----

----

----

----

| Assets                                                                            |   | 2010   |        |   | 2009   |   |
|-----------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                              |   |   |        |   |   |   |
| Cash and due from banks                                                           |   | $      | 15,607,813  |   |   | $      | 35,433,901 |   |
| Federal funds sold                                                                |   |   | 18,133,603  |   |   |   | 4,103,101 |   |
| Total cash and cash equivalents                                                   |   |   | 33,741,416  |   |   |   | 39,537,002 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Trading securities                                                                |   |   | 7,691,331   |   |   |   | 7,627,280 |   |
| Securities available for sale                                                     |   |   | 227,477,867 |   |   |   | 114,532,578 |   |
| Securities held to maturity (fair value $25,069,752 and $47,966,244 respectively) |   |   | 24,143,606  |   |   |   | 47,692,150 |   |
|                                                                              |   |   | -           |   |   |   | - |   |
| Mortgage loans held for sale                                                      |   |   | 857,181     |   |   |   | 687,424 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Loans receivable                                                                  |   |   | 286,849,908 |   |   |   | 298,052,583 |   |
| Allowance for loan losses                                                         |   |   | (4,276,449  | )      |   |   | (2,900,587 | ) |
| Net loans receivable                                                              |   |   | 282,573,459 |   |   |   | 295,151,996 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Federal Home Loan Bank stock, at cost                                             |   |   | 2,108,900   |   |   |   | 2,664,800 |   |
| Premises and equipment, net                                                       |   |   | 19,902,630  |   |   |   | 21,274,516 |   |
| Accrued interest receivable                                                       |   |   | 2,454,753   |   |   |   | 2,468,977 |   |
| Bank owned life insurance                                                         |   |   | 16,331,793  |   |   |   | 15,712,187 |   |
| Other assets                                                                      |   |   | 19,777,031  |   |   |   | 18,344,389 |   |
| Goodwill                                                                          |   |   | 23,300,621  |   |   |   | 23,183,101 |   |
| Other intangible assets                                                           |   |   | 1,217,941   |   |   |   | 1,629,931 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Total Assets                                                                      |   | $      | 661,578,529 |   |   | $      | 590,506,331 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                              |   |   |        |   |   |   |   |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Interest bearing deposits                                                         |   | $      | 486,984,708 |   |   | $      | 426,367,669 |   |
| Non-interest bearing deposits                                                     |   |   | 65,179,106  |   |   |   | 62,996,738 |   |
| Borrowings                                                                        |   |   | 12,000,000  |   |   |   | 31,000,000 |   |
| Other liabilities                                                                 |   |   | 11,494,420  |   |   |   | 11,025,751 |   |
| Total liabilities                                                                 |   |   | 575,658,234 |   |   |   | 531,390,158 |   |
| Commitments and contingent liabilities (Note 14)                                  |   |   | -           |   |   |   | - |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Oneida Financial Corp. Stockholders' equity:                                      |   |   |        |   |   |   |   |   |
| Preferred stock, 10,000,000 and 1,000,000 shares authorized at December 31, 2010  |   |   | -           |   |   |   | - |   |
| and December 31, 2009 respectively; 0 issued and outstanding                      |   |   |        |   |   |   |   |   |
| Common stock, $.01 par value, 30,000,000 shares authorized; 7,164,794             |   |   |        |   |   |   |   |   |
| issued at December 31, 2010; 20,000,000 shares authorized                         |   |   | 71,648      |   |   |   | 83,225 |   |
| 8,322,452 shares issued at December 31, 2009                                      |   |   |        |   |   |   |   |   |
| Additional paid-in capital                                                        |   |   | 45,636,501  |   |   |   | 19,481,956 |   |
| Retained earnings                                                                 |   |   | 44,816,499  |   |   |   | 44,024,272 |   |
| Accumulated other comprehensive loss                                              |   |   | (6,198,239  | )      |   |   | (3,960,866 | ) |
| Treasury stock (at cost, 2,521 and 490,620 shares)                                |   |   | (19,790     | )      |   |   | (3,071,414 | ) |
| Unearned employee stock ownership plan (ESOP) (118,228 and 0 shares)              |   |   | (945,824    | )      |   |   | - |   |
| Total Oneida Financial Corp. stockholders' equity - controlling interest          |   |   | 83,360,795  |   |   |   | 56,557,173 |   |
| Noncontrolling interest                                                           |   |   | 2,559,500   |   |   |   | 2,559,000 |   |
| Total stockholders' equity                                                        |   |   | 85,920,295  |   |   |   | 59,116,173 |   |
|                                                                              |   |   |        |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                        |   | $      | 661,578,529 |   |   | $      | 590,506,331 |   |

