                                         Residential
                                                                         Collateralized   Mortgage
                                                   Trading                   Debt         -backed
                                                   Securities Corporate   Obligations     Securities    Total
                                                   -----------------------------------------------------------
                                                                          (In thousands)
<S>                       <C>                      <C>         <C>        <C>         <C>             <C>
Beginning balance January 1, 2009                  $  2,020    $  1,500   $  9,208    $    768        $ 13,496
Total gains or losses (realized/unrealized)
  Included in earnings
         Interest income (losses) on securities         (10)         --         (5)         --             (15)
         Other changes in fair value                     70          --         --          --              70
 Included in other comprehensive income (losses)         --         631     (3,624)       (191)         (3,184)
                                                   -----------------------------------------------------------
Ending balance March 31, 2009                      $  2,080       2,131   $  5,579    $    577        $ 10,367
Total gains or losses (realized/unrealized)
  Included in earnings
         Interest income (losses) on securities         (10)         --         (4)          7              (7)
         Other changes in fair value                     10          --       (454)         --            (444)

 Included in other comprehensive income (losses)         --          94      1,079         416           1,589
Transfers out of Level 3                                 --          --         --      (1,000)         (1,000)
                                                   -----------------------------------------------------------
Ending balance June 30, 2009                       $  2,080    $  2,225   $  6,200    $     --        $ 10,505
                                                   ===========================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                   Fair Value Measurements Using Significant
                                                                            Unobservable Inputs
                                                                                   (Level 3)
                                                              ----------------------------------------------
                                                                                  Collateralized
                                                     Trading                         Debt
                                                     Securities      Corporate     Obligations       Total
                                                   ---------------------------------------------------------
                                                                                (In thousands)
<S>                       <C>                       <C>            <C>            <C>            <C>
Beginning balance January 1, 2008                   $     1,996    $     2,360    $     8,045    $    12,401
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                      --           (576)          (509)        (1,085)
                                                   ---------------------------------------------------------
Ending balance March 31, 2008                       $     1,828    $     1,784    $     7,530    $    11,142
Total gains or losses (realized/unrealized)
  Included in earnings
         Interest income on securities                      (10)            --             (6)           (16)
         Other changes in fair value                        229             --             --            229
 Included in other comprehensive income                      --           (134)          (672)          (806)
                                                   ---------------------------------------------------------
Ending balance June 30, 2008                        $     2,047    $     1,650    $     6,852    $    10,549
                                                   =========================================================
</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 in the  consolidated
statement of cash flows.

Fair Value of Financial Instruments

Carrying amounts and estimated fair values of financial  instruments at June 30,
2009 and December 31, 2008 were as follows:

                                  Page 22 of 37
<PAGE>

Note J - Fair Value (Continued)
<TABLE>
<CAPTION>
                                                           June 30, 2009                      December 31, 2008
                                                     -------------------------        ---------------------------
                                                    Carrying          Estimated       Carrying         Estimated
                                                    Amount            Fair Value      Amount           Fair Value
                                                    ------            ----------      ------           ----------
                                                                      (in thousands)
<S>                                                <C>            <C>                    <C>          <C>
Financial assets:
     Cash and cash equivalents                     $   21,143     $   21,143             $   13,294   $   13,294
     Trading securities                                 6,491          6,491                  5,941        5,941
     Investment securities, available for sale        129,198        129,198                134,763      134,763
     Investment securities, held to maturity           23,774         23,621                    N/A          N/A
     Loans receivable, net                            291,783        294,776                301,752      317,625
     Federal Home Loan Bank stock                       2,787            N/A                  3,784          N/A
     Accrued interest receivable                        2,431          2,431                  2,659        2,659

Financial liabilities:
     Deposits                                      $  460,525     $  457,851             $  425,698   $  421,101
     Federal Home Loan Bank advances                   32,000         32,314                 52,825       52,788
     Notes payable                                         --             --                     12           12
     Accrued interest payable                             151            151                    332          332
</TABLE>

Our fair value  estimates  are based on our  existing on and off  balance  sheet
financial   instruments   without  attempting  to  estimate  the  value  of  any
anticipated future business.  In addition,  the tax ramifications related to the
realization of the unrealized gains and losses can have a significant  effect on
our fair value  estimates  and have not been  considered in these Our fair value
estimates  are  made  as of  the  dates  indicated,  based  on  relevant  market
information  and  information  about the  financial  instruments,  including our
judgments   regarding   future  expected  loss   experience,   current  economic
conditions,  risk  characteristics of various financial  instruments,  and other
factors.  These estimates are subjective in nature and involve uncertainties and
matters  of  significant  judgment  and  therefore  cannot  be  determined  with
precision.  Changes in our assumptions could significantly affect the estimates.
Our fair value estimates,  methods, and assumptions are set forth below for each
type of financial instrument.

