SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549

                           FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [FEE REQUIRED]
     For the fiscal year ended December 31, 1995

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE  ACT OF 1934 [NO FEE REQUIRED]
     For the transition period from              to


                 Commission file number  0-18533

            LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
        (Name of Small Business Registrant in Its Charter)

          New York                      16-1168175

(State or Other Jurisdiction            (I.R.S. Employer
 of Incorporation or Organization)       Identification Number)

50 North Main Street, Castile, New York           14427
(Address of Principal Executive Offices)      (Zip Code)

                    (716) 493-2577
        (Registrant's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

                  Common Stock, $1.00 par value
                         (Title of Class)

           Warrants to Purchase Shares of Common Stock
                         (Title of Class)

     Check whether the Registrant:  (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes   X             No

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-B is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[ X ]

     State Registrant's revenues for its most recent fiscal year:
$18,986,168.

     The aggregate market value of the shares of Registrant's voting
stock held by non-affiliates of Registrant as of March 18, 1996 was
$23,973,720, based upon the average "Bid" and "Ask" price of
Registrant's common stock on said date.

     The number of shares outstanding of Registrant's common stock as
of March 25, 1996 was 905,470.

               Documents Incorporated by Reference

Portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 1995 are incorporated into Part II of this Form 10-
KSB.
<PAGE>
                              PART I

Item 1 -  Description of Business General

          Letchworth Independent Bancshares Corporation is a bank
holding company incorporated under the laws of the State of New York
in 1981 (the "Company").  The Company has only one banking subsidiary,
The Bank of Castile, a commercial bank formed in 1869 and incorporated
under the laws of the State of New York in 1917 (the "Bank").  The
Bank is a full service, community-oriented, commercial bank which
offers a full range of commercial banking and consumer banking
services to businesses and individuals.  The Bank, however, does not
provide trust services.

Market Area

          The Bank conducts its operations through its main office
located in Castile, New York, and at its nine (9) branch offices in
towns situated in and around the areas commonly known as the
Letchworth State Park area and the Genesee Valley region of New York
State.  Specifically, the Bank has branch offices in the Towns of
Avon, Batavia, Caledonia, Gainesville, LeRoy, Perry, York(Retsof), and
Warsaw in addition to its main office in Castile. On December 2, 1994,
the Bank purchased the Caledonia and Avon offices of The Chase
Manhattan Bank (National Association) ("Chase Manhattan").  Chase
Manhattan's Avon office was combined with the Bank's existing Avon
office and the Caledonia office became the 9th branch of the Bank.
The Bank's primary market includes the counties of Livingston,
Wyoming, and Genesee.  In addition, adjoining sections of the
surrounding counties of Cattaraugus, Allegany, Monroe, and Erie are
also serviced.  The Bank continues to place emphasis on the Route 5
Corridor just south of Monroe County and the City of Rochester.

Banking Services

          The Bank is engaged in the general commercial banking
business and provides a full scope of loan and deposit services
related thereto.  All of the deposit accounts offered by the Bank are
insured by the Federal Deposit Insurance Corporation ("FDIC") up to
$100,000 per depositor.  The Bank also offers a wide range of retail
services including checking, savings, and money market accounts, as
well as various types of time deposit instruments. Mortgage lending
activities include a variety of commercial, industrial and residential
loans secured by real estate and the Bank's installment loan
department makes direct auto, home improvement, and personal loans to
individuals.  The Bank also offers safety deposit box services at all
of its branches.

          In addition, beginning in 1992, the Bank, through an
arrangement with Circuit Agency, Inc., an affiliate of the New York
State Bankers Association, enabled annuity products to be offered to
its customers.

          All of the Bank's lending is in its market area and
approximately nineteen percent (19%) of its loans are concentrated in
the farming and agricultural or related industries.  The Bank has no
foreign loans.  No other single industry or group of related
industries are responsible for a significant portion of the Bank's
loans.  The Bank has no material concentrations of deposits from any
single customer or group of customers, nor does it rely on foreign
sources of funds or brokered deposits.  The Bank does not utilize off-
balance sheet derivative instruments.

Competition

          Management believes that the Company is a prominent
financial institution in its market area.  Although the Bank faces
competition for deposits from other bank and non-bank financial
institutions, the Bank has been able to compete effectively for
deposits because of its image in the community as a community-oriented
bank and the loyalty of its local customers.  The Bank has emphasized
personalized banking services and the advantage of local decision-
making in its banking business, and this emphasis appears to have been
well received by the public in the Bank's market area.

          The Bank competes for deposits principally by offering
depositors a wide variety of deposit programs, convenient branch
locations and hours, tax-deferred retirement programs, and other
services, as well as providing the personalized services and local
decision-making noted above.  The Bank also utilizes local advertising
to attract deposits.

          In addition, the Bank is a major provider of mortgage loans
in its market area.  Although the Bank faces competition for real
estate loans from mortgage banking companies, savings banks, savings
and loans associations, other commercial banks, insurance companies
and other institutional lenders, management believes that the Bank's
image in the community as a local bank gives the Bank a substantial
competitive advantage.  Factors which affect competition include the
general availability of lendable funds and credit, general and local
economic conditions, current interest rate levels and mobility in the
mortgage markets.

Regulation

          The Company is a bank holding company subject to the
provisions of the Bank Holding Company Act of 1956, as amended (the
"Act").  As a bank holding company, the Company is required to file
annual reports and such additional information as may be required by
the Federal Reserve Board pursuant to the Act.  The Federal Reserve
Board has the authority to examine the Company and its subsidiaries.

          The Bank is a stock form commercial bank chartered under the
laws of the State of New York, and its deposits are insured by the
FDIC. As such, the Bank is subject to the regulation, examination and
supervision of the Banking Department of the State of New York and the
FDIC.  Such supervision and regulation, intended primarily for the
protection of depositors, restricts or prohibits certain activities
and neither the Company nor the Bank may enter into certain
transactions without meeting applicable regulatory tests, or without
notification to or prior approval of certain regulatory agencies.
Although the Bank is not a member of the Federal Reserve System, it is
also subject to Federal Reserve Board regulations that require it to
maintain certain reserves against its transaction accounts (primarily
checking and NOW accounts).

Personnel

          As of December 31, 1995, the Company and its subsidiaries
had 101 full-time employees and 44 part-time employees.  The employees
are not represented by any collective bargaining unit, and the
Company's management and the Bank's management considers its
relationship with its employees to be good.

Statistical Disclosure

     Distribution of Assets, Liabilities and Shareholders' Equity;
Interest Rates and Interest Differential

          The following table reflects the components of the
Company's average assets, liabilities and shareholders' equity,
interest income earned and interest expense paid, average rates earned
and paid, and the net interest margin for the years ended December 31,
1995, 1994, and 1993, respectively.
<TABLE>
<CAPTION>
                                        December 31, 1995

Assets
                              Average                             Average
Interest-earning asset        Balance            Interest          Yield
<S>                               <C>            <C>                 <C>
Loans
     Loans (1)                    $125,819,403   $12,788,697         10.16%
Less allowance for
     possible loan losses         (  1,586,241)
          Net Loans                124,233,162

Investment securities
     Taxable                        55,948,083     3,603,440          6.44
     Tax-exempt                     21,352,540     1,088,331          5.10
          Total investment
          securities                77,300,623     4,691,771          6.07

Other interest-earning assets             0            0            0

Federal funds sold                   6,639,348       397,103          5.98
          Total interest-
          earning assets (2)       208,173,133    17,877,571          8.59

Cash and due from banks              6,921,269
Premises and equipment, net          4,459,641
Accrued interest receivable          1,828,432
Other assets                         2,645,883
          Total assets            $224,028,358

Liabilities and
  Shareholders' Equity

Interest-bearing liabilities
Interest-bearing demand deposits   $ 26,285,775   $   479,590          1.82%
Savings deposits                     36,658,584     1,090,028          2.97
Money market deposits                11,990,156       332,510          2.77
Certificates of deposit             100,009,723     5,410,000          5.41
Total interest-bearing deposits     174,944,238     7,312,128          4.18

Federal funds purchased                   0             0           0

Securities sold under agreement
to repurchase                         1,164,094        66,160          5.68

Advances from Federal Home Loan
 Bank and Other                       3,210,917       232,073          7.23
Total interest-bearing liaiblities  179,319,249     7,610,361          4.25

Demand deposits                      21,568,931
Other liabilities                     1,647,857
Shareholders' equity                 21,492,321

Total liaiblities and
  shareholders' equity             $224,028,358

Net interest income                           10,267,210
Net interest spread                                          4.34%
Net interest margin (3)                                      4.93%
<PAGE>
                                        December 31, 1994

Assets
                                  Average                          Average
Interest-earning assets            Balance        Interest          Yield
Loans
     Loans (1)                     $115,048,113   $10,665,418          9.27%
Less allowance for
     possible loan losses          (  1,459,494)
          Net Loans                 113,588,619

Investment securities
     Taxable                         41,622,229     2,353,604          5.65
     Tax-exempt                      16,609,272       828,048          4.99
          Total investment
          securities                 58,231,501     3,181,652          5.46

Other interest-earning assets           391,351        15,138          3.87

Federal funds sold                    4,379,110       173,644          3.97
          Total interest-
          earning assets (2)        176,590,581    14,035,852          7.95

Cash and due from banks               5,096,571
Premises and equipment, net           3,644,458
Accrued interest receivable           1,242,240
Other assets                          2,614,756
          Total assets             $189,188,606

Liabilities and
  Shareholders' Equity

Interest-bearing liabilities
Interest-bearing demand deposits   $ 21,976,525   $   470,342          2.14%
Savings deposits                     33,089,354       911,799          2.76
Money market deposits                11,241,650       295,338          2.63
Certificates of deposit              77,945,692     3,425,509          4.39
Total interest-bearing deposits     144,253,221     5,102,988          3.54

Federal funds purchased                 105,548         5,291          5.01

Securities sold under agreement
to repurchase                         1,087,949        36,048          3.31

Advances from Federal Home Loan
 Bank and Other                       1,487,759       87,659           5.89

Total interest-bearing liaiblities  146,934,477     5,231,986          3.56

Demand deposits                      21,469,381
Other liabilities                     1,407,466
Shareholders' equity                 19,377,282

Total liaiblities and
  shareholders' equity             $189,188,606

Net interest income                           8,803,866
Net interest spread                                               4.39%
Net interest margin (3)                                           4.99%
<PAGE>
                                        December 31, 1993

Assets
                                  Average                           Average
Interest-earning assets            Balance        Interest           Yield
Loans
     Loans (1)                     $105,209,708   $ 9,294,697          8.83%
Less allowance for
     possible loan losses          (  1,364,227)
          Net Loans                 103,845,481

Investment securities
     Taxable                         32,772,709     2,072,324          6.32
     Tax-exempt                      13,568,288       690,507          5.09
          Total investment
          securities                 46,340,997     2,762,831          5.96

Other interest-earning assets         1,406,750        44,296          3.15

Federal funds sold                    4,431,756       131,069          2.96
          Total interest-
          earning assets (2)        156,024,984    12,232,893          7.84

Cash and due from banks               4,469,390
Premises and equipment, net           2,874,781
Accrued interest receivable           1,060,895
Other assets                          2,150,859
          Total assets             $166,580,909

Liabilities and
  Shareholders' Equity

Interest-bearing liabilities
Interest-bearing demand deposits   $ 22,798,000   $   473,409          2.08%
Savings deposits                     27,811,625       758,079          2.73
Money market deposits                14,295,000       343,700          2.40
Certificates of deposit              72,169,006     3,118,545          4.32
Total interest-bearing deposits     137,073,631     4,693,733          3.42

Federal funds purchased                   0              0           0

Securities sold under agreement
to repurchase                           624,658        16,532          2.65

Advances from Federal Home Loan
 Bank and Other                         197,885         8,386          4.24
Total interest-bearing liaiblities  137,896,174     4,718,651          3.42

Demand deposits                      13,332,003
Other liabilities                     1,013,211
Shareholders' equity                 14,339,521

Total liaiblities and
  shareholders' equity             $166,580,909

Net interest income                           7,514,242
Net interest spread                                              4.42%
Net interest margin (3)                                           4.82%
</TABLE>

(1)  Average loans include non-accrual loans.  Interest on loans
includes loan fees of $259,918, $238,033 and $170,665 in fiscal 1995,
1994, and 1993, respectively.

(2)  Interest income on a portion of the Company's loans and
investment securities is exempt from income tax. If income from these
assets had been adjusted to a level comparable to fully taxable income
before application of income taxes, the interest income and average
rate would have been as follows:
<TABLE>
<CAPTION>
                                         Year Ended December 31,
                             1995               1994               1993

                                Average            Average           Average
                      Interest    Rate    Interest   Rate   Interest   Rate

<S>                  <C>         <C>     <C>         <C>   <C>         <C>
Loans................$12,796,041 10.17%  $10,672,614 9.28% $9,302,065  8.84%
Investment securities -
  Tax exempt.......    1,648,986  7.72%    2,254,618 7.55%  1,046,223  7.71%
</TABLE>

     The tax rate used to develop this taxable equivalent adjustment
is the federal statutory rate of 34%. The tax-equivalent adjustments
do not give effect to the disallowance for federal income tax purposes
ofinterest expense related to certain tax exempt assets, nor do they
reflect any benefit of interest being exempt from state income taxes,
the effect of which would be insignificant.

(3)  Net interest margin represents net interest income divided by
total interest-earning assets.
<PAGE>
Rate/Volume Variance Analysis

          The following table sets forth a summary of the changes in
interest earned and interest paid resulting from changes in volumes
and changes in interest rates for the Company for the years ended
December 31, 1995 and 1994, respectively.
<TABLE>
<CAPTION>

                                                     Change
                              Change       Change      Due to
                              Due to       Due to      Rate/          Net
1995 Compared to 1994         Volume       Rate        Volume        Change
                               (1)         (2)          (3)
<S>                          <C>          <C>            <C>        <C>
Revenue Earned On:
Loans.............       $   998,499     $1,023,928     $100,852   $2,123,279
      Investment securities
       Taxable...............809,411        328,816      111,609    1,249,836
       Tax-exempt............236,689         18,270        5,324      260,283
         Total investment
           securities...   1,046,100        347,086      116,933    1,510,119
      Other interest-earning
           assets......        -0-           -0-         (15,138)    (15,138)
      Federal funds sold.     89,731         88,020       45,708     223,459
        Total interest-earning
           assets......... 2,134,330      1,459,034      248,355   3,841,719
     Interest Paid On:
      Interest-bearing demand
       deposits............   92,218     (   70,325)    ( 12,645)      9,248
      Savings deposits......  98,511         69,488       10,230     178,229
      Money market deposits.  19,686         15,738        1,748      37,172
      Certificates of
       deposit.............. 968,611        795,046      220,834   1,984,491

      Federal funds purchased..                           (5,291)     (5,291)
      Securities sold under
      agreement to repurchase. 2,520         25,784        1,808      30,112
      Advances from Federal
       Home Loan Bank....... 138,027          2,493        3,894     144,414

         Total interest-bearing
          liabilities..... 1,319,573        838,224      220,578   2,378,375
     Net Interest Income.$   814,757      $ 620,810     $(27,777) $1,463,344
</TABLE>
_________________________
(1) The volume variance reflects the change in the average balance
outstanding multiplied by the average rate during the prior period.

(2) The rate variance reflects the change in the average rate
multiplied by the average balance outstanding during the prior period.

(3) The rate/volume variance reflects the change in average rate
multiplied by the change in the average balance outstanding.
Rate/Volume Variance Analysis

         The following table sets forth a summary of the changes in
interest earned and interest paid resulting from changes in volumes
and changes in interest rates for the Company for the years ended
December 31, 1994 and 1993, respectively.
<PAGE>
<TABLE>
<CAPTION>
                                                        Change
                              Change         Change       Due to
                              Due to         Due to       Rate/        Net
1994 Compared to 1993         Volume         Rate         Volume     Change
                                (1)           (2)            (3)
  <S>                         <C>            <C>          <C>      <C>
Revenue Earned On:
  Loans.................. $   868,731      $ 462,923    $ 39,067  $1,370,721
  Investment securities
  Taxable.................    559,290      ( 219,577)   ( 58,433)    281,280
  Tax-exempt..............    154,786      (  13,568)   (  3,677)    137,541
    Total investment
      securities..........    714,076      ( 233,145)   ( 62,110)    418,821
  Other interest-earning
    assets..............   (   31,985)        10,129    (  7,302)   ( 29,158)
  Federal funds sold...... (    1,558)        44,761    (    628)     42,575
    Total interest-earning
      assets..............  1,549,264        284,668    ( 30,973)  1,802,959
Interest Paid On:
  Interest-bearing demand
    deposits..............(    17,333)         6,839    (    959)  (  11,453)
   Savings deposits........   144,082          8,343       1,295     153,720
   Money market deposits. (    73,280)        32,879    (  7,961)  (  48,362)
   Certificates of deposit... 249,553         50,518       6,893     306,964

   Federal funds purchased..     -0-            -0-        5,291       5,291
   Securities sold under
     agreement to repurchase.  12,277          4,123       3,116      19,516
   Advances from Federal
     Home Loan Bank..........    -0-            -0-       87,659      87,659

       Total interest-bearing
         liabilities......... 315,299        102,702      95,334     513,335
   Net Interest Income....$ 1,233,965      $ 181,966   $(126,307) $1,289,624
</TABLE>
_________________________
(1) The volume variance reflects the change in the average balance
outstanding multiplied by the average rate during the prior period.

(2) The rate variance reflects the change in the average rate
multiplied by the average balance outstanding during the prior period.

(3) The rate/volume variance reflects the change in average rate multiplied
by the change in the average balance outstanding.
<TABLE>
<CAPTION>
                                                      Change
                             Change      Change       Due to
                              Due to      Due to       Rate/        Net
1993 Compared to 1992         Volume       Rate        Volume      Change
                                (1)        (2)          (3)
<S>                         <C>          <C>         <C>           <C>
Revenue Earned On:
 Loans ....................$1,360,854  $(  636,510) $( 94,880)  $  629,464
 Investment securities
 Taxable..................... 346,763   (  160,933) (  27,431)     158,399
 Tax-exempt.................. 120,953   (   19,157) (   3,652)      98,144
    Total investment
      securities............. 467,716   (  180,090) (  31,083)     256,543
 Other interest-earning
    deposits...............(   53,420)  (   11,372)     5,848    (  58,944)
 Federal funds sold........(   35,904)  (   31,059)     5,855    (  61,108)
 Total interest-earning
      assets................1,739,246   (  859,031) ( 114,260)     765,955
Interest Paid On:
 Interest-bearing demand
  deposits................... 102,344   (  203,310) (  33,708)   ( 134,674)
 Savings deposits............ 204,374   (  190,221) (  50,254)   (  36,101)
 Money market deposits..... (  52,213)  (  125,861)    13,425    ( 164,649)
 Certificates of deposit......486,968   (  669,046) (  95,583)   ( 277,661)
 Securities sold under
  agreement to repurchase......   0            0       16,532       16,532
   Total interest-bearing
    liabilities.............. 741,473   (1,188,438) ( 149,588)   ( 596,553)
Net Interest Income........$  997,773  $   329,407  $  35,328   $1,362,508
</TABLE>

(1) The volume variance reflects the change in the average balance
outstanding multiplied by the average rate during the prior period.

(2) The rate variance reflects the change in the average rate
multiplied by the average balance outstanding during the prior period.

(3) The rate/volume variance reflects the change in average rate
multiplied by the change in the average balance outstanding.
Investment Portfolio
<PAGE>
    The following table summarizes the carrying values of the
Company's investment securities portfolio at the dates indicated.
Investment securities held to maturity are stated at cost, adjusted on
a straight-line basis for amortization of premiums and accretion of
discounts.  Investment securities available for sale are carried at
estimated market value.
<TABLE>
<CAPTION>
                                              December 31,
                               1995               1994                1993

                     Held to    Available   Held to     Available  Held to
                     Maturity   for Sale    Maturity    for Sale   Maturity
<S>                <C>         <C>         <C>         <C>         <C>
U.S. Treasury securities
  and U.S. Government
  corporation and
  agencies........$15,992,787  32,380,800  $20,698,476 $17,050,000 $17,315,510
State and political
  subdivision
  obligations......21,674,732   1,070,000   20,166,690      -0-     14,526,836
Federal Home Loan
  Bank Stock.......    -0-        636,300       -0-        579,100     482,600
Mortgage-backed
  securities........6,738,922   4,113,800    7,937,564   4,651,700  17,809,432
Total securities..$44,406,441 $38,200,900  $48,802,730 $22,280,800 $50,134,378
</TABLE>

         At December 31, 1995 the estimated market value of the held
to maturity portfolio was more than the amortized cost by $1,216,059.
At December 31, 1995, the estimated market value of available for sale
securities was more than the amortized cost by $515,112.