----

----

|                                                     |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                     |   |   |       |   |   |   |       |   |   |
| Interest and dividend income:                            |   |   |       |   |   |   |       |   |   |
| Interest and fees on loans                               |   | $      | 16,791,404 |   |   | $      | 17,761,357 |   |   | $ | 18,535,294 |   |
| Interest and dividends on investment securities:         |   |   |       |   |   |   |       |   |   |   |   |   |
| U. S. Government and agency obligations                  |   |   | 1,927,182  |   |   |   | 1,068,409  |   |   |   | 1,371,440 |   |
| Corporate debt and equity obligations                    |   |   | 795,810    |   |   |   | 1,333,524  |   |   |   | 2,232,170 |   |
| Mortgage-backed securities                               |   |   | 2,628,810  |   |   |   | 3,481,521  |   |   |   | 3,377,135 |   |
| Tax exempt securities                                    |   |   | 1,304,501  |   |   |   | 988,844    |   |   |   | 809,620 |   |
| Other                                                    |   |   | 293,257    |   |   |   | 330,233    |   |   |   | 239,026 |   |
| Interest on federal funds sold                           |   |   |       |   |   |   |       |   |   |   |   |   |
| and interest-earning deposits                            |   |   | 39,007     |   |   |   | 37,324     |   |   |   | 169,340 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Total interest and dividend income                       |   |   | 23,779,971 |   |   |   | 25,001,212 |   |   |   | 26,734,025 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest expense:                                        |   |   |       |   |   |   |       |   |   |   |   |   |
| Savings deposits                                         |   |   | 507,841    |   |   |   | 488,033    |   |   |   | 602,747 |   |
| Money market and interest-bearing checking               |   |   | 1,571,647  |   |   |   | 1,654,830  |   |   |   | 1,892,303 |   |
| Time deposits                                            |   |   | 2,606,188  |   |   |   | 3,734,008  |   |   |   | 6,020,667 |   |
| Short-term borrowings                                    |   |   | 465,650    |   |   |   | 245,156    |   |   |   | 288,187 |   |
| Long-term borrowings                                     |   |   | 530,020    |   |   |   | 1,451,765  |   |   |   | 2,277,416 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Total interest expense                                   |   |   | 5,681,346  |   |   |   | 7,573,792  |   |   |   | 11,081,320 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Net interest income                                      |   |   | 18,098,625 |   |   |   | 17,427,420 |   |   |   | 15,652,705 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Provision for loan losses                                |   |   | 1,650,000  |   |   |   | 760,000    |   |   |   | 525,000 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Net interest income after                                |   |   |       |   |   |   |       |   |   |   |   |   |
| provision for loan losses                                |   |   | 16,448,625 |   |   |   | 16,667,420 |   |   |   | 15,127,705 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Other-than-temporary impairment loss                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Total impairment loss                                    |   |   | (2,822,283 | )      |   |   | (2,908,143 | )      |   |   | (1,021,845 | ) |
| Loss recognized in other comprehensive income            |   |   | 399,172    |   |   |   | 613,302    |   |   |   | - |   |
| Net impairment loss recognized in earnings               |   |   | (2,423,111 | )      |   |   | (2,294,841 | )      |   |   | (1,021,845 | ) |
| Net gains on sales of securities                         |   |   | 1,522,260  |   |   |   | 787,842    |   |   |   | 62,854 |   |
| Changes in fair value of trading securities              |   |   | 103,280    |   |   |   | 1,725,032  |   |   |   | (7,674,699 | ) |
| Non-interest income                                      |   |   | 22,888,310 |   |   |   | 20,884,330 |   |   |   | 18,318,255 |   |
| Non-interest expenses                                    |   |   | 33,607,038 |   |   |   | 32,189,556 |   |   |   | 28,643,660 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Income (Loss) before income taxes                        |   |   | 4,932,326  |   |   |   | 5,580,227  |   |   |   | (3,831,390 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Provision (Benefit) for income taxes                     |   |   | 914,200    |   |   |   | 1,210,920  |   |   |   | (2,222,800 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Net Income (Loss)                                        |   |   | 4,018,126  |   |   |   | 4,369,307  |   |   |   | (1,608,590 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Less: net income attributable to noncontrolling interest |   |   | 257,438    |   |   |   | 255,950    |   |   |   | 68,500 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Net Income (Loss) attributable to Oneida Financial Corp. |   | $      | 3,760,688  |   |   | $      | 4,113,357  |   |   | $ | (1,677,090 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings (Loss) per share - basic                        |   | $      | 0.53       |   |   | $      | 0.58       |   |   | $ | (0.24 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings (Loss) per share - diluted                      |   | $      | 0.53       |   |   | $      | 0.58       |   |   | $ | (0.24 | ) |

