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, 2006

                                       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]

Indicate by check mark whether the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities 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 7,632,249 shares of
          the Registrant's common stock outstanding as of May 1, 2006.

<PAGE>
<TABLE>
<CAPTION>

                                           ONEIDA FINANCIAL CORP.
                                                   INDEX

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

    Item 1.       Financial Statements                                                                    1

                  Consolidated Statements of Condition                                                    2
                  As of March 31, 2006 (unaudited) and December 31, 2005 (audited)

                  Consolidated Statements of Operations (unaudited)                                       3
                  For the three months ended March 31, 2006 and 2005

                  Consolidated Statements of Comprehensive Income (unaudited)                             4
                  For the three months ended March 31, 2006 and 2005

                  Consolidated Statements of Changes in Stockholders' Equity (unaudited)                  5
                  For the three months ended March 31, 2006

                  Consolidated Statements of Cash Flows (unaudited)                                       6
                  For the three months ended March 31, 2006 and 2005

                  Notes to Consolidated Financial Statements (unaudited)                                  8

   Item 2.        Management's Discussion and Analysis of Financial Condition                            13
                  And Results of Operations

   Item 3.        Quantitative and Qualitative Disclosures about Market Risk                             20

   Item 4.        Controls and Procedures                                                                20

PART II. OTHER INFORMATION                                                                               21

   Item 1.        Legal Proceedings                                                                      21

   Item 1a.       Risk Factors                                                                           21

   Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds                            21

   Item 3.        Defaults Upon Senior Securities                                                        22

   Item 4.        Submission of Matters to a Vote of Security Holders                                    22

   Item 5.        Other Information                                                                      22

   Item 6.        Exhibits                                                                               22

</TABLE>


<PAGE>


PART I.      FINANCIAL INFORMATION
                      Item I.    Financial Statements








                                  Page 1 of 23
<PAGE>
<TABLE>
<CAPTION>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
At March 31, 2006 and December 31, 2005
                                                         (unaudited)   (audited)
                                                              At           At
                                                           March 31,   December 31,
                                                             2006         2005
                                                             ----         ----
<S>                                                          <C>         <C>
ASSETS                                                (in thousands, except share data)
         Cash and due from banks                          $  11,540    $  12,147
         Federal funds sold                                     876          730
                                                          ----------------------
  TOTAL CASH AND CASH EQUIVALENTS                            12,416       12,877

         Investment securities, at fair value                98,598      106,432
         Mortgage-backed securities, at fair value           28,792       29,097

         Mortgage loans held for sale                           439        1,354

         Loans receivable                                   236,622      236,682
         Allowance for loan losses                           (2,063)      (1,959)
                                                          ----------------------
   LOANS RECEIVABLE, NET                                    234,559      234,723

         Federal Home Loan Bank stock                         3,234        3,858
         Bank premises and equipment, net                    13,823       12,703
         Accrued interest receivable                          1,904        2,194
         Other assets                                         6,144        7,921
         Cash surrender value - life insurance               11,343       11,238
         Goodwill                                            14,067       13,491
         Other intangible assets                                912          873
         -----------------------------------------------------------------------
         TOTAL ASSETS                                     $ 426,231    $ 436,761
         =======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
         Interest bearing deposits                        $ 254,528    $ 250,142
         Non-interest bearing deposits                       50,273       51,044
         Borrowings                                          63,400       77,270
         Other liabilities                                    3,703        4,717
                                                          ----------------------
TOTAL LIABILITIES                                           371,904      383,173
Stockholders' equity:
         Preferred stock, 1,000,000 shares authorized            --           --
         Common stock ($.01 par value; 20,000,000
              shares authorized; 8,242,452 issued)               82           82
         Additional paid-in capital                          18,249       18,300
         Retained earnings                                   41,895       41,711
         Common shares issued under employee
               stock plans - unearned                          (288)        (288)
         Accumulated other comprehensive income              (2,570)      (3,091)
         Treasury stock (at cost, 540,239
                                    and 549,412 shares)      (3,041)      (3,075)
         Unearned stock-based compensation                       --          (51)
         -----------------------------------------------------------------------
         TOTAL STOCKHOLDERS' EQUITY                          54,327       53,588
         -----------------------------------------------------------------------
         TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                             $ 426,231    $ 436,761
         =======================================================================
</TABLE>

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


                                  Page 2 of 23
<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2006 (unaudited) and 2005 (unaudited)

                                                           Three Months Ended
                                                          March 31,   March 31,
                                                            2006        2005
                                                            ----        ----
                                           (in thousands, except per share data)