         The following table presents the book value of all
investment securities of a single issuer, excluding securities of the
United States Government and its agencies, whose aggregate carrying
value at December 31, 1995 exceeded ten percent (10%) of consolidated
shareholders' equity:


                                                    Estimated
                                       Carrying      Market
                                         Value       Value

Federal Home Loan Mortgage Corp. CMO  $5,125,365  $5,125,628
Federal Home Loan Bank                 2,488,193   2,445,938
Federal National Mortgage Association  9,398,928   9,399,186


         At December 31, 1995, the estimated market value of the
investment portfolio was more than the amortized cost by $1,216,059
for the held to maturity category, and by $515,112 for the available
for sale category.

    The accounts and maturities of debt securities held to maturity
and available for sale at December 31, 1995 and the weighted average
yields of such securities are shown below:

Held to Maturity:
<TABLE>
<CAPTION>

                   Under       1-5        5-10        Over
December 31, 1995  1 year      years      years       10 years   Total
 <S>             <C>          <C>           <C>        <C>        <C>
U.S. Treasury
 securities and
 obligations of
U.S. Government
corporations and
agencies
 Carrying value..$5,213,190   $9,775,364   $1,004,233     0       $15,992,787  
 Average tax
   equivalent
   yield(1)........  5.92%        6.99%        7.41%     0.00%       6.67%
State and
 political
 subdivisions
Carrying value..  4,470,641    8,835,762    7,749,171   619,158    21,674,732
 Average tax
   equivalent
   yield(1)........ 6.86%         7.37%        7.99%     9.42%         7.55%

Total carrying
 value excluding
 mortgage-backed
 securities...... $9,683,831  $18,611,126  $8,753,404  $619,158   $37,667,519
 Average tax
 equivalent
 yield excluding
 mortgage-backed
 securities......  6.35%          7.17%        7.92%     9.42%         6.76%

Mortgage-backed
securities....... $    9,319  $ 2,508,823  $2,546,543 $1,674,237   $6,738,922
Carrying Value
 Average tax
 equivalent
 yield...........   8.68%          6.02%       6.85%      6.49%        6.45%

Total carrying
 value........... $9,693,150  $21,119,949 $11,299,947 $2,293,395  $44,406,441

Average
 tax equivalent
 yield............  6.36%         7.03%        7.68%      7.28%         7.06%



(1) Rates of tax-exempt securities are shown assuming a 34% federal
statutory tax rate.  The actual average yield on tax-exempt securities was
4.95%.

Available for Sale:

                    Under      1-5        5-10        Over
December 31, 1995  1 year      years       years       10 years         Total

U.S. Treasury
 securities and
obligations of
U.S. Government
corporations and
agencies
 Carrying value.. $5,486,290  $25,795,966  $1,098,544   $      0  $32,380,800
 Average tax
   equivalent
   yield(1)........    6.18%        6.28%       7.20%       0.00%      6.29%
State and
 political
 subdivisions
Carrying value..     557,910      512,090        0              0   1,070,000
 Average tax
   equivalent
   yield(1)........    5.19%         7.46%       0%             0%     6.28%

Total carrying
 value excluding
 mortgage-backed
 securities and
 FHLB stock...... $6,044,200  $26,308,056  $1,098,544  $        0 $33,450,800
 Average tax
 equivalent
 yield excluding
 mortgage-backed
 securities and
 FHLB stock......      6.09%        6.30%       7.20%           0%     6.28%

Mortgage-backed
securities....... $       0  $ 1,517,744   $1,541,856  $ 1,007,900 $4,067,500
Carrying Value
 Average tax
 equivalent
 yield............       0%        6.04%        6.86%        6.42%     6.44%

Total carrying
 value........... $6,044,200 $27,825,800   $2,640,400  $1,007,900 $37,518,300

Average
 tax equivalent
 yield............     6.18%       6.29%        7.00%       6.42%      6.31%

</TABLE>
(1) Rates of tax-exempt securities are shown assuming a 34% federal
statutory tax rate.  The actual average yield on tax-exempt securities
was 4.14%
<PAGE>

    Loan Portfolio

          The following table sets forth the composition of the
Company's loan portfolio at the dates indicated.
<TABLE>
<CAPTION>

                                                December 31
                         1995           1994          1993            1992    1991
<S>                    <C>           <C>           <C>           <C>          <C>
Agricultural loans...$ 25,168,552  $ 22,091,563  $ 17,141,043  $ 14,534,670 $ 11,403,348
Commercial and
  industrial loans...  23,317,057    19,670,283    16,303,801    14,241,549   13,944,567
Real estate loans:
  Secured by 1 to 4
    family residential
    properties.......  41,120,730    40,353,744    41,299,434    37,234,082   29,810,944
  Other..............  33,917,880    27,971,189    24,631,305    22,301,728   18,199,478
Consumer loans.......   9,954,869    11,280,962    13,393,064    12,827,632   11,834,792
  Total loans........ 133,479,088  $121,367,741  $112,768,647  $101,139,661 $ 85,193,129

</TABLE>

               Potential Problem Loans

                   Potential problem loans consist of loans which are
generally secured and not currently considered nonperforming, but
where information about possible credit problems has caused management
to have doubts as to the ability of such borrowers to comply with
present repayment terms.  As of December 31, 1995, the Company
considers $2,003,000 to be potentially problem assets. Historically,
however, only a very small portion of those loans have resulted in
actual losses for the Company.


               Non-performing Loans

                   The following table summarizes the Company's non-
performing loans at the dates indicated.
<TABLE>
<CAPTION>

December 31,
<S>                                <C>      <C>      <C>      <C>      <C>
                                    1995      1994    1993      1992     1991
Non-accruing loans........        $450,500 $254,800 $125,700 $213,704 $ 86,439
Accruing loans past due 90 days or more.
                                   291,200  215,600  480,800  333,749  222,521
Renegotiated loans......................-0-        -0-        -0-        -0-       -0-
</TABLE>

         For each period shown the gross interest income that would
have been recorded in such period if the loans had been current in
accordance with their original terms, and the amount of interest
income on those loans that was included in such period's net income,
was negligible.

         Interest on loans is accrued from the date an advance is
made.  The performance of loans other than real estate and installment
loans is evaluated primarily on the basis of a review of each
customer's financial position and relationship over a period of time
and the judgment of senior lending officers as to the ability of
borrowers to conduct a financially healthy business and to meet the
repayment terms of the loan.  If there is reasonable doubt as to the
repayment of a loan in accordance with the agreed upon terms, even
though the financial condition of the borrower or the collateral may
be sufficient ultimately to reduce or satisfy the obligation, the loan
may be placed on a non-accrual basis pending the sale of any of the
collateral or the determination that other sources of repayment exist.
When a loan is placed on a non-accrual basis all previously accrued
but unpaid interest is reversed and charged against current income.
Interest income is thereafter recognized only when payments are
received.

         Loans, including impaired loans, are placed on non-accrual
status in accordance with policies established by management.  Loans,
other than consumer loans, are generally transferred to non-accrual
status when principal or interest payment become ninety days past due.
Any accrued but uncollected interest previously recorded on such loans
is reversed in the current period and interest income is subsequently
recognized only when actually collected.  Past due consumer loans are
generally fully reserved or charged-off when they reach a 90-day
delinquency status.  Loans are returned to accrual status when
management determines that the circumstances have improved to the
extent that both principal and interest are deemed collectible and
there has been a sustained period of repayment performance.  The
Company may continue to accrue interest on loans past due ninety days
or more which are well secured and in the
process of collection.

         Loans, principally residential real estate loans, are
periodically sold without recourse and servicing is generally
retained.  Gains and losses on sales of loans are recognized at the
time of settlement and are determined by the difference between net
sales proceeds and the carrying value of the loans sold.  Fees related
to the servicing of loans for benefit of others are determined on the
basis of loans serviced and are recorded as income when payments are
received.

         At December 31, the average balance of impaired loans during
1995 was approximately $309,000.  At December 31, 1995, the balance of
impaired loans and related reserve against that balance was $741,700
and $195,000, respectively.  Interest income recognized on impaired
loans and interest income recognized on a cash basis was not
significant.

         Residential mortgage loans are placed on non-accrual status
when they become 90 days past due, and the collection efforts of the
Bank continue in accordance with the Bank's collection policies and
procedures.

         Lending officers are responsible for the ongoing review and
administration of each particular loan.  As such, they make the
initial identification of loans which may present some difficulty in
collection, or where circumstances indicate that the probability of
loss exists.  The responsibilities of the lending officers include the
initial collection effort on a delinquent loan.  Unless other
arrangements are made with the lending officer and approved by the
Board of Directors of the Bank, any loan deficiencies more than 90
days past due are generally charged-off. Senior management is informed
of the status of delinquent and problem loans weekly.  The Board of
Directors and senior management reviews the current allowance for
possible loan losses monthly, and senior management makes the final
determination as to loan charge-offs.

   Summary of Loan Loss Experience

         The provision for possible loan losses represents
management's determination as to the amount necessary to be
transferred to the allowance for possible loan losses to bring it to a
level which is considered adequate in relationship to the risk of
future losses inherent in the loan portfolio.  While it is the
Company's policy to charge-off in the current period those loans in
which a loss is considered probable, there also exists the risk of
future losses which cannot be quantified precisely or attributed to
particular loans or classes of loans.  Because this risk is
continually changing in response to factors beyond the control of the
Company, such as the state of the economy, management's judgment as to
the adequacy of the provision is necessarily approximate and
imprecise.

         In assessing adequacy, management relies on its ongoing
review of the loan portfolio, which is undertaken both to ascertain
whether there are probable losses which must be charged-off and to
assess the risk characteristics of the portfolio in the aggregate.
This review takes into consideration management's evaluation of
individual loans, past loan loss experience, the assessment of
prevailing and anticipated economic conditions, the estimated value of
collateral and other relevant factors.  It is management's ongoing
policy to maintain a conservative approach as to the establishment of
an adequate allowance for possible loan losses.

         In evaluating the allowance, management also considers the
Bank's loan loss experience, the amount of past due, non-performing
and impaired loans current and anticipated economic conditions, lender
requirements and other appropriate information.

         The allowance for possible loan losses is maintained as a general
reserve without any internal allocation to the specific loan classes of the
loan portfolio.  Based on a historical four-year average of gross charge-
offs, however, the allowance for possible loan losses would be allocated by
management to specific loan classes as follows:

December 31, 1995


                              Percent of          Percent of
                              Allowance in   Loans in
                              Category to         Category to
                    Amount    Total Allowance     Total Loans

Domestic Loans (1)
Agricultural loans.....$   37,930        2.21%           18.9%
 Commercial and
 industrial loans......   357,334       20.82          17.5
 Real Estate mortgages.    44,408         2.59          56.2
 Consumer loans........ 1,276,628        74.38           7.4
Totals                 $1,716,300       100.0%         100.0%


                              December 31, 1994


                              Percent of          Percent of
                              Allowance in   Loans in
                              Category to         Category to
                    Amount    Total Allowance     Total Loans

Domestic Loans (1)
Agricultural loans.....$   44,738        2.90%           18.2%
 Commercial and
 industrial loans......   301,104       19.70          16.2
 Real Estate mortgages.    38,023         2.50          56.3
 Consumer loans........ 1,143,035        74.90           9.3
Totals                 $1,526,900       100.0%         100.0%


                              December 31, 1993


                              Percent of          Percent of
                              Allowance in   Loans in
                              Category to         Category to
                    Amount    Total Allowance     Total Loans

Domestic Loans (1)
Agricultural loans.....$   56,762        3.90%           15.2%
 Commercial and
 industrial loans......   310,596       21.40          14.5
 Real Estate mortgages.    34,276         2.40          58.4
 Consumer loans........ 1,046,366        72.30          11.9
Totals                 $1,448,000       100.0%         100.0%



                              December 31, 1992


                              Percent of          Percent of
                              Allowance in   Loans in
                              Category to         Category to
                    Amount    Total Allowance     Total Loans

Domestic Loans (1)
Agricultural loans.....$   53,876        4.30%           14.4%
 Commercial and
 industrial loans......   309,367       24.40          14.1
 Real Estate mortgages.    34,783         2.70          58.8
 Consumer loans........   867,919        68.60          12.7
Totals                 $1,265,945       100.0%         100.0%



                              December 31, 1991


                              Percent of          Percent of
                              Allowance in   Loans in
                              Category to         Category to
                    Amount    Total Allowance     Total Loans

Domestic Loans (1)
Agricultural loans.....$   66,530        6.00%           13.39%
 Commercial and
 industrial loans......   302,104        27.50         16.36
 Real Estate mortgages.    31,958          2.90         56.35
 Consumer loans........   700,049         63.60         13.90
Totals                 $1,100,641        100.0%        100.0%


    (1)  The Company had no foreign loans

         The following table sets forth certain information with
respect to the Company's loans and the allowance for possible loan
losses.
<TABLE>
<CAPTION>
                                   For the Year Ended December 31,
                                   1995              1994     1993    1992       1991
<S>                                <C>         <C>        <C>        <C>          <C>      
Balance at beginning of period...$1,526,900  $1,448,000 $1,265,945 $1,100,641    942,905
Charge-offs:
  Agricultural loans.............(    1,573) (    2,534)  (  13,789)   12,000     10,341
  Commercial and industrial loans(   69,607) (   47,816)  (  39,657)   20,832     65,638
  Real estate mortgages..........         0           0          0         0          0
  Consumer loans.................(  145,435) (  238,642)  ( 190,850)  130,065    100,735
                                 (  216,615) (  288,992)  ( 244,296)  162,897    176,714
Recoveries:
  Agricultural loans.............     1,404       3,815       8,140     1,746      5,315
  Commercial and industrial loans.    8,035       6,069       6,189    18,053     11,421
  Real estate mortgages...........        0          0           0         0          0
  Consumer loans..................   72,213      45,283      50,573    21,005     24,950
                                     81,652      55,167      64,902    40,804     41,769
Net charge-offs...................(134,963) (  233,825)  ( 179,394) (122,093) (134,945)
Additions charged to operations...  324,363     312,725)    361,449   287,397    292,681
Balance at end of period......... 1,716,300  $1,526,900  $1,448,000$1,265,945 $1,100,641
Ratio of net charge-offs during
  the period to average loans
  outstanding during the period..     0.11%       0.20%       0.17%     0.13%      0.17%
</TABLE>

         Net loans charged-off in 1995 totaled $134,963, or 0.11% of
average loans.  The reserve for possible loan losses equalled 1.29% of
the total loan portfolio at December 31, 1995, compared to 1.26% at
December 31, 1994.  Management believes that the allowance for
possible loan losses of $1,716,300  at December 31, 1995 was adequate
to absorb anticipated risk in the portfolio based upon the
Company's historical experience.

         All segments of the Company's loan portfolio are subject to
continuous quality evaluation.  In the opinion of the management of
the Company, there are no credit risks relating to the loan portfolio,
other than what is already disclosed in this document, and the
allowance for possible loan losses is adequate to absorb anticipated
loan losses in the present loan portfolio of the Company.  It must be
emphasized, however, that the determination of allowance for possible
loan losses using the Company's procedures and methods rests upon
various judgments and assumptions about future economic conditions and
other factors affecting loans.  In addition, management reviews
overall portfolio quality through an analysis of current levels and
trends and charge-offs, delinquency and non-accruing loan data and
reviews the overall banking environment.  These reviews are of
necessity dependent upon estimates, appraisals and judgments, which
may change quickly because of changing economic conditions and the
Company's perception as to how these factors may affect the financial
condition of debtors.  As a result, no assurance can be given that the
Company will not in any particular period sustain loan losses which
are sizeable in relationship to the amount reserved or that
subsequent evaluations of the loan portfolio, in light of
conditions and factors then prevailing, will not require
significant changes in the allowance for possible loan losses.


    Rate Sensitivity of Loans

         Presented below is a table which sets forth the maturity of
the Company's loans as of December 31, 1995.
<TABLE>
<CAPTION>
                                  Maturities at December 31, 1995

                                     One Year
                         One Year    Through        After
                         or Less     5 Years        5 Years        Total
<S>                    <C>            <C>           <C>           <C>
Agricultural loans....$15,979,006   $ 2,865,693   $ 6,323,853    $25,168,552
Commercial and
   industrial loans....18,935,317     2,729,976     1,651,764     23,317,057
Real estate loans:
   Secured by 1 to 4
   family residential
   properties............ 939,273       832,942    39,348,515     41,120,730
   Other...............11,072,644     1,339,134    21,506,102     33,917,880
Consumer loans......... 4,337,071     5,006,361       611,437      9,954,869
   Total loans.........$51,263,311  $12,774,106   $69,441,671   $133,479,088

</TABLE>
         The following table sets forth the various maturity dates of
the above-mentioned loans with pre-determined interest rates and
floating or adjustable interest rates.

                         Maturities at December 31, 1995
                               One Year
                               Through          After
                               5 Years         5 Years
Loans with pre-determined
  interest rates.........    $ 8,750,778     $18,114,596
Loans with floating or
  adjustable interest rates    4,023,328      51,327,075

Totals...................    $12,774,106     $69,441,671


         The Company ensures safety of depositor funds and
relative balances between interest rate sensitive assets and
liabilities through its Asset/Liability Committee, which activity
monitors the maturity and repricing characteristics of interest rate
sensitive assets and liabilities on an ongoing basis.

    Deposits

    The following tables set forth the average amount of, and the
average rates paid on, major deposit categories for the years ended
December 31, 1995, 1994, and 1993, respectively.
<TABLE>
<CAPTION>
                                    Year Ended December 31,
                            1995                1994                 1993
                     Average   Average   Average   Average    Average  Average
                     Balance    Rate     Balance     Rate      Balance   Rate
<S>                 <C>         <C>     <C>         <C>      <C>        <C>
Noninterestbearing
 demand deposits. $ 21,568,931   ---  $ 21,469,381   ---   $ 13,332,003   ---
Interest-bearing demand
 deposits.......... 26,285,775   1.82%  21,976,525  2.14%  $ 22,798,000  2.11%
Savings deposits... 36,658,584   2.97   33,089,354  2.76   $ 27,811,625  2.73
Money market
  deposits......... 11,990,156   2.77   11,241,650  2.63     14,295,000  2.40
Certificates of
 deposit...........100,009,723   5.41   77,945,692  4.39     72,169,006  4.3

  Total Deposits..$196,513,169        $165,722,602         $150,405,634

Securities sold under
 agreement to
 repurchase.......$  1,164,094  5.68% $  1,087,949  3.31%  $    624,658  2.65%

   Total..........$197,677,263        $166,810,551         $151,030,292

</TABLE>
    The following table sets forth the amount of time
certificates of deposit of $100,000 or more of the Bank as of December
31, 1995 for various dates of maturity.

  December 31, 1995 - Time Certificates of Deposit $100,000 or More

Three months or less......................    $12,264,705
Three months through six months...........      3,875,947
Six months through twelve months..........      3,269,121
Over twelve months........................      4,127,933
     Totals...............................    $23,537,706
  Return on Equity and Assets

    The following table sets forth selected financial ratios
of the Company on a consolidated basis for the periods indicated.


                                  For the Year Ended December 31,
                                    1995      1994      1993

Return on average assets......       1.19%     1.19%     1.16%
Return on average equity......      12.36     11.61     13.45
Dividends declared to net income    18.23     19.08     15.54
Loans to deposits.............      65.41     64.74     73.17
Loans to deposits and securities
  sold under agreement to
  repurchase..................      64.84     64.43     72.70
Non-performing loans to total
  loans.......................        .56       .39       .54
Net charge-offs to average
  total loans.................        .11       .20       .17
Allowance for possible loan
  losses to loans at year-end.       1.29      1.26      1.28
Average shareholders' equity
  to average total assets.....       9.59%    10.24%     8.61%

  Short-Term Borrowings

    Not applicable.

Item 2 -     Properties

    The following table sets forth the location of the Bank's offices,
as well as certain information related to these offices, as of
December 31, 1995:


  Location of Office             Owned or Leased

   50 North Main Street
   Castile, New York.........              Owned

   263 East Main Street
   Avon, New York............              Owned

   1 Main Street
   Gainesville, New York.....              Owned

   102 North Center Street
   Perry, New York...........              Owned

   2727 Genesee Street
   Retsof, New York..........              Leased

   445 North Main Street
   Warsaw, New York..........              Owned

   129 North Center Street
   Perry, New York...........              Owned

   29 Main Street
   LeRoy, New York...........              Owned

   604 West Main Street
   Arcade, New York..........              Owned

   408 East Main Street
   Batavia, New York.........              Owned

   3155 State Street
   Caledonia, New York.......              Owned

    Each of the foregoing properties is in generally good
condition and is appropriate for its intended uses.