----

----

|                                                 |   | Common Stock |      |   | Additional Paid-In |   |   | Retained |   |   | Comprehensive |   |   | Accumulated Other Comprehensive Income |       |   | Treasury |   |       | Employee Stock Ownership |   |   | Attributable To Oneida Financial |   |   | Noncontrolling |       |   |     |   |
|------------------------------------------------------|--------|--------------|-----------|--------|--------------------|--------|--------|----------|--------|--------|---------------|--------|--------|----------------------------------------|------------|--------|----------|--------|------------|--------------------------|--------|--------|----------------------------------|--------|--------|----------------|------------|--------|----------|--------|
|                                                 |   | Shares       |      |   | Amount             |   |   | Capital  |   |   | Earnings      |   |   | Income                                 |       |   | (Loss)   |   |       | Stock                    |   |   | Plan                             |   |   | Corp.          |       |   | Interest |   |   | Total |   |
|                                                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |
| Balance at December 31, 2007                         |   |         | 8,322,452 |   |               | $      | 83,225 |     |   | $      | 19,053,113    |   |   | $                                      | 46,434,898 |   |     |   | -          |                     |   | $      | (3,161,222                       | )      |   | $              | (3,069,790 | )      |     | $      | - |   |   | $ | 59,340,224 |   |   | $ | 59,000 |   |   | $ | 59,399,224 |   |
| Reclassification adjustment to initially apply       |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| fair value guidance, net of tax                      |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | (1,519,341 | )      |     |   |       |                     |   |   | 1,519,341                        |   |   |           |       |   |     |   |   |   |   |   | - |   |   |   |   |   |   | $ | - |   |
| Adjustment to initially apply measurement provisions |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of pension guidance                                  |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | 8,215      |   |     |   |       |                     |   |   | (69,854                          | )      |   |           |       |   |     |   |   |   |   |   | (61,639 | ) |   |   |   |   |   | $ | (61,639 | ) |
| Net loss                                             |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | (1,677,090 | )      |     | $      | (1,677,090 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | (1,677,090 | ) |   |   | 68,500 |   |   | $ | (1,608,590 | ) |
| Distributions to non-controlling interest            |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | - |   |   |   | (68,500 | ) |   | $ | (68,500 | ) |
| Other comprehensive loss, net of tax                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized losses on securities arising              |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| during period                                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | (5,001,265 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for losses included      |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| in net income                                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 958,991    |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | (4,042,274 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in unrealized loss on pension benefits        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | (2,375,636 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss before tax                  |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | (6,417,910 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                   |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 2,567,164  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net of tax                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | (3,850,746 | )                        |   |   | (3,850,746                       | )      |   |           |       |   |     |   |   |   |   |   | (3,850,746 | ) |   |   |   |   |   | $ | (3,850,746 | ) |
| Comprehensive loss                                   |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     | $      | (5,527,836 | )                        |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares earned under stock plans                      |   |         |      |   |               |   |   |     |   |   | 165,654       |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | 165,654 |   |   |   |   |   |   | $ | 165,654 |   |
| Tax benefit from stock plans                         |   |         |      |   |               |   |   |     |   |   | 2,822         |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | 2,822 |   |   |   |   |   |   | $ | 2,822 |   |
| Common stock cash dividends: $.23 per share          |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | (1,662,053 | )      |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | (1,662,053 | ) |   |   |   |   |   | $ | (1,662,053 | ) |
| Stock issued                                         |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   | 2,501,000 |   |   | $ | 2,501,000 |   |
| Treasury stock purchased                             |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           | (20,277    | )      |     |   |   |   |   |   | (20,277 | ) |   |   |   |   |   | $ | (20,277 | ) |
| Treasury stock reissued                              |   |         |      |   |               |   |   |     |   |   | (168          | )      |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           | 32,515     |   |     |   |   |   |   |   | 32,347 |   |   |   |   |   |   | $ | 32,347 |   |
|                                                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                         |   |         | 8,322,452 |   |               | $      | 83,225 |     |   | $      | 19,221,421    |   |   | $                                      | 41,584,629 |   |     |   | -          |                     |   | $      | (5,562,481                       | )      |   | $              | (3,057,552 | )      |     | $      | - |   |   | $ | 52,269,242 |   |   | $ | 2,560,000 |   |   | $ | 54,829,242 |   |
| Net income                                           |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | 4,113,357  |   |     | $      | 4,113,357  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | 4,113,357 |   |   |   | 255,950 |   |   |   | 4,369,307 |   |
| Distributions to non-controlling interest            |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | - |   |   |   | (255,950 | ) |   |   | (255,950 | ) |
| Other comprehensive loss, net of tax                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains on securities arising               |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| during period                                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 514,308    |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for losses included      |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| in net income                                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 1,506,999  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses                        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 2,021,307  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in unrealized loss on pension benefits        |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 648,051    |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income before tax                |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 2,669,358  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                   |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 1,067,743  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income, net of tax               |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   | 1,601,615  |                     |   |   | 1,601,615                        |   |   |           |       |   |     |   |   |   |   |   | 1,601,615 |   |   |   |   |   |   |   | 1,601,615 |   |
| Comprehensive income                                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     | $      | 5,714,972  |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares earned under stock plans                      |   |         |      |   |               |   |   |     |   |   | 258,830       |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | 258,830 |   |   |   |   |   |   |   | 258,830 |   |
| Tax benefit from stock plans                         |   |         |      |   |               |   |   |     |   |   | 3,608         |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | 3,608 |   |   |   |   |   |   |   | 3,608 |   |
| Common stock cash dividends: $.23 per share          |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   | (1,673,714 | )      |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | (1,673,714 | ) |   |   |   |   |   |   | (1,673,714 | ) |
| Stock repurchased                                    |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   | - |   |   |   | (1,000 | ) |   |   | (1,000 | ) |
| Treasury stock purchased                             |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           | (379,976   | )      |     |   |   |   |   |   | (379,976 | ) |   |   |   |   |   |   | (379,976 | ) |
| Treasury stock reissued                              |   |         |      |   |               |   |   |     |   |   | (1,903        | )      |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           | 366,114    |   |     |   |   |   |   |   | 364,211 |   |   |   |   |   |   |   | 364,211 |   |
|                                                 |   |         |      |   |               |   |   |     |   |   |          |   |   |                                   |       |   |     |   |       |                     |   |   |                             |   |   |           |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                         |   |         | 8,322,452 |   |               | $      | 83,225 |     |   | $      | 19,481,956    |   |   | $                                      | 44,024,272 |   |     |   | -          |                     |   | $      | (3,960,866                       | )      |   | $              | (3,071,414 | )      |     | $      | - |   |   | $ | 56,557,173 |   |   | $ | 2,559,000 |   |   | $ | 59,116,173 |   |