Cash and Cash Equivalents

The  carrying  value of our cash and cash  equivalents  approximates  fair value
because these instruments have original maturities of three months or less.

Investment Securities

We carry our  investment  securities  held to  maturity at cost and we carry our
investment securities available for sale at fair value. The fair value estimates
of these  securities  are  primarily  based on quoted market prices of identical
assets or liabilities,  where available.  Where sufficient data is not available
to produce a fair  valuation,  fair  value is based on broker  quotes of similar
assets or  liabilities.  Broker quotes may be adjusted to ensure that  financial
instruments  are  recorded at fair  value.  Adjustments  may include  amounts to
reflect  counterparty  credit  quality  and our  creditworthiness,  among  other
things, as well as unobservable  parameters.  Any such valuation adjustments are
applied  consistently over time. If quoted prices are not available,  fair value
is based upon valuation models that use cash flow, security structure, and other
observable information.

Loans and Leases

Variable-rate loans reprice as the associated rate index changes. Therefore, the
carrying  value of these loans  approximate  fair  value.  The fair value of our
fixed-rate loans were calculated by discounting scheduled cash flows through the
estimated  maturity using credit adjusted  quarter-end  origination  rates.  Our
estimate  of  maturity  is based on the  contractual  cash  flows  adjusted  for
prepayment estimates based on current economic and lending conditions.

FHLB Stock

It is  not  practicable  to  estimate  the  fair  value  of  FHLB  stock  due to
restrictions placed on its transferability.

Accrued Interest Receivable

The carrying value of accrued interest receivable approximates fair value.

Deposits

The fair value of our  deposits  with no stated  maturity,  such as savings  and
checking, as well as mortgagors' payments held in escrow, is equal to the amount
payable on demand.  The fair value of time deposits was estimated by discounting
expected  maturities  at interest  rates  approximating  those  currently  being
offered.  The fair value of accrued interest  approximates fair value


                                  Page 23 of 37
<PAGE>

Borrowings
The fair value of borrowings is estimated  using  discounted cash flows analysis
to maturity.


                                  Page 24 of 37
<PAGE>

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

                                  Page 25 of 37
<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  primarily  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 December 31, 2008 and June 30, 2009 the Company had
7,745,660 and 7,781,856  respectively  of 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 July 28, 2009 of
$0.24 per share which was paid to its  shareholders  on August 11, 2009.  Oneida
Financial MHC waived its receipt of dividends.

      As an  FDIC-insured  institution,  the  Bank is  required  to pay  deposit
insurance  premiums to the FDIC.  Because the FDIC's deposit insurance fund fell
below prescribed levels in 2008, the FDIC has announced  increased  premiums for
all  insured  depository  institutions,  including  the Bank,  in order to begin
recapitalizing  the fund.  Insurance  assessments  range  from 0.12% to 0.50% of
total deposits for the first calendar quarter 2009  assessment.  Effective April
1, 2009, insurance  assessments will range from 0.07% to 0.78%,  depending on an
institution's  risk  classification and other factors.  In addition,  on May 22,
2009  the FDIC  adopted  a final  rule  that  imposed  a 5 basis  point  special
assessment on insured depository  institutions to be paid on September 30, 2009,
based on assets  less tier 1 capital as of June 30,  2009.  These  changes  have
resulted,  and will continue to result,  in increased  deposit insurance expense
for the Bank in 2009. These increases will be reflected in other expenses in the
Bank's  income  statement in the period of  enactment.  FDIC  insurance  premium
expense was  $656,000  for the six months  ended June 30, 2009 as compared  with
$25,000  for the  six  months  ended  June  30,  2008.