INTEREST INCOME:
         Interest and fees on loans                      $   3,805   $   3,332
         Interest on investment and mortgage-
                  backed securities                          1,328       1,577
         Dividends on equity securities                        199         157
         Interest on federal fund sold and
              interest-earning deposits                         13          15
------------------------------------------------------------------------------
   Total interest and dividend income                        5,345       5,081
------------------------------------------------------------------------------
INTEREST EXPENSE:
         Savings deposit                                       117          78
         Money market and interest-bearing checking            280         151
         Time deposits                                         906         781
         Borrowings                                            854         741
------------------------------------------------------------------------------
                  Total interest expense                     2,157       1,751
------------------------------------------------------------------------------
NET INTEREST INCOME                                          3,188       3,330
         Less: Provision for loan losses                        80          80
------------------------------------------------------------------------------
   Net interest income after provision for loan losses       3,108       3,250
------------------------------------------------------------------------------
OTHER INCOME:
         Investment security gain, net                          31           3
     Insurance commission income                             2,406       2,129
         Other operating income                                987         801
------------------------------------------------------------------------------
   Total other income                                        3,424       2,933
------------------------------------------------------------------------------
OTHER EXPENSES:
         Compensation and employee benefits                  3,374       3,111
         Occupancy expenses, net                               885         805
         Other operating expense                             1,037         956
------------------------------------------------------------------------------
   Total other expenses                                      5,296       4,872
------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                   1,236       1,311
------------------------------------------------------------------------------
   Provision for income taxes                                  308         336
------------------------------------------------------------------------------
NET INCOME                                               $     928   $     975
==============================================================================
EARNINGS PER SHARE - BASIC                               $    0.12   $    0.13
==============================================================================
EARNINGS PER SHARE - DILUTED                             $    0.12   $    0.13
==============================================================================

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

                                  Page 3 of 23
<PAGE>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2006 (unaudited) and 2005 (unaudited)


                                                 Three Months Ended
                                                March 31,  March 31,
                                                  2006       2005
                                                  ----       ----
                                                  (in thousands)
 Net income                                     $   928    $   975
                                                -------    -------

 Other comprehensive income, net of tax:
      Unrealized gains (losses) on assets
        available for sale:
    Unrealized holding gains (losses)
        arising during period                       899     (2,207)
    Less: reclassification adjustment for
              gains included in net income          (31)        (3)
                                                -------    -------
                                                    868     (2,210)
    Net income tax (provision)benefit              (347)       884
                                                -------    -------
Other comprehensive income (loss), net of tax       521     (1,326)

 Comprehensive Income (loss)                    $ 1,449    $  (351)
                                                =======    =======




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

                                  Page 4 of 23
<PAGE>
<TABLE>
<CAPTION>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2006 (unaudited)

                                                                                                 Common Stock
                                                                          Accumulated             Issued Under  Unearned
                                                      Additional             Other                 Employee      Stock
                                     Common Stock      Paid-In   Retained Comprehensive Treasury  Stock Plans-   Based
                                  Shares     Amount    Capital    Earning  Income(Loss)   Stock     Unearned  Compensation   Total
<S>                             <C>        <C>       <C>        <C>        <C>         <C>         <C>         <C>        <C>
                                                                   (in thousands, except number of shares)
Balance as of December 31, 2005  8,242,452  $     82  $  18,300  $  41,711  $  (3,091)  $  (3,075)  $    (288)  $    (51) $  53,588
Net income                                                             928                                                      928
Other comprehensive income,
     net of tax                                                                   521                                           521
Shares issued under
     stock plans
Shares earned under
     stock plans                                                                                           --
Common stock dividends:
     $0.22 per share                                                  (744)                                                    (744)
Reclassification of unearned
     stock based Compensation
     in accordance with
     SFAS No. 123R                                          (51)                                                      51         --
Treasury stock reissued                                                                        34                     34
                                 --------------------------------------------------------------------------------------------------

Balance as of March 31, 2006     8,242,452  $     82  $  18,249  $  41,895  $  (2,570)  $  (3,041)  $    (288)  $     --  $  54,327
                                 ==================================================================================================
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.
                                  Page 5 of 23
<PAGE>
<TABLE>
<CAPTION>

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2006 (unaudited) and 2005 (unaudited)

                                                                 Three Months Ended
                                                                March 31,   March 31,
                                                                  2006        2005
                                                                  ----        ----
<S>                                                                   <C>         <C>
Operating Activities:                                              (in thousands)
   Net income                                                   $    928    $    975
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                                  296         266
      Amortization of premiums/discounts on securities, net           28          64
      Provision for loan losses                                       80          80
      Stock compensation earned                                       --          65
      Gain on sale/call of securities, net                           (31)         (3)
      Gain on sale of loans, net                                     (36)        (48)
      Income tax payable                                             287         236
      Accrued interest receivable                                    290         165
      Other assets                                                 1,876         796

