SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                     --------------------------------------

                                    FORM 10-Q

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

      For the quarterly period ended March 31, 2007

                                       OR

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

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

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

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

                     182 Main Street, Oneida, New York 13421

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
   to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
 during the preceding 12 months (or for such shorter period that the Registrant
  was required to file such reports), and (2) has been subject to such filing
                  requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark whether the Registrant is a large accelerated file,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
One):
  [ ] Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer

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 7,682,601 shares of
          the Registrant's common stock outstanding as of May 1, 2007.

<PAGE>

                             ONEIDA FINANCIAL CORP.
                                      INDEX

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

   Item 1.   Financial Statements                                                       1

             Consolidated Statements of Condition                                       2
             As of March 31, 2007 (unaudited) and December 31, 2006 (audited)

             Consolidated Statements of Operations (unaudited)                          3
             For the three months ended March 31, 2007 and 2006

             Consolidated Statements of Comprehensive Income (unaudited)                4
             For the three months ended March 31, 2007 and 2006

             Consolidated Statements of Changes in Stockholders' Equity (unaudited)     5
             For the three months ended March 31, 2007

             Consolidated Statements of Cash Flows (unaudited)                          6
             For the three months ended March 31, 2007 and 2006

             Notes to Consolidated Financial Statements (unaudited)                     8

   Item 2.   Management's Discussion and Analysis of Financial Condition               15
             And Results of Operations

   Item 3.   Quantitative and Qualitative Disclosures about Market Risk                22

   Item 4.   Controls and Procedures                                                   22

PART II.     OTHER INFORMATION                                                         24

   Item 1.   Legal Proceedings                                                         24

   Item 1a.  Risk Factors                                                              24

   Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds               24

   Item 3.   Defaults Upon Senior Securities                                           25

   Item 4.   Submission of Matters to a Vote of Security Holders                       25

   Item 5.   Other Information                                                         25

   Item 6.   Exhibits                                                                  25
</TABLE>

<PAGE>

PART I. FINANCIAL INFORMATION

   Item I.    Financial Statements

                                  Page 1 of 25

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
At March 31, 2007 and December 31, 2006

<TABLE>
<CAPTION>
                                                    (unaudited)         (audited)
                                                    At March 31,     At December 31,
                                                        2007              2006
                                                    ------------     ----------------
                                                    (in thousands, except share data)
<S>                                                 <C>              <C>
ASSETS
   Cash and due from banks                          $     16,564     $        12,514
   Federal funds sold                                     14,866               6,196
                                                    ---------------------------------
TOTAL CASH AND CASH EQUIVALENTS                           31,430              18,710

   Investment securities, at fair value                   78,055              85,717
   Mortgage-backed securities, at fair value              27,815              29,081

   Mortgage loans held for sale                            2,329               1,581

   Loans receivable                                      243,857             247,940
   Allowance for loan losses                              (2,085)             (2,081)
                                                    ---------------------------------
LOANS RECEIVABLE, NET                                    241,772             245,859

   Federal Home Loan Bank stock                            3,317               3,228
   Bank premises and equipment, net                       18,790              17,428
   Accrued interest receivable                             1,872               2,088
   Other assets                                           17,940               7,699
   Cash surrender value - life insurance                  11,790              11,676
   Goodwill                                               18,269              18,137
   Other intangible assets                                 1,645               1,733
   ----------------------------------------------------------------------------------
   TOTAL ASSETS                                     $    455,024     $       442,937
   ==================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Interest bearing deposits                        $    267,307     $       260,173
   Non-interest bearing deposits                          52,487              53,097
   Federal funds purchased                                10,430               4,000
   Borrowings                                             61,400              61,400
   Notes payable                                           1,104               1,411
   Other liabilities                                       3,874               4,456
                                                    ---------------------------------
TOTAL LIABILITIES                                        396,602             384,537
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                             18,748              18,704
   Retained earnings                                      44,496              44,580
   Common shares issued under employee
      stock ownership plans - unearned                      (142)               (142)
   Accumulated other comprehensive (loss)                 (1,715)             (1,786)
   Treasury stock (at cost, 535,521
      and 541,621 shares)                                 (3,048)             (3,039)
   ----------------------------------------------------------------------------------
   TOTAL STOCKHOLDERS' EQUITY                             58,422              58,400
   ----------------------------------------------------------------------------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $    455,024     $       442,937
   ==================================================================================
</TABLE>

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

                                  Page 2 of 25

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                 March 31,            March 31,
                                                                   2007                 2006
                                                                 ---------            ---------
                                                              (in thousands, except per share data)
<S>                                                              <C>                  <C>
INTEREST INCOME:
      Interest and fees on loans                                 $   4,218            $   3,805
      Interest on investment and mortgage-
         backed securities                                           1,129                1,328
      Dividends on equity securities                                   203                  199
      Interest on federal funds sold and
         interest-earning deposits                                     166                   13
--------------------------------------------------------------------------------------------------
   Total interest and dividend income                                5,716                5,345
--------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
      Savings deposits                                                 114                  117
      Money market and interest-bearing checking                       390                  280
      Time deposits                                                  1,294                  906
      Borrowings                                                       814                  852
      Notes Payable                                                     16                    2
--------------------------------------------------------------------------------------------------
         Total interest expense                                      2,628                2,157
--------------------------------------------------------------------------------------------------
NET INTEREST INCOME                                                  3,088                3,188
      Less: Provision for loan losses                                   --                   80
--------------------------------------------------------------------------------------------------
   Net interest income after provision for loan losses               3,088                3,108
--------------------------------------------------------------------------------------------------
OTHER INCOME:
      Investment securities gains, net                                   1                   31
      Gain on sale of mortgages, net                                    25                   36
      Commissions and fees on sales of
         non-banking products                                        3,312                2,406
      Other operating income                                           910                  951
--------------------------------------------------------------------------------------------------
   Total other income                                                4,248                3,424
--------------------------------------------------------------------------------------------------
OTHER EXPENSES:
      Compensation and employee benefits                             4,117                3,374
      Occupancy expenses, net                                        1,001                  885
      Other operating expense                                        1,213                1,037
--------------------------------------------------------------------------------------------------
   Total other expenses                                              6,331                5,296
--------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                           1,005                1,236
--------------------------------------------------------------------------------------------------
   Provision for income taxes                                          257                  308
--------------------------------------------------------------------------------------------------
NET INCOME                                                       $     748            $     928
==================================================================================================
EARNINGS PER SHARE - BASIC                                       $    0.10            $    0.12
==================================================================================================
EARNINGS PER SHARE - DILUTED                                     $    0.10            $    0.12
==================================================================================================
</TABLE>

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

                                  Page 3 of 25

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)