                                 Page 26 of 37
<PAGE>

FINANCIAL CONDITION

      ASSETS.  Total assets at June 30, 2009 were $557.5 million, an increase of
$17.4  million  from  $540.1  million  at  December  31,  2008.  Mortgage-backed
securities  increased  $1.9 million  reflecting  purchases  of $24.0  million of
mortgage-backed  securities  partially offset by the principal  collected on and
proceeds from sales and maturities of  mortgaged-backed  securities.  Investment
securities  increased  $16.3  million  reflecting  purchases of $34.6 million of
investment  securities  partially  offset  by  the  principal  collected  on and
proceeds from sales and  maturities of  investment  securities.  The increase in
investment  and  mortgage-backed  securities  is  primarily  the  result  of the
increase in collateral  for municipal  deposit  accounts and a decrease in loans
receivable  partially  offset by a decrease in  borrowings.  Securities  held to
maturity were purchases in 2009 that are collateral for municipal deposits where
management  has the  intent  to  hold  until  the  contractual  maturity  of the
securities.  Loans  receivable,  including  loans held for sale,  decreased $9.7
million to $295.4  million at June 30,  2009  compared  with  $305.1  million at
December 31, 2008.  Residential  loans  decreased by $7.8 million since December
31, 2008, after the sale of $37.1 million of fixed-rate  residential real estate
loans in the secondary  market  during the six month  period.  At June 30, 2009,
total  commercial real estate loans  increased by $3.3 million while  commercial
business  loans  decreased by $3.6 million from  December 31, 2008.  At June 30,
2009 total consumer loans decreased by $1.8 million from December 31, 2008. As a
result of the decrease in loans  receivable  and  increase in deposit  accounts,
cash and cash equivalents  increased $7.8 million from $13.3 million at December
31,  2008 to $21.1  million at June 30,  2009.  Goodwill  and other  intangibles
totaled  $25.0  million as of June 30, 2009 and $25.1 as of December  31,  2008.
Additional  goodwill in the amount of $136,000 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 $2.6  million  at June 30,  2009 and
December 31, 2008,  respectively.  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 June 30, 2009 the allowance for
loan losses as a  percentage  of net loans  receivable  was 0.90% as compared to
0.87% as of December 31, 2008.

      LIABILITIES.  Total  liabilities  increased  by $16.6  million  to  $501.9
million at June 30, 2009 from $485.3  million at December 31, 2008. The increase
is  primarily  the result of an increase in  interest-bearing  deposits of $33.4
million and an  increase  in  non-interest  bearing  deposits  of $1.4  million.
Contributing to the increase in total deposits has been an increase in municipal
deposits  offered  through  Oneida Savings  Bank's  limited  purpose  commercial
banking  subisidiary,  State Bank of Chittenango.  Municipal  deposits increased
$23.5  million to $78.4  million at June 30, 2009 from $54.9 million at December
31,  2008.  The  increase  in total  deposits  also  enabled  the Bank to reduce
borrowings  outstanding  by $20.8  million  to $32.0  million  at June 30,  2009
compared with $52.8 million at December 31, 2008.

      STOCKHOLDERS'  EQUITY. Total stockholders' equity increased by $792,000 to
$55.6  million at June 30,  2009 as compared  to $54.8  million at December  31,
2008.  Stockholders'  equity  decreased  $656,000  as a result of the  valuation
adjustment   made  for  the  Company's   available  for  sale   investment   and
mortgage-backed  securities.  In  addition,  stockholders'  equity  decreased by
$832,000 due to the payment of  semiannual  cash  dividends  of $0.24  partially
offset by the  addition of  after-tax  net income of $2.2  million for the three
months ended June 30, 2009.


                                  Page 27 of 37
<PAGE>

     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 and six months  ended June 30, 2009 and
2008 and for the year ended  December 31, 2008. 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.  The average
yields and rates are annualized where appropriate. 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 June 30,                   Twelve Months Ended Dec. 31,
                                        ------------------------------------------------------------  -----------------------------
                                                     2009                           2008                           2008
                                          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                      $296,782   $ 4,410       5.94%  $286,411   $ 4,518       6.31%  $293,499   $18,535       6.32%
Investment and Mortgage-Backed
      Securities                       149,668     1,697       4.54%   151,156     1,869       4.95%   143,987     7,379       5.12%
  Federal Funds                         16,839        11       0.26%    12,434        76       2.44%     7,342       169       2.30%
  Equity Securities                      5,510       107       7.77%    13,038       255       7.82%    12,814       651       5.08%
                                      --------   -------    -------    -------   -------    -------    -------   -------    -------
    Total Interest-earning Assets      468,799     6,225       5.31%   463,039     6,718       5.80%   457,642    26,734       5.84%
                                      --------   -------    -------    -------   -------    -------    -------   -------    -------
Non interest-earning Assets:
  Cash and due from banks               12,956                          12,355                          11,725
  Other assets                          75,035                          74,779                          74,999
                                      --------                        --------                        --------
              Total assets            $556,790                        $550,173                        $544,366
                                      ========                        ========                        ========
Liabilities and Stockholders'Equity
Interest-bearing Liabilities:
  Money Market Deposits                $115,240  $   404       1.41%   $79,770   $   386       1.94%   $83,115   $ 1,654       1.99%
  Savings Accounts                      81,739       122       0.60%    77,310       153       0.80%    77,266       603       0.78%
  Interest-bearing Checking             45,794        37       0.32%    40,082        44       0.44%    40,459       238       0.59%