      Other liabilities                                           (1,587)     (1,097)
      Origination of loans held for sale                          (4,180)     (2,172)
      Proceeds from sales of loans                                 5,131       3,751
------------------------------------------------------------------------------------
          Net cash provided by operating activities                3,082       3,078
------------------------------------------------------------------------------------
Investing Activities:
  Purchase of investment securities                               (2,944)     (9,273)
  Principal collected on and proceeds of maturities
      sales or calls from investments                             11,813       2,521
  Purchase of mortgage-backed securities                            (999)         --
  Principal collected on and proceeds from sales
     of mortgage-backed securities                                 1,140       2,757
  Net decrease (increase) in loans                                    22      (4,646)
  Purchase of bank premises and equipment                         (1,384)       (115)
  Purchase of insurance agency                                      (226)         --
------------------------------------------------------------------------------------
          Net cash provided by (used in) investing activities      7,422      (8,756)
------------------------------------------------------------------------------------
Financing Activities:
  Net increase in demand deposit, savings,
      money market, super now and escrow                           4,273       3,567
  Net decrease in time deposits                                     (658)     (1,688)
  Proceeds from borrowings                                        16,500      13,500
  Repayment of borrowings                                        (30,370)    (13,500)
  Cash dividends                                                    (744)       (672)
  Exercise of stock options (using treasury stock)                    34          14
------------------------------------------------------------------------------------
          Net cash (used in) provided by financing activities    (10,965)      1,221
------------------------------------------------------------------------------------
Decrease in cash and cash equivalents                               (461)     (4,457)
------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period                  12,877      15,033
------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                      $ 12,416    $ 10,576
====================================================================================
</TABLE>

                                  Page 6 of 23
<PAGE>

Supplemental disclosures of cash flow information:
Cash paid for interest                                        2,848      1,750
Cash paid for income taxes                                       20         --
Non-cash investing activities:
Unrealized gain (loss) on investment and mortgage-backed
     securities designated as available for sale                521     (1,326)
Transfer of loans to other real estate                           62         --
Note payable issued in connection with acquisition              420
==============================================================================

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



                                  Page 7 of 23
<PAGE>

                             ONEIDA FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)
                                 MARCH 31, 2006

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, 2006 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, 2006.

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 years ended March 31:

                                     Income       Shares    Per Share

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           0      77,636
                                    ---------------------
Diluted Earnings Per Share          $ 928,197   7,708,681   $    0.12
                                                            ---------

March 31, 2005:
Net income (Three Months Ended)     $ 974,536
                                    ---------

Basic Earnings Per Share            $ 974,536   7,538,990   $    0.13
                                                            ---------
Effect of dilutive securities:
         Stock options and awards           0     135,182
                                    ---------------------
Diluted Earnings Per Share          $ 974,536   7,674,172   $    0.13
                                                            ---------

Stock options for 53,820 and 26,638 shares of commons stock were not considered
in computing diluted earnings per common share for March 31, 2006 and March 31,
2005 respectively because they were antidilutive.

Note C - Stock-Based Compensation

Effective January 1, 2006, the Company adopted provisions of Financial
Accounting Standards Board (FASB) Statement 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.

                                  Page 8 of 23

<PAGE>

Note C - Stock-Based Compensation (Continued)

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 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.

The following table illustrates the effect on net income per share if the
Company had applied the fair value recognition provisions of FASB Statement No.
123, "Accounting for stock-Based Compensation," to stock-based employee
compensation.

                                                        Three Months Ended
                                                         March 31, 2005
                                                        -----------------
                                           (in thousands, except per share data)
Net income:
         As reported                                         $   975
Deduct:  Total stock-based employee
         Compensation expense determined under
          fair value method, net of related taxes                (29)
                                                             -------
Pro forma                                                    $   946
                                                             =======

Earnings per share:
  As reported
         Basic                                               $  0.13
         Diluted                                             $  0.13
  Pro forma
         Basic                                               $  0.13
         Diluted                                             $  0.12

Compensation expense charged against income during the first quarter of 2006 for
stock options was $6,000. The options granted were reload options for options
exercised during the quarter. The reloaded options have the same features as the
original awarded options such as an expiration date of 4/25/2010 and immediately
vest. All original awarded options were vested as of April 2005.

Compensation expense equal to the market value of Oneida Financial Corp.'s stock
on the grant date is accrued ratably over the vesting period for shares of
restricted stock granted. Compensation expense recorded in conjunction with this
plan was $0 and $65,239 for the three months ended March 31, 2006 and 2005
respectively. All awarded shares were vested as of April 2005. Shares
unallocated under the plan available for future awards were 10,886 at March 31,
2006.

Note D - Dividend Restrictions

Oneida Financial MHC, which owns 4,309,750 or 55.95% of the outstanding shares
as of March 31, 2006 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 subject to the
condition that Oneida Financial Corp.'s retained earnings be restricted by the
dollar amount of dividends waived by Oneida Financial MHC. As of March 31, 2006
and December 31, 2005, the retained earnings restricted for cash dividends
waived was $8,083,176 and $6,229,984, respectively.