    All owned offices are in the name of the Bank.  Prior to
March 10, 1995, two (2) offices were owned by Southern Wyoming Realty
Corp., a wholly-owned subsidiary of the Bank.  Effective March 10,
1995, Southern Wyoming Realty Corp. was dissolved and all of its
assets were transferred and conveyed to the Bank.

    For information relating to the Company's investment
policies, see "Item 1- Description of Business -- Statistical
Disclosure" of this Annual Report on Form 10-KSB.

Item 3 -     Legal Proceedings

    The Company is not presently involved in any legal
proceedings which management or counsel to the Company believe to be
material to its financial condition or results of operations. As the
nature of the Bank's business involves the collection of loans and the
enforcement and validity of security interests, mortgages and liens,
the Bank is plaintiff or defendant in various legal proceedings which
may be considered as arising in the ordinary course of its business.
In the opinion of management of the Bank, after consultation with its
counsel handling all such litigation, there are no legal proceedings
now pending by or against the Bank the outcome of which might have a
material effect on the Bank's business, business prospects or
financial position.

    In December, 1994, the Company was advised that the Bank
may be named as a defendant in a certain lawsuit entitled American
River Bank, Inc., et al v. Community Bankers Mutual Fund, Inc., et
al., a lawsuit which was commenced on or about October 21, 1994 in
United States District Court, Central District of California.  In this
action, the plaintiffs alleged that they purchased certain shares in
the United States Government Money Market Fund (the "Fund"), which
were allegedly issued and sold by one of the defendants, namely,
Community Bankers Mutual Fund, Inc.  In connection therewith, the
plaintiffs sued the Community Bankers Mutual Fund, Inc., Community
Asset Management, Inc., allegedly the investment advisor for the Fund,
the directors of Community Asset Management, Inc. and various
participants in the Fund that were alleged to be "affiliates" of such
directors, for alleged violations of Federal and State securities
laws, fraud, breach of fiduciary duty, negligence and an accounting.

    Although the Bank was subsequently named in the action,
the lawsuit was settled on September 6, 1995.  The terms of the
settlement had no material impact on the Bank or the Company.

Item 4 -     Submission of Matters to a Vote of Security Holders

    Not applicable.

                              PART II

Item 5 -     Market for the Registrants Common Equity and Related
Stockholder Matters

    During November of 1993, the Company completed a second
public offering of 200,000 shares of its common stock and 200,000
warrants to purchase additional shares of its common stock.  The
offering was very successful, increasing to approximately 800 the
number of shareholders of the Company.  On January 3, 1994, the
Company listed its common stock and warrants on the National
Association of Securities Dealers Quotation System (NASDAQ) Small Cap
Market.  Although the market for the Company's common stock has become
more active since the listing, as with many stocks of companies such
as the Company, trading remains limited.

    As of March 18, 1996, the "Bid" and "Ask" price of the
Company's common stock was $30.50 and $31.75 per share,
respectively, as reported on the National Association of Securities
Dealers Quotation System (NASDAQ) Small Cap Market.  These quotations
represent inter-dealer quotations without adjustment for retail mark-
ups, mark-downs, or commissions, and may not necessarily represent
actual quotations.  For a discussion of the quarterly high and low
"Bid" quotations for the years ended December 31, 1995 and 1994,
respectively, as well as a recent closing price of the warrants,
reference is made to "Market For The Common Stock" included on pages
35 of this report from the 1995 Annual Report to Shareholders.

    The Company declared dividends of $.54 per share to its
shareholders during the year ended December 31, 1995.  In 1994, the
Company declared annual dividends of $.48 per share.  Although the
Board of Directors of the Company has declared its intention to
continue the payment of cash dividends on the Company's common stock,
no assurance can be given that any dividends will be declared or, if
declared, what the amount of the dividends will be or whether such
dividends, once declared, will continue.  As a bank holding company,
the Company's ability to pay dividends is primarily a function of the
dividend payments it receives from the Bank, which are subject to
certain limitations.  See Note 17 of "Notes to Consolidated Financial
Statements" included on page 57 of this report from the 1995 Annual
Report to Shareholders. In determining the amount of such dividends to
be paid by the Company, if any, the Board of Directors will consider
such factors as the earnings and financial condition of the Company,
as well as regulatory requirements and the Bank's need to retain
capital to support its growth.

Item 6 -     Management's Discussion and Analysis of Financial
Condition and Results of Operations

    Reference is made to "Management's Discussion and Analysis of
Financial Condition and Results of Operation" from the 1995 Annual
Report to Shareholders, and incorporated below on pages 26 - 34 of
this Annual Report on Form 10-KSB.


The  purpose  of this section is to focus on relevant business  events
and  information  provided in this Annual Report.  For  a  full  under
standing  of  this  discussion,  reference  should  be  made  to   the
Consolidated  Financial  Statements,  and  Notes  thereto,   and   the
Consolidated  Financial  Highlights herein.  The  preceding  Financial
Statements have neither been audited nor approved by the FDIC.

Management Discussion and Analysis

The Company is a bank holding company with one subsidiary, The Bank of
Castile  (the "Bank"). The Bank is a full-service, community oriented,
commercial  bank which offers a full range of commercial and  consumer
banking  services  to municipalities, businesses and individuals.  The
Bank, however, does not provide trust services.
The  Bank  conducts its operations through its main office located  in
Castile,  New  York,  and  at its nine (9)  branch  offices  in  towns
situated  in  and  around the areas commonly known as  the  Letchworth
State  Park  and  the  Genesee  Valley  regions  of  New  York  state.
Specifically,  the  Bank has branch offices in the  towns  of  Arcade,
Avon,  Batavia,  Caledonia, Gainesville, LeRoy, Perry, York  (Retsof),
and  Warsaw.  On  December 2, 1994, the Bank  acquired  the  Avon  and
Caledonia offices of The Chase Manhattan Bank, N.A. ("Chase"). Chase's
Avon office was combined with the Bank's existing office in Avon which
was  expanded and renovated, and the Caledonia office was opened as  a
new office of The Bank of Castile.
The  Company's  strategic plan calls for the continued growth  of  its
banking  franchise within the current market area and adjoining  areas
through the acquisition and/or expansion of additional offices, if and
when, opportunities occur.
The  Company's  market  area  has  remained  reasonably  healthy.   As
evidenced by the following chart, the average annual unemployment rate
has  remained relatively constant in each of the three counties  where
the Bank does the majority of its business.

         Genesee Livingston Wyoming
 1995      5.1%    5.2%      6.6%
 1994      5.9%    4.8%      6.7%

In  addition,  the efforts of local development agencies are  yielding
moderate results in the Bank's market area, with several new companies
relocating or expanding in the three county area during the past year.
FINANCIAL CONDITION
1995 Compared With 1994
The  total assets of the Company as of December 31, 1995 increased  by
$21.8  million to $233.5 million, representing a 10.29% increase  from
the  $211.7  million figure as of December 31, 1994.  This  growth  in
total   assets  occurred  in  several  areas,  including  the   Bank's
investment  securities portfolio which increased by  16.21%  or  $11.5
million,  and  the loan portfolio, which increased by 9.98%  or  $12.1
million. The remaining increase in total assets was primarily  in  the
Bank's  premises and equipment area which increased by $.7 million  or
17.37%,  primarily  as  a  result  of  the  expansion  of  the  Bank's
Operations  Center  located  in Perry,  New  York.  The  Company  also
purchased four additional automatic teller machines (ATMs), and  other
various equipment.
Commercial  and  industrial loan volume increased by $3.6  million  to
$23.3  million  at year end 1995, representing an increase  of  18.54%
from  the  year  ended  December 31, 1994. The Company's  real  estate
loans,   exclusive  of  one-to-four  family  residential   properties,
increased  by $5.9 million to $33.9 million. These loans are generally
commercial  in nature and are secured by real estate. In the  view  of
management, the growth in these areas is at least partially due to the
business development efforts of the Company's calling officers  and  a
continuing  change in strategic focus of larger competing institutions
away  from  this type of lending. This is also the primary reason  for
the  $3.1  million,  or  13.93%, increase  in  our  agricultural  loan
portfolio, which consists primarily of loans to the larger dairy farms
and  selected  cash crop farms. Most dairy operations  have  not  been
appreciably  affected by the recent trend of modest  decline  in  milk
prices.
The  consumer loan portfolio decreased by $1.3 million, or 11.76%,  to
$10.0  million at December 31, 1995. This was primarily the result  of
decreased demand for direct and indirect consumer loans in all of  our
markets, which follows a nationwide trend. The Bank does not presently
have any plans to aggressively pursue indirect lending activities.
Due  to  the sale of $2.8 million of mortgage loans during  1995,  the
Company's  real estate loans secured by one-to-four family residences,
including  home equity lines of credit, increased by  a  modest   $0.8
million, or 1.90%, to $41.1 million at December 31, 1995. The mortgage
loans  that were sold were fixed rate loans; adjustable rate  mortgage
loans  and servicing of all loans are retained by the Bank. The volume
of  home equity lines of credit grew to $9.2 million at year end 1995,
an increase of 4.32% from the prior year. These loans are priced in an
adjustable  manner tied to the prime rate and repriced quarterly,  and
have been subject to fierce marketplace competition.
Total  deposit growth in 1995 was $16.6 million, or 8.86%,  to  $204.1
million at December 31, 1995. This growth was accomplished as follows:
an  increase  of  $3.6  million  in  noninterest-bearing  deposits;  a
decrease  of $2.1 million in savings deposits; a $1.0 million decrease
in NOW Accounts; an increase of $0.5 million in money market accounts;
an increase of $8.9 million in certificates of deposit under $100,000;
and  an  increase  of $6.8 million in certificates of deposit  greater
than  $100,000.  At year end 1995, the Bank also had $1.8  million  in
securities   sold  under  agreements  to  repurchase,   "deposit-like"
instruments.
The  growth in noninterest-bearing deposits at year end is due to  the
timing of deposits in municipal accounts. Noninterest-bearing deposits
increased  to  $26.7 million at year end 1995, a 15.41% increase  when
compared  to  year end 1994. There were no branch acquisitions  during
1995,  which  means that all the growth detailed above was  internally
generated.   Average   noninterest-bearing  deposits   is   relatively
unchanged from $21.5 million for the year ended 1994 to $21.6  million
for  the  year ended 1995. Average noninterest-bearing deposits  as  a
percentage of total average deposits decreased from 12.75% at year end
1994 to 10.98% at year end 1995.
Certificates of deposit increased by $15.6 million during  1995  to  a
total  of  $104.2 million at December 31, 1995. Of that total increase
in  certificates of deposit, $6.8 million occurred in the category  of
CDs  of  $100,000  or  more. Much of the volume in  that  category  is
attributable to municipal customers.
The  yield on the Company's interest earning assets was 8.59% for  the
year ended December 31, 1995, an increase of 64 basis points from  the
yield of 7.95% for the year ended December 31, 1994. During this  same
period,  the rate for total interest-bearing liabilities increased  68
basis points to 4.25% from 3.57%. As a result, the net interest spread
decreased slightly to 4.34% for the year ended December 31, 1995, from
4.38%  for the prior year. The net interest margin decreased  slightly
to 4.93% in 1995 from 4.99% in 1994.
The  Company's shareholders' equity increased to $22.8 million at year
end  1995,  up 15.27% from the $19.8 million figure at year end  1994.
This increase was primarily the result of the current year's earnings.
Shareholders' equity for 1995 was also affected negatively by a net of
$27,928  due  to  transactions  associated  with  the  Employee  Stock
Ownership  Plan  ("ESOP"), and affected positively by  the  unrealized
gain of $307,400, net of tax, on the available for sale portion of the
investment portfolio.
The Company's return on average shareholders' equity was 12.36%, which
is  consistent  with  industry averages.  This  figure  represents  an
increase  from  the  11.61% figure during 1994  as  the  Company  more
profitably employs its capital.
1994 Compared With 1993
The  total assets of the Company as of December 31, 1994 increased  by
$37.1  million to $211.7 million, representing a 21.23% increase  from
the  $174.6  million figure as of December 31, 1993. The  majority  of
this  growth  in  total  assets  occurred  in  the  Bank's  investment
securities  portfolio which increased by 41.79% or $20.9 million,  and
the  loan  portfolio, which increased by 7.63% or $8.6 million.  Other
assets  increased  by $1.0 million or 49.16%, which  increase  related
primarily to the deposit premium associated with the purchase  of  the
two  offices  from Chase. The remaining increase in total  assets  was
primarily  in  the Bank's premises and equipment area, resulting  from
the  purchase  of the Batavia and Caledonia offices, as  well  as  the
renovation of the Avon office.
Commercial  and  industrial loan volume increased by $3.4  million  to
$19.7  million  at year end 1994, representing an increase  of  20.65%
from  the  year  ended  December 31, 1993. The Company's  real  estate
loans,   exclusive  of  one-to-four  family  residential   properties,
increased  by  $3.3  million to $28.0 million. The  agricultural  loan
portfolio increased by $5.0 million, or 28.88% to $22.1 million.
The  consumer loan portfolio decreased by $2.1 million, or 15.77%,  to
$11.3  million at December 31, 1994. This was primarily the result  of
decreased demand for direct and indirect consumer loans in all of  our
markets, following a nationwide trend. Some of this decrease was  off-
set  by  the increased home equity lines of credit, which were heavily
promoted in 1993.
Due  to  increasing  mortgage rates and the sale of  $6.3  million  of
mortgage loans during 1994, the Company's real estate loans secured by
one-to-four family residences, including home equity lines of  credit,
decreased by $0.9 million, or 2.29%, to $40.4 million at December  31,
1994.  The volume of home equity lines of credit grew to $8.9  million
at year end 1994, an increase of 18.51% from the prior year.
Total  deposit growth in 1994 was $33.3 million, or 21.63%, to  $187.5
million at December 31, 1994. This growth was accomplished as follows:
an  increase  of  $4.3  million  in noninterest-bearing  deposits;  an
increase  of $9.8 million in savings deposits; a $5.4 million increase
in  NOW Accounts; a decrease of $0.4 million in money market accounts;
an increase of $6.6 million in certificates of deposit under $100,000;
and  an  increase  of $7.6 million in certificates of deposit  greater
than  $100,000.  Approximately  $20 million  in  total  deposits  were
acquired in connection with the Bank's acquisition of the two  offices
from  Chase.  At  year  end 1994, the Bank also had  $0.9  million  in
securities  sold  under  agreements to  repurchase,  a  "deposit-like"
instrument.
The  growth  in noninterest-bearing deposits at year end reflects  the
Bank's  continuing  focus  on commercial lending.  Noninterest-bearing
deposits  increased  to  $23.1 million at  year  end  1994,  a  22.52%
increase  when  compared  to  year end  1993.  The  Chase  acquisition
accounted  for  $2.6  million  of the increase.  Average  noninterest-
bearing deposits increased from $13.3 million for the year ended  1993
to  $21.5 million for the year ended 1994. Average noninterest-bearing
deposits  as  a  percentage of total average deposits  increased  from
8.86% at year end 1993 to 12.75% at year end 1994.
The   combination  of  savings  accounts  and  money  market  accounts
increased by $9.4 million, or 23.78%, from the $40.0 million  at  year
end  1993.  Of that increase, however, $9.2 million was  part  of  the
Chase acquisition. IRA accounts increased to $15.3 million at December
31, 1994, up 20.25% from December 31, 1993.
The  yield on the Company's interest earning assets was 7.95% for  the
year ended December 31, 1994, an increase of 11 basis points from  the
yield of 7.84% for the year ended December 31, 1993. During this  same
period,  the rate for total interest-bearing liabilities increased  14
basis points to 3.57% from 3.43%. As a result, the net interest spread
decreased slightly to 4.38% for the year ended December 31, 1994, from
4.41%  for  the  prior  year. Nevertheless, the  net  interest  margin
increased  to 4.99% in 1994 from 4.82% in 1993. The increase  was  due
primarily to the growth of the Company's assets and careful management
of the Company's pricing structure.
The  Company's shareholders' equity increased to $19.8 million at year
end  1994,  up 8.11% from the $18.3 million figure at year  end  1993.
This increase was primarily the result of 1994 earnings. Shareholders'
equity for 1994 was also affected by the $109,000 payment made on  the
loan associated with the  ESOP, and accounting for the unrealized loss
of  $389,976,  net of tax, on the available for sale  portion  of  the
investment  portfolio.  The Company's return on average  shareholders'
equity  was  11.64%,  which  is  consistent  with  industry  averages.
Although  this  figure represents a decrease from  the  13.45%  figure
during  1993,  this decrease relates to the Company's  higher  capital
levels  for all of 1994 following the successful common stock offering
during the last quarter of 1993.
The  Company is well capitalized. As shown in the chart below, capital
ratios  for  the  past  two  year periods far  exceed  the  regulatory
minimums:

                                                      Regulatory
                                           1995  1994  Minimum
Tier 1 Risk Based Capital Ratio          15.97% 13.58%  4.00%
Total Risk Based Capital Ratio           17.22% 14.69%  8.00%
Tier 1 Leverage Ratio                    19.40% 19.37%  4.00%


RESULTS FROM OPERATIONS
Income before taxes increased by 19.35% to $3.95 million in 1995  from
$3.31 million in 1994. Net income for the year ended December 31, 1995
was  $2.66  million compared to $2.26 million for the  prior  year,  a
17.80%  increase. The Company's other operating income  for  the  year
ended December 31, 1995 increased by $105,797 or 10.55% from the prior
year.  This increase resulted primarily from increased service charges
and  an increase in the number of transaction accounts which more than
offset  a  decrease  of $17,750 in income from the  prior  year  which
resulted  from gains on sales of loans and investments. Sale of  loans
reflects  an ongoing effort to achieve the Company's goal of  removing
certain fixed rate loans from the Company's balance sheet.
During  the  fourth  quarter of 1995 banks  were  permitted  to  shift
investment  securities amongst the various categories on  a  one  time
basis.   The  Bank  took  advantage  of  this  opportunity  to   shift
approximately $16.5 million of securities from the "held to  maturity"
category  to the "available for sale" category. Management  felt  that
this  would give the Company increased flexibility to deal with future
asset/liability and liquidity management issues even though shifts  in
the  value  of  these  securities now have  to  be  reflected  in  the
shareholders' equity.
The  Company's other operating expenses increased to $7.1  million  in
1995, up 14.83% from $6.2 million for the prior year. This reflects  a
significant increase in salaries and benefits expense of $567,468, due
to  a  full  year's salary for the newly acquired employees  of  Chase
Manhattan, as well as normal salary increases, increased benefit costs
and  additional  expenses for year end performance bonuses.  The  FDIC
assessment for the year 1995 decreased by $119,387 due to the decrease
at  mid year of the FDIC premiums on the Bank Insurance Fund. However,
the  decrease  does not effect the premium on Savings  Insurance  Fund
deposits. For The Bank of Castile, the deposits purchased in 1992 from
Anchor  Savings Bank in LeRoy remain insured by the Savings  Insurance
Fund.  It is also anticipated that although less than 10% of the total
Bank deposits are involved, the insurance rate of $.23 per hundred and
a  one time fee will be assessed sometime during 1996. The increase in
other  operating  expenses reflect increases in  premium  amortization
associated  with the acquisitions and normal expenses  for  the  newly
purchased offices.
The  Company's net income was $2,657,451 for 1995, or $2.84 per common
and  common equivalent share outstanding. This represents an  increase
of  17.83%  in net income and a 14.06% increase in earnings per  share
when compared to the prior year's figures. Charges to expense for  the
provision  for income taxes amounted to $1,288,150 for 1995,  up  from
$1,050,000  in 1994. The increase results from higher pre-tax  income,
as  the  Company's  effective  income  tax  rate  remained  relatively
constant at 32.60% in 1995, compared to 31.80% in 1994.
RATE SENSITIVITY AND FUNDS LIQUIDITY MANAGEMENT
The  Company  maintains  adequate  liquidity  and  ensures  safety  of
depositor funds and a relative balance between interest rate sensitive
assets  and liabilities through its asset/liability committee. As  set
forth  above, the Company's net interest margin decreased by six basis
points  to  4.93% in 1995 from 4.99% in 1994. The net interest  margin
remains  strong  compared to peer organizations.  Management  believes
that  the Company is presently well balanced in terms of the repricing
of its assets and liabilities.
Liquidity is provided by the Company's investment portfolio, including
the federal funds position which averaged 37.47% and 33.09% of average
total  assets in 1995 and 1994, respectively. The investment portfolio
has  a  weighted average maturity of 38 months, with $15.7 million  of
the investment portfolio maturing in one year or less. The size of the
investment portfolio increased modestly during 1995 particularly  when
compared  to the significant growth experienced during the prior  year
due to the Chase acquisition.
Daily  liquidity is provided by the purchase or sale of federal  funds
with  various  institutions. During 1995, the Bank  was  a  seller  of
federal  funds  with  average  daily sales  of  $6.6  million.  Though
employed  for only six days during 1995, the Bank has the  ability  to
borrow  from  the  Federal Reserve Bank of New York,  a  correspondent
bank,  or  the Federal Home Loan Bank. Membership allows the  Bank  to
borrow  periodically on a short-term or long-term basis  at  preferred
rates.  The Bank has borrowings of $365,678 and $3,141,342 on a  long-
term  basis  from the Federal Home Loan Bank to fund the ESOP  and  to
purchase  investments  for  the purpose of neutralizing  our  slightly
asset  sensitive  position. The overall liquidity of  the  Company  is
supplemented  by  its core deposits which, as previously  noted,  have
grown both in volume and in percentage of total deposits.
The Bank also sold $2.8 million in various commercial, agricultural or
residential  mortgage  loans  on  the secondary  market  during  1995.
Management expects to continue such sales from time to time.
GAP Analysis
Certain  assumptions are necessary in establishing  a  meaningful  GAP
analysis.  These  key  assumptions  are  discussed  in  this  section.
Floating rate securities and loans are categorized according to  their
repricing frequency. For other investment securities that have ongoing
principal  reduction,  modified duration is used  in  identifying  the
repricing  opportunities. Contractual payment schedules are  used  for
fixed  rate  commercial  loans.  For consumer  installment  loans,  an
assumed maturity of 36 months is used, and the dollars are pooled over
this time period.
In  recognition  that  cash and due from bank accounts  are  reflected
entirely  in  the  zero  to three month category,  a  like  amount  of
noninterest  bearing demand deposits are shown in the  same  category.
The  remainder of those deposits are spread out up to the  three  year
time period. Savings accounts are slotted in the categories up to  and
including two years, with 80% of the dollars repricing in the  one  to
two  year  category.  NOW accounts and MMDA accounts  are  treated  as
variable  rate  instruments, and are therefore shown in  the  zero  to
three  month category. All other categories of interest-earning assets
and   interest-bearing  liabilities  not  discussed   separately   are
classified according to their contractual agreements.
The  Company's  balance sheet was well matched at year end  1995.  The
continued  upturn  of  rates is not expected to  significantly  impact
earnings.  The  Company  is  not involved in  any  off  balance  sheet
derivative  products and its holding in mortgage backed securities  is
very stable.