  Time Deposits                        153,872       963       2.51%   166,922     1,624       3.91%   159,933     6,020       3.76%

  Borrowings                            35,226       408       4.65%    56,428       643       4.58%    56,194     2,561       4.56%
  Notes Payable                              0         0       0.00%       107         1       3.76%        88         5       5.68%
                                      --------   -------    -------    -------   -------    -------    -------   -------    -------
    Total Interest-bearing Liabilities 431,871     1,934       1.80%   420,619     2,851       2.73%   417,055    11,081       2.66%
                                      --------   -------    -------    -------   -------    -------    -------   -------    -------
Non-interest-bearing Liabilities:
  Demand deposits                       59,920                          64,450                          63,711
  Other liabilities                     11,719                           6,185                           7,559
                                      --------                         -------                         -------
      Total liabilities               $503,510                        $491,254                        $488,325
                                      --------                         -------                        --------
Stockholders' equity                    53,280                          58,919                          56,041
                                       -------                         -------                         -------
Total liabilities and stockholders'
 equity                               $556,790                        $550,173                        $544,366
                                      ========                        ========                        ========

    Net Interest Income                          $ 4,291                         $ 3,867                         $15,653
                                                 =======                         =======                         =======
    Net Interest Spread                                        3.51%                           3.07%                           3.18%
                                                             ======                         =======                         =======
    Net Earning Assets                $ 36,928                        $ 42,420                        $ 40,587
                                      ========                        ========                        ========
   Net yield on average
      Interest-earning assets                      3.66%                            3.34%                           3.42%
                                                 =======                        ========                         =======
    Average interest-earning
      assets to average
      Interest-bearing liabilities                108.55%                         110.09%                         109.73%
                                                 =======                        ========                         =======
</TABLE>

                                  Page 28 of 37
<PAGE>

<TABLE>
<CAPTION>
                                                         Six Months Ended June 30,                     Twelve Months Ended Dec. 31,
                                        ------------------------------------------------------------  -----------------------------
                                                     2009                           2008                           2008
                                          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                        $299,313   $ 8,891       5.94%  $286,001   $ 9,223       6.45%  $293,499   $18,535     6.32%
Investment and Mortgage-Backed
     Securities                          143,965     3,330       4.63%   140,183     3,548       5.06%   143,987     7,379     5.12%
Federal Funds                             13,650        25       0.37%    10,073       141       2.80%     7,342       169     2.30%
Equity Securities                          5,722       211       7.38%    15,856       531       6.70%    12,814       651     5.08%
                                         -------   -------    -------    -------   -------    -------    -------   -------   ------
  Total Interest-earning Assets          462,650    12,457       5.39%   452,113    13,443       5.95%   457,642    26,734     5.84%
                                         -------   -------    -------    -------   -------    -------    -------   -------   ------
Non interest-earning Assets:
  Cash and due from banks                 12,767                          12,603                          11,725
  Other assets                            75,863                          74,500                          74,999
                                        --------                        --------                        --------
              Total assets              $551,280                        $539,216                        $544,366
                                        ========                        ========                        ========
Liabilities and Stockholders' Equity
Interest-bearing Liabilities:
  Money Market Deposits                 $106,813   $   772       1.46%   $75,424   $   817       2.18%   $83,115   $ 1,654     1.99%
  Savings Accounts                        78,963       238       0.61%    75,787       298       0.79%    77,266       603     0.78%
  Interest-bearing Checking               45,071        74       0.33%    39,830       100       0.50%    40,459       238     0.59%