                                                     Three Months Ended
                                                    March 31,   March 31,
                                                      2007        2006
                                                    ---------   ---------
                                                        (In thousands)

Net income                                          $     748   $     928
                                                    ---------   ---------

Other comprehensive income, net of tax:
   Unrealized gains on assets available for sale:
      Unrealized holding gains
         arising during period                            119         899
      Less: reclassification adjustment for
         gains included in net income                      (1)        (31)
                                                    ---------   ---------
                                                          118         868
      Net income tax effect                               (47)       (347)
                                                    ---------   ---------
Other comprehensive income, net of tax                     71         521

Comprehensive income                                $     819   $   1,449
                                                    =========   =========

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

                                  Page 4 of 25

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2007 (unaudited)

<TABLE>
<CAPTION>
                                                                                                           Common Stock
                                                                                   Accumulated             Issued Under
                                                            Additional                Other                  Employee
                                           Common Stock       Paid-In   Retained  Comprehensive  Treasury  Stock Plans-
                                          Shares   Amount     Capital   Earnings  Income (Loss)   Stock      Unearned     Total
                                                                 (in thousands, except number of shares)
<S>                                      <C>       <C>      <C>         <C>       <C>            <C>       <C>           <C>
Balance as of December 31, 2006          8,322,452 $   83   $   18,704  $ 44,580  $      (1,786) $ (3,039) $       (142) $ 58,400
Net income                                                                   748                                              748
Other comprehensive income, net of tax                                                       71                                71
Shares earned under stock plans                                     44                                                         44
Common stock dividends: $0.24 per share                                     (832)                                            (832)
Treasury stock purchased                                                                              (38)                    (38)
Treasury stock reissued                                                                                29                      29
                                         -----------------------------------------------------------------------------------------

Balance as of March 31, 2007             8,322,452 $   83   $   18,748  $ 44,496  $      (1,715) $ (3,048) $       (142) $ 58,422
                                         =========================================================================================
</TABLE>

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

                                  Page 5 of 25

<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                               March 31,    March 31,
                                                                 2007          2006
                                                               ---------    ---------
                                                                   (in thousands)
<S>                                                            <C>          <C>
Operating Activities:
   Net income                                                  $     748    $     928
   Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation and amortization                                  366          296
      Amortization of premiums/discounts on securities, net           40           28
      Provision for loan losses                                       --           80
      Stock compensation earned                                       44           --
      Gain on sale/call of securities, net                            (1)         (31)
      Gain on sale of loans, net                                     (25)         (36)
      Income tax payable                                             193          287
      Accrued interest receivable                                    216          290
      Other assets                                               (10,624)       1,876
      Other liabilities                                             (989)      (1,587)
      Origination of loans held for sale                          (5,312)      (4,180)
      Proceeds from sales of loans                                 4,589        5,131
--------------------------------------------------------------------------------------
         Net cash (used in) provided by operating activities     (10,755)       3,082
--------------------------------------------------------------------------------------
Investing Activities:
   Purchase of investment securities                              (1,635)      (2,944)
   Principal collected on and proceeds of maturities
      sales or calls from investments                              9,273       11,813
   Purchase of mortgage-backed securities                             --         (999)
   Principal collected on and proceeds from sales
      of mortgage-backed securities                                1,371        1,140
   Net decrease in loans                                           4,087           22
   Purchase of bank premises and equipment                        (1,640)      (1,384)
   Purchase of insurance agency                                       --         (226)
   Purchase of employee benefits company                            (132)          --
--------------------------------------------------------------------------------------
         Net cash provided by investing activities                11,324        7,422
--------------------------------------------------------------------------------------
Financing Activities:
   Net increase in demand deposit, savings,
      money market, super now and escrow                           2,866        4,273
   Net increase (decrease) in time deposits                        3,658         (658)
   Proceeds from borrowings                                       28,180       16,500
   Repayment of borrowings                                       (21,750)     (30,370)
   Cash dividends                                                   (832)        (744)
   Exercise of stock options (using treasury stock)                   29           34
--------------------------------------------------------------------------------------
         Net cash provided by (used in) financing activities      12,151      (10,965)
--------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                  12,720         (461)
--------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period                  18,710       12,877
--------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                     $  31,430    $  12,416
======================================================================================
Supplemental disclosures of cash flow information:
Cash paid for interest                                             2,631        1,750
Cash paid for income taxes                                            25           --
Non-cash investing activities:
Transfer of loans to other real estate                                --           --
Note payable issued in connection with acquisition                    --           --
======================================================================================
</TABLE>

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

                                  Page 6 of 25

<PAGE>

                             ONEIDA FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)
                                 MARCH 31, 2007

Note A - Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance  with the  instructions  to Form 10-Q and Rule 10-01 of Regulation
S-X  and,  therefore,  do  not  include  all of the  information  and  footnotes
necessary  for a  complete  presentation  of  financial  condition,  results  of
operations,  and cash flows in conformity  with  generally  accepted  accounting
principles.   Accordingly,   in  the  opinion  of  management,  all  adjustments
(consisting  of normal  recurring  accruals)  necessary  to fairly  present  the
consolidated financial position of the Oneida Financial Corp. (the "Company") at
March 31, 2007 and the results of its consolidated operations and cash flows for
the period then ended have been included.  Operating results for the three-month
period are not  necessarily  indicative  of the results that may be expected for
the year ended December 31, 2007.

Note B - Earnings per Share

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

                                               Income     Shares      Per Share
March 31, 2007:
---------------

Net income (Three Months Ended)                $747,957
                                               --------

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

March 31, 2006:
---------------

Net income (Three Months Ended)                $928,197
                                               --------

Basic Earnings Per Share:                      $928,197   7,631,045     $0.12
                                                                        -----
Effect of dilutive securities:
      Stock options and awards                       --      77,636
                                               --------------------
Diluted Earnings Per Share                     $928,197   7,708,681     $0.12
                                                                        -----

Stock options for 52,368 and 53,820  shares of common stock were not  considered
in computing diluted earnings per common share for the three months ending March
31, 2007 and March 31, 2006 respectively because they were antidilutive.

                                  Page 7 of 25

<PAGE>

Note C - Stock-Based Compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 123R "Share-Based  Payment," (FAS 123R) for its share-based
compensation  plans. The Company previously  accounted for these plans under the
recognition and measurement  principles of Accounting Principles Board (APB) No.
25,   "Accounting  for  Stock  Issued  to  Employees,"   (APB  25)  and  related
interpretations and disclosure requirements  established by FAS 123, "Accounting
for Stock-Based  Compensation."  Under APB 25, because the exercise price of the
Company's  employee  stock  options  equaled the market price of the  underlying
stock on the date of the grant,  no compensation  expense was recorded.  The pro
forma effects on income for stock  options were instead  disclosed in a footnote
to the financial  statements.  Expense was recorded in the income  statement for
restricted stock awards.