----

----

|                                            |   | Common Stock |      |   | Additional Paid-In |   |   | Retained |   |   | Comprehensive Income |   |   | Accumulated Other Comprehensive Income |       |   | Treasury |   |       | Unearned Employee Stock Ownership |   |       | Total Equity Attributable To Oneida Financial |   |   | Noncontrolling |      |   |     |   |
|-------------------------------------------------|--------|--------------|-----------|--------|--------------------|--------|--------|----------|--------|--------|----------------------|--------|--------|----------------------------------------|------------|--------|----------|--------|------------|-----------------------------------|--------|------------|-----------------------------------------------|--------|--------|----------------|-----------|--------|----------|--------|
|                                            |   | Shares       |      |   | Amount             |   |   | Capital  |   |   | Earnings             |   |   | (Loss)                                 |       |   | (Loss)   |   |       | Stock                             |   |       | Plan                                          |   |   | Corp.          |      |   | Interest |   |   | Total |   |
|                                            |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |
| Balance at December 31, 2009 (continued)        |   |         | 8,322,452 |   |               | $      | 83,225 |     |   | $      | 19,481,956           |   |   | $                                      | 44,024,272 |   |     |   |       |                              | $      | (3,960,866 | )                                             |   | $      | (3,071,414     | )         |   | $        | -      |   |   | $ | 56,557,173 |   |   | $ | 2,559,000 |   |   | $ | 59,116,173 |   |
| Net income                                      |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   | 3,760,688  |   |     | $      | 3,760,688  |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | 3,760,688 |   |   |   | 257,438 |   |   |   | 4,018,126 |   |
| Distributions to non-controlling interest       |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | - |   |   |   | (257,438 | ) |   |   | (257,438 | ) |
| Other comprehensive loss, net of tax            |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized losses on securities arising         |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| during period                                   |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | (4,724,655 | )                                 |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for losses included |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| in net income                                   |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | 900,851    |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses                   |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | (3,823,804 | )                                 |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in unrealized loss on pension benefits   |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | 94,848     |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss before tax             |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | (3,728,956 | )                                 |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                              |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | 1,491,583  |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net of tax            |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   | (2,237,373 | )                                 |   |       | (2,237,373                                    | )      |   |           |      |   |     |   |   |   |   |   | (2,237,373 | ) |   |   |   |   |   |   | (2,237,373 | ) |
| Comprehensive income                            |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     | $      | 1,523,315  |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares earned under stock plans                 |   |         |      |   |               |   |   |     |   |   | 185,598              |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | 185,598 |   |   |   |   |   |   |   | 185,598 |   |
| Tax benefit from stock plans                    |   |         |      |   |               |   |   |     |   |   | 9,165                |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | 9,165 |   |   |   |   |   |   |   | 9,165 |   |
| Common stock cash dividends: $.42 per share     |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   | (2,968,461 | )      |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | (2,968,461 | ) |   |   |   |   |   |   | (2,968,461 | ) |
| Stock repurchased                               |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   | - |   |   |   | 500 |   |   |   | 500 |   |
| Treasury stock purchased                        |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           | (155,877  | )      |     |   |   |   |   |   | (155,877 | ) |   |   |   |   |   |   | (155,877 | ) |
| Treasury stock reissued                         |   |         |      |   |               |   |   |     |   |   | (888                 | )      |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           | 170,923   |   |     |   |   |   |   |   | 170,035 |   |   |   |   |   |   |   | 170,035 |   |
| Proceeds of common stock offering and           |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| conversion of existing shares, net of expenses  |   |         | (688,001  | )      |               |   | (6,880 | )        |   |   | 29,003,988           |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   | (1,260,000 | ) |   |   | 27,737,108 |   |   |   |   |   |   |   | 27,737,108 |   |
| Retirement of 469,657 treasury stock            |   |         | (469,657  | )      |               |   | (4,697 | )        |   |   | (3,031,881           | )      |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           | 3,036,578 |   |     |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Allocation of ESOP shares                       |   |         |      |   |               |   |   |     |   |   | (11,437              | )      |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   | 314,176 |   |   |   | 302,739 |   |   |   |   |   |   |   | 302,739 |   |
|                                            |   |         |      |   |               |   |   |     |   |   |                 |   |   |                                   |       |   |     |   |       |                              |   |       |                                          |   |   |           |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010                    |   |         | 7,164,794 |   |               | $      | 71,648 |     |   | $      | 45,636,501           |   |   | $                                      | 44,816,499 |   |     |   | -          |                              |   | $          | (6,198,239                                    | )      |   | $              | (19,790   | )      |     | $      | (945,824 | ) |   | $ | 83,360,795 |   |   | $ | 2,559,500 |   |   | $ | 85,920,295 |   |