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,
                                                         2006        2005
                                                         ----        ----

Service cost                                           $     --    $     --
Interest cost                                            70,986      77,601
Expected return on plan assets                          (73,005)    (97,693)
Amortization of unrecognized loss                        18,539      33,903
Amortization of unrecognized prior service liability         --          --
                                                       --------    --------
         Net pension and postretirement cost           $ 16,520    $ 13,811
                                                       ========    ========

                                  Page 9 of 23

<PAGE>

Note E - Pension Plan (Continued)
                                                          2006       2005
Weighted-average assumptions as of December 31:
         Discount rate                                   5.750%     6.125%
         Expected return on plan assets                  7.000%     9.000%
         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. The Bank previously disclosed in its financial statements for
the year ended December 31, 2005, that it expected to contribute $33,073 to its
pension plan in 2006. As of March 31, 2006, no contribution has been made. The
Bank anticipates contributing $91,793 in 2006 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, 2006 and December 31, 2005:

                                                       March 31, 2006
                                            ------------------------------------
                                                      Gross Unrealized
Investment Securities                       Fair Value      Gains       Losses
                                            ------------------------------------
Available for sale portfolio:                           (in thousands)
-----------------------------
     Debt securities:
         U. S. Agencies                     $   34,432   $       --   $    1,097
         Corporate                              18,164           74          574
         State and municipals                   28,601          135          200
                                            ----------   ----------   ----------
                                                81,197          209        1,871
     Equity investments:
         Preferred and other equity stocks      14,619          454           65
         Mutual fund                             2,782           --            1
                                            ----------   ----------   ----------
                                            $   98,598   $      663   $    1,937
                                            ==========   ==========   ==========
Mortgage-Backed Securities
  Available for sale portfolio:
     Fannie Mae                             $    9,880   $       --   $      352
     Freddie Mac                                16,864            1          538
     Small Business Administration                  20           --           --
     Collateralized Mortgage Obligations         2,028           --           65
                                            ----------   ----------   ----------
                                            $   28,792   $        1   $      955
                                            ==========   ==========   ==========

                                                      December 31, 2005
                                             ---------------------------------

                                                      Gross Unrealized
Investment Securities                        Fair Value    Gains       Losses
                                             ---------------------------------
  Available for sale portfolio:                       (in thousands)
  -----------------------------
     Debt securities:
         U. S. Agencies                      $  35,437   $      --   $   1,087
         Corporate                              21,903          75         868
         State and municipals                   32,498         194         187
                                             ---------   ---------   ---------
                                                89,838         269       2,142
     Equity investments:
         Preferred and other equity stocks      13,904         132         456
         Mutual fund                             2,690          --          93
                                             ---------   ---------   ---------
                                             $ 106,432   $     401   $   2,691
                                             =========   =========   =========
Mortgage-Backed Securities
  Available for sale portfolio:
     Fannie Mae                              $   8,937   $      21   $     289
     Freddie Mac                                18,034       1,749         461
     Small Business Administration                  23          --          --
     Collateralized Mortgage Obligations         2,103          --          58
                                             ---------   ---------   ---------
                                             $  29,097   $   1,770   $     808
                                             =========   =========   =========


                                  Page 10 of 23

<PAGE>

Note F - Investment Securities (Continued)

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 at March 31, 2006 of $260,000 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's evaluation of
the adequacy of the allowance is based on the Bank's 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. Quarterly, management evaluates the adequacy of the allowance and
determines the appropriate level of provision of 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. 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, 2006 the allowance for loan losses as a percentage of
net loans receivable was 0.88% as compared to 0.92% on March 31, 2005.

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

                                         Three Months Ended March 31,
                                             2006          2005
                                           ----------------------
                                               (in thousands)

Balance at beginning of period:            $   1,959    $   1,982
     Charge-offs                                 (56)        (108)
     Recoveries                                   80           18
     Provision for loan losses                    80           80
                                           ---------    ---------
Balance at end of period                   $   2,063    $   1,972
                                           =========    =========

Impaired loans were as follows:               March 31, 2006   December 31, 2005
                                                       (in thousands)
     Impaired loans                              $      32         $      39
     Allocated allowance for loan losses         $      --         $      14
     Average of impaired loans during the year   $      35         $      55
     Cash-basis interest income recognized       $       1         $       3



                                  Page 11 of 23
<PAGE>

Note H - Segment Information

The Company has determined that it has two primary business segments, its
banking franchise and its insurance activities. For the three months ended March
31, 2006 and 2005, the Company's insurance activities consisted of those
conducted through its wholly owned subsidiary, Bailey & Haskell Associates, Inc.
Information about the Company's segments is presented in the following table for
the periods indicated (amounts in thousands):

                                            Three Months Ended March 31, 2006
                                          ------------------------------------
                                           Banking     Insurance
                                          Activities   Activities      Total
                                                     (in thousands)
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                                 3,361        1,935        5,296
                                          ----------   ----------   ----------
         Income before income taxes              765          471        1,236
Income tax expense                               158          150          308
                                          ----------   ----------   ----------
         Net income                       $      607   $      321   $      928
                                          ==========   ==========   ==========