The  following  GAP table as of December 31, 1995 includes  all  major
categories    of    interest-earning   assets   and   interest-bearing
liabilities:
                           0-3     3-12      1-5     Over
                           MonthS  Months   Years   5 Years   Total
ASSETS: (In millions)

  Investment securities   $10,792  $23,602 $37,793  $10,420  $82,607
  Federal funds sold        2,050                              2,050
  LoanS                    78,665   22,997  16,853   14,964  133,479
  Allowance for possible loan losses        (1,716)  (1,716)
     Net loans             78,665   22,997  16,853   13,248  131,763
     Total interest-earning assets
                           91,507   46,599  54,646   23,668  216,420
  Other assets              7,752                     9,322   17,074
     Total assets         $99,259  $46,599 $54,646  $32,990 $233,494

LIABILITIES AND SHAREHOLDERS' EQUITY:

  NOW accounts            $25,827                            $25,827
  Money market deposit accounts
                           11,771                             11,771
  Savings accounts          1,777  $ 5,332  $28,436           35,545
  Certificates of deposit  39,046   40,488   24,599 $    94  104,227
     Total interest-bearing deposits
                          78,421     45,820   53,035     94  177,370
  Repurchase agreements    1,264       421       83            1,768
  Long-term debt              79       352    1,506   1,570    3,507
     Total interest-bearing liabilities
                          79,764    46,593   54,624   1,664  182,645
  Noninterest-bearing deposits
                           7,752     8,502   10,451           26,705
  Other liabilities                                   1,318    1,318
     Total liabilities     87,516   55,095   65,075   2,982  210,668
  Shareholders' equity                       22,826  22,826
     Total liabilities and shareholders' equity
                          $87,516  $55,095  $65,075 $25,808 $233,494

GAP                       $11,743  $(8,496)$(10,429)$ 7,182

CUMULATIVE GAP            $11,743  $(3,247)$ (7,182)


MEASURES OF PERFORMANCE
Various  measures of performance are available to analyze  any  bank's
safety,  soundness,  and financial health. The Consolidated  Financial
Highlights section of this Annual Report details common measures  such
as  return  on assets, return of equity and earnings per share.  Other
indicators are as follows:
1. Banks usually strive to cover a portion of other operating expenses
with  noninterest  or fee income. In 1995, 1994, and  1993,  the  Bank
covered  15.60%,  16.21%,  and  18.20%, respectively,  of  such  other
operating expenses with noninterest income or fees.
2.  The  capital  ratio measures the ending capital of  a  bank  as  a
percentage of its ending assets. This ratio reflects a bank's  ability
to  support  deposit growth and provide a reserve  for  any  potential
future  deterioration in asset quality. At year end 1995, the  capital
ratio  of  the  Bank was 9.78%, up from 9.35% at year end  1994.  This
change is a result of 1995 net earnings and gains in the available for
sale section of the investment portfolio.
3.  The loan to deposit ratio is a secondary measure of liquidity. The
Bank's loan to deposit ratio increased to 65.41% at year end 1995 from
64.74%  in 1994. Although the current ratio is somewhat below the  70-
75% range set forth in the Company's strategic plan, it is not unusual
for  a  full  service  community bank, and  indicates  that  the  Bank
maintains adequate liquidity and is actively serving the credit  needs
of  its  community. The ratio was clearly affected by the increase  in
deposits  that  accompanied the acquisition of the  two  offices  from
Chase during the fourth quarter of 1994.
4.  Asset  quality is a critical measure of any bank's  potential  for
continued  performance.  The net loan charge-offs  of  the  Bank  were
$134,963,  $233,825, and $179,394, for the years  ended  December  31,
1995,  1994, and 1993, respectively. During 1995, 1994 and  1993,  the
ratio  of  net  charge-offs to average loans  outstanding  was  0.11%,
0.20%,  and  0.17%, respectively, which are very low percentages  when
compared with our peer group. Commercial and industrial, agricultural,
and mortgage loan losses were negligible during 1995, with most of the
charge-offs  coming  primarily from the  consumer  lending  area.  The
Company has recently added a full time consumer loan collector and the
results have been excellent.
5.  The  allowance for possible loan losses as a percentage  of  total
loans  outstanding increased slightly from 1.26% at year end  1994  to
1.29%  at  year  end  1995. As a result of  the  growth  of  the  loan
portfolio and charge-offs during 1995 and 1994, $324,363 and $312,725,
respectively, were charged to the provision for loan losses.
With  the  category  of non-performing loans defined  as  non-accruing
loans  plus  accruing loans past due 90 days or more, the Company  had
$741,700  in non-performing loans at year end 1995, or 0.56% of  total
loans, and $470,400 in non-performing loans at year end 1994, or 0.39%
of total loans. This compares very favorably with peer group banks.
BANK FACILITIES AND SERVICES
During  1995,  the Company purchased and obtained an  option  on  land
adjacent to its existing Operations Center in Perry, New York. A 7,800
square  foot  addition  was  made to the existing  3,700  square  foot
facility  to  house  various  internal  departments  for  the   Bank's
operations.  In  November,  1995,  the  mortgage  and  consumer   loan
departments  were  combined  into  the  consumer  loan  administration
department   and   relocated  to  the  center.  The  commercial   loan
administration department, and the training area also relocated to the
facility,  joining  the  central  data  processing  department   which
remained  there.  The  new  training  facility  represents   a   major
commitment to what we believe to be a most important future effort.
On  December  2,  1994, the Bank acquired Chase's historic  office  in
Caledonia. The facility has a drive-in teller and an ATM. The building
is in need of renovation which is anticipated during 1996.
During 1995, a major study of the various data processing options took
place  and a decision was reached to continue with the current vendor,
upgrading both our central processing software and hardware. While the
cost is modest when compared with past technological upgrades, a great
deal  of  training will be necessary. The Bank is presently  reviewing
technological advances such as imaging and home banking options, which
would significantly reduce our internal processing costs and serve our
customers better.
MARKET FOR THE COMMON STOCK
As of January 2, 1994, the market price for the Company's common stock
is  reflected daily on the National Association of Securities  Dealers
Automated Quotation System (NASDAQ) Small Cap Market under the  symbol
LEBC. The Company's warrants also trade on the NASDAQ Small Cap Market
under  the  symbol  LEBCW.  First Albany  Corporation,  Ryan,  Beck  &
Company, McConnell, Budd and Downes, and Tucker Anthony, Inc. all make
a  market in the Company's common stock and warrants. However, trading
in  the Company's stock is limited and therefore, no assurance can  be
given that an active or liquid market for the common stock or warrants
will  exist.  Presently, there are approximately 800  holders  of  the
Company's  securities. All shareholders who own their stock  in  their
individual names are eligible to participate in the Company's Dividend
Reinvestment Plan.
On  February  6, 1996, the closing Bid/Asked price for  the  Company's
common  stock  and  the warrants, as quoted on the  NASDAQ  Small  Cap
Market,  was  $30.00/31.00  per  share  and  $7.00/8.13  per  warrant,
respectively.
During  1995,  the Company declared four quarterly dividends  totaling
$.54  per share of common stock. This represents an increase  of  $.06
per  share, or 12.50%, over the amount declared in 1994. In  November,
1991,  the  Company  implemented  a Dividend  Reinvestment  Plan  (the
"Plan"). The shareholders commenced participation under the Plan  with
the  first dividend of 1992. Presently, over one-third of the eligible
shareholders  participate in the Plan. The Company's  only  source  of
income  is  from the Bank. As explained in Note 17 of the Consolidated
Financial  Statements,  the Bank's ability  to  declare  dividends  is
restricted by law and related restrictions as to the amount  of  funds
which can be transferred to its parent company.

Item 7 -     Financial Statements

    The Consolidated Financial Statements of the Company,
together with the report thereon of Price Waterhouse LLP, dated
January 19, 1996, included below on pages 37 through 60 of the 1995
Annual Report to Shareholders,  are incorporated by reference in this
Annual Report on Form 10-KSB.

Report of Independent Accountants



Price Waterhouse LLP


To the Board of Directors and Shareholders of
Letchworth Independent Bancshares Corporation


In our opinion, the accompanying consolidated statement of condition and
the related consolidated statements of income, changes in shareholders'
equity and cash flows present fairly, in all material respects, the
financial position of Letchworth Independent Bancshares Corporation and its
subsidiary at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 1 to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards (SFAS) No.
115, "Accounting for Certain Investments in Debt and Equity
Securities," in 1994 and SFAS No. 109, "Accounting for Income Taxes,"
in 1993.



PRICE WATERHOUSE LLP
Buffalo, New York
January 19, 1996


                Consolidated Statement of Condition

                                                 December 31,
                                                  1995           1994
ASSETS:
Cash and due from banks                      $  7,752,080   $  6,264,350
     Federal funds sold                         2,050,000      5,600,000
     Investment securities:
          Available for sale (cost of $37,685,788
              and 22,938,239, respectively)    38,200,900     22,280,800
          Held to maturity (market value of
              $45,622,500 and $47,806,100,
               respectively)                   44,406,441     48,802,730
               Total investment securities     82,607,341     71,083,530
     Loans                                    133,479,088    121,367,741
    Less - Allowance for possible loan losses
                                               (1,716,300)    (1,526,900)
               Net loans                      131,762,788    119,840,841       

     Other assets                               2,373,972      2,955,312
     Accrued interest receivable                1,949,266      1,711,571
     Premises and equipment, net                4,998,697      4,259,030

                                           $  233,494,144  $ 211,714,634

Liabilities and Shareholders' Equity:
     Deposits:
     Noninterest-bearing                 $     26,704,826  $  23,138,166
     Interest-bearing                         177,370,635    164,319,775
               Total deposits                 204,075,461    187,457,941
     Securities sold under agreements to repurchase
                                                1,767,984        900,000
     Accrued interest payable                     747,351        419,953
     Accrued taxes and other liabilities          570,448        197,702
     Advances from Federal Home Loan Bank       3,507,020      2,936,368
               Total liabilities              210,668,264    191,911,964
     Commitments and contingent liabilities
     Shareholders' equity:
          Common stock, $1.00 par value, 1,500,000
            shares authorized, 899,970 and 896,720
            shares issued, respectively           899,970        896,720
     Capital surplus                           10,206,024     10,087,067
     Retained earnings                         11,778,164      9,605,255
     Unearned employee stock ownership plan share
                                               s (365,678)      (337,750)
     Unrealized gain (loss) on investments, net   307,400       (389,976)
     Minimum pension liability adjustment                        (58,646)
               Total shareholders' equity      22,825,880     19,802,670
                                           $  233,494,144  $ 211,714,634
                                   
                                   
The accompanying notes are an integral part of these financial statements.
<PAGE>

                   Consolidated Statement of Income

                        

<TABLE>
<CAPTION>
                                  


                                        Year ended December 31,
<S>                                    <C>           <C>          <C>
                                         1995             1994        1993
INTEREST INCOME:
     Interest and fees on loans       $12,788,697   $10,665,418   $9,294,697
     Interest and dividends on investment securities -
       Taxable                          3,603,440     2,368,742     ,116,620
       Exempt from federal income taxes 1,088,331       828,048      690,507
     Interest on federal funds sold       397,103       173,644      131,069
               Total interest income   17,877,571    14,035,852   12,232,893
     Interest expense on deposits & advances  
                                        7,610,361     5,231,986    4,718,651
Net interest income                    10,267,210     8,803,866    7,514,242
Provision for possible loan losses        324,363       312,725      361,449
               Net interest income after provision for possible loan losses
                                        9,942,847     8,491,141    7,152,793
OTHER OPERATING INCOME:
     Service charges on deposit accounts  888,363       777,402     719,855
     Other charges and fees                83,228        70,005      94,455
     Other operating income               116,681       117,318      70,421
     Net gain on sales of loans and investment securities
                                           20,325        38,075      99,162
           Total other operating income 1,108,597     1,002,800     983,893
OTHER OPERATING EXPENSE:
     Salaries and employee benefits     3,752,036     3,184,568   2,733,511
     Occupancy expense                    449,478       370,600    362,235
     Printing and supplies                323,182       319,195     258,443
     Equipment expense                    550,829       500,945     439,753
     FDIC assessment                      239,097       358,484     326,490
     Other operating expenses           1,791,221     1,454,317   1,285,902
           Total other operating expens 7,105,843     6,188,109   5,406,334

Income before income taxes and cumulative effect
   of a change in accounting principle  3,945,601     3,305,832   2,730,352
Provision for income taxes              1,288,150     1,050,000     864,000

Income before cumulative effect of a change in
   accounting principle                 2,657,451     2,255,832   1,866,352
Cumulative effect of a change in accounting principle                62,000
               Net income            $  2,657,451 $   2,255,832 $ 1,928,352
EARNINGS PER SHARE:
     Income before cumulative effect of a change in
        accounting principle             $  2.84        $ 2.49      $  2.61
     Cumulative effect of a change in accounting principle              .09
               Net income                $  2.84        $ 2.49      $  2.70
                                   
</TABLE>
The accompanying notes are an integral part of these financial statements.
                                   
<PAGE>                                   
                                   
       Consolidated Statement of Changes in Shareholders' Equity
                               


                                   

<TABLE>
<CAPTION>
                                                  Unearned
                                                  employee               Minimum
                                                   stock     Unrealized  pension
                      Common   Capital   Retained  ownership gain(loss)  liability
                      Stock    Surplus   Earnings plan shares investment adjustment
<S>                  <C>      <C>        <C>        <C>        <C>        <C>
BALANCE AT
  DECEMBER 31,1992  $696,720 $6,455,435 $6,151,229 $(221,500)
  Net income                             1,928,352
  Net proceeds from sale
    of common stoc   200,000  3,631,632
  Payment of ESOP debt                                75,750
  Additional shares purchased by ESOP               (301,000)
  Cash dividends declared
    ($.43 per share)                      (299,732)
 BALANCE AT
   DECEMBER 31, 1993 896,720  10,087,067  7,779,849 (446,750)
  Net income                              2,255,832
  Payment of ESOP debt                               109,000
  Net unrealized depreciation
    of securities available for sale                          (389,976)
  Minimum pension liability adjustment                                   (58,646)
  Cash dividends declared
    ($.48 per share)                        430,426
 BALANCE AT
   DECEMBER 31, 1994 896,720  10,087,067  9,605,255  (337,750)  (389,976) (58,646)
  Net income                              2,657,451
  Exercise of stock warrants
                       3,250      71,500
  Payment of ESOP debt                                112,583
  Additional shares purchased by ESOP                (140,511)
  Excess of fair value over cost of ESOP
    shares released               47,457
  Net unrealized appreciation
    of securities available for sale                             697,376
  Minimum pension liability adjustment                                    58,646
  Cash dividends declared
    ($.54 per share)                      (484,542)
 BALANCE AT
DECEMBER 31,1995  $899,970  $10,206,024 11,778,164 $(365,678)  $307,400    $-0 -
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>                                   
                                   
                              


                                   


                 Consolidated Statement of Cash Flows
                                
<TABLE>
<CAPTION>

                                   


                                             Year ended December 31,
                                            1995      1994        1993
CASH FLOWS FROM OPERATING ACTIVITIES:
  <S>                                   <C>          <C>         <C>
  INTEREST RECEIVED                     $17,881,690 $13,813,697 $12,483,654
  Service charges, fees and other income received 
                                         1,088,272      964,725     881,246
  Interest paid                         (7,282,963)  (5,387,319) (4,722,769)
  Cash paid to suppliers and employees  (6,009,766)  (6,134,082) (4,928,314)
  Income taxes paid                     (1,375,000)  (1,118,150)   (998,000)
   Net cash provided by operating activities  
                                         4,302,233    2,138,871    2,715,817
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of investment secu              5,026,718    2,203,750
  Proceeds from calls and maturities of investment securities -
    Held to maturity                     8,804,540    7,666,031   13,903,678
    Available for sale                   2,708,815    1,021,436
  Proceeds from sales of loans           2,806,959    6,262,318    1,970,229
  Purchases of investment securities - held to maturity
                                       (21,062,965) (29,541,871) (20,317,406)
  Purchases of investment securities - available for sale
                                        (1,043,450)  (6,157,550)
  Net increase in loans                (15,032,944) (15,036,503) (13,746,575)
  Expenditures for capital assets       (1,193,167)  (1,558,884)    (741,962)
   Net cash used in investing activities
                                       (24,012,212) (32,318,305) (16,728,286)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in demand deposits,
     NOW accounts and money market accoounts
                                         3,122,589     (632,758)   4,157,839
  Net increase in time deposits         13,494,931   14,090,814    2,977,825
  Assumption of deposits of acquired branch          19,876,751
  Net increase (decrease) in securities sold
    under agreements to repurchase         867,984     (100,000)   1,000,000
  Proceeds from sale of common stock                               3,831,632
  Proceeds from current borrowings         892,511    2,667,900       99,000
  Repayment of borrowings                 (320,514)    (277,282)
  Exercise of warrants                      74,750
  Cash dividends paid                    (484, 542)    (430,426)    (299,732)
    Net cash provided by financing activitie  
                                        17,647,709   35,194,999   11,766,564
  Net (decrease) increase in cash and cash equivalents
                                        (2,062,270)   5,015,565   (2,245,905)
  Cash and cash equivalents, beginning of year   
                                        11,864,350    6,848,785    9,094,690
  Cash and cash equivalents, end of year 
                                       $ 9,802,080  $11,864,350   $6,848,785





RECONCILIATION OF NET INCOME TO NET CASH
 PROVIDED BY OPERATING ACTIVITIES:
  Net income                          $ 2,657,451  $ 2,255,832   $1,928,352
  Adjustments to reconcile net income to net cash
    provided by operating activities -
     Depreciation and amortization        629,877      535,534      481,403
     Provision for possible loan losses   324,363      312,725      361,449
     Loss (gain) on sales of investments                20,685      (67,128)
     Gain on sales of loans               (20,325)     (58,760)     (32,034)
     (Increase) decrease in interest receivable 
                                         (237,695)    (483,614)      94,542
     Amortization of bond premium         313,745      326,437      192,328
     Accretion of bond discount           (71,931)     (64,978)     (14,594)
     Increase in other assets            (166,024)    (627,549)    (253,497)
     Increase in interest payable         327,398      155,333        4,118
     Increase (decrease) in accrued taxes and other liabilities
                                          545,374     (232,774)      20,878
     Net cash provided by operating activities    
                                      $ 4,302,233   $ 2,138,871 $ 2,715,817
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>                                   