Under FAS 123R, all share-based compensation cost is measured at the grant date,
based on the fair value of the  award,  and is  recognized  as an expense in the
income statement over the vesting period. The Company adopted FAS 123R using the
modified  prospective  method.  The  cost  for all  share-based  awards  granted
subsequent to January 1, 2006,  represented  the grant-date  fair value that was
estimated in accordance with the provisions of FAS 123R.  Prior periods have not
been restated.

There is no unrecognized compensation cost for this plan as of March 31, 2007 as
all shares are vested under the terms of the plan. New grants are for the reload
feature  which are  expensed  at date of grant.  There were no  options  granted
during 2007.

Activity in the plan for 2007 was as follows:

<TABLE>
<CAPTION>
                                                   Range of
                                       --------------------------------   Weighted Average
                                                      Option Exercise     Exercise Price
                                         Options           Price          Shares             Intrinsic
                                       Outstanding       Per Share        Outstanding        Value
                                       ---------------------------------------------------------------
<S>                                    <C>           <C>                  <C>                <C>
Outstanding at December 31, 2006         186,492     $ 4.722 - $ 18.167       $  7.561       $ 912,880
Granted                                       --
Exercised                                 (6,100)         $ 4.722                            $  72,508
Forfeited                                     --
                                       ---------
Outstanding at March 31, 2007            180,392       $ 4.722-$18.167        $ 7.6572       $ 840,372
                                       =========
</TABLE>

At March  31,  2007,  the  weighted  average  information  for  outstanding  and
exercisable shares is as follows:

                      Shares outstanding and Exercisable
           ---------------------------------------------------------
           Range of                        Average        Average
           Exercise                        Exercise   Remaining Life
           Price                  Shares   Price          (Years)
           ---------------------------------------------------------

           $3.633 - $5.45        121,115   $  4.722        3.07
           $9.094 - $10.90         4,465   $  9.419        3.07
           $10.90 - $12.717       19,221   $ 11.985        3.07
           $12.717 - $14.534      18,689   $ 14.000        3.07
           $14.534 - $16.350       6,600   $ 14.794        3.07
           $16.350 - $18.167      10,302   $ 17.247        3.07
                                --------   --------       -----
             Total               180,392   $ 7.6572        3.07
                                ========   ========       =====

During 2006, the Company reserved 80,000 shares of restricted stock under the
2006 Recognition and Retention Plan. The market value of the 68,000 shares
awarded at the date of grant approximated $777,920. In addition, in 2006, the
Company awarded 10,000 shares of restricted stock from the unallocated shares
under the 2000 Management Recognition and Retention Plan having a market value
of approximately $114,400. Compensation expense equal to the market value of
Oneida Financial Corp.'s stock on the grant date is amortized over the five year
vesting period for shares of restricted stock granted which will be fully vested
at December 31, 2010. Compensation expense recorded in conjunction with these
plans was $43,701 and $0 for the three months ended March 31, 2007 and 2006
respectively. Shares unallocated under the plans available for future awards
were 12,886 and 10,886 at March 31, 2007 and March 31, 2006 respectively. At
March 31, 2007 and December 31, 2006, there were nonvested shares of 75,286 with
unrecognized compensation cost of $769,517 and $813,218 respectively.

Note D - Dividend Restrictions

Oneida  Financial MHC, which owns 4,309,750 or 55.35% of the outstanding  shares
as of March 31,  2007 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.

                                  Page 8 of 25

<PAGE>

Note E - 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:

                                                            Three Months Ended
                                                          March 31,   March 31,
                                                            2007        2006
                                                          ---------   ---------
Service cost                                              $      --   $      --
Interest cost                                                55,000      70,986
Expected return on plan assets                              (87,000)    (97,693)
Amortization of unrecognized loss                            14,000      33,903
Amortization of unrecognized prior service liability             --          --
                                                          ---------   ---------
   Net pension and postretirement cost                    $ (18,000)  $  13,811
                                                          =========   =========

                                                            2007        2006
Weighted-average assumptions as of December 31:
   Discount rate                                            5.080%      5.750%
   Expected return on plan assets                           9.000%      7.000%
   Rate of compensation increase                            0.000%      0.000%

The rate of compensation increase is expected to be 0% as the plan was frozen as
of June 15,  2004.  As of March  31,  2007,  contributions  to the plan  totaled
$9,950.  The Bank anticipates  contributing  $79,643 in 2007 to fund its pension
plan.

Note F - Investment Securities and Mortgage-Backed Securities

Investment securities and mortgage-backed securities consist of the following at
March 31, 2007 and December 31, 2006:

<TABLE>
<CAPTION>
                                                          March 31, 2007
                                            ----------------------------------------
                                                         Gross Unrealized
                                            Fair Value        Gains          Losses
                                            ----------------------------------------
                                                         (in thousands)
<S>                                         <C>          <C>                <C>
Investment Securities
   Available for sale portfolio:
   -----------------------------
      Debt securities:
         U. S. Agencies                     $   30,634   $         9        $    633
         Corporate                              18,062            97             356
         State and municipals                   13,705            62             118
                                            ----------   -----------        --------
                                                62,401           168           1,107
      Equity investments:
         Preferred and other equity stocks      12,978           372               4
         Mutual fund                             2,676            --             107
                                            ----------   -----------        --------
                                            $   78,055   $       540        $  1,218
                                            ==========   ===========        ========
Mortgage-Backed Securities
   Available for sale portfolio:
   -----------------------------
      Fannie Mae                            $    9,661   $        19        $    181
      Freddie Mac                               15,361             2             310
      Ginnie Mae                                   969            --               3
      Small Business Administration                 17            --              --
      Collateralized Mortgage Obligations        1,807            --              32
                                            ----------   -----------        --------
                                            $   27,815   $        21        $    526
                                            ==========   ===========        ========
</TABLE>

                                  Page 9 of 25

<PAGE>

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

<TABLE>
<CAPTION>
                                                          December 31, 2006
                                               ---------------------------------------
                                                           Gross Unrealized
                                               Fair Value        Gains         Losses
                                               ---------------------------------------
                                                            (in thousands)
<S>                                            <C>         <C>                 <C>
Investment Securities
   Available for sale portfolio:
   -----------------------------
      Debt securities:
         U. S. Agencies                        $   36,245  $           13      $   659
         Corporate                                 18,067              94          388
         State and municipals                      15,706              75          117
                                               ----------  --------------      -------
                                                   70,018             182        1,164
      Equity investments:
         Preferred and other equity stocks         12,943             379           45
         Mutual fund                                2,756              --           27
                                               ----------  --------------      -------
                                               $   85,717  $          561      $ 1,236
                                               ==========  ==============      =======
Mortgage-Backed Securities
   Available for sale portfolio:
   -----------------------------
      Fannie Mae                               $   10,008  $           17      $   232
      Freddie Mac                                  16,197               2          377
      Ginnie Mae                                      989              --            5
      Small Business Administration                    16              --           --
      Collateralized Mortgage Obligations           1,871              --           32
                                               ----------  --------------      -------
                                               $   29,081  $           19      $   646
                                               ==========  ==============      =======
</TABLE>

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

The Company currently has a $2.0 million General Motors Acceptance Corp. (GMAC)
bond, maturing October 15, 2010 which has a rating below investment grade. The
unrealized loss of $20,000 at both March 31, 2007 and December 31, 2006 has not
been considered other than temporary as GMAC is a profitable division of General
Motors, the Company has the intent and ability to retain the investment for a
period of time sufficient to allow for recovery in the market value, and
management believes that the repayment of the investment is probable at
maturity.