  Time Deposits                          154,517     2,059       2.69%   161,703     3,326       4.14%   159,933     6,020     3.76%
  Borrowings                              41,397       964       4.71%    56,519     1,309       4.66%    56,194     2,561     4.56%
  Notes Payable                                2         0       0.00%       125         3       4.83%        88         5     5.68%
                                         -------   -------    -------    -------   -------    -------    -------   -------   ------
    Total Interest-bearing Liabilities   426,763     4,107       1.95%   409,388     5,853       2.88%   417,055    11,081     2.66%
                                         -------   -------    -------    -------   -------    -------    -------   -------   ------
Non-interest-bearing Liabilities:
  Demand deposits                         59,475                          63,498                          63,711
  Other liabilities                       10,788                           7,236                           7,559
                                        --------                        --------                        --------
      Total liabilities                 $497,026                        $480,122                        $488,325
                                        --------                        --------                        --------
Stockholders' equity                      54,254                          59,094                          56,041
                                        --------                        --------                        --------
Total liabilities and stockholders'
   equity                               $551,280                        $539,216                        $544,366
                                        ========                        ========                        ========
   Net Interest Income                             $ 8,350                         $ 7,590                         $15,653
                                                   =======                         =======                         =======
   Net Interest Spread                                           3.44%                           3.07%                         3.18%
                                                               =======                        =======                        =======
   Net Earning Assets                    $35,887                         $42,725                         $40,587
                                         =======                         =======                         =======
   Net yield on average
      Interest-earning assets                         3.61%                           3.36%                           3.42%
                                                   =======                         =======                         =======
   Average interest-earning
      assets to average
      Interest-bearing liabilities                  108.41%                         110.44%                         109.73%
                                                   =======                         =======                         =======
</TABLE>

RESULTS OF OPERATIONS

      GENERAL.  Net income  for the three  months  ended June 30,  2009 was $1.1
million, an increase of $423,000 or 65% from $646,000 for the three months ended
June 30,  2008.  Net  income for the six  months  ended  June 30,  2009 was $2.2
million,  an increase of $1.1 million from $1.1 million for the six months ended
June 30,  2008.  The  increase  in net  income  was  primarily  the result of an
increase in net  interest  income and an increase in other  income  offset by an
increase in other  expenses and the provision for income taxes.  Net income from
operations  for the six months  ended June 30, 2009 which  excludes the FASB 159
change in fair value of $569,000, net of $155,000 income taxes, was $1.8 million
or $0.23 per diluted share.  This compares to net income from operations for the
same period in 2008 of $1.5 million, or $0.19 per diluted share. The increase in
net interest  income  reflects the effects of the steepening  yield curve as the
cost of our interest-bearing  liabilities decreased faster than the yield on our
interest-earning assets.

                                  Page 29 of 37
<PAGE>

      INTEREST  INCOME.  Interest and dividend  income  decreased by $493,000 or
7.3%, to $6.2 million for the three months ended June 30, 2009 from $6.7 million
for three months ended June 30,  2008.  The decrease in interest  income was the
result of a decrease in the yield of 49 basis points on interest  earning assets
partially  offset by an  increase in the  average  balances of  interest-earning
assets during the current period of $5.7 million.  For the six months ended June
30, 2009,  interest and dividend income  decreased by $986,000 or 7.3%, to $12.5
million from $13.4 million for the six months ended June 30, 2008.

      Interest on loans decreased  $108,000 to $4.4 million for the three months
ended June 30, 2009 from $4.5  million for the three months ended June 30, 2008.
The  decrease in interest  income on loans is a result of a decrease of 37 basis
points in the average  yield to 5.94% for the three  months  ended June 30, 2009
from 6.31% for the three  months  ended June 30,  2008  offset by an increase of
$10.4 million in the average  balance of loans  receivable  for the three months
ended June 30, 2009 as compared with the same period in 2008. For the six months
ended June 30, 2009,  interest on loans  decreased  $332,000 or 3.6%,  from $9.2
million  for the same period in 2008.  The average  balance of loans for the six
month period  increased $13.3 million while the average yield decreased 51 basis
points to 5.94% during the 2009 period from 6.45%  during the 2008  period.  The
decrease in yield  reflected  the decrease in market  interest  rates during the
quarter.

      Interest on investments and mortgage-backed  securities decreased $172,000
as a result of a decrease in the average yield of 41 basis points from 4.95% for
the three  months  ended June 30, 2008 to 4.54% for the three  months ended June
30, 2009 and a decrease  in the average  balance of  investment  securities  and
mortgage-backed  securities  of $1.5 million for the three months  period ending
June 30, 2009 as compared with the same period in 2008. For the six months ended
June 30, 2009, interest on investments and mortgage-backed  securities decreased
$218,000  as  compared  with the same  period in 2008 due to a  decrease  in the
average yield of 43 basis points offset by an increase in the average balance of
investments and mortgage-backed securities of $3.8 million.