                                             Three Months Ended March 31, 2005
                                          ------------------------------------
                                           Banking     Insurance
                                          Activities   Activities      Total
                                                     (in thousands)
Net interest income                       $    3,330   $       --   $    3,330
Provision for loan losses                         80           --           80
                                          ----------   ----------   ----------
    Net interest income after provision
         for loan losses                       3,250           --        3,250
Other income                                     804        2,129        2,933
Other expenses                                 3,095        1,777        4,872
                                          ----------   ----------   ----------
         Income before income taxes              959          352        1,311
Income tax expense                               226          110          336
                                          ----------   ----------   ----------
         Net income                       $      733   $      242   $      975
                                          ==========   ==========   ==========


Note I - Acquisitions

On February 23, 2006, the Bank completed its acquisition of Parsons, Cote & Co.,
Inc., an insurance agency. The Bank paid $214,376 in cash and established a note
payable for $419,570 to be paid over 36 months with interest at 5.00% per annum
for fixed assets and other intangible assets. Goodwill in the amount of $576,000
and intangible assets in the amount of $71,000 was recorded in conjunction with
the transaction. Parsons, Cote & Co., Inc. has been subsequently merged into
Bailey and Haskell Associates, Inc.

In December 2005, the Company signed a letter of intent to acquire the assets of
Benefit Consulting Group L.L.C., an employee benefits consulting and retirement
plan administration firm for $1.4 million cash and establish a note payable for
$2.2 million to be paid over 24 months with interest at 5.00% per annum. The
acquisition is expected to close during the second quarter of 2006.


                                  Page 12 of 23

<PAGE>

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




                                  Page 13 of 23


<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 activities
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, 2005 and March 31, 2006 the
Company had 7,623,076 shares and 7,623,249 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 cash dividend as of January 12, 2006 of $0.22
per share which was paid to its shareholders on February 7, 2006. Oneida
Financial MHC waived its receipt of dividends. As of March 31, 2006 and December
31, 2005 the retained earnings restricted for cash dividends waived was
$8,083,176 and $6,229,984.

         On February 23, 2006, the Bank completed its acquisition of Parsons,
Cote & Co., Inc., an insurance agency. The Bank paid $214,376 in cash and
established a note payable for $419,570 to be paid over 36 months with interest
at 5.00% per annum for fixed assets and other intangible assets. Goodwill in the
amount of $576,000 and intangible assets in the amount of $71,000 was recorded
in conjunction with the transaction. Parsons, Cote & Co., Inc. has been
subsequently merged into Bailey and Haskell Associates, Inc.

         In December 2005, the Company signed a letter of intent to acquire the
assets of Benefit Consulting Group L.L.C., an employee benefits consulting and
retirement plan administration firm for $1.4 million cash and establish a note
payable for $2.2 million to be paid over 24 months with interest at 5.00% per
annum. The acquisition is expected to close during the second quarter of 2006.


                                  Page 14 of 23
<PAGE>

FINANCIAL CONDITION

         ASSETS. Total assets at March 31, 2006 were $426.2 million, a decrease
of $10.5 million from $436.8 million at December 31, 2005. Investment securities
decreased $7.8 million and mortgage-backed securities decreased $305,000 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
2006 for liquidity purposes to reduce the balance in the Bank's overnight line
of credit held with the Federal Home Loan Bank of New York. Loans receivable,
including loans held for sale, also decreased $1.0 million to $237.1 million at
March 31, 2006 compared with $238.0 million at December 31, 2005. At March 31,
2006, total commercial loans increased by $422,000 while consumer and commercial
real estate loans decreased by $269,000 from December 31, 2005. Management
continues to seek to increase the Bank's consumer and commercial loan portfolios
with the intent of increasing the average yield on the Bank's interest earning
assets. Residential loans decreased by $213,000 since December 31, 2005, after
the sale of $5.1 million of fixed-rate residential real estate loans in the
secondary market during the first quarter 2006. The mortgage loans held for sale
at March 31, 2006 decreased $915,000 from December 31, 2005.

          The allowance for loan losses increased slightly to $2.1 million at
March 31, 2006 from $2.0 million at December 31, 2005. 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's evaluation of the adequacy of the allowance is based
on the Bank's 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. Quarterly, management evaluates the
adequacy of the allowance and determines the appropriate level of provision of
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. 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, 2006 the allowance for
loan losses as a percentage of net loans receivable was 0.88% as compared to
0.92% on March 31, 2005.

          Premises and equipment increased $1.1 million from December 31, 2005
to March 31, 2006 as a result of the construction of a 15,000 square foot
insurance office located in Clay, New York which will replace three leased
office locations. The Company also began construction of a new banking,
insurance and retail center at the Griffiss Business and Technology Park in
Rome, New York which is expected to be completed during the fourth quarter of
2006.