Note G - Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred
credit losses. Loan losses are charged against the allowance when management
believes the uncollectibility of a loan balance is confirmed. Subsequent
recoveries, if any, are credited to the allowance. Management estimates the
allowance required by using past loan loss experience, the nature and volume of
the portfolio, information about specific borrower situations and estimated
collateral values, economic conditions, and other factors. Allocation of the
allowance may be made for specific loans, but the entire allowance is available
for any loan that, in management's judgment, should be charged off. Quarterly,
management evaluates the adequacy of the allowance and determines the
appropriate provision for loan losses by applying a range of estimated loss
percentages to each category of performing loans and classified loans. The
allowance adjustment is based upon the net change in each portfolio category, as
well as adjustments related to impaired loans, since the prior quarter.
Management monitors and modifies the level of the allowance for loan losses to
maintain it at a level which it considers adequate to provide for probable
incurred loan losses. A loan is considered impaired, based on current
information and events, if it is probable that the Bank will be unable to
collect the scheduled payments of principal and interest when due according to
the contractual terms of the loan agreement. Factors considered by management in
determining impairment include payment status, collateral value, and the
probability of collecting scheduled principal and interest payments when due.
The measurement of impaired loans is generally based on the present value of
expected future cash flows discounted at the historical effective interest rate,
except that all collateral-dependent loans are measured for impairment based on
the estimated fair value of the collateral. At March 31, 2007 the allowance for
loan losses as a percentage of net loans receivable was 0.85% as compared to
0.84% at December 31, 2006.

                                  Page 10 of 25

<PAGE>

Note G - Allowance for Loan Losses (Continued)

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

                                                          Three Months Ended
                                                         March 31,   March 31,
                                                            2007       2006
                                                         ---------   ---------
                                                            (in thousands)
Balance at beginning of period:                          $   2,081   $   1,959
   Charge-offs                                                 (40)        (56)
   Recoveries                                                   44          80
   Provision for loan losses                                    --          80
                                                         ---------   ---------
Balance at end of period                                 $   2,085   $   2,063
                                                         =========   =========

Impaired loans were as follows:
                                              March 31, 2007   December 31, 2006
                                                        (in thousands)
   Impaired loans                                 $  --               $ --
   Allocated allowance for loan losses            $  --               $ --
   Average of impaired loans during the year      $  --               $  8
   Cash-basis interest income recognized          $  --               $  1

Note H - Segment Information

The Company has determined that it has three primary business segments, its
banking franchise, its insurance activities and its benefit consulting activity.
For the three months ended March 31, 2007 and 2006, the Company's insurance
activities consisted of those conducted through its wholly owned subsidiary,
Bailey & Haskell Associates, Inc. The Company's benefit consulting activities
consisted of those conducted through its wholly owned subsidiary Benefit
Consulting Group, Inc which was acquired June 2006. Information about the
Company's segments is presented in the following table for the periods
indicated:

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

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

                                  Page 11 of 25

<PAGE>

Note H - Segment Information (Continued)

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31, 2006
                                                         -----------------------------------------------------------
                                                             Banking      Insurance   Benefit Consulting
                                                           Activities    Activities       Activities         Total
                                                                       (in thousands)
<S>                                                      <C>             <C>          <C>                  <C>
Net interest income                                      $       3,188   $       --   $               --   $   3,188
Provision for loan losses                                           80           --                   --          80
                                                         -------------   ----------   ------------------   ---------
   Net interest income after provision for loan losses           3,108           --                   --       3,108
Other income                                                     1,018        2,406                   --       3,424
Other expenses                                                   3,115        1,885                   --       5,000
Depreciation and amortization                                      246           50                   --         296
                                                         -------------   ----------   ------------------   ---------
      Income before income taxes                                   765          471                   --       1,236
Income tax expense                                                 158          150                   --         308
                                                         -------------   ----------   ------------------   ---------
      Net income                                         $         607   $      321   $               --       $ 928
                                                         =============   ==========   ==================   =========

Total Assets                                             $     418,812   $   11,901   $               --   $ 430,713
                                                         =============   ==========   ==================   =========
</TABLE>

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

               Assets                          2007        2006
                                            ---------   ---------

Total assets for reportable segments        $ 460,347   $ 430,713
Elimination of intercompany cash balances      (5,323)     (4,482)
                                            ---------   ---------

Consolidated Total                          $ 455,024   $ 426,231
                                            =========   =========

Note I - Acquisitions

On April 2, 2007, the Bank completed its acquisition of Vernon Bank Corporation,
the stock holding company of the National Bank of Vernon. Under terms of the
agreement, Oneida Savings Bank paid $11.4 million or $54.00 in cash for each of
the 210,447 shares of commons stock outstanding in Vernon Bank Corporation. The
results of Vernon Bank Corporation will be included in the consolidated
financial statements since April 2, 2007. The acquisition of The National Bank
of Vernon will allow Oneida Savings Bank to enter markets not previously in.

The following table summarizes the estimated fair values of the assets acquired
and liabilities assumed at the date of acquisition. Oneida Savings Bank is in
the process of obtaining third party valuations of certain intangible assets;
thus, the allocation of the purchase price is subject to refinement as well as
the allocation of goodwill and intangible assets.

                                                   At April 2, 2007
                                                    (in thousands)

      Cash and cash equivalents                    $         12,216
      Investments and mortgage backed securities             18,104
      Loans receivable, net                                  25,812
      Property, plant and equipment                           2,452
      Goodwill and intangible assets                          4,686
      Cash surrender value life insurance                     2,238
      Other assets                                              896
                                                   ----------------
               Total assets acquired                         66,404
      Deposits                                              (54,665)
      Other liabilities                                        (807)
                                                   ----------------

                                                   $         10,932
                                                   ================

                                  Page 12 of 25

<PAGE>

Note J - Accounting Pronouncements

The Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income
Taxes ("Fin 48"), as of January 1, 2007. A tax position is recognized as a
benefit only if it is "more likely than not" that the tax position would be
sustained in a tax examination, with a tax examination being presumed to occur.
The amount recognized is the largest amount of tax benefit that is greater than
50% likely of being realized on examination. For tax positions not meeting the
"more likely than not" test, no tax benefit is recorded. The adoption had no
affect on the Company's financial statements.