----

----

|                                                  |   | 2010   |         |   | 2009   |   |        | 2008   |   |
|-------------------------------------------------------|--------|--------|--------------|--------|--------|--------|-------------|--------|--------|
|                                                  |   |   |         |   |   |   |        |   |   |
| Operating activities:                                 |   |   |         |   |   |   |        |   |   |
| Net income (loss)                                     |   | $      | 3,760,688    |   |   | $      | 4,113,357   |   |   | $ | (1,677,090 | ) |
| Adjustments to reconcile net income (loss) to         |   |   |         |   |   |   |        |   |   |   |   |   |
| net cash provided by operating activities:            |   |   |         |   |   |   |        |   |   |   |   |   |
| Depreciation and amortization                         |   |   | 1,981,965    |   |   |   | 2,078,087   |   |   |   | 2,149,989 |   |
| Amortization of premiums and                          |   |   |         |   |   |   |        |   |   |   |   |   |
| (accretion of discounts) on securities, net           |   |   | 492,598      |   |   |   | 242,344     |   |   |   | 95,508 |   |
| Net change in fair value of trading securities        |   |   | (103,280     | )      |   |   | (1,725,032  | )      |   |   | 7,674,699 |   |
| Provision for loan losses                             |   |   | 1,650,000    |   |   |   | 760,000     |   |   |   | 525,000 |   |
| Provision for deferred income taxes                   |   |   | (1,494,208   | )      |   |   | 349,184     |   |   |   | (2,853,698 | ) |
| Gain on sale of premises and equipment                |   |   | (62,870      | )      |   |   | -           |   |   |   | (135,395 | ) |
| Gain on available for sale securities, net            |   |   | (1,522,260   | )      |   |   | (787,842    | )      |   |   | (62,854 | ) |
| Loss on impairment of securities                      |   |   | 2,423,111    |   |   |   | 2,294,841   |   |   |   | 1,021,845 |   |
| ESOP shares earned                                    |   |   | 302,739      |   |   |   | -           |   |   |   | - |   |
| Stock compensation earned                             |   |   | 185,598      |   |   |   | 258,830     |   |   |   | 165,654 |   |
| Loss on sale of foreclosed assets                     |   |   | 122,986      |   |   |   | 61,762      |   |   |   | 29,249 |   |
| Gain on sale of loans                                 |   |   | (651,656     | )      |   |   | (343,622    | )      |   |   | (134,809 | ) |
| Income taxes payable                                  |   |   | 647,448      |   |   |   | 41,663      |   |   |   | 394,764 |   |
| Accrued interest receivable                           |   |   | 14,224       |   |   |   | 190,097     |   |   |   | (1,362 | ) |
| Other assets                                          |   |   | 1,371,518    |   |   |   | (3,621,019  | )      |   |   | (472,712 | ) |
| Other liabilities                                     |   |   | (314,180     | )      |   |   | 4,896,373   |   |   |   | (1,211,634 | ) |
| Earnings on bank owned life insurance, net            |   |   | (601,684     | )      |   |   | (692,217    | )      |   |   | (552,250 | ) |
| Origination of loans held for sale                    |   |   | (36,846,898  | )      |   |   | (55,882,280 | )      |   |   | (15,719,216 | ) |
| Proceeds from sale of loans                           |   |   | 37,328,797   |   |   |   | 56,279,208  |   |   |   | 18,706,624 |   |
|                                                  |   |   |         |   |   |   |        |   |   |   |   |   |
| Net cash provided by operating activities             |   |   | 8,684,636    |   |   |   | 8,513,734   |   |   |   | 7,942,312 |   |
|                                                  |   |   |         |   |   |   |        |   |   |   |   |   |
| Investing activities:                                 |   |   |         |   |   |   |        |   |   |   |   |   |
| Purchase of securities available for sale             |   |   | (244,076,005 | )      |   |   | (54,791,609 | )      |   |   | (77,674,551 | ) |
| Proceeds from sales of securities available for sale  |   |   | 45,899,020   |   |   |   | 31,953,561  |   |   |   | 31,666,785 |   |
| Maturities and calls of securities available for sale |   |   | 60,670,003   |   |   |   | 20,813,063  |   |   |   | 24,355,809 |   |
| Principal collected on securities available for sale  |   |   | 19,552,701   |   |   |   | 22,614,146  |   |   |   | 10,570,453 |   |
| Purchase of securities held to maturity               |   |   | -            |   |   |   | (50,040,459 | )      |   |   | - |   |
| Maturities and calls of securities held to maturity   |   |   | 19,060,975   |   |   |   | 1,000,000   |   |   |   | - |   |
| Principal collected on securities held to maturity    |   |   | 4,318,540    |   |   |   | 1,300,916   |   |   |   | - |   |
| Purchase of FHLB stock                                |   |   | (476,600     | )      |   |   | (600,200    | )      |   |   | (4,329,000 | ) |
| Redemption of FHLB Stock                              |   |   | 1,032,500    |   |   |   | 1,119,400   |   |   |   | 3,948,500 |   |
| Net decrease (increase) in loans                      |   |   | 10,065,786   |   |   |   | 5,404,815   |   |   |   | (21,711,825 | ) |
| Purchase of bank premises and equipment               |   |   | (1,274,858   | )      |   |   | (1,092,767  | )      |   |   | (870,449 | ) |
| Proceeds from sale of bank premises and equipment     |   |   | 1,139,639    |   |   |   | -           |   |   |   | 139,166 |   |
| Proceeds from sale of foreclosed assets               |   |   | 540,549      |   |   |   | 373,120     |   |   |   | 230,400 |   |
| Purchase of employee benefits company                 |   |   | (117,520     | )      |   |   | (135,417    | )      |   |   | (129,044 | ) |
| Purchase of insurance agency                          |   |   | -            |   |   |   | (84,245     | )      |   |   | (72,567 | ) |
| Purchase of bank, net of cash received                |   |   | -            |   |   |   | -           |   |   |   | (8,800 | ) |
|                                                  |   |   |         |   |   |   |        |   |   |   |   |   |
| Net cash used in investing activities                 |   |   | (83,665,270  | )      |   |   | (22,165,676 | )      |   |   | (33,885,123 | ) |