                                   

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       Description of operations
       Letchworth Independent Bancshares Corporation is a bank
       holding  company  headquartered in Castile,  New  York.
       Through  its  subsidiary, The Bank of  Castile,  it  is
       engaged  primarily  in the business of  commercial  and
       retail  banking in the Genesee Valley region of western
       New York.
       Basis of presentation
       The   consolidated  financial  statements  include  the
       accounts    of   Letchworth   Independent    Bancshares
       Corporation  and  its subsidiary, The Bank  of  Castile
       (collectively,   "the   Company").   All    significant
       intercompany  accounts  and  transactions   have   been
       eliminated.
       The  accounting  policies of the Company  conform  with
       generally accepted accounting principles and prevailing
       practices  within the banking industry. The preparation
       of  financial  statements in conformity with  generally
       accepted  accounting principles requires management  to
       make estimates and assumptions that affect the reported
       amounts  of assets and liabilities at the date  of  the
       financial  statements  and  the  reported  amounts   of
       revenue  and  expenses  during  the  reporting  period.
       Actual results could differ from those estimates.
       Certain  prior year balances have been reclassified  to
       conform with current year presentation.
       Investment securities
       On  January  1, 1994, the Company adopted Statement  of
       Financial   Accounting  Standards   (SFAS)   No.   115,
       "Accounting for Certain Investments in Debt and  Equity
       Securities." As required, the provisions  of  SFAS  115
       were not applied to any prior periods.
       Investments in debt securities are classified  as  held
       to   maturity  and  stated  at  amortized   cost   when
       management has the positive intent and ability to  hold
       such  securities to maturity. Investments in other debt
       securities   and   equity  securities  having   readily
       determinable  fair values are classified  as  available
       for sale and stated at estimated fair value. Unrealized
       gains   or  losses  related  to  investment  securities
       available   for  sale  are  reflected  in  a   separate
       component  of  shareholders' equity, net of  applicable
       income taxes.
       During  1995, the Financial Accounting Standards  Board
       issued a Special Report, "A Guide to Implementation  of
       Statement  115 on Accounting for Certain Investment  in
       Debt  and  Equity  Securities." As  permitted  by  this
       report,  management  reassessed the appropriateness  of
       the  classification  of investment  securities  between
       available  for  sale and held to maturity.  Based  upon
       this   reassessment,  investment  securities  with   an
       amortized  cost basis of $16,510,200 were  reclassified
       from held to maturity to available for sale. Other than
       this  transaction, no investment securities  have  been
       transferred between the available for sale and held  to
       maturity  categories or sold from the held to  maturity
       category.
       Prior  to January 1, 1994, debt securities were carried
       at  amortized cost when management had both the ability
       and   intent  to  hold  such  securities  to  maturity.
       Periodic sales of these securities occurred principally
       as a result of measures taken by management in reaction
       to a changing business environment.
       Amortization of premiums and accretion of discounts for
       investment  securities available for sale and  held  to
       maturity  are  included in interest income.  Gains  and
       losses  on  the sale of investment securities available
       for    sale   are   determined   using   the   specific
       identification method.
       The   Company   does  not  utilize  off-balance   sheet
       derivative financial instruments.
       Loans
       Loans are stated at their principal amount outstanding,
       net  of  deferred loan origination and commitment  fees
       and certain direct costs, which are recognized over the
       contractual  life of the loan as an adjustment  of  the
       loan's yield. Interest income on loans is accrued on  a
       level yield method.
       Loans,  principally residential real estate loans,  are
       periodically  sold without recourse  and  servicing  is
       generally retained. Gains and losses on sales of  loans
       are  recognized  at  the  time of  settlement  and  are
       determined by the difference between net sales proceeds
       and the carrying value of the loans sold.
       Allowance for possible loan losses
       During  the first quarter of 1995, the Company  adopted
       the  provisions of SFAS 114, "Accounting  by  Creditors
       for Impairment of a Loan" and SFAS 118, "Accounting  by
       Creditors   for   Impairment  of  a   Loan   -   Income
       Recognition."  Under  these  Standards,   a   loan   is
       considered  impaired, based on current information  and
       events,  when it is probable that the Company will  not
       be  able to collect the scheduled payments of principal
       or interest when due according to the contractual terms
       of  the  loan  agreement (generally  within  90  days).
       Impaired loans include loans on nonaccrual status.  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 fair value of the  collateral.
       Loans are generally evaluated individually. Loans  with
       similar   risk   characteristics,  such   as   consumer
       installment  loans,  credit card loans  or  residential
       real  estate mortgage loans, are assessed in  aggregate
       based  upon historical statistics. The effect  of  this
       implementation was not material.
       The allowance for possible loan losses is maintained at
       a  level  which,  in  the  opinion  of  management,  is
       considered adequate to absorb potential losses  in  the
       loan portfolio. The level of the allowance is based  on
       management's evaluation of individual loans, past  loan
       loss  experience,  the  assessment  of  prevailing  and
       anticipated economic conditions, the estimated value of
       collateral and other relevant factors.
       The  allowance for possible loan losses is  established
       through  charges to earnings in the form of a provision
       for loan loss. Increases and decreases in the allowance
       due to changes in the measurement of the impaired loans
       are  included  in  the provision for loan  loss.  Loans
       continue  to be classified as impaired unless they  are
       brought  fully current and the collection of  scheduled
       interest and principal is considered probable.
       When  a loan or portion of a loan is determined  to  be
       uncollectible,  the  portion  deemed  uncollectible  is
       charged    against   the   allowance   and   subsequent
       recoveries, if any, are credited to the allowance.
       Income recognition on impaired and nonaccrual loans
       Loans,  including  impaired  loans,  are  placed  on  a
       nonaccrual   status   in   accordance   with   policies
       established  by management. Loans, other than  consumer
       loans,  are generally transferred to nonaccrual  status
       when principal or interest payments become 90 days past
       due.  Any  accrued but uncollected interest  previously
       recorded  on  such  loans is reversed  in  the  current
       period.  Past  due consumer loans are  generally  fully
       reserved  or  charged-off when  they  reach  a  90  day
       delinquency  status.  Loans  are  returned  to  accrual
       status    when   management   determines    that    the
       circumstances  have improved to the  extent  that  both
       principal  and interest are collectible and  there  has
       been  a  sustained period of repayment  performance  in
       accordance  with the contractual terms of interest  and
       principal.
       While a loan is classified as nonaccrual and the future
       collectibility   of  the  recorded  loan   balance   is
       doubtful,  collections of interest  and  principal  are
       generally   applied   as  a  reduction   to   principal
       outstanding.  When  the  future collectibility  of  the
       recorded loan balance is expected, interest income  may
       be  recognized  on a cash basis. In the  case  where  a
       nonaccrual   loan  had  been  partially  charged   off,
       recognition of interest on a cash basis is  limited  to
       that  which would have been recognized on the  recorded
       loan  balance  at the contractual interest  rate.  Cash
       interest receipts in excess of that amount are recorded
       as  recoveries to the allowance for loan  losses  until
       prior charge-offs have been fully recovered.
       Premises and equipment
       Premises   and  equipment  are  stated  at  cost   less
       accumulated depreciation and amortization. Depreciation
       is   computed  on  the  straight-line  basis  over  the
       estimated useful lives of the related assets, generally
       ranging  from  three  to  40  years.  Amortization   of
       leasehold  improvements is computed on a  straight-line
       basis  over the term of the lease. Maintenance, repairs
       and minor improvements are charged to operating expense
       as incurred. Major improvements are capitalized.
       Income taxes
       The  Company  and  its subsidiary file  a  consolidated
       federal  income  tax return. The provision  for  income
       taxes   is   based  on  income  as  recorded   in   the
       consolidated   financial  statements.  This   provision
       differs  from  amounts  currently  payable  because  of
       temporary  differences  in the recognition  of  certain
       income   and  expense  items  for  financial  and   tax
       purposes.
       Statement  of Financial Accounting Standards  No.  109,
       "Accounting  for  Income Taxes,"  was  adopted  by  the
       Company as of January 1, 1993. SFAS 109 requires that a
       deferred  tax  liability or asset be  adjusted  in  the
       period  of enactment for the effect of changes  in  tax
       laws  or  rates. As changes in tax laws  or  rates  are
       enacted,  deferred  tax  assets  and  liabilities   are
       adjusted  through the provision for income  taxes.  The
       adoption  of  SFAS 109 resulted in a $62,000  favorable
       impact on 1993 earnings.
       Earnings per share
       Earnings per share are based upon the weighted  average
       number  of  common shares and, when applicable,  common
       equivalent shares outstanding during the year less ESOP
       shares  not  committed  to be  released.  The  weighted
       average  number of common and common equivalent  shares
       outstanding was 942,386 in 1995, 906,435 in  1994,  and
       713,327 in 1993.
       Statement of Cash Flows
       For  purposes of preparing the statement of cash flows,
       the  Company defines cash and  cash equivalents as cash
       and due from banks and federal funds sold.
       New accounting pronouncements
       Statement of Financial Accounting Standards (SFAS)  No.
       122,  "Accounting  for  Mortgage Servicing  Rights,  an
       amendment of FASB Statement No. 65," was issued in May,
       1995  and  requires adoption in years  beginning  after
       December  15,  1995.  SFAS  122  requires  entities  to
       recognize as separate assets rights to service mortgage
       loans  for  others, however those rights are  acquired.
       SFAS   122  also  requires  that  capitalized  mortgage
       servicing  rights be assessed for impairment  based  on
       the  fair  value of those rights. Management  does  not
       anticipate that adoption of this Statement will have  a
       significant impact on the Company's financial  position
       or results of operations.

NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANKS:

      The  Federal  Reserve Board requires  banks  to  maintain
      certain  minimum cash balances consisting of  vault  cash
      and  deposits in the Federal Reserve Bank. The amount  of
      such  reserves is based on percentages of certain deposit
      types  and totaled $1,414,000 and $1,407,000 at  December
      31, 1995 and 1994, respectively.




NOTE 3 - INVESTMENT SECURITIES:
<TABLE>
<CAPTION>
      The   amortized  cost  and  estimated  market  value   of
      investment securities held to maturity are as follows:
                                              December 31, 1995
                                   Amortized Gross        Gross     Estimated
                                     Cost    Unrealized  Unrealized  Market
                                             Gains          Losses    Value
<S>                              <C>           <C>      <C>       <C>
U.S. Treasury securities and obligations
  of U.S. government corporations
  and agencies                  $15,992,787   $502,574 $(11,461)  $16,483,900
State and political subdivision obligations
                                 21,674,732    760,214  (38,846)   22,396,100
Mortgage-backed securities        6,738,922     31,312  (27,734)    6,742,500
     Totals                     $44,406,441 $1,294,100 $(78,041)  $45,622,500

                                             December 31, 1994
                                   Amortized Gross         Gross    Estimated
                                     Cost    Unrealized  Unrealized   Market
                                             Gains         Losses      Value
U.S. Treasury securities and obligations
  of U.S. government corporations
  and agencies                   $20,698,476  $    554  $(514,330 )$20,184,700
State and political subdivision obligations
                                  20,166,690    71,049   (266,239)  19,971,500
Mortgage-backed securities         7,937,564    20,963   (308,627)   7,649,900
     Totals                      $48,802,730  $ 92,566$(1,089,196) $47,806,100
          
          The  amortized cost and estimated market value of investment
          securities available for sale are as follows:

                                             December 31, 1995
                                   Amortized Gross          Gross   Estimated
                                     Cost    Unrealized  Unrealized   Market
                                             Gaines         Losses     Value
U.S. Treasury securities and obligations
  of U.S. government corporations
  and agencies                  $31,907,710   $580,506 $(107,416) $32,380,800
State and political subdivision obligations
                                  1,054,794     15,206              1,070,000
Mortgage-backed securities        4,086,984     29,149    (2,333)   4,113,800
Federal Home Loan Bank              636,300                           636,300
     Totals                     $37,685,788   $624,861 $(109,749) $38,200,900

                                             December 31, 1994
                                   Amortized Gross          Gross   Estimated
                                     Cost    Unrealized  Unrealized   Market
                                             Gains          Losses     Value
U.S. Treasury securities and obligations
  of U.S. government corporations
  and agencies                 $17,449,363   $  7,503   $(406,866) $17,050,000
Mortgage-backed securities       4,909,776        134    (258,210)    4,651,700
Federal Home Loan Bank stock       579,100                             579,100
     Totals                    $22,938,239   $  7,637   $(665,076)  $22,280,800
</TABLE>
       
       The  market  values  of securities are  estimated  utilizing
       independent  pricing  services and are  based  on  available
       market  data.  The  market values  of  state  and  political
       subdivision  obligations that are not  actively  traded  are
       determined by independent pricing services based  on  market
       transactions   in   comparable   securities   and    various
       relationships between securities.
       The  amortized  cost  and estimated  market  value  of  debt
       securities  at  December 31, 1995, by contractual  maturity,
       are   shown   below.  Actual  maturities  may  differ   from
       contractual maturities because borrowers may have the  right
       to call or prepay obligations.
<TABLE>
<CAPTION>
       
                      Available for sale     Held to maturity
                                         Estimated  Estimated
                           Amortized     Market     Amortized Market
                              Cost       Value      Cost      Value
<S>                      <C>           <C>         <C>         <C>
Due within one year     $6,031,584    $6,044,200  $9,693,150  $9,710,900
Due after one year through five years
                        27,426,914    27,825,800  21,119,949  21,725,700
Due after five years through ten years
                         2,540,429     2,640,400  11,299,947  11,824,900
Due after ten years      1,004,260     1,007,900   2,293,395   2,361,000
                       $37,003,187   $37,518,300 $44,406,441 $45,622,500

       
       The total amortized cost of investment securities pledged to
       secure  public deposits, as required by law, was $42,025,000
       and $35,668,000 at December 31, 1995 and 1994, respectively.

NOTE 4 - LOANS:
       Loans consisted of the following:
                                                    December 31,
                                                 1995         1994
                  Real estate loans:
                    Secured by one to four family residential
                    properties             $41,120,730    $40,353,744
                    Other                   33,917,880     27,971,189
                                            75,038,610     68,324,933
                  
                   Agricultural loans       25,168,552     22,091,563
                   Commercial and industrial loans  
                                            23,317,057     19,670,283
                   Consumer loans            9,954,869     11,280,962
                                          $133,479,088   $121,367,741
       
       Loans  serviced  for  others, principally  residential  real
       estate loans, amounting to $11,590,700 and $12,449,700
       at  December  31,  1995  and  1994,  respectively,  are  not
       included  in  the  consolidated  financial  statements.   At
       December 31, 1995, the balance of impaired loans and related
       reserve  against  that  balance was $741,700  and  $195,000,
       respectively.  The average balance of impaired loans  during
       1995  was approximately $309,000. Interest income recognized
       on  impaired loans and interest income recognized on a  cash
       basis was not significant.

NOTE 5 - ALLOWANCE FOR POSSIBLE LOAN LOSSES:
       An  analysis of changes in the allowance for possible
       loan losses is as follows:
                                         Year ended December 31,
                                        1995       1994       1993
            Balance, beginning of year $1,526,900 $1,448,000 1,265,945
              Provision expense           324,363    312,725   361,449
              Charge-offs                (216,615)  (288,992) (244,296)
              Recoveries                   81,652     55,167    64,902
            Balance, end of year       $1,716,300 $1,526,900 1,448,000
          
          A summary of nonaccrual and past due loans is as follows:
                                                       December 31,
                                                     1995       1994
            Nonaccrual loans                        $450,500   $254,800
            Accruing loans past due 90 days or more $291,200   $215,600

NOTE 6 - PREMISES AND EQUIPMENT:

       Premises  and  equipment, net of accumulated  depreciation  and
       amortization, consisted of the following:

                                                    December 31,
                                                   1995         1994
               Land and improvements             $  320,976 $  204,876
               Premises                           4,000,757  2,457,630
               Furniture, fixtures and equipment  2,681,308  2,752,904
               Leasehold improvements               176,070    176,070
                                                  7,179,111  6,591,480
                  Less - Accumulated depreciation and amortization
                  (2,180,414)(2,332,450)
                                                 $4,998,697 $4,259,030

NOTE 7 - DEPOSITS:

          Deposits consisted of the following:

                                                     December 31,
                                                  1995         1994
          Noninterest-bearing deposits       26,704,826  $23,138,166
          Negotiable order of withdrawal deposits
                                             25,827,144   26,777,592
          Savings deposits                   35,545,073   37,692,445
          Money market deposits              11,770,921   11,264,544
          Certificates of deposit less than $100,000
                                             80,689,791   71,835,119
          Certificates of deposit $100,000 or greater
                                             23,537,706   16,750,075
                                           $204,075,461 $187,457,941




NOTE 8 - ADVANCES FROM FEDERAL HOME LOAN BANK:

       At  December  31, 1995, the Company has advances  from  the
       Federal  Home  Loan  Bank of New York of $3,507,020.  These
       borrowings mature at various dates through 2005 and carry a
       weighted   average   interest  rate  of  7.10%.   Principal
       repayments required in 1996, 1997, 1998, 1999 and 2000  are
       as  follows:  $350,300,  $368,300, $321,900,  $342,700  and
       $365,100, respectively.
       At  December 31, 1995, the Company has an available line of
       credit  with  the Federal Home Loan Bank  of  New  York  of
       $22,787,500.  There are no commitment fees associated  with
       this  line. There were no borrowings against this  line  at
       December  31,  1995. Maximum borrowings against  this  line
       during the year ended December 31, 1995 were $3,547,500.

NOTE 9 - SHAREHOLDERS' EQUITY:

       During  November 1993, the Company sold 200,000  shares  of
       its  common  stock with attached warrants  to  purchase  an
       additional 200,000 shares. The warrants are exercisable  at
       $23.00  per  share and expire on December 31,  1997.  Gross
       proceeds from the sale of stock totalled $4,000,000. Direct
       expenses associated with the offering approximated $168,000
       and  were  charged  against capital surplus.  During  1995,
       warrants for 3,250 shares of common stock were exercised.
       The  Company has 100,000 shares reserved for issuance under
       its stock option plan. The options may be granted at prices
       not  less  than the fair market value at the date of  grant
       and expire no later than ten years after the date of grant.
       Options  to purchase 81,258 shares were granted in 1990  to
       selected employees at a price of $15.00 per share. For  two
       employees, the options are exercisable at a rate of 20%  at
       the  end of years one and eight and 10% at the end of years
       two through seven. For all other employees, the options are
       exercisable  at  the rate of 10% at the end  of  years  one
       through  eight and 20% at the end of year nine. There  were
       no  stock options issued in 1995, 1994 or 1993. At December
       31,  1995,  options for 54,631 shares of common stock  were
       exercisable.