      Interest income from federal funds decreased during the three months ended
June 30,  2009 to $11,000 as compared  with  $76,000  for the 2008  period.  The
decrease in interest  income is primarily  due to a decrease of 218 basis points
in the  average  yield  offset by an  increase  in the  average  balance of $4.4
million.  For the six months  ended June 30,  2009,  interest  income on federal
funds decreased $116,000 due to a decrease in both the average yield and average
balance as compared with the same period in 2008.

      Interest income from equity securities decreased $148,000 as a result of a
decrease in the  average  balances  of $7.5  million for the three month  period
ending  June 30,  2009 as  compared  with the same  period in 2008.  For the six
months ended June 30, 2009,  interest  income from equity  securities  decreased
$320,000 as a result of a decrease in the average  balances of $10.1 million for
the period as compared with the same period in 2008. The decrease in the average
balance  was the result of the  continued  decline  in market  values for equity
securities during 2009.

      INTEREST  EXPENSE.  Interest expense was $1.9 million for the three months
ended June 30,  2009,  a decrease  of  $917,000 or 32.2% from the same period in
2008. The decrease in interest  expense is due to a decrease in interest paid on
deposit accounts.  Interest expense on deposits  decreased  $681,000 and totaled
$1.5  million  for the three  months  ended June 30,  2009 as  compared  to $2.2
million for the three month  period in 2008.  The average  cost of deposits  was
1.54% for the three month period  ending June 30, 2009  compared  with 2.42% for
the three month  period in 2008.  In  addition,  the average  balance of deposit
accounts  increased  $32.6  million from the three months ended June 30, 2008 to
the three months ended June 30, 2009. Interest expense on borrowed funds totaled
$408,000  for the second  quarter of 2009  compared  with  $643,000 for the 2008
period. The average balance of borrowings  decreased $21.2 million for the three
months period ending June 30, 2009 as compared with the same period in 2008. For
the six months  ended June 30, 2009  interest  expense on  borrowings  decreased
$345,000 due to a decrease in the average  balance  outstanding of borrowings to
$41.4  million as  compared to $56.5  million for the six month  period in 2008.
Interest expense on deposits decreased $1.4 million and totaled $3.1 million for
the six months ended June 30, 2008 as compared to $4.5 million for the six month
period in 2008.  For the six months  ended June 30,  2009,  the average  cost of
deposits was 1.63% as compared  with 2.57% for the six month period in 2008.  In
addition,  the average balance of deposit  accounts  increased $32.6 million for
the six months  ended June 30, 2009 as compared  with six months  ended June 30,
2008.

      PROVISION  FOR LOAN LOSSES.  The total  provision  for loan losses for the
three months ended and six months  ended June 30, 2009 was  $160,000.  The total
provision  for loan losses for the three  months ended and six months ended June
30, 2008 was $150,000. The allowance for loan losses was $2.6 million as of June
30,  2009 and $2.5  million  as of June 30,  2008.  The  ratio of the loan  loss
allowance to net loans  receivable  is 0.90% at June 30, 2009 as compared with a
ratio of 0.87% of loans  receivable  at June 30, 2008.  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  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.


                                  Page 30 of 37
<PAGE>

      OTHER INCOME.  Other  operating  income  increased by $1.0 million for the
three month period ending June 30, 2009 compared with the same period in 2008 to
$5.5 million from $4.5  million.  The increase in other income was primarily due
to increases in commissions and fees on the sale of non-banking products through
the Company's  subsidiaries for the three months ended June 30, 2009 as compared
with the same period during 2008.  Commissions  and fees on sales of non-banking
products  was $3.9  million for the three months ended June 30, 2009 as compared
to $3.4  million for the same period in 2008.  Offsetting  the increase in other
income was an impairment  charge of $454,000 recorded for the three months ended
June 30, 2009 for two trust  preferred  securities  which were  determined to be
other-than-temporarily  impaired.  The trust preferred  securities  owned by the
Company are  diversified  pools of  collateralized  debt  obligations  primarily
issued by domestic financial  institutions and their holding companies.  For the
six month period ending June 30, 2009,  other operating income increased by $2.4
million  to  $10.9  million  from  $8.5  million  for the same  period  in 2008.
Commissions  and fees on sales of non-banking  products was $8.1 million for the
six months  ended June 30, 2009 as compared to $6.9  million for the same period
in 2008. In addition,  the non-cash change in fair value as of June 30, 2009 was
a gain of $569,000 as compared to a loss of $599,000  that was  recognized as of
June 30, 2008 in connection  with the adoption of FAS 159 for certain  preferred
and common equity securities. Net investment gains for the six months ended June
30, 2009 were 238,000  compared with net investment gains of $18,000 for the six
months ended June 30, 2008.