----

----

|                                                                 |   | 2010   |        |   | 2009   |   |        | 2008   |   |
|----------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
|                                                                 |   |   |        |   |   |   |        |   |   |
| Financing activities:                                                |   |   |        |   |   |   |        |   |   |
| Net increase in demand deposits,                                     |   |   |        |   |   |   |        |   |   |
| savings, money market, interest-bearing checking and                 |   |   |        |   |   |   |        |   |   |
| mortgagor's escrow accounts                                          |   | $      | 67,507,687  |   |   | $      | 62,587,639  |   |   | $ | 22,642,526 |   |
| Net (decrease) increase in time deposits                             |   |   | (4,708,280  | )      |   |   | 1,078,671   |   |   |   | 2,926,277 |   |
| Proceeds from borrowings                                             |   |   | 110,000     |   |   |   | 2,975,000   |   |   |   | 50,825,000 |   |
| Repayment of borrowings                                              |   |   | (19,110,000 | )      |   |   | (24,800,000 | )      |   |   | (54,400,000 | ) |
| Cash dividends                                                       |   |   | (2,108,687  | )      |   |   | (1,673,714  | )      |   |   | (1,662,053 | ) |
| Stock issued - minority interest                                     |   |   | 500         |   |   |   | -           |   |   |   | 2,501,000 |   |
| Stock repurchased - minority interest                                |   |   | -           |   |   |   | (1,000      | )      |   |   | - |   |
| Exercise of stock options (using treasury stock)                     |   |   | 170,035     |   |   |   | 364,211     |   |   |   | 32,347 |   |
| Purchase of treasury stock                                           |   |   | (155,877    | )      |   |   | (379,976    | )      |   |   | (20,277 | ) |
| Dividends on preferred stock of subsidiary held by minority interest |   |   | (257,438    | )      |   |   | (255,950    | )      |   |   | (68,500 | ) |
| Net proceeds of stock offering and conversion                        |   |   | 27,737,108  |   |   |   | -           |   |   |   | - |   |
|                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
| Net cash provided by financing activities                            |   |   | 69,185,048  |   |   |   | 39,894,881  |   |   |   | 22,776,320 |   |
|                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
| (Decrease) increase in cash and cash equivalents                     |   |   | (5,795,586  | )      |   |   | 26,242,939  |   |   |   | (3,166,491 | ) |
|                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                       |   |   | 39,537,002  |   |   |   | 13,294,063  |   |   |   | 16,460,554 |   |
|                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash and Cash Equivalents at End of Year                             |   | $      | 33,741,416  |   |   | $      | 39,537,002  |   |   | $ | 13,294,063 |   |
|                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                   |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash paid during the year for:                                       |   |   |        |   |   |   |        |   |   |   |   |   |
| Interest on deposits and obligations                                 |   | $      | 5,745,286   |   |   | $      | 7,753,508   |   |   | $ | 11,125,771 |   |
| Income taxes                                                         |   |   | 1,810,015   |   |   |   | 875,285     |   |   |   | 551,000 |   |
| Non-cash investing activities:                                       |   |   |        |   |   |   |        |   |   |   |   |   |
| Transfer of loans to foreclosed assets                               |   |   | 862,751     |   |   |   | 434,882     |   |   |   | 259,649 |   |
| Non-cash financing activities:                                       |   |   |        |   |   |   |        |   |   |   |   |   |
| Dividends declared and unpaid                                        |   |   | 859,774     |   |   |   | -           |   |   |   | - |   |

----

----

| 1. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 1. | Summary of Significant Accounting Policies (Continued) |
|----|--------------------------------------------------------|

----

----

| 2. | Investment Securities and Mortgage-Backed Securities |
|----|------------------------------------------------------|