The Company and its subsidiaries are subject to U.S. federal income tax as well
as income tax of the state of New York. The Company is no longer subject to
examination by taxing authorities for years before 1999. The Company does not
expect the total amount of unrecognized tax benefits to significantly increase
in the next twelve months.

The Company recognizes interest and/or penalties related to income tax matters
in income tax expense. The Company did not have any amounts accrued for interest
and penalties at January 1, 1007.

                                  Page 13 of 25

<PAGE>

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

                                  Page 14 of 25

<PAGE>

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

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

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

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

GENERAL

      Oneida  Financial Corp. is the parent company of Oneida Savings Bank ("the
Bank").  The Company conducts no business other than holding the common stock of
the Bank and general investment  activities resulting from the capital it holds.
Consequently,  the net  income  of the  Company  is  primary  derived  from  its
investment in the Bank. The Bank's results of operations are primarily dependent
on its net interest  income,  which is the difference  between  interest  income
earned on its investments in loans,  investment  securities and  mortgage-backed
securities  and its cost of funds  consisting  of interest  paid on deposits and
borrowings.  The Bank's net income is also  affected by its  provision  for loan
losses, as well as by the amount of other income, including income from fees and
service charges,  revenue derived from the insurance agency and employee benefit
services  provided by subsidiaries of the Bank, net gains and losses on sales of
investments and loans, and operating expenses such as employee  compensation and
benefits,  occupancy and equipment costs and income taxes.  Earnings of the Bank
are also affected significantly by general economic and competitive  conditions,
particularly changes in market interest rates, which tend to be highly cyclical,
and government policies and actions of regulatory authorities,  which events are
beyond the  control of the Bank.  At  December  31,  2006 and March 31, 2007 the
Company had 7,676,501 shares and 7,682,601 shares outstanding of which 4,309,750
were held by Oneida Financial MHC, the Company's mutual holding company parent.

RECENT DEVELOPMENTS

      The Company  announced a semi-annual  cash dividend as of January 23, 2007
of $0.24 per share  which was paid to its  shareholders  on  February  6,  2007.
Oneida Financial MHC waived its receipt of dividends.

On April 2, 2007, the Bank completed its acquisition of Vernon Bank Corporation,
the stock holding company of the National Bank of Vernon. Under terms of the
agreement, Oneida Savings Bank paid $11.4 million or $54.00 in cash for each of
the 210,447 shares of commons stock outstanding in Vernon Bank Corporation. The
results of Vernon Bank Corporation will be included in the consolidated
financial statements since April 2, 2007. The acquisition of The National Bank
of Vernon will allow Oneida Savings Bank to enter markets not previously in.

See footnote I to the consolidated financial statements for the estimated fair
values of the assets acquired and liabilities assumed at the date of
acquisition. Oneida Savings Bank is in the process of obtaining third party
valuations of certain intangible assets; thus, the allocation of the purchase
price is subject to refinement as well as the allocation of goodwill and
intangible assets.

                                  Page 15 of 25

<PAGE>

FINANCIAL CONDITION

      ASSETS. Total assets at March 31, 2007 were $455.0 million, an increase of
$12.1 million from $442.9  million at December 31, 2006.  Investment  securities
decreased $7.6 million and mortgage-backed securities decreased $1.3 million due
to the  principal  collected  on and  proceeds  from  sales  and  maturities  of
investment and mortgaged  backed  securities.  Investments  were sold during the
first  quarter  2007 and the  proceeds  from such  sales  were used to have cash
available  for the  anticipated  acquisition  and which were invested in Federal
Funds which is a highly liquid  investment.  Loans  receivable,  including loans
held for sale,  decreased  $3.3  million  to $244.1  million  at March 31,  2007
compared  with $247.4  million at December  31, 2006.  At March 31, 2007,  total
commercial business loans decreased by $2.1 million while commercial real estate
loans  increased by $522,000  from  December  31, 2006.  At March 31, 2007 total
consumer  loans  decreased by $1.6 million from  December 31, 2006.  Residential
loans  decreased by $96,000  since  December  31,  2006,  after the sale of $4.6
million of  fixed-rate  residential  real estate loans in the  secondary  market
during the three month  period.  Goodwill and other  intangibles  totaled  $19.9
million as of March 31, 2007 and at December  31, 2006.  Additional  goodwill in
the amount of $132,000 was recorded for the contingent  purchase payment made to
the benefit  consulting  company.  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 $2.1  million at March 31, 2007 and at
December 31, 2006.  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 balance required by using past loan loss experience, the
nature  and  volume  of  the  portfolio,  information  about  specific  borrower
situations  and estimated  collateral  values,  economic  conditions,  and other
factors.  Allocation of the allowance  may be made for specific  loans,  but the
entire  allowance  is available  for any loan that,  in  management's  judgment,
should be charged  off.  Quarterly,  management  evaluates  the  adequacy of the
allowance and determines the appropriate provision for loan losses by applying a
range of estimated  loss  percentages  to each category of performing  loans and
classified loans. The allowance  adjustment is based upon the net change in each
portfolio category,  as well as adjustments related to impaired loans, since the
prior quarter.  Management  monitors and modifies the level of the allowance for
loan losses to maintain it at a level which it considers adequate to provide for
probable incurred loan losses. A loan is considered  impaired,  based on current
information  and  events,  if it is  probable  that the Bank  will be  unable to
collect the  scheduled  payments of principal and interest when due according to
the contractual terms of the loan agreement. Factors considered by management in
determining  impairment  include  payment  status,  collateral  value,  and  the
probability of collecting  scheduled  principal and interest  payments when due.
The  measurement  of impaired  loans is generally  based on the present value of
expected future cash flows discounted at the historical effective interest rate,
except that all collateral-dependent  loans are measured for impairment based on
the estimated fair value of the collateral.  At March 31, 2007 the allowance for
loan losses as a  percentage  of net loans  receivable  was 0.85% as compared to
0.84% as of December 31, 2006.

      The book value of premises  and  equipment  increased  $1.4  million  from
December 31, 2006 to March 31, 2007 as a result of the  construction of a 26,000
square foot banking,  insurance  and retail center at the Griffins  Business and
Technology Park in Rome, New York which opened for business on April 3, 2007.