NOTE 10 - INCOME TAXES:

       The  components of the provision for income  taxes  are  as
       follows:

                                       Year ended December 31,
                              1995           1994         1993
          Current:
               Federal     $1,210,150      $605,000    $731,000
               State          371,000       198,000     228,000
                            1,581,150       803,000     959,000
          Deferred:
               Federal       (223,000)      185,000     (72,000)  
               State          (70,000)       62,000     (23,000)
                             (293,000)      247,000     (95,000)
                  
                           $1,288,150    $1,050,000    $864,000
          
          The components of deferred taxes are as follows:
                  
                                                        December 31,
                                                      1995      1994
          Deferred tax assets:
              Allowance for possible loan losses    $505,600  $448,500
              Deferred compensation                   79,200    69,400
              Deferred loan origination fees and costs
                                                      58,100    79,200
              Unrealized gains recognized for tax purposes
                                                      39,000
              Minimum pension liability                         40,200
              Unrealized investment losses                     267,500
                                                     681,900   904,800
          
          Deferred tax liabilities:
               Depreciation                          137,700   119,600
               Pension                                21,000    35,900
               Unrealized investment gains           208,000
               Unrealized losses recognized for tax purposes   130,600
               Insurance accruals                               80,800
                                                     366,700   366,900
                            Net deferred tax asset  $315,200  $537,900
       
       The  provision  for income taxes is different from  that  which
       would be obtained by applying the statutory federal income  tax
       rate  to income before taxes. The items causing this difference
       are as follows:

</TABLE>
<TABLE>
<CAPTION>
       
                                         Year ended December 31,
                                   1995        1994             1993
                                       % of          % of              % of
                                      pretax           pretax          pretax
                             Amount   income   Amount  income  Amount  income
<S>                        <C>       <C>     <C>       <C>     <C>     <C>
Expected tax at federal
   statutory rates        $1,342,000 34.00% $1,124,000 34.00% $928,300 34.00%
Increases (decreases) resulting from:
  Tax exempt interest on investments
    in state and political subdivision
    securities              (320,000)(8.10)   (251,000)(7.60) (208,900)(7.70)
  State franchise taxes, less federal
    income tax benefit       199,000  5.00     171,600  5.20   135,300  5.00
  Other, net                  67,150  1.70       5,400   .20     9,300   .30
Provision for income taxes$1,288,150 32.60% $1,050,000 31.80% $864,000 31.60%
</TABLE>

NOTE 11 - EMPLOYEE BENEFIT PLANS:

       The  Company has a noncontributory defined benefit  pension
       plan  covering  substantially all employees.  Benefits  are
       based   on   1%   of  career  average  annual  compensation
       multiplied  by  the number of years of service,  up  to  40
       years.  The  Company's  funding  policy  is  to  contribute
       annually an amount, based on actuarial computations,  which
       would   satisfy  the  Internal  Revenue  Service's  funding
       standards.
       Net   pension  expense  (benefit)  includes  the  following
       components:

                                         Year ended December 31,
                                        1995       1994     1993
          Service cost - benefits earned during the period
                                    $62,704        $88,666    $60,021
          Interest cost on projected benefit obligation
                                     76,282         76,646     45,828
          Actual return on plan assets  
                                   (168,603)        49,001)  (111,468)
          Net amortization and deferral    
                                     71,494       (137,755)    11,865
               Net pension expense  $41,877        $76,558     $6,246
          
          The funded status of the plan was as follows:
                                                          December 31,
                                                  1995          1994
          Actuarial present value of benefit obligations:
               Vested benefit obligation            $931,924  $1,145,206
               Accumulated benefit obligation     $1,027,518  $1,232,342
          Projected benefit obligation for services rendered to date
                                                  $1,212,983  $1,428,163
          Plan assets at fair value                1,305,276   1,170,237
          Excess (deficiency) of plan assets at fair value
            over projected benefit obligation         92,293    (257,926)
          Unrecognized net loss from past experience different from
            that assumed and effects of changes in assumptions
                                                      26,538     405,839
          Unrecognized prior service cost               (378)       (406)
          Unrecognized net transition asset          (48,095)    (55,168)
          Prepaid pension cost excluding minimum pension liability
                                                      70,358      92,339
          Minimum pension liability                             (154,444)
          Combined minimum pension liability and prepaid pension cost
                                                  $   70,358  $  (62,105)

       
       The  projected benefit obligation at December 31, 1995 and 1994
       was  determined  using  a discount rate  of  7.00%  and  7.25%,
       respectively,  and  an  assumed average  rate  of  increase  in
       future  compensation  levels of 5.50%. The  expected  long-term
       rate of return on plan assets was 7.75%.
       The   plan   assets  consist  primarily  of   fixed   income
       securities.  The  unrecognized net transition  asset  as  of
       January  1,  1989  is  being amortized  over  the  remaining
       service  lives  of  the participants which  approximates  14
       years.
       In   accordance  with  Statement  of  Financial   Accounting
       Standards No. 87, "Employers' Accounting for Pensions,"  the
       Company recorded an additional minimum pension liability  of
       $154,444  at December 31, 1994, representing the  excess  of
       unfunded  accumulated  benefit  obligation  over  previously
       recorded   pension  assets.  A  corresponding   amount   was
       recognized as an intangible asset except to the extent  that
       this  additional liability exceeded the related unrecognized
       prior  service cost and net transition obligation, in  which
       case  the increase in the liability was charged directly  to
       shareholders' equity. At December 31, 1994, $98,870  of  the
       excess   minimum   pension   liability   was   charged    to
       shareholders' equity, net of income taxes of $40,224.
       The  Company also has an executive supplemental income  plan
       which  provides for specified deferred compensation benefits
       payable   to  certain  officers  in  the  event  of   death,
       disability  or  retirement. The liability relating  to  this
       plan was approximately $196,000 and $171,000 at December 31,
       1995  and  1994,  respectively, and was determined  using  a
       discount  rate  of  8% and an assumed rate  of  increase  in
       future  compensation  of 3%. There were  charges  to  income
       related  to  this  plan  in 1995 and 1994  of  approximately
       $36,800 and $8,000, respectively. The Company is both  owner
       and  beneficiary of a life insurance policy on the  life  of
       each  participant, the proceeds from which can  be  used  to
       fund  the after-tax cost of the promised benefits. The  cash
       surrender   value  of  such  life  insurance  policies   was
       approximately $536,000 and $511,000 as of December 31,  1995
       and 1994, respectively.
       The  Company  sponsors a leveraged employee stock  ownership
       plan  (ESOP)  that  covers all employees with  one  year  of
       service, who work at least 1,000 hours per year and who have
       attained the age of 21. The Company purchased 61,200  shares
       of  common stock in 1986 for $685,500, 15,050 shares in 1993
       for  $301,000  and  5,500 shares in 1995 for  $140,500.  The
       Company  has  financed  the purchase  of  ESOP  shares  with
       borrowings from the Federal Home Loan Bank of New York.  The
       Company makes annual contributions to the ESOP equal to  the
       ESOP's  debt  service.  As the debt is  repaid,  shares  are
       released  from collateral and allocated to active employees,
       based on the proportion of debt service paid in the year.
       The  Company  accounts  for  its  ESOP  in  accordance  with
       Statement  of Position 93-6. Accordingly, the  debt  of  the
       ESOP  is  recorded  as  debt  and  the  shares  pledged   as
       collateral  are  reported as unearned  ESOP  shares  in  the
       consolidated statement of condition. As shares purchased  by
       the  ESOP  prior  to  December 31, 1992 were  released  from
       collateral,  the  Company  recognized  compensation  expense
       based  on  actual  cash  payments,  which  approximated   or
       exceeded  expense required to be recognized using the  share
       allocated   method.  At  December  31,  1994,   there   were
       approximately 2,500 shares that will be accounted for  using
       this  method  when released in 1995. As shares purchased  by
       the  ESOP subsequent to December 31, 1992 are released  from
       collateral,  the  Company  recognizes  compensation  expense
       equal  to  the current market price of the shares,  and  the
       shares   become   outstanding   for   earnings   per   share
       computations.  Dividends  on  allocated  ESOP   shares   are
       recorded  as a reduction of retained earnings; dividends  on
       unallocated ESOP shares are available for debt service. ESOP
       compensation expense was $168,700, $122,800 and $69,000  for
       the   years   ended  December  31,  1995,  1994  and   1993,
       respectively. The ESOP shares are as follows:

                                             December 31,
                                             1995           1994
               Allocated shares             55,579         49,844
               Allocated shares withdrawn from plan
                                            10,130          8,865
               Unreleased shares            16,041         17,541
                    Total ESOP shares       81,750         76,250
               Fair value of unreleased shares
                                        $  477,200     $  330,800

NOTE 12 - RELATED PARTY TRANSACTIONS:

       Certain    executive    officers,    directors,    principal
       shareholders,  and companies in which such individuals  have
       10%  or  more  ownership, engage in  transactions  with  the
       Company  in  the  ordinary course of  business.  It  is  the
       Company's  policy  that all related party  transactions  are
       conducted  at  "arms-length" and all loans  and  commitments
       included in such transactions are made on substantially  the
       same  terms,  including interest rates  and  collateral,  as
       those  prevailing  at  the time for comparable  transactions
       with other customers.
       During 1994, the Company completed an "arms-length" purchase
       of   a  building  from  a  director  at  a  total  cost   of
       approximately $435,000. The building is being utilized as  a
       branch office.
       A  summary  of the changes in outstanding loans to  officers
       and directors during the year ended December 31, 1995 is  as
       follows:
               Balance of loans outstanding at December 31,1994
                                                            $4,683,400
               New loans and increases in existing loans    12,727,717
               Principal repayments of loans                12,094,617
               Balance of loans outstanding at December 31, 1995
                                                            $5,316,500

NOTE 13 - COMMITMENTS AND CONTINGENT LIABILITIES:

       The   Company   operates   one   branch   office   under    a
       noncancellable  lease agreement which expires  in  1997.  Two
       other  branch  offices are located on  land  which  is  being
       leased  through  1999  and  2090, respectively.  These  lease
       agreements  contain various renewal and purchase  options  at
       maturity.
       Future  minimum  rentals  under  these  leases  are:  1996  -
       $23,600;  1997 - $17,600; 1998 - $16,400; and 1999 - $11,300.
       Total  rental  expense  was approximately  $21,000  in  1995,
       1994, and 1993.
       The   Savings  Administration  Insurance  Fund   (SAIF)   has
       proposed  a  one-time  assessment of institutions  with  SAIF
       insured  deposits  in  order  to recapitalize  its  insurance
       fund.  While  the  majority  of the  Company's  deposits  are
       insured  by  the Bank Insurance Fund (BIF), certain  deposits
       are  insured  by  SAIF. If the proposal is  approved  in  its
       current   form,   the  Company  expects  its  assessment   to
       approximate $150,000 to $200,000.

NOTE 14 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND
CONCENTRATIONS OF CREDIT RISK:

       The  Company  is  party  to financial instruments  with  off-
       balance sheet risk in the normal course of business in  order
       to   meet  the  financing  needs  of  its  customers.   These
       financial  instruments include commitments to  extend  credit
       and  standby  letters  of credit which  involve,  to  varying
       degrees, elements of credit, interest rate or liquidity  risk
       in  excess  of  the  amount recognized  in  the  consolidated
       statement  of  condition. The Company's  exposure  to  credit
       loss  in  the event of nonperformance by the other  party  to
       the  financial  instrument for commitments to  extend  credit
       and   standby  letters  of  credit  is  represented  by   the
       contractual  amounts of those instruments.  The  Company  has
       experienced  minimal credit losses to date on  its  financial
       instruments with off-balance sheet risk.
       The   Company  uses  the  same  credit  policies  in   making
       commitments  and conditional obligations as it does  for  on-
       balance  sheet instruments. The Company controls  the  credit
       risk   of   off-balance  sheet  instruments  through   credit
       approvals,  limits and monitoring procedures, and  management
       evaluates  each customer's credit worthiness  on  a  case-by-
       case  basis.  The amount of collateral obtained is  based  on
       management's credit evaluation of the customer.
       Commitments  to  extend credit, which  generally  have  fixed
       expiration  dates or other termination clauses,  are  legally
       binding  agreements to lend to a customer (as long  as  there
       is   no  violation  of  any  condition  established  in   the
       contract).   At  December  31,  1995,  the  Company's   total
       commitments  to extend credit approximated $2,118,000.  Since
       a  portion  of the commitments is expected to expire  without
       being  drawn  upon,  the  total  commitment  amounts  do  not
       necessarily represent future liquidity requirements.
       The    Company    has   identified   certain   credit    risk
       concentrations  in relation to its on- and off-balance  sheet
       financial  instruments.  Credit  risk  is  defined   as   the
       possibility  that  a  loss  may occur  from  the  failure  of
       another  party  to  perform according to  the  terms  of  the
       contract.  A  credit  risk  concentration  results  when  the
       Company  has  a significant credit exposure to an  individual
       or   a  group  engaged  in  similar  activities  or  affected
       similarly by economic conditions.
       The   Company's  customers  are  located  primarily  in   the
       counties  of  Genesee,  Wyoming and Livingston  in  New  York
       state.  As  Note  4 to the consolidated financial  statements
       indicates,  approximately  19% of the  Company's  outstanding
       loans  are  to  customers who are directly  involved  in  the
       agriculture  industry, primarily dairy farmers. In  addition,
       there  are other commercial and industrial loans, real estate
       loans  and  consumer loans outstanding to customers  who  are
       indirectly related to the agriculture industry.

NOTE 15 - ACQUISITION OF BRANCHES:

       On  December  2,  1994,  the Company acquired  the  Avon  and
       Caledonia  branches of Chase Manhattan Bank, N.A.  Under  the
       terms  of  the agreement, the Company was paid cash of  $17.6
       million  and assumed approximately $19.9 million  in  deposit
       liabilities,  and  acquired  approximately  $1.5  million  in
       loans,  real  estate anad other assets. The  acquisition  was
       accounted for as a purchase.

NOTE 16 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

       The  following methods and assumptions were used to  estimate
       the fair value of each class of financial instruments:
       Cash and short-term investments
       For   those  short-term  instruments,  the  carrying   amount
       represents an estimate of fair value.
       Loan receivables
       For  certain  homogeneous categories of loans, such  as  some
       residential  mortgages  and  credit  card  receivables,  fair
       value  is  estimated  using  the  quoted  market  prices  for
       securities  backed by similar loans, adjusted for differences
       in  loan  characteristics. The fair value of other  types  of
       loans  is  estimated  by discounting the  future  cash  flows
       using the current rates at which similar loans would be  made
       to  borrowers  with similar credit ratings and for  the  same
       remaining maturities.
       Deposit liabilities
       The  fair  value  of demand deposits, savings  accounts,  and
       certain  money  market  deposits is  the  amount  payable  on
       demand  at  the  reporting date. The  fair  value  of  fixed-
       maturity  certificates  of deposit  is  estimated  using  the
       rates  currently  offered for deposits of  similar  remaining
       maturities.
       Long-term debt
       Rates  currently available to the bank for debt with  similar
       terms  and  remaining maturities are used  to  estimate  fair
       value of existing debt.
       Commitments to extend credit
       The  fair  value of commitments is estimated using  the  fees
       currently  charged  to enter into similar agreements,  taking
       into  account the remaining terms of the agreements  and  the
       present  credit worthiness of the counterparties. For  fixed-
       rate   loan  commitments,  fair  value  also  considers   the
       difference between current levels of interest rates  and  the
       committed  rates.  The  fair value of letters  of  credit  is
       based  on fees currently charged for similar agreements.  The
       fair  value  of  these instruments was approximately  $13,650
       and $50,000 at December 31, 1995 and 1994, respectively.
       The   estimated  fair  values  of  the  Company's   financial
       instruments are as follows:



<TABLE>
<CAPTION>

                                   December 31, 1995        December31, 1994
                              Carrying                  Carrying
                              amount    Fair value       amount    Fair value
     <S>                     <C>         <C>            <C>         <C>
Financial assets:
     Cash and due from bank $7,752,080  $7,752,080     $6,264,350  $6,264,350
     Federal funds sold      2,050,000   2,050,000      5,600,000   5,600,000
     Investment securities  82,607,341  83,823,400     71,083,530  70,086,900
     Loans, net of allowance for possible loan losses
                           131,762,788 136,105,000    119,840,841 119,092,000

Financial liabilities:
     Deposits              204,075,461 206,481,000    187,457,941 187,132,000
     Securities sold under agreements to repurchase
                             1,767,984   1,767,984        900,000     900,000
     Advances from the Federal Home Loan Bank
                             3,507,020   3,507,020      2,936,368   2,398,000
</TABLE>
NOTE 17 - CONDENSED FINANCIAL INFORMATION:

       The  Company's principal asset is its investment in The Bank
       of  Castile  (the Bank). The Bank is restricted by  law  and
       related regulations as to the amount of funds which  can  be
       transferred   to  the  Company.  Under  such   restrictions,
       approval  from  regulatory  agencies  is  required  for  the
       declaration of dividends in any year which exceed the  total
       of  net  income of the subsidiary in the current year,  plus
       retained net income for the preceding two years. At December
       31,  1995, the Bank could declare dividends of approximately
       $6,253,000 without prior approval from regulatory agencies.
       Condensed financial information of the Company follows:
          
          Statement of Condition

                                                          December 31,
                                                         1995      1994
          ASSETS
          Cash and due from banks - The Bank of Castile $428,519  $   50,900
            Investment in The Bank of Castile         22,460,114  20,555,581
                                                     $22,888,633 $20,606,481
          LIABILITIES AND SHAREHOLDERS' EQUITY
            Accrued expenses                          $    4,475 $    17,439
            Employee stock ownership plan loan payable    365,678    337,750
               Total liabilities                          370,153    355,189
            Common stock - par value $1 per share, 1,500,000 shares
          authorized                                      899,970    896,720
            Capital surplus                            10,206,024 10,087,067
            Retained earnings                          11,778,164  9,605,255
            Unearned employee stock ownership plan shares
                                                         (365,678)  (337,750)
               Total shareholders' equity              22,518,480 20,251,292
                                                      $22,888,633$20,606,481



          

NOTE 17 - CONDENSED FINANCIAL INFORMATION (continued):
<TABLE>
<CAPTION>
          Statement of Income
                                                 Year ended December  31,
          <S>                                     <C>       <C>       <C>
                                                  1995      1994      1993
          Dividends received-The Bank of Castile $909,902   $520,470  $317,447
                         Total income             909,902    520,470   317,447
          Operating expenses                      109,527
          Loss on investment securities                      (25,000) (25,000)
          Income before equity in undistributed income
            of subsidiary                         800,375    495,470   292,447
          Equity in undistributed income of subsidiary -
            The Bank of Castile                 1,857,076  1,760,362 1,635,905
                         Net income            $2,657,451 $2,255,832$1,928,352
          
          Statement of Cash Flows
                                                  Year ended December 31,
                                                1995          1994       1993
          CASH FLOWS FROM OPERATING ACTIVITIES:
            Cash paid to subsidiary            $(56,751)   $(64,044)
            Cash paid to suppliers and employee (65,740)
               Net cash used in operating activities
                                               (122,491)    (64,044)
          CASH FLOWS FROM INVESTING ACTIVITIES:
            Dividends received - The Bank of Castile
                                                909,902     520,470   $317,447
            Capital contribution to The Bank of Castile
                                                                  ( 3,831,632)
               Net cash provided by (used in) investing activities
                                                909,902    520,470 (3,514,185)
          CASH FLOWS FROM FINANCING ACTIVITIES:
            Cash dividends paid                (484,542)  (430,426)  (299,732)
            Proceeds from current borrowing                            99,000
            Payment of current borrowings                  (99,000)
            Proceeds from sale of common stock                       3,831,632
            Proceeds from exercise of warrants   74,750
               Net cash (used in) provided by financing activities
                                              (409,792)   (529,426)  3,630,900
          Net increase(decrease) in cash and cash equivalents
                                               377,619     (73,000)    116,715
          Cash and cash equivalents, beginning of year
                                                50,900     123,900       7,185
          Cash and cash equivalents, end of year
                                              $428,519     $50,900    $123,900
        
          
          RECONCILIATION OF NET INCOME TO NET CASH
          USED IN OPERATING ACTIVITIES:
            Net income                     $2,657,451   $2,255,832  $1,928,352
            Loss on investment securities                   25,000      25,000
            Adjustments to reconcile net income to
             net cash used in operating activities -
            Equity in income of subsidiaries   
                                           (2,766,978)  (2,357,940)(1,953,352)
            (Decrease) increase in accrued expenses
                                              (12,964)      13,064         0
               Net cash used in operating activities
                                            $(122,491)    $(64,044)   $- 0 -
</TABLE>


Item 8 -     Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure

    Not applicable.
<PAGE>


                             PART III

Item 9 -     Directors, Executive Officers and Control
Persons of the Registrant

    In accordance with the Bylaws of the Company, three (3)
classes of directors are elected in three (3) staggered
three-year terms.  Each director so elected serves for a
term of three (3) years and until his successor is duly
elected and qualified.

    Executive officers serve until the next annual meeting
of directors and until their successors are appointed and
qualified.

    Set forth below is certain information regarding the
executive officers and directors of the Company as of March
24, 1996.


                                     Positions
                                      Held With
Name                            Age   the Company         Address

James H. Van Arsdale, III        75   Chairman of         71 Park Road East
                                      the Board of         Castile, NY 14427
                                      Directors

James W. Fulmer                  44   President, Chief    38 Wolcott Street
                                      Executive Officer,   LeRoy,NY 14482
                                      and Director

Charles L. Van Arsdale           72   Director             5136 Park Road West
                                                           Castile, NY 14427

Stanley J. Harmon                75   Secretary and        4845 Luther Road
                                      Director              Silver Springs, NY
                                                             14550

Gunther K. Buerman               52   Director            1186 Lake Road
                                                           Webster, NY 14580

Steven C. Lockwood               36   Treasurer           34 N. Lyon Street
                                                           Batavia, NY 14020
___________________________________

    James W. Fulmer and Charles L. Van Arsdale also serve as
directors of the Bank.  The principal occupation or
employment of each director and each executive officer of
the Company and the year in which each such director became
a director of the Company and/or the Bank is set forth
below.