         LIABILITIES. Total liabilities decreased by $11.3 million or 2.9% to
$371.9 million at March 31, 2006 from $383.2 million at December 31, 2005. The
decrease is primarily the result of a decrease in borrowings as the overnight
line of credit of $10.9 million as of December 31, 2005 was completely paid off
as of March 31, 2006. Total borrowings decreased $13.9 million from $77.3
million at December 31, 2005 to $63.4 million at March 31, 2006. Partially
offsetting the decrease in borrowings, interest bearing deposits increased $4.4
million while non-interest bearing deposits decreased $771,000.

         STOCKHOLDERS' EQUITY. Total stockholders' equity at March 31, 2006 was
$54.3 million, an increase of $739,000 from $53.6 million at December 31, 2005.
The increase in stockholders' equity was due to the addition of after-tax net
income of $928,000 for the three months ended March 31, 2006 as well as a
positive valuation adjustment made for the Company's available for sale
investment and mortgage-backed securities. The payment of the Company's
semiannual cash dividend of $0.22 resulted in a reduction in stockholders'
equity of $744,000.

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, 2006
and 2005 and for the year ended December 31, 2005. 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.

                                  Page 15 of 23
<PAGE>

                         TABLE 1. Average Balance Sheet.
<TABLE>
<CAPTION>

                                                   Three Months Ended March 31,                     Twelve   MonthsEnded Dec. 31,
                              -------------------------------------------------------------------  --------------------------------
                                             2006                               2005                              2005
                                Average    Interest                Average    Interest               Average     Interest
                              Outstanding   Earned/     Yield/   Outstanding   Earned/     Yield/  Outstanding    Earned/    Yield/
Assets                          Balance      Paid       Rate       Balance      Paid        Rate      Balance      Paid      Rate
------                          -------      ----       ----       -------      ----        ----      -------      ----      ----
<S>                              <C>          <C>          <C>      <C>          <C>          <C>      <C>          <C>        <C>
Interest-earning Assets:                                        ( Dollars in Thousands)
------------------------
  Loans Receivable*             $237,810   $  3,805        6.40%   $215,943   $  3,332        6.17%   $226,940   $ 14,197      6.26%
  Investment and                 116,003      1,328        4.58%    137,431      1,577        4.59%    132,251      6,025      4.56%
Mortgage-Backed
Securities
  Federal Funds                      949         13        5.48%      1,594         15        3.76%      1,349         49      3.63%
  Equity Securities               20,637        199        3.86%     17,120        157        3.67%     19,934        740      3.71%
                                --------   --------    --------    --------   --------    --------    --------   --------   -------
   Total Interest-earning Assets 375,399      5,345        5.70%    372,088      5,081        5.46%    380,474     21,011      5.52%
                                --------   --------    --------    --------   --------    --------    --------   --------   -------

Non interest-earning assets:
----------------------------
  Cash and due from banks         10,739                             11,109                             10,781
  Other assets                    45,981                             41,163                             41,566
                                  ------                             ------                             ------
              Total assets      $432,119                           $424,360                           $432,821
                                ========                           ========                           ========
Liabilities and Stockholders'
-----------------------------
 Equity
 ------
Interest-bearing Liabilities:
-----------------------------
  Money Market Deposits         $ 42,753   $    256        2.43%   $ 40,447   $    129        1.28%   $ 44,352   $    706      1.59%
  Savings Accounts                69,931        117        0.68%     73,045         78        0.43%     73,036        395      0.54%
  Interest-bearing Checking       30,930         24        0.31%     28,840         22        0.31%     29,348        132      0.45%
  Time Deposits                  105,771        906        3.47%    110,357        781        2.87%    109,030      3,313      3.04%

  Borrowings                      72,155        854        4.80%     65,382        741        4.60%     68,372      3,141      4.59%
                                --------   --------    --------    --------   --------    --------    --------   --------   -------
    Total Interest-bearing       321,540      2,157        2.72%    318,071      1,751        2.23%    324,138      7,687      2.37%
                                --------   --------    --------    --------   --------    --------    --------   --------   -------
Liabilities
Non interest-bearing liabilities:
---------------------------------
  Demand deposits                 49,895                             48,382                             50,490
  Other liabilities                7,027                              5,163                              5,358
                                --------                           --------                           --------
      Total liabilities         $378,462                           $371,616                           $379,986
                                --------                           --------                           --------
Stockholders' equity              53,657                             52,744                             52,835
                                --------                           --------                           --------
Total liabilities and           $432,119                           $424,360                           $432,821
                                ========                           ========                           ========
stockholders' equity

    Net Interest Income                    $  3,188                           $  3,330                           $ 13,324
                                           ========                           ========                           ========
    Net Interest Spread                                    2.97%                              3.23%                            3.15%
                                                       ========                           ========                           =======
    Net Earning Assets          $ 53,859                           $ 54,017                           $ 56,336
                                ========                           ========                           ========
   Net yield on average
      Interest-earning assets                  3.40%                              3.58%                              3.50%
                                            ========                           ========                           ========
    Average interest-earning
      assets to average
      Interest-bearing liabilities            116.75%                            116.98%                            117.38%
                                            ========                           ========                           ========
</TABLE>

*Included in average loans receivable balance for the periods presented is
Mortgage Loans Held for Sale.