      LIABILITIES.  Total  liabilities  increased  by $12.1  million  to  $396.6
million at March 31, 2007 from $384.5 million at December 31, 2006. The increase
is  primarily  the result of an  increase  in Federal  Funds  purchased  of $6.8
million  and  an  increased  in  interest-bearing   deposits  of  $7.1  million.
Offsetting these increases,  interest bearing deposits decreased by $610,000 and
other liabilities decreased by $582,000.

      STOCKHOLDERS'  EQUITY. Total stockholders' equity remained steady at $58.4
million at March 31, 2007 as compared to December 31, 2006. Stockholders' equity
increased  due to the addition of after-tax net income of $748,000 for the three
months ended March 31, 2007 and an increase in the  valuation  adjustments  made
for the Company's available for sale investment and mortgage-backed  securities.
Accumulated  Other  Comprehensive  Income (Loss) increased $71,000 from December
31, 2006 to a loss of $1.7 million from a loss of $1.8  million.  The payment of
the  Company's  semiannual  cash  dividends of $0.24  resulted in a reduction in
stockholders' equity of $832,000.

                                  Page 16 of 25

<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  months  ended March 31, 2007 and 2006 and
for the year ended  December 31,  2006.  For the periods  indicated,  the dollar
amount of interest income from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing  liabilities
is  expressed  in  thousands  of  dollars  and  percentages.  No tax  equivalent
adjustments  were made.  The average  balance is computed  based upon an average
daily balance.

      TABLE 1. Average Balance Sheet.

<TABLE>
<CAPTION>
                                             Three Months Ended March 31,                      Twelve Months Ended Dec. 31,
                                 ----------------------------------------------------          -----------------------------
                                                2007                           2006                           2006
                                   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               $   248,554  $  4,218    6.79% $   237,810  $  3,805    6.40% $   243,661  $ 16,165    6.63%
  Investment and
    Mortgage-Backed Securities        95,241     1,129    4.74%     116,003     1,328    4.58%     107,479     5,080    4.73%
  Federal Funds                       11,078       166    5.99%         949        13    5.48%       3,014       178    5.91%
  Equity Securities                   15,392       203    5.28%      20,637       199    3.86%      17,677       838    4.74%
                                 -----------  --------  ------  -----------  --------  ------  -----------  --------  ------
    Total Interest-earning
      Assets                         370,265     5,716    6.18%     375,399     5,345    5.70%     371,831    22,261    5.99%
                                 -----------  --------  ------  -----------  --------  ------  -----------  --------  ------
Non interest-earning Assets:
----------------------------
  Cash and due from banks             11,783                         10,739                         10,440
  Other assets                        60,988                         45,981                         53,147
                                 -----------                    -----------                    -----------
        Total assets             $   443,036                    $   432,119                    $   435,418
                                 ===========                    ===========                    ===========
Liabilities and Stockholders'
-----------------------------
  Equity
  ------
Interest-bearing Liabilities:
-----------------------------
  Money Market Deposits          $    45,195  $    335    3.01% $    42,753  $    256    2.43% $    43,664  $  1,135    2.60%
  Savings Accounts                    66,633       114    0.69%      69,931       117    0.68%      68,165       483    0.71%
  Interest-bearing Checking           31,559        55    0.71%      30,930        24    0.31%      30,979       143    0.46%
  Time Deposits                      118,283     1,294    4.44%     105,771       906    3.47%     109,711     4,202    3.83%
  Borrowings                          65,519       814    5.04%      72,016       852    4.80%      67,749     3,383    4.99%
  Notes Payable                        1,303        16    4.87%         139         2    5.71%       1,016       100    9.84%
                                 -----------  --------  ------  -----------  --------  ------  -----------  --------  ------
    Total Interest-bearing
      Liabilities                    328,492     2,628    3.24%     321,540     2,157    2.72%     321,284     9,446    2.94%
                                 -----------  --------  ------  -----------  --------  ------  -----------  --------  ------
Non-interest-bearing
--------------------
  Liabilities:
  ------------
  Demand deposits                     50,475                         49,895                         51,737
  Other liabilities                    5,697                          7,027                          7,629
                                 -----------                    -----------                    -----------
    Total liabilities            $   384,664                        378,462                    $   380,650
                                 -----------                    -----------                    -----------
Stockholders' equity                  58,372                         53,657                         54,768
                                 -----------                    -----------                    -----------
Total liabilities and
stockholders' equity             $   443,036                    $   432,119                    $   435,418
                                 ===========                    ===========                    ===========

  Net Interest Income                         $  3,088                       $  3,188                       $ 12,815
                                              ========                       ========                       ========
  Net Interest Spread                                     2.93%                          2.97%                          3.05%
                                                        ======                         ======                         ======
  Net Earning Assets             $    41,773                    $    53,859                    $    50,547
                                 ===========                    ===========                    ===========
  Net yield on average
    Interest-earning assets                       3.34%                          3.40%                          3.45%
                                              ========                       ========                       ========
  Average interest-earning
    assets to average
    Interest-bearing
      liabilities                               112.72%                        116.75%                        115.73%
                                              ========                       ========                       ========
</TABLE>

                                  Page 17 of 26

<PAGE>

RESULTS OF OPERATIONS

      GENERAL.  Net  income  for the  three  months  ended  March  31,  2007 was
$748,000,  a decrease of $180,000 or 19.4% from  $928,000  for the three  months
ended March 31, 2006. The decrease in net income was due primarily the result of
an increase in non-interest  income and decreases in the provision for loan loss
and income taxes offset by a decrease in net interest  income and an increase in
other expenses.

      INTEREST  INCOME.  Interest and dividend  income  increased by $371,000 or
6.9%,  to $5.7  million  for the three  months  ended  March 31,  2007 from $5.3
million for three months ended March 31, 2006.  The increase in interest  income
was the result of an increase in the average  yield of  interest-earning  assets
offset by a decrease in the average balances during the three months ended March
31, 2007 compared to the same period in 2006.

      Interest on loans increased  $413,000 to $4.2 million for the three months
ended March 31,  2007 from $3.8  million  for the three  months  ended March 31,
2006.  The  increase in  interest  income on loans is a result of an increase of
$10.7 million in the average  balance of loans  receivable  for the three months
ended  March 31,  2007 as  compared  with the same  period in 2006 as well as an
increase of 39 basis  points in the average  yield to 6.79% for the three months
ended March 31, 2007 from 6.40% for the three months  ended March 31, 2006.  The
average  balance of commercial real estate loans increased $5.3 million at March
31, 2007 from March 31, 2006 while the average  balance of  commercial  business
loans  increased  $1.3 million  during the three months ended 2007 compared with
2006. The average balance of consumer loans  increased  $661,000 during the 2006
period as compared to 2005. The average balance of residential real estate loans
increased  $3.4 million for the same time period,  after  recording  the sale of
$16.5 million in fixed rate  one-to-four  family  residential  real estate loans
over the last 12 months.