    Mr. James H. Van Arsdale, III, a director of the Company
since 1981, was named Chairman of the Board of Directors of
the Company in 1981.  Prior to that time, Mr. Van Arsdale
performed various managerial functions for the Bank and held
various executive offices of the Bank.  He was the Chairman
of the Board of Directors of the Bank until 1992 when he
retired.  Mr. Van Arsdale had also been a director of the
Bank since 1948.  Mr. Van Arsdale is the brother of Mr.
Charles L. Van Arsdale.

    Mr. James W. Fulmer has served as the President and
Chief Executive Officer of the Company since January 1,
1991, and as the Chief Executive Officer of the Bank since
January, 1996.  Before joining the Company as the Executive
Vice President in December, 1988, Mr. Fulmer held various
executive positions with Fleet Bank of New York (formerly
known as Security New York State Corporation and Norstar
Bank) for approximately twelve (12) years and with the
Genesee Valley Penny Saver for approximately one year.  Mr.
Fulmer has served as a director of the Bank since 1988 and
as Vice Chairman of the Board of Directors of the Bank since
1991.  Effective May 1, 1992, he assumed the position of
Chairman of the Board of Directors of the Bank, and he
currently serves as a member of the Board of Directors of
the Cherry Valley Cooperative Insurance Company, St.
Jerome's Hospital, the Genesee County Industrial Development
Agency, and is Treasurer of the Independent Bankers
Association of New York State.  He is also the past Chairman
of the Executive Committee for Retail Banking for the New
York State Bankers Association and is a past member of the
Board of Directors of the New York State Bankers
Association.

    Mr. Charles L. Van Arsdale was the President of the
Company from the date of its incorporation in 1981 until
December 31, 1990.  In addition, Mr. Van Arsdale has been a
director of the Bank since 1949.  Prior to 1981, Mr. Van
Arsdale performed several managerial functions for the Bank
and held various executive offices of the Bank.  Mr. Van
Arsdale is the brother of Mr. James H. Van Arsdale, III.

    Mr. Stanley J. Harmon, the Secretary of the Company
since 1981, is a retired funeral director.  Mr. Harmon also
served as a director of the Bank from 1960 until April 30,
1993.

    Mr. Gunther K. Buerman has been a director of the
Company since January 25, 1990.  Mr. Buerman has been a
partner in the law firm of Harris Beach & Wilcox located in
Rochester, New York, since 1982 and has been the Managing
Partner of the firm since March, 1984.

    Mr. Steven C. Lockwood, Treasurer of the Company since
1992, is also the Chief Financial Officer for the Company
and the Bank.  Mr. Lockwood graduated from St. Bonaventure
University in 1981, and joined the Bank in 1982 as Internal
Auditor.  Mr. Lockwood graduated from the Bank
Administration Institute School of Banking located in
Madison, Wisconsin in 1995.

    The following table sets forth the names and ages of the
principal officers and directors of the Bank and their
current
positions with the Bank.

Name*                            Age       Position

James W. Fulmer                  44        Chief Executive Officer,
                                            Chairman ofthe Board of
                                            Directors, and  Director
Charles L. Van Arsdale           72        Vice Chairman of the Board
                                           of Directors and Director
Robert L. Brass                  58        Director
Joseph G. Bucci                  52        Director
Brenda L. Copeland               44        President and Director
Thomas E. Cushing                45        Director
Gary D. Gates                    59        Director
Benjamin C. Mancuso, Jr.         62        Director
John McClurg                     34        Director
Craig Yunker                     44        Director

___________________________________
*Effective December 31, 1995, Dr. Carol C. Harter resigned
as a member of the Board of Directors of the Bank.

    James W. Fulmer and Charles L. Van Arsdale also serve as
directors of the Company.  The principal occupation or
employment of all other directors and principal officers of
the Bank and the year in which each such director and
principal officer of the Bank became a director or principal
officer of the Bank, as the case may be, is set forth below.

    Mr. Robert L. Brass, a director of the Bank since 1992,
is President of L.R. Brass, Inc., a retail food market.

    Mr. Joseph G. Bucci, a director of the Bank since 1986,
is a self-employed real estate agent.

    Ms. Brenda L. Copeland became the President of the Bank
on January 1, 1991.  In addition, she has served as a
director of the Bank since 1988, and has been employed by
the Bank since 1971.

    Mr. Thomas E. Cushing, a director since 1989, is the
Vice President, Secretary and Treasurer of J.O. Cook, Inc.

    Mr. Gary D. Gates, a director since 1986, is the
President of Gary's TV, Inc.

    Mr. Benjamin C. Mancuso, Jr., a director since 1992, is
President of Charles Mancuso and Son, Inc., a family-owned
holding company.

    Mr. Craig Yunker, a director of the Bank since 1991, is
a partner in CY Farms.

    John McClurg, 34, a director since 1995, is President
and owner of McClurg Chrysler-Plymouth, Inc. and McClurg
Chevrolet-Pontiac-Oldsmobile, Inc., two automobile
dealerships located in Perry, New York.

Item 10 -    Executive Compensation

    The following tables show, for the years ended December
31, 1995, 1994, and 1993, the total cash compensation paid
by the Company and the Bank to executive officers who
received total annual salary and bonus in excess of $100,000
and to the Chief Executive Officer of the Company.



                          SUMMARY COMPENSATION TABLE

                                   Annual Compensation

Name and                                        All Other
Principal
Compensation2
Position          Year   Salary($)1   Bonus($)      ($)
James W. Fulmer     1995    $119,111    $17,500     $8,345
President, CEO      1994    $105,122    $15,000     $8,345
& Director of       1993    $101,344    $10,000     $8,345
the Company, and
Chairman of the
Board of the Bank

Brenda L. Copeland  1995    $ 98,775   $13,000       None
President of        1994    $ 90,863   $10,000       None
  the Bank          1993    $ 85,756   $ 7,500      $6,499



                              Long Term Compensation

                               Awards
                                         Long Term
Name and                   Restricted    Options Incentive  All Other
Principal                  Stock Award(s) SARs    Payout   Compensatio
Position            Year
                               ($)         (#)      ($)        ($)
James W. Fulmer     1995      None      None      None      $10,454
President, CEO      1994      None      None      None        6,555
& Director of       1993      None      None      None        5,868
the Company, and
Chairman of the
Board of the Bank

Brenda L. Copeland  1995      None      None     None        $8,648
President of        1994      None      None     None         5,599
  the Bank          1993      None      None     None         5,739



1) Includes matching contributions under the Company's
401(k) plan in an amount equal to $3,050.32, $2,553.88, and
$2,642.38, respectively, for James W. Fulmer, and $2,624.96,
$2,394.80, and $2,313.24, respectively, for Ms. Brenda L.
Copeland, for the years ended December 31, 1995, 1994, and
1993, respectively, as well as director's fees and certain
fringe benefits such as automobiles and group term life
insurance.

(2) The amounts disclosed represent the Company's
contribution pursuant to the Executive Supplemental Income
Agreements executed by and between the Company and each of
Mr. Fulmer and Ms. Copeland.  See "Executive Compensation -
Benefits --Executive Supplemental Income Agreements."

(3) The amounts disclosed represent the Company's
contribution to the Employee Stock Ownership Plan ("ESOP").

    During 1995, all directors of the Company received an
amount equal to $3,000 per year.  During 1995, the Board of
Directors of the Company met five (5) times, and all of the
directors attended 75% or more of the meetings.

    During 1995, the directors of the Bank each received an
annual retainer of $6,650 in lieu of meeting attendance
fees. During 1995, the Board of Directors of the Bank met
thirteen (13) times. Two  (2) of the members of the Board of
Directors of the Bank entered into a certain Deferred
Compensation Agreement relating to all amounts received from
the Bank during the period from 1986 until 1990.  Under
these agreements, all fees earned as a director during that
period are deferred until such director's death or
retirement from the Board of Directors of the Bank.
Payments of the fees so deferred, as well as all earnings on
such deferred amounts, are then paid to such director or his
beneficiary, as the case may be, in one hundred twenty (120)
equal monthly installments.  The Bank does not currently
intend to offer such agreements to other members of its
Board of Directors.

    In addition, during 1995, one designated director of the
Board of Directors of the Bank received a weekly fee of $100
for his services in connection with the Bank's Loan
Committee.  Members of the Examining Committee also receive
a quarterly fee of $100 in lieu of meeting attendance fees.

Employment Contracts

    On January 1, 1991, James W. Fulmer began to serve as
the President and Chief Executive Officer of the Company in
accordance with his employment agreement dated September 12,
1989, as amended, effective January 1, 1991.  Subsequently,
on May 1, 1992, Mr. Fulmer became the Chairman of the Board
of Directors of the Bank. Pursuant to the terms of the
agreement, as amended, each year the term of Mr. Fulmer's
employment agreement is automatically extended for an
additional year so that the term of the employment agreement
is always three (3) years.  In the event that the Company
terminates the employment agreement without cause, the
Company is required to pay Mr. Fulmer, as severance pay, his
annual compensation plus all fringe benefits for a period of
three (3) years from the date of such termination.  In
addition, in the event of such termination without cause or
the sale, merger, or substantial reorganization of the
Company or the Bank, all of Mr. Fulmer's options to purchase
common stock shall become immediately exercisable.  See
"Executive Compensation - Benefits -- Stock Option Plan."

    Effective January 1, 1991, the Company entered into an
amended employment agreement with Ms. Brenda L. Copeland
whereby Ms. Copeland agreed to serve as the President of the
Bank or in any other capacity that the Board of Directors of
the Company or the Bank may reasonably request.  Each year
the term of Ms. Copeland's employment agreement is
automatically extended for an additional year so that the
term of the employment agreement is always three (3) years.
In the event that the Company terminates the employment
agreement without cause, the Company is required to pay Ms.
Copeland, as severance pay, her annual compensation plus all
fringe benefits for a period of eighteen (18) months from
the date of such termination.  In addition, in the event
that the Company terminates the employment agreement as a
result of a change of "control" of the Company, the Company
is required to pay Ms. Copeland, as severance pay, her
annual compensation plus all fringe benefits for a period of
three (3) years from the date of such termination.  For
purposes of the employment agreement, the term "control" is
defined as the possession of the power to elect a majority
of the members of the Board of Directors of the Company
through the ownership of voting securities in the Company.

Benefits

    Employee Stock Ownership Plan.  In 1986, the Board of
Directors of the Company adopted the Employee Stock
Ownership Plan ("ESOP"), effective as of January 1, 1986.
Employees eligible to participate in the ESOP are all
employees who have met the eligibility requirements on the
effective date of adoption of the ESOP, and any employees
hired subsequent to that date who have completed one year of
service, work at least 1,000 hours per year, and have
attained the age of 21 years. Contributions to the ESOP
are discretionary, as determined by the Board of Directors
of the Bank.  All funds contributed are received, held,
invested and reinvested by the ESOP trustee.  Although the
trustee may invest the funds contributed to the ESOP in such
prudent investments as the trustee deems desirable,
substantially all the trust funds are invested in the common
stock of the Company.

    Each participant is entitled to direct the trustee as to
the exercise of any voting rights attributable to the shares
of common stock allocated to such participant and if the
trustee receives no voting instructions, the shares of
common stock are not voted.  All common stock of the ESOP
not allocated to the plan participants is voted by the
trustee in its sole discretion.  The ESOP also contains
provisions permitting the ESOP to borrow funds to purchase
common stock and on June 16, 1986, the ESOP borrowed
$500,000 pursuant to a certain loan and pledge agreement
with two (2) unaffiliated banks.  The proceeds of the loan
were used to purchase approximately 48,000 newly issued
shares of common stock, after giving effect to a 6-for-1
stock split of the Company, with such shares pledged as
security for the payment of principal and interest as
provided in the above-mentioned agreement.  All amounts
due and owing under this loan have been satisfied.

    In November of 1990, the Company borrowed $185,500 on
behalf of the ESOP pursuant to a loan and pledge agreement
with an unaffiliated bank.  The loan proceeds were used to
purchase 14,000 shares of the Company's outstanding stock,
with such shares pledged as security for the payment of
principal and interest as provided in said agreement.  In
November of 1993, the Company borrowed $301,000 on behalf of
the ESOP to purchase 15,050 shares of the Company's common
stock and 15,050 warrants to purchase additional shares of
common stock as part of the public offering.  All amounts
due and owing under these loans were subsequently refinanced
with the Bank (with appropriate collateral granted to the
Bank), which in turn, borrowed the funds from the Federal
Home Loan Bank under an existing accommodation.  In 1995,
the Company borrowed $140,511 on behalf of the ESOP to
purchase 5,500 shares of common stock.

    Upon an ESOP participant's retirement, disability or
death, as those terms are defined in the ESOP, the
participant shall be fully vested in all amounts allocated
to such participant under the ESOP, as well as such
participant's share in the allocation of all contributions
made by the Company during the "Plan Year" (as that term is
defined in the ESOP) in which such retirement, disability or
death occurs.  In the event a participant's service
terminates for any reason other than retirement, disability
or death, such participant's account becomes vested
based upon the number of years of "Credited Service" of such
participant (as that term is defined in the ESOP) in
accordance with the following schedule, as amended so as to
comply with the requirements of the Tax Reform Act of 1986,
as amended (the "1986 Act"):

    Credited Service             Vested Percentage

    Less than three years              0%
    Three years                       30%
    Four years                        40%
    Five years                       100%

    Contributions to the ESOP amounted to $169,000,
$123,000, $69,000, and for the years ended December 31,
1995, 1994, and 1993, respectively.

    Defined Benefit Pension Plan.  The Company maintains a
defined benefit pension plan for the benefit of all
employees covered under the Company's prior pension plan and
any other employees with at least six (6) months of service
who work at least 1,000 hours per year and have attained the
age of 21 years.  Amounts contributed to the pension plan
for each covered employee by the Company are determined on
an actuarial basis.  The discount rate used in determining
the actuarial present value of accumulated benefits was
seven percent and seven and one-quarter percent at
December 31, 1995 and December 31, 1994, respectively.

    Under the plan, a participant is eligible for the
"Normal Retirement Pension Benefits" upon attainment of age
65 years. Vested employees who terminate before attaining
age 65 may elect optional early retirement benefits (at
reduced levels).

    The following table sets forth the current regular
vesting schedule for participants under the plan, as amended
so as to comply with the requirements of the 1986 Act:

    Years of Service        Vested Percentage

    Less than three years          0%
    Three years                   20%
    Four years                    40%
    Five years                    60%
    Six years                     80%
    Seven years                  100%

    An employee's "Normal Retirement Pension" benefit under
the plan is an amount (payable monthly in the form of a life
only annuity) equal to the product of 1% of such employee's
"Average Compensation" and such employee's years of "Benefit
Accrual Service" (not to exceed forty (40) years), as those
terms are defined in the plan.  The following table sets
forth the annual Normal Retirement Pension benefit at age 65
to an employee covered by the plan for each of the following
Average Compensation amounts and periods of Benefit Accrual
Service with the Company.


                Normal Retirement Pension Benefit
               for Years of Benefit Accrual Service


Average
Compensation 15 Years  20 Years  25 Years  30 Years  35 Years  40 Years

$15,000     $ 2,250   $ 3,000   $ 3,750   $ 4,500   $ 5,250    $ 6,000

$30,000     $ 4,500   $ 6,000   $ 7,500   $ 9,000   $10,500    $12,000

$45,000     $ 6,750   $ 9,000   $11,250   $13,500   $15,750    $18,000

$60,000     $ 9,000   $12,000   $15,000   $18,000   $21,000    $24,000

$75,000     $11,250   $15,000   $18,750   $22,500   $26,250    $30,000

    The pension plan also provides for certain disability
retirement benefits and death benefits as well as optional
forms of payment of benefits which a covered employee may
elect.  The benefits provided for under the plan are in
addition to and separate from the benefits available to the
participants under the Social Security Act.

    The pension plan was adopted in 1986, to be effective as
of January 1, 1986, the date in which the Company terminated
its former defined benefit pension plan.  There were no
contributions made in 1995.  Contributions were
approximately $50,000 in both 1994 and 1993.

    401(k) Plan. The Bank maintains a qualified 401(k) plan,
entitled "The Bank of Castile Salary Savings Plan", to
encourage the accumulation of savings for retirement or
other purposes. Employees of the Bank who have attained the
age of 20-1/2 years are eligible to join the plan following
the completion of three (3) months of service.

    Under the terms of the plan, participants may elect to
contribute from 1% to 6% of their eligible salary and the
Bank contributes an amount equal to 50% of this participant
contribution for employees.  Employees may elect to
contribute up to an additional 9% of eligible salary without
any matching Bank contribution.

    All amounts contributed into the plan are invested with
the Principal Mutual Life Insurance Company (formerly known
as Bankers Life Company), with its principal office located
at 711 High Street, Des Moines, Iowa.  Pursuant to the plan,
contributions by and for employees are held in trust by the
Bank.

    Participants are immediately fully vested in all
contributions to the plan.  Withdrawals of contributions are
subject to limitations and generally not permitted, except
in the event of hardship, until termination of employment,
or the participant's attainment of "Normal Retirement Age",
as that term is defined in the plan.  During 1995, the
Company contributed a total of $3,050.32 as a matching
contribution for James W. Fulmer, and $2,624.96 for Brenda
L. Copeland, which amounts are included in the Summary
Compensation Table set forth on page 62 of this Form 10-KSB.

    Executive Supplemental Income Agreements.  The Bank has
also entered into certain executive supplemental income
agreements which provide for specified deferred compensation
benefits payable to certain highly compensated officers and
members of a select management group of the Bank in the
event of death, disability or retirement.  The Board of
Directors, in its sole discretion, determines who is
eligible to participate in this arrangement. Although the
Bank is not under any obligation whatsoever to fund
its obligations under the above-mentioned agreements, the
Bank is both the owner and beneficiary of a life insurance
policy on the life of each participant, the proceeds from
which can be used to fund the after-tax cost of the promised
benefits.  Charges to income related to these agreements
were approximately $37,000, $8,000, and 52,000 for the years
ended December 31, 1995, 1994, and 1993, respectively.

    Under these agreements, a participant who has reached
"Normal Retirement Age," as that term is defined in the
agreements, and has attained twenty (20) continuous years of
service with the Bank (including periods of disability and
authorized leaves of absence) receives an annual amount
equal to the difference between (i) 75% of such officer's
average "Annual Compensation," as that term is defined in
the agreements, during his final five (5) calendar years of
employment with the Bank, and (ii) the sum of all
social security benefits paid to such officer and any
amounts paid to such officer under the Company's defined
benefit pension plan.  Participants may retire after age 55
with the approval of the Board of Directors and in the event
that there has been a buy-out, merger, or substantial change
in ownership of the Bank, an officer may retire at any time
after attaining the age of 55 years without approval of the
Board of Directors.  In either case, the benefits available
on early retirement are equal to the benefits available
at "Normal Retirement Age," actuarially reduced.  The
agreements also contain certain provisions for the payment
of pre-"Normal Retirement Age" death benefits.

    Stock Option Plan.  At the Annual Meeting of
Shareholders of the Company on April 26, 1990, the
shareholders approved the Letchworth Independent Bancshares
Corporation Stock Option Plan of 1990 (the "Option Plan").
The purpose of the Option Plan is to increase the incentive
and to encourage the continued employment and services of
key employees of the Company and the Bank by facilitating
their purchase of a stock interest in the Company.
Management believes that the implementation of the Option
Plan is in the best interests of the Company and its
shareholders since it will enhance the Company's ability to
continue to attract and retain qualified directors, officers
and other key employees.

        Under the Option Plan, the Board of Directors may
grant incentive stock options as well as options that do not
qualify as incentive stock options ("non-statutory stock
options").  The Board of Directors determines the
individuals to receive grants and the number of shares to be
awarded, subject to certain federal tax regulations in the
case of incentive stock options granted under the Option
Plan.  The Option Plan provides that the exercise price
under each incentive stock option shall be no less than 100%
of the "Fair Market Value" (as defined in the Option Plan)
of the common stock on the date the option is granted.  The
exercise price for each non-statutory stock option granted
under the Option Plan is the price established by the Board
of Directors of the Company, which normally is expected to
be no less than 100% of the "Fair Market Value" (as defined
in the Option Plan) on the date the option is granted.

    On May 3, 1990, the Company issued options to acquire
81,258 shares of its common stock at a purchase price of
$15.00 per share.  No options have been granted under the
Option Plan since that date.  The following table shows the
aggregate number of options outstanding as of March 24, 1996
for each of James W. Fulmer and Brenda L. Copeland, and for
all executive officers as a group.