|                                   |   | 2010      |        |
|----------------------------------------|--------|-----------|-------------|
|                                   |   | Amortized |        |   | Gross Unrealized |   |   | Fair |   |
|                                   |   | Cost      |        |   | Gains |   |   | Losses |   |   | Value |   |
| Available-for-sale                     |   |      |        |   |   |   |   |   |   |   |   |   |
| Investment Securities                  |   |      |        |   |   |   |   |   |   |   |   |   |
| Debt securities:                       |   |      |        |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                         |   | $         | 70,214,246  |   |   | $ | 136,289 |   |   | $ | 1,205,122 |   |   | $ | 69,145,413 |   |
| Corporate                              |   |      | 25,139,215  |   |   |   | 156,973 |   |   |   | 1,042,765 |   |   |   | 24,253,423 |   |
| Trust preferred securities             |   |      | 6,857,958   |   |   |   | - |   |   |   | 3,455,057 |   |   |   | 3,402,901 |   |
| State and municipals                   |   |      | 50,249,041  |   |   |   | 529,172 |   |   |   | 1,707,993 |   |   |   | 49,070,220 |   |
| Small Business Administration          |   |      | 3,027,241   |   |   |   | - |   |   |   | 91,247 |   |   |   | 2,935,994 |   |
|                                   |   | $         | 155,487,701 |   |   | $ | 822,434 |   |   | $ | 7,502,184 |   |   | $ | 148,807,951 |   |
| Residential Mortgage-Backed Securities |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                             |   | $         | 38,331,436  |   |   | $ | 287,881 |   |   | $ | 511,260 |   |   | $ | 38,108,057 |   |
| Freddie Mac                            |   |      | 14,928,162  |   |   |   | 172,655 |   |   |   | 150,777 |   |   |   | 14,950,040 |   |
| Government National Mortgage Assoc.    |   |      | 22,164,654  |   |   |   | 276,955 |   |   |   | 307,353 |   |   |   | 22,134,256 |   |
| Collateralized Mortgage Obligations    |   |      | 3,700,819   |   |   |   | 8,548 |   |   |   | 231,804 |   |   |   | 3,477,563 |   |
|                                   |   | $         | 79,125,071  |   |   | $ | 746,039 |   |   | $ | 1,201,194 |   |   | $ | 78,669,916 |   |
| Total available-for-sale               |   | $         | 234,612,772 |   |   | $ | 1,568,473 |   |   | $ | 8,703,378 |   |   | $ | 227,477,867 |   |
|                                   |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-Maturity                       |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Securities                  |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                       |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                         |   | $         | 3,998,308   |   |   | $ | 139,892 |   |   | $ | - |   |   | $ | 4,138,200 |   |
| State and municipals                   |   |      | 8,270,081   |   |   |   | 483,578 |   |   |   | - |   |   |   | 8,753,659 |   |
| Small Business Administration          |   |      | 663,269     |   |   |   | - |   |   |   | 123 |   |   |   | 663,146 |   |
|                                   |   | $         | 12,931,658  |   |   | $ | 623,470 |   |   | $ | 123 |   |   | $ | 13,555,005 |   |
| Residential Mortgage-Backed Securities |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                             |   | $         | 5,566,395   |   |   | $ | 177,188 |   |   | $ | - |   |   | $ | 5,743,583 |   |
| Freddie Mac                            |   |      | 1,306,248   |   |   |   | 27,028 |   |   |   | - |   |   |   | 1,333,276 |   |
| Government National Mortgage Assoc.    |   |      | 4,339,305   |   |   |   | 98,583 |   |   |   | - |   |   |   | 4,437,888 |   |
|                                   |   | $         | 11,211,948  |   |   | $ | 302,799 |   |   | $ | - |   |   | $ | 11,514,747 |   |
| Total held-to-maturity                 |   | $         | 24,143,606  |   |   | $ | 926,269 |   |   | $ | 123 |   |   | $ | 25,069,752 |   |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

|                                   |   | 2009      |        |
|----------------------------------------|--------|-----------|-------------|
|                                   |   | Amortized |        |   | Gross Unrealized |   |   | Fair |   |
|                                   |   | Cost      |        |   | Gains |   |   | Losses |   |   | Value |   |
| Available-for-sale                     |   |      |        |   |   |   |   |   |   |   |   |   |
| Investment Securities                  |   |      |        |   |   |   |   |   |   |   |   |   |
| Debt securities:                       |   |      |        |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                         |   | $         | 23,951,698  |   |   | $ | 162,684 |   |   | $ | 230,648 |   |   | $ | 23,883,734 |   |
| Corporate                              |   |      | 16,739,255  |   |   |   | 246,263 |   |   |   | 779,971 |   |   |   | 16,205,547 |   |
| Trust preferred securities             |   |      | 9,435,890   |   |   |   | - |   |   |   | 3,515,126 |   |   |   | 5,920,764 |   |
| State and municipals                   |   |      | 17,643,641  |   |   |   | 486,916 |   |   |   | 142,555 |   |   |   | 17,988,002 |   |
| Small Business Administration          |   |      | 12,243      |   |   |   | - |   |   |   | 143 |   |   |   | 12,100 |   |
|                                   |   | $         | 67,782,727  |   |   | $ | 895,863 |   |   | $ | 4,668,443 |   |   | $ | 64,010,147 |   |
| Residential Mortgage-Backed Securities |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                             |   | $         | 16,418,038  |   |   | $ | 548,210 |   |   | $ | 42,357 |   |   | $ | 16,923,891 |   |
| Freddie Mac                            |   |      | 14,901,761  |   |   |   | 574,751 |   |   |   | 5,833 |   |   |   | 15,470,679 |   |
| Government National Mortgage Assoc.    |   |      | 11,982,885  |   |   |   | 330,582 |   |   |   | 15,243 |   |   |   | 12,298,224 |   |
| Collateralized Mortgage Obligations    |   |      | 6,758,271   |   |   |   | 49,957 |   |   |   | 978,591 |   |   |   | 5,829,637 |   |
|                                   |   | $         | 50,060,955  |   |   | $ | 1,503,500 |   |   | $ | 1,042,024 |   |   | $ | 50,522,431 |   |
| Total available-for-sale               |   | $         | 117,843,682 |   |   | $ | 2,399,363 |   |   | $ | 5,710,467 |   |   | $ | 114,532,578 |   |
| Held-to-Maturity                       |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Securities                  |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                       |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                         |   | $         | 22,975,417  |   |   | $ | 113,368 |   |   | $ | 164,311 |   |   | $ | 22,924,474 |   |
| State and municipals                   |   |      | 8,615,302   |   |   |   | 335,117 |   |   |   | 25,410 |   |   |   | 8,925,009 |   |
| Small Business Administration          |   |      | 886,546     |   |   |   | - |   |   |   | 3,865 |   |   |   | 882,681 |   |
|                                   |   | $         | 32,477,265  |   |   | $ | 448,485 |   |   | $ | 193,586 |   |   | $ | 32,732,164 |   |
| Residential Mortgage-Backed Securities |   |      |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                             |   | $         | 8,006,052   |   |   | $ | 39,381 |   |   | $ | - |   |   | $ | 8,045,433 |   |
| Freddie Mac                            |   |      | 1,958,484   |   |   |   | 3,461 |   |   |   | - |   |   |   | 1,961,945 |   |
| Government National Mortgage Assoc.    |   |      | 5,250,349   |   |   |   | 3,629 |   |   |   | 27,276 |   |   |   | 5,226,702 |   |
|                                   |   | $         | 15,214,885  |   |   | $ | 46,471 |   |   | $ | 27,276 |   |   | $ | 15,234,080 |   |
| Total held-to-maturity                 |   | $         | 47,692,150  |   |   | $ | 494,956 |   |   | $ | 220,862 |   |   | $ | 47,966,244 |   |