      Investment  income  decreased  $199,000  as a result of a decrease  in the
average balance of investment securities and mortgage-backed securities of $20.8
million for the three months  period  ending March 31, 2007 as compared with the
same period in 2006. The decrease in the average balance was partially offset by
an increase in average  yield of 16 basis  points to 4.74% for the three  months
ended March 31, 2007 from 4.58% for the three months ended March 31, 2006.

      Interest income from federal funds increased during the three months ended
March 31, 2007 to $166,000 as compared  with  $13,000 for the 2006  period.  The
increase  in interest  income is due to an  increase  in the average  balance of
$10.1  million as well as an increase of 142 basis points in the average  yield.
The increase in the average balance of federal funds sold was to provide for the
cash consideration required for the acquisition of Vernon Bank Corporation.

      INTEREST  EXPENSE.  Interest expense was $2.6 million for the three months
ended March 31,  2007,  an increase of $471,000 or 21.8% from the same period in
2006. The increase in interest expense is due to an increase in interest paid on
deposit  accounts  partially  offset be a decrease in interest  paid on borrowed
funds. Interest expense on borrowed funds totaled $814,000 for the first quarter
of 2007  compared  with  $852,000  for the 2006 period.  The average  balance of
borrowings  decreased  $6.5 million for the three months period ending March 31,
2007 as  compared  with the same  period in 2006.  Offsetting  this  decrease in
average  balance,  the cost of borrowed funds increased 24 basis points to 5.04%
for the three  months ended March 31, 2007 from 4.80% for the three months ended
March 31, 2006. Interest expense on deposits increased $495,000 and totaled $1.8
million for the three  months  ended March 31, 2007 as compared to $1.3  million
for the three month  period in 2006.  The average cost of deposits was 2.75% for
the three month period  ending March 31, 2007  compared with 2.09% for the three
month  period in 2006.  In  addition,  the average  balance of deposit  accounts
increased $12.3 million from March 2006 to March 2007.

      PROVISION FOR LOAN LOSSES. There was no provision for possible loan losses
made during the first quarter 2007 as compared with $80,000 for the three months
ended March 31, 2006.  The  allowance  for loan losses was $2.1 million for both
the three months  ended March 31, 2007 and 2006.  The ratio of the net loan loss
allowance  to loans  receivable  is 0.85% at March 31, 2007 as  compared  with a
ratio of 0.88% of loans  receivable at March 31, 2006.  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.

      OTHER  INCOME.  Other  operating  income  increased  by  $824,000  for the
three-month  period  ending March 31, 2007 compared with the same period in 2006
to $4.2 million from $3.4  million.  The increase in other income was  primarily
due to  increases  in  revenue  derived  from  the  Company's  insurance  agency
subsidiary  activities as well as the income  associated with the acquisition of
Benefit Consulting Group LLC effective January 1, 2006.  Commissions and fees on
sales of non-banking  products was $3.3 million for the three months ended March
31, 2007 as compared to $2.4 million for the same period in 2006.

      In addition, service charges on deposit accounts increased $12,000 or 0.2%
for the three months ended March 31, 2007  compared  with the three months ended
March 31, 2006.

                                  Page 18 of 25

<PAGE>

      OTHER  EXPENSES.  Other  operating  expenses  increased by $1.0 million or
19.5%,  to $6.3  million  for the three  months  ended  March 31, 2007 from $5.3
million for the same period in 2006.  Compensation expense increased $743,000 or
22.0% due to expenses  associated with the benefit  consulting group acquisition
and the continual growth of the insurance agency  subsidiary and bank personnel.
Equipment and occupancy  increased  $116,000 or 13.1% due to the  acquisition of
the  Benefit  Consulting  Group as well as an  increase  in various  supplies in
preparation of our acquisition of Vernon Bank  Corporation and the completion of
our banking, insurance and retail center at the Griffiss Business and Technology
Park in Rome, New York.

      INCOME TAX. Income tax expense  decreased to $257,000 for the three months
ended March 31, 2007 as compared to $308,000  for the first  quarter  2006.  The
effective  tax rate  increased  to 25.6% for the three months of 2007 from 24.9%
for the three  months of 2006 to reflect the overall tax rate  expected to be in
effect for 2007.

      LIQUIDITY  AND CAPITAL  RESOURCES.  In addition to the  Company's  primary
funding sources of cash flow from 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.  While maturities and scheduled  amortization of loans and
securities  are  predictable  sources of funds,  deposit  balances  and mortgage
prepayments  are greatly  influenced  by general  interest  rates,  the economic
environment and local competitive conditions.

      The primary  investing  activities of the Company are the  origination  of
residential  mortgages,  commercial  loans and  consumer  loans,  as well as the
purchase of mortgage-backed and other debt securities.  During the first quarter
of 2007,  loan  originations  totaled  $17.5  million  compared to $17.0 million
during the first quarter of 2006. The purchases of investment securities totaled
$1.6 million during the first quarter of 2007 as compared to $3.9 million during
the  first  quarter  of  2006.  The  decrease  in the  purchases  of  investment
securities is due to providing liquidity for the cash consideration required for
the Vernon Bank Corporation acquisition and to fund loan growth.

      Cash flow from operations,  deposit growth, as well as the sales, maturity
and principal payments received on loans and investment  securities were used to
fund the investing  activities  described above.  Additionally,  the Company has
lines of credit with the Federal  Home Loan Bank,  Federal  Reserve Bank and two
commercial  banks that provide funding sources for lending,  liquidity and asset
and liability management as needed.  During the first quarter of 2007 cash flows
provided by the sale,  principal  payments and maturity of securities  available
for sale were $10.6  million  compared  to $13.0  million for the same period in
2006.

      In the ordinary  course of business,  the Company  extends  commitments to
originate residential and commercial loans and other consumer loans. Commitments
to extend  credit are  agreements  to lend to a customer  as long as there is no
violation of any condition  established in the contract.  Commitments  generally
have fixed expiration dates or other termination clauses and may require payment
of a fee. Since the Company does not expect all of the commitments to be funded,
the  total  commitment   amounts  do  not  necessarily   represent  future  cash
requirements.  The  Company  evaluates  each  customer's  creditworthiness  on a
case-by-case   basis.   Collateral  may  be  obtained  based  upon  management's
assessment of the customers' creditworthiness.  Commitments to extend credit may
be written on a fixed rate basis  exposing  the  Company to  interest  rate risk
given the  possibility  that market rates may change between the commitment date
and the  actual  extension  of  credit.  As of March 31,  2007 the  Company  had
outstanding  commitments to originate loans of approximately $4.2 million, which
generally have an expiration  period of less than 120 days.  Commitments to sell
residential mortgages amounted to $3.1 million at March 31, 2007.