RESULTS OF OPERATIONS

         GENERAL. Net income for the three months ended March 31, 2006 was
$928,000; a decrease of $47,000 or 4.8% from $975,000 for the three months ended
March 31, 2005. The decrease was due primarily to a decrease in net interest
income and an increase in other expenses, partially offset by an increase in
other income and a decrease in provision for taxes.

         INTEREST INCOME. Interest and dividend income increased by $264,000 or
5.2%, to $5.3 million for the three months ended March 31, 2006 from $5.1
million for three months ended March 31, 2005. The increase in interest income
was primarily a result of an increase in the average balances and average yield
of interest-earning assets during the first three months of 2006 as compared to
the same period in 2005.

         Interest on loans increased $473,000 to $3.8 million for the three
months ended March 31, 2006 from $3.3 million for the three months ended March
31, 2005. The increase in interest income on loans is a result of an increase of
$21.9 million in the average balance of loans receivable for the three months
ended March 31, 2006 as compared with the same period in 2005 as well as an
increase of 23 basis points in the average yield to 6.40% at March 31, 2006 from
6.17% at March 31, 2005. The average balance of commercial real estate loans
increased $7.6 million at March 31, 2006 from March 31, 2005 while the average
balance of commercial business loans increased $2.0 million during the quarter
ended 2006 compared with 2005. Consumer loans increased $7.9 million for the

                                 Page 16 of 23
<PAGE>

same period. The average balance of residential real estate loans increased $4.4
million for the same time period, after recording the sale of $16.2 million in
fixed rate one-to-four family residential real estate loans.

         Investment income decreased as a result of a decrease in the average
yield of investment securities and mortgage-backed securities of 1 basis point
to 4.58% at March 31, 2006 from 4.59% at March 31, 2005 as well as a decrease of
$21.4 million in the average balance of investment and mortgage-backed
securities for the three month period ended March 31, 2006 as compared with the
same period in 2005.

         Interest income from federal funds decreased during the three months
ended March 31, 2006 to $13,000 as compared with $15,000 for the 2005 period.
The decrease in interest income is due to a decrease in the average balance of
$645,000 partially offset by an increase of 172 basis points in the average
yield.

         INTEREST EXPENSE. Interest expense was $2.2 million for the three
months ended March 31, 2006, an increase of $406,000 or 23.2% from the same
period in 2005. The increase in interest expense is due to an increase in
interest paid on borrowed funds and deposit accounts. Interest expense on
borrowed funds totaled $854,000 for the first quarter of 2006 compared with
$741,000 for the 2005 period. The average cost of borrowed funds increased 20
basis points to 4.80% as of March 31, 2006 from 4.60% for the three months ended
March 31, 2005. In addition, the average balance outstanding of borrowings
increased during the three months ended March 31, 2006 to $72.2 million compared
to $65.4 million for the same period in 2005. Interest expense on deposits
increased $293,000 and totaled $1.3 million for the three months ended March 31,
2006 as compared to $1.0 million for the same period in 2005. The average cost
of deposits was 2.09% for the period ending March 31, 2006 compared with 1.60%
for the same period in 2005. In addition, the average balance of deposit
accounts decreased $3.3 million from March 2005 to March 2006.

         PROVISION FOR LOAN LOSSES. Total provision for loan losses for the
three months ended March 31, 2006 and 2005 were $80,000. The allowance for loan
losses was $2.1 million or 0.88% of loans receivable at March 31, 2006 as
compared with $2.0 million or 0.92% of loans receivable at March 31, 2005.
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 $491,000 for the
three-month period ending March 31, 2006 compared with the same period in 2005
to $3.4 million from $2.9 million. The increase in other income was primarily
due to increases in revenue derived from the Company's insurance agency
subsidiary activities and deposit account service fee income. Insurance revenue
increased $277,000 or 13.0% for the three months ended March 31, 2006 as
compared with the same period in 2005. In addition, service charges on deposit
accounts increased $62,000, or 13.0%, during the first quarter of 2006 as
compared with the first quarter of 2005.

         OTHER EXPENSES. Other operating expenses increased by $424,000 or 8.7%,
to $5.3 million for the three months ended March 31, 2006 from $4.9 million for
the same period in 2005. Compensation expense increased $263,000 or 8.5% due to
expenses associated with the insurance agency subsidiary. Equipment and
occupancy increased $80,000 or 9.9% due to the completion of two new banking
facilities in Oneida and Chittenango, New York during the last quarter 2005.

         INCOME TAX. Income tax expense was $308,000 for the three months ended
March 31, 2006, a decrease of $28,000 from the first quarter 2005 expense of
$336,000. The effective tax rate decreased to 25.0% for the three months of 2006
from 25.6% for the three months of 2005 to reflect the overall tax rate in
effect for 2005.