                         Number of Options   Average Per
                         Outstanding         Share Price*

James W. Fulmer             33,576              $15.00
Brenda L. Copeland          25,182              $15.00
All Executive Officers
  as a Group                58,758              $15.00


* This price represents the "Fair Market Value," as that
term is defined in the Option Plan, of the common stock of
the Company on the date that the options were granted.

    As of December 31, 1995, no stock options have been
exercised under the Option Plan.  The following table shows
the breakdown between options granted to James W. Fulmer and
Brenda L. Copeland that were exercisable and unexercisable
as of the end of the fiscal year, and the potential value of
"in-the-money" options, both exercisable and unexercisable,
as of the end of the fiscal year.  "In-the-money" options
are those options where the fair market value of the
Company's common stock as of the close of the fiscal year
was in excess of the exercise price established on the grant
date.  This value is only realized by the executive when the
option is exercised and will fluctuate with changes in the
price for the Company's common stock after the close of the
fiscal year.


               No. of Unexercised       Value of "In-the-Money"
                    Options at           Unexercised Options at
                December 31, 1995         December 31, 1995
Name         (Exercisable/Unexercisable) (Exercisable/Unexercisable)*

James W. Fulmer        23,504/10,072        $346,684/$148,562
Brenda L. Copeland     17,627/ 7,555        $259,998/$111,436


* Assumes that the "Bid" price of $29.75 at December 31,
1995 represents a reasonable valuation of the Company's
common stock.

  No assurances can be given relating to the dilative effect
that the Option Plan or options granted thereunder may have
on the outstanding common stock.

Item 12 -    Security Ownership of Certain Beneficial Owners
and Management

    Based upon information made available to the Company,
the following table sets forth certain information as of
December 31,1995, with respect to the beneficial ownership
of common stock by the only persons or entities known to the
Company to be the beneficial owner of more than 5% of the
Company's outstanding common stock, each director of the
Company, and as to all executive officers and directors as a
group:

                            Amount and
                            Nature of      Percent of
                            Beneficial     Common Stock
Name and Address            Ownership(1)   Outstanding (2)


Charles L. Van Arsdale       75,246 (3)         7.82%
5136 Park Road West
Castile, NY  14427

James H. Van Arsdale, III    44,140 (4)         5.09%
71 Park Road East
Castile, NY 14427

James W. Fulmer              27,506 (5)         2.83%
38 Wolcott Street
LeRoy, New York  14482

Stanley J. Harmon             9,594             1.00%
Luther Road
Silver Springs, New York 14550

Brenda L. Copeland           25,520 (6)         2.65%
130 South Main Street
Gainesville, New York  14066

Gunther K. Buerman            4,200 (7)          .44%
1186 Lake Road
Webster, New York  14580

Steven C. Lockwood            1,403 (8)          .15%
34 North Lyon Street
Batavia, New York 14020

Letchworth Independent Bancshares
Corporation Employee Stock
     Ownership Plan          92,344 (9)         9.59%
50 North Main Street
Castile, New York  14427

Executive officers and
directors, as a group
(7 persons)                 192,460 (10)       19.99%
___________________________________

(1) Except for the shares of common stock beneficially owned
by the Letchworth Independent Bancshares Corporation
Employee Stock Ownership Plan (the "ESOP"), all such shares
are owned with sole investment and voting power.

(2) These percentages have been calculated based upon
962,700 shares of the Company's common stock outstanding,
which amount includes the shares of common stock that Mr.
Fulmer and Ms. Copeland have the right to acquire pursuant
to the exercise of certain options granted under the Option
Plan that are exercisable within sixty (60) days of the date
of this Annual Report on Form 10-KSB, as well as the shares
of common stock that Ms. Copeland, Mr. Buerman, Mr.
Lockwood, and the ESOP have the right to acquire by the
exercise of certain warrants.

(3) Includes 3,528 shares of common stock owned by Mr. Van
Arsdale's wife.

(4) Includes 4,851 shares of common stock owned by Mr. Van
Arsdale's wife.

(5) Includes 23,503 shares of common stock that Mr. Fulmer
has the right to acquire by the exercise of certain stock
options granted under the Option Plan that are exercisable
within sixty (60) days of the date of this Annual Report on
Form 10-KSB, as well as 2,608 shares of common stock
allocated to Mr. Fulmer under the ESOP.

(6) Includes 17,627 shares of common stock that Ms. Copeland
has the right to acquire by the exercise of certain stock
options granted under the Option Plan that are exercisable
within sixty (60) days of the date of this Annual Report on
Form 10-KSB, as well as 546 shares of common stock that
Ms. Copeland has or would have voting control as custodian
under the New York Uniform Gift to Minors Act, 3,041 shares
of common stock allocated to Ms. Copeland under the ESOP,
and 400 shares of common stock that Ms. Copeland has the
right to acquire by the exercise of certain warrants.

(7) Includes 600 shares of common stock that Mr. Buerman has
the right to acquire by the exercise of certain warrants.

(8) Includes 1,296 shares of common stock allocated to Mr.
Lockwood under the ESOP, as well as 50 shares of common
stock that Mr. Lockwood has the right to acquire by the
exercise of certain warrants.

(9) Includes the shares of common stock allocated to Mr.
Fulmer, Ms. Copeland and Mr. Lockwood in accordance with
footnotes (3), (4), and (6) above, as well as 15,050 shares
of common stock that the ESOP has the right to acquire by
the exercise of certain warrants.  The participants in the
ESOP have the sole power to vote shares and dispositive
powers for shares which have been allocated to participant
accounts.  Only 15,050 shares of common stock in the ESOP
have not been allocated to participant accounts.  See
"Item 11 - Executive Compensation -- Benefits --- Employee
Stock Ownership Plan."

(10)    Includes all of the shares of common stock
referenced in footnotes (3),(4), (5), (6), (7) and (8)
above.

Item 13 -    Certain Relationships and Related Transactions

    Certain of the directors and officers of the Company and
the Bank, members of their families and companies or firms
with which they are associated, were customers of and had
banking transactions with the Bank in the ordinary course of
business during 1995.  All loans and commitments to loan
included in such transactions were made on substantially the
same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions
with other persons and, in the opinion of management, did
not involve more than a normal risk of collectibility or
present other unfavorable features.  None of such loans
outstanding to directors or officers of the Company, members
of their families or companies or firms with which directors
or officers of the Company are associated were non-
performing as of December 31, 1995.  Total loans outstanding
to all directors and executive officers of the Company and
the Bank amounted to $5,316,500 at December 31, 1995.

    In addition, other than those sales made pursuant to the
Company's initial public offering or the offering in
November, 1993, there have been no sales of common stock to
the officers, directors, promoters or other affiliated
persons of the Company during the past five (5) years.  All
such transactions were specifically approved in writing by
the Board of Directors and were made on terms no less
favorable to the Company than similar transactions made to
other persons unaffiliated with the Company.


                             PART IV

Item 14 - Exhibits, Financial Statements, Schedules and
Reports on Form 8-K

(a)(1) Financial Statements and Report of Independent
Accountants:

          The following financial statements and
accountant's report are incorporated from the 1995 Annual
Report to Shareholders into this report on the following
pages:

                                               Page of 1995
                                                  10KSB

     Report of Independent Accountants.........     36

     Consolidated Statement of Condition
     as of December 31, 1995 and 1994..........     37

     Consolidated Statement of Income for
     the Years Ended December 31, 1995, 1994
     and 1993..................................     38

     Consolidated Statement of Changes in
     Shareholders' Equity for the Years Ended
     December 31, 1995, 1994, and 1993........      39
     Consolidated Statement of Cash Flows
     for the Years Ended December 31, 1995 and
     1994 and 1993.............................     40

     Notes to Consolidated Financial
     Statements................................     42-58

(2)  Financial Statement Schedules:

          All financial statement schedules have been
omitted as they are not applicable, not required, or the
information is included in the Consolidated Financial
Statements or notes thereto.

(3)  Exhibits:

     3(a)           Certificate of Incorporation of
                    Registrant filed by the New York
                    Department of State on July 17, 1981,
                    incorporated by reference to
                    the Registrant's Registration Statement
                    on Form S-18 (Reg. No. 33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 3(a).

     3(b)           Certificate of Amendment to Certificate
                    of Incorporation of Registrant filed by
                    the New York Department of State on July
                    26, 1989, incorporated by reference to
                    the Registrant's Registration Statement
                    on Form S-18 (Reg. No.33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 3(b).

     3(c)           Certificate of Amendment to Certificate
                    of Incorporation of Registrant filed by
                    the New York Department of State on May
                    2, 1990, incorporated by reference to
                    the Registrant's Quarterly Report on
                    Form 10-Q for the quarter ended June 30,
                    1990 and filed with the Commission on
                    August 9, 1990, and wherein such
                    Exhibit is designated Exhibit (4)-b.

     3(d)           Bylaws of Registrant, as amended by the
                    stockholders of the Registrant at a
                    special meeting of stockholders on July
                    11, 1989,incorporated by reference to
                    the Registrant's Registration Statement
                    on Form S-18 (Reg. No. 33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 3(c).

     4(a)           Form of Common Stock Certificate of
                    Registrant, incorporated by reference to
                    the Registrant's Amendment No. 1 to Form
                    S-18 Registration Statement (Reg. No.
                    33-31149-NY), filed with the Commission
                    on October 31, 1989, and wherein such
                    Exhibit is designate Exhibit 4.

     4(b)           Letchworth Independent Bancshares
                    Corporation Stock Option Plan of 1990
                    and form of Stock Option Agreement,
                    incorporated by reference to the
                    Registrant's Quarterly Report on Form  
                    10-Q for the quarter ended June 30, 1990
                    and filed  with the Commission on August
                    9, 1990, and wherein such Exhibit is
                    designated Exhibit 19.

     4(c)           Form of Warrant of Registrant, and
                    Warrant Agreement, dated as of September 
                    27, 1993, by and between Registrant and
                    Mellon Securities Trust Company,
                    incorporated by reference the
                    Registrant's Annual Report on From 10-KSB
                    for the year ended December 31,
                    1994, filed with the Commission on
                    March 31, 1995, and wherein such
                    Exhibit is designated Exhibit 4(c).

     10(a)          Employment Agreement, dated September
                    12, 1989, by and between Registrant and
                    James W. Fulmer, incorporated by
                    reference to the Registrant's Amendment
                    No. 1 to Form S-18 Registration
                    Statement (Reg. No. 33-31149-NY), filed
                    with the Commission on October 31, 1989,
                    and wherein such Exhibit is designated
                    Exhibit 10(a).

     10(b)          Employment Agreement, dated as of
                    January 1,1991, by and between
                    Registrant and Brenda L.Copeland,
                    incorporated by reference to the
                    Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1991,
                    filed with the Commission on March 30,
                    1992, and wherein such Exhibit is
                    designated Exhibit 10(b).

     10(c)          Employee Stock Ownership Plan of
                    Registrant, incorporated by reference to
                    the Registrant's Registration Statement
                    on Form S-18 (Reg. No. 33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 10(c).

     10(d)          Defined Benefit Pension Plan of
                    Registrant, incorporated by reference to
                    the Registrant's Registration Statement 
                    on Form S-18 (Reg. No.33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 10(d).

     10(e)          Form of Executive Supplemental Income
                    Agreement, as amended, incorporated by
                    reference to the Registrant's Annual
                    Report on Form 10-K for the year ended
                    December 31, 1991 and filed with the
                    Commission on March 30, 1992, and
                    wherein such Exhibit is designated
                    Exhibit 19.

     10(f)          Form of Director Deferred Compensation
                    Agreement, incorporated by reference to
                    the Registrant's Registration Statement
                    on Form S-18 (Reg. No. 33-31149-NY),
                    filed with the Commission on September
                    2, 1989, and wherein such Exhibit is
                    designated Exhibit 10(f).

     10(g)          Loan and Pledge Agreement, dated June
                    16, 1986, by and between Employee Stock
                    Ownership Trust of Registrant and
                    Salamanca Trust Company, incorporated by
                    reference to the Registrant's
                    Registration Statement on Form S-18
                    (Reg. No. 33-31149-NY), filed with the
                    Commission on September 2, 1989, and
                    wherein such Exhibit is designated
                    Exhibit 10(g).

     10(h)          Loan and Pledge Agreement, dated June
                    16, 1986, by and between Employee Stock
                    Ownership Trust of Registrant and
                    Community National Bank, incorporated by
                    reference to the Registrant's
                    Registration Statement on Form S-18
                    (Reg. No. 33-31149-NY), filed with the
                    Commission on September 2, 1989, and
                    wherein such Exhibit is designated
                    Exhibit 10(h).

     10(i)          Lease Agreement, dated March 1, 1982, by
                    and between Registrant and Herald Ford,
                    Inc., incorporated by reference to the
                    Registrant's Registration Statement on
                    Form S-18 (Reg. No. 33-31149-NY), filed
                    with the Commission on September 2,
                    1989, and wherein such Exhibit is
                    designated Exhibit 10(i).

     10(j)          Lease Agreement, dated April 12, 1982,
                    and an Addendum thereto, dated January
                    25, 1973, by and between Registrant and
                    15 South Center Street, Inc.,
                    incorporated by reference to the
                    Registrant's Registration Statement on
                    Form S-18 (Reg. No. 33-31149-NY), filed
                    with the Commission on September 2,
                    1989, and wherein such Exhibit is
                    designated Exhibit 10(j).

     10(k)          Lease Agreement, dated August 1, 1974,
                    by and  between The Citizen Bank, Attica
                    and Fred Glickstein, which Lease
                    Agreement was assumed by Registrant on
                    December 7, 1984,incorporated by 
                    reference to the Registrant's
                    Registration Statement on Form S-18
                    (Reg. No. 33-31149-NY), filed with the
                    Commission on September 2, 1989, and
                    wherein such Exhibit is designated
                    Exhibit 10(k).

     10(l)          Salary Savings Plan (401(k) Plan) of
                    Registrant, incorporated by reference to
                    the Registrant's Amendment No. 1 to Form
                    S-18 Registration Statement (Reg. No.
                    33-31149-NY), filed with the Commission
                    on October 31, 1989, and wherein such
                    Exhibit is designated Exhibit 10(l).

     10(m)          Loan Agreement, dated November 6, 1990,
                    by and between Registrant and Alden
                    State Bank, incorporated by reference to
                    the Registrant's  Annual Report on Form
                    10-K for the year-ended December 31,
                    1990 and filed with the Commission on
                    April 1, 1991, and wherein such
                    Exhibit is designated Exhibit 10(m).

     10(n)          Sales Contract, dated September 10,
                    1991, by and between John Piraino, Jr.
                    ("Piraino") and the Bank, incorporated
                    by reference to the Registrant's Annual
                    Report on Form 10-K for the year ended
                    December 31, 1992 and filed with the
                    Commission on March 30, 1992, and
                    wherein such Exhibit is designated
                    Exhibit 10(n).

     10(o)          Indenture of Lease, dated September 10,
                    1991,by and between Piraino and the
                    Bank, incorporated by reference to the
                    Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1992 and
                    filed with the Commission on March 30,
                    1992, and wherein such Exhibit is
                    designated Exhibit 10(o).

     10(p)          Purchase and Assumption Agreement, dated
                    as of January 10, 1991, by and between
                    the Registrant, The Bank of Castile, and
                    Anchor Savings Bank FSB, incorporated by
                    reference to the Registrant's Report on
                    Form 8 amending the Registrant's Current
                    Report on Form 8-K dated January 31,
                    1992, and which Form 8 was filed
                    with the Commission on April 3, 1992,
                    and wherein such Exhibit is designated
                    Exhibit 10(a).

     10(q)          Sales Contract, dated as of January 10,
                    1991,by and between The Bank of Castile
                    and Anchor Savings Bank FSB, 
                    incorporated by referenced to the
                    Registrant's Report on Form 8 amending
                    the Registrant's Current Report on Form
                    8-K dated January 31, 1992, and which
                    Form 8 was filed with the Commission on
                    April 3, 1992, and wherein such Exhibit
                    is designated Exhibit 10(b).

     10(r)          Purchase and Assumption Agreement, dated
                    as of May 11, 1994, by and between The
                    Bank of Castile and The Chase Manhattan
                    Bank (National Association),
                    incorporated by reference to the
                    Registrant's Report on Form 8-K, dated
                    December 12, 1994, and which Form 8-K 
                    was filed with the Commission on
                    December 19, 1994, and wherein such
                    Exhibit is designated Exhibit 2.1.

     10(s)          Sales Contract, dated as of May 11,
                    1994, by and between The Bank of Castile
                    and The Chase Manhattan Bank (National
                    Association), incorporated by reference
                    to the Registrant's Report on Form 8-K,
                    dated December 12, 1994, and which Form
                    8-K was filed with the Commission on
                    December 19, 1994, and wherein such
                    Exhibit is designated Exhibit 2.2.

     11             Computation of Earnings Per Share for
                    the year ended December 31, 1995.

     13             Annual Report to Shareholders of
                    Registrant for the year ended December
                    31, 1995, incorporated by reference.

     21             Subsidiaries of Registrant.

     23             Consent of Price Waterhouse LLP for the
                    Annual  Report on Form 10-KSB for the
                    fiscal year ended December 31, 1995.

     24             Power of Attorney, included with the
                    Signature  Page of this Annual Report on
                    Form 10-KSB.

(b)  Reports on Form 8-K.  The Company did not file any
Current Reports on Form 8-K during the fiscal year ended
December 31, 1995.
<PAGE>

                            SIGNATURES

          In accordance with Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this Annual Report on Form 10-KSB to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date:     March 28, 1996      LETCHWORTH INDEPENDENT
                              BANCSHARES CORPORATION


                              By: /s/ James W. Fulmer
                                 James W. Fulmer, President
                                 and Chief Executive Officer



                        POWER OF ATTORNEY

          KNOW ALL MEN BY THESE PRESENTS that each
individual whose signature appears below constitutes and
appoints JAMES W. FULMER his true and lawful attorney-in-
fact and agent with full power of substitution and re-
substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to
this Annual Report on Form 10-KSB, and to file the same,
with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done by virtue thereof.

          In accordance with the Securities Exchange Act of
1934, this Annual Report on Form 10-KSB has been signed
below on March 28, 1996 by the following persons on behalf
of the Registrant and in the capacities indicated.



      Signatures                         Title


 /s/ James W. Fulmer             President, Chief Executive
James W. Fulmer                        Officer and Director

 /s/ Charles L. Van Arsdale      Director
Charles L. Van Arsdale

/s/ James H. Van Arsdale, III    Chairman of the Board
James H. Van Arsdale, III          of Directors

 /s/ Stanley J. Harmon           Secretary and Director
Stanley J. Harmon

 /s/ Steven C. Lockwood          Treasurer and Chief
Steven C. Lockwood                 Financial Officer

 /s/ Gunther K. Buerman          Director
Gunther K. Buerman

<PAGE>


EXHIBIT 11



          LETCHWORTH INDEPENDENT BANCSHARES CORPORATION

                         AND SUBSIDIARIES

                COMPUTATION OF EARNINGS PER SHARE

                        DECEMBER 31, 1995

Net Income                                    $2,657,451
Add: Adjustment due to assumed interest
savings on debt reduction                         17,282
Adjusted Net Income                           $2,674,733

Weighted average shares outstanding              897,533
Add: Common stock equivalent shares due
to assumed exercise of options and warrants       61,428
Less: ESOP shares accounted for in
accordance with SOP 93-6 not committed
to be released                                   (16,574)
Adjusted common and common equivalent shares     942,387

Net Income per common and common equivalent share $ 2.84




Notes

There was a dilative effect on earnings per share relating
to stock options as the year end market price of the common
stock exceeded the exercise price of the stock options.
However, fully diluted earnings per share is immaterially
different than primary earnings per share.

<PAGE>
EXHIBIT 21


The following is a list of all subsidiaries of Letchworth
Independent Bancshares Corporation (the "Company") as of
December 31, 1995:

     1.   The Bank of Castile (the "Bank").  Prior to March
10, 1995, the Bank had a wholly-owned subsidiary called
Southern Wyoming County Realty Corp.  Effective March 10,
1995, Southern Wyoming County Realty Corp. was dissolved.

<PAGE>
EXHIBIT 23


                CONSENT OF INDEPENDENT ACCOUNTANTS



We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 of Letchworth Independent
Bancshares Corporation, which was filed with the Securities
and Exchange Commission on February 28, 1996, of our report
dated January 19, 1996, appearing on page 36 of Form 10-KSB.


PRICE WATERHOUSE LLP

Rochester, New York
March 26, 1996