      OTHER EXPENSES.  Other operating  expenses increased by $876,000 or 11.9%,
to $8.2  million for the three  months ended June 30, 2009 from $7.3 million for
the same period in 2008.  The increase in  noninterest  expense is primarily the
result of an increase in operating expenses associated with our insurance agency
and consulting  subsidiaries  associated with  commissions  paid concurrent with
revenue  increases.  In addition,  an increase in premiums being assessed by the
Federal Deposit Insurance Corporation for the current calendar year has resulted
in additional  non-interest  expense of $459,000 for the three months ended June
30, 2009 as compared with the three months ended June 30, 2008.  Other operating
expenses increased by $1.6 million or 11.2%, to $16.1 million for the six months
ended June 30, 2009 from $14.5 million for the same period in 2008. The premiums
being assessed by the Federal Deposit  Insurance  Corporation for the six months
ended June 30, 2009  increased  $631,000  compared to the six month period ended
June 30, 2008.

      INCOME TAX. Income tax expense  increased to $398,000 for the three months
ended June 30, 2009 as compared to $239,000 for the second quarter 2008. For the
six months ended June 30, 2009,  income tax expense  increased to $810,000  from
$394,000 for the six months ended June 30, 2009. Net income  increased from $1.1
million to $2.2 million for the six month period  while the  effective  tax rate
increased  to 27.1% for the six  months of 2009 from 26.8% for the six months of
2008 to reflect the overall tax rate expected to be in effect for 2009.

      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 second quarter
of 2009,  loan  originations  totaled  $41.4  million  compared to $39.4 million
during  the  second   quarter  of  2008.   The  purchases  of   investment   and
mortgage-backed  securities  totaled $23.9 million  during the second quarter of
2009 as  compared  to $23.2  million  during  the second  quarter  of 2008.  The
purchases  of  investment  securities  were funded 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 second quarter of 2009 cash flows
provided by the sale,  principal  payments and maturity of securities  available
for sale was $9.7 million compared to $14.1 million for the same period in 2008.

      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 customer's 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 31 of 37
<PAGE>

      June 30, 2009 the Company had  outstanding  commitments to originate loans
of approximately $7.2 million, which generally have an expiration period of less
than 120  days.  Commitments  to sell  residential  mortgages  amounted  to $8.0
million at June 30, 2009.

      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 $54.4 million at June 30, 2009 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 June 30, 2009 the total of cash, interest-earnings demand
accounts and federal funds sold was $21.1 million.

      At June 30, 2009, 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
<S>                                   <C>              <C>          <C>               <C>          <C>                 <C>
As of June 30, 2009:                                                (Dollars in thousands)
Total Capital
   (to Risk Weighted
    Assets)                             $  39,618       10.16%      $  31,194           8%           $  38,993          10%
Tier I Capital
   (to Risk Weighted
    Assets)                             $  36,994        9.49%      $  15,597           4%           $  23,396           6%
Tier I Capital
   (to Average Assets)                  $  36,994        6.95%      $  21,300           4%           $  26,625           5%

<CAPTION>
                                                                                                          To Be Well
                                                                                                      Capitalized Under
                                                                          For Capital                 Prompt Corrective
                                                Actual                 Adequacy Purposes              Action Provisions
                                      ----------------------      --------------------------    ---------------------------
                                         Amount          Ratio           Amount         Ratio          Amount         Ratio
<S>                                   <C>              <C>          <C>                <C>          <C>               <C>
As of December 31, 2008:                                            (Dollars in thousands)
     Total Capital
        (to Risk Weighted Assets)       $   37,214      10.21%      $  29,165           8%           $  36,457          10%
     Tier I Capital
        (to Risk Weighted Assets)       $   34,590       9.49%      $  14,582           4%           $  21,873           6%
     Tier I Capital
        (to Average Assets)             $   34,590       6.64%      $  20,837           4%           $  26,046           5%
</TABLE>