         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 2006, loan originations totaled $17.0 million compared to $16.9 million
during the first quarter of 2005. The purchases of investment securities totaled
$3.9 million during the first quarter of 2006 as compared to $9.3 million during
the first quarter of 2005. The decrease in the purchases of investment
securities is due to liquidity constraints and use of overnight lines of credit
to fund loan growth.

                                 Page 17 of 23
<PAGE>

         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 2006 cash
flows provided by the sale, principal payments and maturity of securities
available for sale were $13.0 million compared to $5.3 million for the same
period in 2005.

         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, 2006 the Company had
outstanding commitments to originate loans of approximately $7.2 million, which
generally have an expiration period of less than 120 days. Commitments to sell
residential mortgages amounted to $4.2 million at March 31, 2006.

         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 $37.6 million at March 31,
2006 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-bearing 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, 2006 the total of cash, interest-bearing demand
accounts and federal funds sold was $12.4 million.

At March 31, 2006, the Bank exceeded all regulatory capital requirements. The
current requirements and the actual levels for the Bank are detailed in the
following table.

<TABLE>
<CAPTION>
                                                                                               To Be Well
                                                                                           Capitalized Under
                                                                   For Capital             Prompt Corrective
                                           Actual               Adequacy Purposes           Action Provisions
                                 ------------------------     ---------------------      ------------------------
                                    Amount       Ratio           Amount      Ratio          Amount       Ratio
<S>                              <C>               <C>        <C>                <C>     <C>                   <C>

                               (In thousands)
Total Capital
   (to Risk Weighted Assets)     $   40,183        14.25%     $   22,555         8%      $   28,983           10%
Tier I Capital
   (to Risk Weighted Assets)     $   37,944        13.46%     $   11,278         4%      $   17,390            6%
Tier I Capital
   (to Average Assets)           $   37,944         9.16%     $   16,563         4%      $   21,049            5%

</TABLE>

                                 Page 18 of 23
<PAGE>


ONEIDA FINANCIAL CORP.
SELECTED FINANCIAL RATIOS
At and for the Three Months
Ended March 31, 2006 and March 31, 2005 (unaudited)

(Annualized where appropriate)

                                                  Three Months Ending
                                                         March 31,
                                                     2006        2005
                                                     ----        ----

Performance Ratios:

    Return on average assets                          0.86%      0.92%
    Return on average equity                          6.92%      7.39%
    Net interest margin                               3.40%      3.58%
    Efficiency Ratio                                 79.61%     77.34%
    Ratio of operating expense
         to average total assets                      4.90%      4.59%
    Ratio of average interest-earning assets
         to average interest-bearing liabilities    116.75%    116.98%

Asset Quality Ratios:

    Non-performing assets to total assets             0.05%      0.12%
    Allowance for loan losses
         to non-performing loans                   3033.82%    392.05%
    Allowance for loan losses
         to loans receivable, net                     0.88%      0.92%

Capital Ratios:

    Total stockholders' equity to total assets       12.75%     12.24%
    Average equity to average assets                 12.42%     12.43%


                                 Page 19 of 23
<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, 2006, 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 2005 Annual Report to Stockholders.
There has been no material change in the Company's interest rate risk profile
since December 31, 2005.

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 20 of 23
<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 2   Changes in Securities and Use of Proceeds

         The following table summarizes our share repurchase activity during the
three months ended March 31, 2006 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 21 of 23
<PAGE>
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
Period                     Total      Average Price Paid per  Total Number of Shares    Maximum
                           Number of  Share                   Purchased as Part of      Number of
                           Shares                             Publicly Announced Plans  Shares that
                           Purchased                                                    May Yet Be
                                                                                        Purchased
                                                                                        Under the Plan
-------------------------------------------------------------------------------------------------------
<S>                       <C>        <C>                      <C>                       <C>
January 1, 2006 - January  1,452      11.70                   --                        250,000
31, 2006
-------------------------------------------------------------------------------------------------------
February 1, 2006 -         --                                 --                        --
February 28, 2006
-------------------------------------------------------------------------------------------------------
March 1, 2006 - March 31,  --                                 --                        --
2006
-------------------------------------------------------------------------------------------------------
Total                      1,452                              --                        250,000
-------------------------------------------------------------------------------------------------------
</TABLE>


Item 3   Defaults Upon Senior Securities

         Not applicable.

Item 4   Submission of Matters to a Vote of Security Holders

         None

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 22 of 23
<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 12, 2006                  By:   /s/ Michael R. Kallet
                                           -------------------------------------
                                           Michael R. Kallet
                                           President and Chief Executive Officer


Date:  May 12, 2006                  By:   /s/ Eric E. Stickels
                                           -------------------------------------
                                           Eric E. Stickels
                                           Executive Vice President and Chief
                                           Financial Officer


                                 Page 23 of 23