      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 $41.8 million at March 31, 2007 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 than expected loan commitment fundings, deposit outflows or the amount of
debt being called,  additional sources of funds are available through the use of
repurchase agreements, the sale of loans or investments or the Company's various
lines of  credit.  As of March  31,  2007 the  total of cash,  interest-earnings
demand accounts and federal funds sold was $31.4 million.

                                  Page 19 of 25

<PAGE>

At March 31, 2007, the Bank exceeded all regulatory  capital  requirements.  The
current  requirements  and the actual  levels for the Bank are  detailed  in the
following table.

<TABLE>
<CAPTION>
                                                                                                        To Be Well
                                                                                                    Capitalized Under
                                                                           For Capital              Prompt Corrective
                                                Actual                  Adequacy Purposes           Action Provisions
                                       -------------------------    -------------------------   --------------------------
                                           Amount          Ratio        Amount          Ratio       Amount           Ratio
                                                                     (Dollars in thousands)
<S>                                    <C>                 <C>      <C>                 <C>     <C>                  <C>
As of March 31, 2007:
   Total Capital
     (to Risk Weighted Assets)         $   39,879          13.09%   $   24,367              8%  $   30,459              10%
   Tier I Capital
     (to Risk Weighted Assets)         $   37,738          12.39%   $   12,184              4%  $   18,275               6%
   Tier I Capital
     (to Average Assets)               $   37,738           9.01%   $   16,757              4%  $   20,947               5%
</TABLE>

<TABLE>
<CAPTION>
                                                                                                        To Be Well
                                                                                                     Capitalized Under
                                                                           For Capital               Prompt Corrective
                                                Actual                  Adequacy Purposes            Action Provisions
                                       -------------------------    -------------------------   --------------------------
                                           Amount          Ratio        Amount          Ratio       Amount           Ratio
                                                                     (Dollars in thousands)
<S>                                    <C>                 <C>      <C>                 <C>     <C>                  <C>
As of December 31, 2006:
   Total Capital
     (to Risk Weighted Assets)         $   39,204          13.36%   $   23,522              8%  $   29,402              10%
   Tier I Capital
     (to Risk Weighted Assets)         $   37,045          12.63%   $   11,761              4%  $   17,642               6%
   Tier I Capital
     (to Average Assets)               $   37,045           8.89%   $   16,706              4%  $   20,883               5%
</TABLE>

                                  Page 20 of 25

<PAGE>

ONEIDA FINANCIAL CORP.
SELECTED FINANCIAL RATIOS
At and for the Three Months Ended March 31, 2007 and 2006 (unaudited)

<TABLE>
<CAPTION>
(Annualized where appropriate)                             Three Months Ending
                                                                March 31,
                                                             2007        2006
                                                          ---------    --------
<S>                                                        <C>         <C>
Performance Ratios:

   Return on average assets                                    0.68%       0.86%
   Return on average equity                                    5.13%       6.92%
   Net interest margin                                         3.34%       3.40%
   Efficiency Ratio                                           85.10%      79.61%
  Ratio of operating expense
      to average total assets                                  5.72%       4.90%
   Ratio of average interest-earning assets
      to average interest-bearing liabilities                112.72%     116.75%

Asset Quality Ratios:

   Non-performing assets to total assets                       0.01%       0.05%
   Allowance for loan losses
      to non-performing loans                              3,677.19%   3,033.82%
   Allowance for loan losses
      to loans receivable, net                                 0.85%       0.88%

Capital Ratios:

   Total stockholders' equity to total assets                 12.84%      12.75%
   Average equity to average assets                           13.18%      12.42%
</TABLE>

                                  Page 21 of 25

<PAGE>

ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

      Various forms of market risk are inherent in the business of the Bank
including concentration risk, liquidity management, credit risk and collateral
risk among others. However, the Bank's most significant form of market risk is
interest rate risk, as the majority of the Bank's assets and liabilities are
sensitive to changes in interest rates. Ongoing monitoring and management of
this risk is an important component of the Company's asset and liability
management process. The Bank's interest rate risk management program focuses
primarily on evaluating and managing the composition of the Bank's assets and
liabilities in the context of various interest rate scenarios. Factors beyond
Management's control, such as market interest rates and competition, also have
an impact on interest income and expense. Based on the asset-liability
composition at March 31, 2007, 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 2006 Annual Report to Stockholders.
There has been no material change in the Company's interest rate risk profile
since December 31, 2006.

ITEM 4. 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 22 of 25

<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 2006 Form 10-K for the fiscal year ended
December 31, 2006.

Item 2      Unregistered Sales of Equity Securities and Use of Proceeds

      The following table summarizes our share repurchase activity during the
three months ended March 31, 2007 and additional information regarding our share
repurchase program. The shares purchased during the current quarter were
received in exchange for the exercise of options or to satisfy tax withholding
obligations that arose on the vesting of restricted stock. Our current
repurchase plan of 250,000 was announced on June 8, 2004. The plan has no
expiration date.

                                  Page 23 of 25

<PAGE>

<TABLE>
<CAPTION>
                                                                                            Maximum
                                                                                            Number of
                            Total                                                           Shares that
                            Number of                            Total Number of Shares     May Yet Be
                            Shares      Average Price Paid per   Purchased as Part of       Purchased
Period                      Purchased   Share                    Publicly Announced Plans   Under the Plan
----------------------------------------------------------------------------------------------------------
<S>                         <C>         <C>                      <C>                        <C>
January 1, 2007 -           3,190       $11.81                   --                         250,000
January 31, 2007
----------------------------------------------------------------------------------------------------------
February 1, 2007 -          --                                   --                         --
February 28, 2007
----------------------------------------------------------------------------------------------------------
March 1, 2007 -             --                                   --                         --
March 31, 2007
----------------------------------------------------------------------------------------------------------
Total                       3,190                                --                         250,000
----------------------------------------------------------------------------------------------------------
</TABLE>

Item 3      Defaults Upon Senior Securities

            Not applicable.

Item 4      Submission of Matters to a Vote of Security Holders

            Not applicable.

Item 5      Other Information

            None

Item 6      Exhibits

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

                  Exhibits

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

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

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

                                  Page 24 of 25

<PAGE>

                                   SIGNATURES

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

                                          ONEIDA FINANCIAL CORP.

Date:    May       15, 2007               By:      /s/ Michael R. Kallet
                                          ------------------------------------
                                          Michael R. Kallet
                                          President and Chief Executive Officer

Date:    May       15, 2007               By:      /s/ Eric E. Stickels
                                          -------------------------------------
                                          Eric E. Stickels
                                          Executive Vice President and Chief
                                          Financial Officer

                                  Page 25 of 25