                                  Page 32 of 37
<PAGE>

ONEIDA FINANCIAL CORP.
SELECTED   FINANCIAL RATIOS
At and for the Three  and Six  Months Ended  June 30, 2009 and 2008 (unaudited)

<TABLE>
<CAPTION>
(Annualized where appropriate)                     Three Months Ending      Six Months Ended
                                                         June 30,               June 30,
                                                     2009        2008        2009        2008
                                                     ----        ----        ----        ----
<S>                                                  <C>         <C>         <C>         <C>
Performance Ratios:

Return on average assets                             0.77%       0.47%       0.79%       0.40%
Return on average equity                             8.03%       4.39%       8.05%       3.64%
Net interest margin                                  3.66%       3.34%       3.61%       3.36%

Efficiency Ratio                                     80.43%      86.03%      82.39%      88.25%
Ratio of operating expense
    to average total assets                          5.90%       5.33%       5.84%       5.37%
Ratio of average interest-earning assets
     to average interest-bearing liabilities       108.55%     110.09%     108.14%     110.44%

Asset Quality Ratios:

   Non-performing assets to total assets             0.19%       0.09%       0.19%       0.09%

   Allowance for loan losses
   to non-performing loans                         420.51%     566.82%     420.51%     566.82%
     Allowance for loan losses
       to loans  receivable, net                     0.90%       0.87%       0.90%       0.87%

Capital Ratios:

    Total stockholders' equity to total assets       9.98%      10.37%       9.98%      10.37%
     Average equity to average assets                9.57%      10.71%       9.84%      10.96%
</TABLE>


                                  Page 33 of 37
<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 June 30, 2009, 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  2008 Annual  Report to  Stockholders.
There has been no material  change in the  Company's  interest rate risk profile
since December 31, 2008.

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 34 of 37
<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  2008 Form  10-K for the  fiscal  year  ended
December 31, 2008.

Item 2   Unregistered Sales of Equity Securities and Use of Proceeds

The following  table  summarizes our share  repurchase  activity  during the six
months ended June 30, 2009. The shares  repurchased were stock options that were
exercised  using  reload  options.  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 35 of 37
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Period                                Total Number     Average        Total Number of Shares      Maximum Number of Shares
                                      of Shares        Price Paid     Purchased as Part of        that May Yet Be Purchased
                                      Purchased        per Share      Publicly Announced Plans    Under the Plan
------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>            <C>                         <C>
April 1, 2009 - April 30, 2009        --               --             --                          --
------------------------------------------------------------------------------------------------------------------------------
May 1, 2009 - May 31, 2009            2,518            $11.25         --                          --
------------------------------------------------------------------------------------------------------------------------------
June 1, 2009 - June 30, 2009          --               --             --                          --
------------------------------------------------------------------------------------------------------------------------------
Total                                 2,518            $11.25         --                          250,000
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Item 3            Defaults Upon Senior Securities

                  Not applicable.

Item 4            Submission of Matters to a Vote of Security Holders

At the Annual Meeting of Shareholders,  held on May 5, 2009,  shareholders voted
on the following matters as follows:

                  Proposal No. 1 - Election of Directors
<TABLE>
<CAPTION>
                                                                           For          Withheld
                                                                           ---          --------
<S>                                                                    <C>               <C>
                  Patricia D. Caprio                                   7,292,964           72,620
                  Frank O. White Jr.                                   7,287,619           77,965
                  Ralph L. Stevens MD                                  7,264,920          100,664
                  Gerald N. Volk                                       7,301,606           63,978
                  John A. Wight MD                                     7,296,810           68,774
</TABLE>

                  Directors continuing in Office are as follows:

                  Michael R. Kallet
                  John E. Haskell
                  Edward J. Clarke
                  Rodney D. Kent
                  Richard B. Myers

                  Proposal No. 2 - Ratification of Crowe Horwath LLP as auditors
                  for the Company for the fiscal year ended December 31, 2009:

                  For               Against          Abstain
                  ---               -------          -------
                  7,340,199          12,618          12,767

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 36 of 37
<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:    August    14, 2009          By:      /s/ Michael R. Kallet
                                     -------------------------------------------
                                     Michael R. Kallet
                                     President and Chief Executive Officer


Date:    August    14, 2009          By:      /s/ Eric E. Stickels
                                     -------------------------------------------
                                     Eric E. Stickels
                                     Executive Vice President and Chief
                                     Financial Officer

                                  Page 37 of 37