|                               |   | December 31, 2010 |        |
|------------------------------------|--------|-------------------|-------------|
|                               |   | Amortized         |        |   | Fair |   |
|                               |   | Cost              |        |   | Value |   |
| Available-for-sale                 |   |              |        |   |   |   |
| Within one year                    |   | $                 | 5,331,027   |   |   | $ | 5,358,875 |   |
| After one year through five years  |   |              | 29,887,473  |   |   |   | 30,017,692 |   |
| After five years through ten years |   |              | 60,417,550  |   |   |   | 59,944,455 |   |
| After ten years                    |   |              | 59,851,651  |   |   |   | 53,486,929 |   |
| Total                              |   | $                 | 155,487,701 |   |   | $ | 148,807,951 |   |
| Held-to-maturity                   |   |              |        |   |   |   |   |   |
| Within one year                    |   | $                 | 6,952       |   |   | $ | 6,952 |   |
| After one year through five years  |   |              | 4,128,000   |   |   |   | 4,339,349 |   |
| After five years through ten years |   |              | 6,421,863   |   |   |   | 6,531,626 |   |
| After ten years                    |   |              | 2,374,843   |   |   |   | 2,677,078 |   |
| Total                              |   | $                 | 12,931,658  |   |   | $ | 13,555,005 |   |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

|                               |   | December 31, 2009 |       |
|------------------------------------|--------|-------------------|------------|
|                               |   | Amortized         |       |   | Fair |   |
|                               |   | Cost              |       |   | Value |   |
| Available-for-sale                 |   |              |       |   |   |   |
| Within one year                    |   | $                 | 6,055,255  |   |   | $ | 5,960,786 |   |
| After one year through five years  |   |              | 15,477,926 |   |   |   | 15,267,625 |   |
| After five years through ten years |   |              | 28,431,307 |   |   |   | 28,772,022 |   |
| After ten years                    |   |              | 17,818,239 |   |   |   | 14,009,714 |   |
| Total                              |   | $                 | 67,782,727 |   |   | $ | 64,010,147 |   |
|                               |   |              |       |   |   |   |   |   |
| Held-to-maturity                   |   |              |       |   |   |   |   |   |
| Within one year                    |   | $                 | 53,179     |   |   | $ | 53,593 |   |
| After one year through five years  |   |              | 7,160,000  |   |   |   | 7,272,752 |   |
| After five years through ten years |   |              | 19,602,014 |   |   |   | 19,554,985 |   |
| After ten years                    |   |              | 5,662,072  |   |   |   | 5,850,834 |   |
| Total                              |   | $                 | 32,477,265 |   |   | $ | 32,732,164 |   |

|         |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|         |   |   |       |   |   |   |       |   |   |
| Proceeds     |   | $      | 45,899,020 |   |   | $      | 31,953,561 |   |   | $ | 31,666,785 |   |
| Gross Gains  |   | $      | 1,549,848  |   |   | $      | 790,839    |   |   | $ | 200,727 |   |
| Gross Losses |   | $      | 27,588     |   |   | $      | 2,997      |   |   | $ | 137,873 |   |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

| December 31, 2010                   |   | Less than 12 Months |        |   | More than 12 Months |   |      | Total  |   |
|-------------------------------------|--------|---------------------|-------------|--------|---------------------|--------|-----------|--------|--------|
|                                |   | Fair                |        |   | Unrealized          |   |      | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Description of Securities           |   | Value               |        |   | Loss                |   |      | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
| Available-for-Sale                  |   |                |        |   |                |   |      |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                      |   | $                   | 50,289,047  |   |                | $      | 1,205,122 |   |   | $ | - |   |   | $ | - |   |   | $ | 50,289,047 |   |   | $ | 1,205,122 |   |
| Corporate                           |   |                | 9,033,450   |   |                |   | 96,151    |   |   |   | 4,043,200 |   |   |   | 946,614 |   |   |   | 13,076,650 |   |   |   | 1,042,765 |   |
| Trust preferreds                    |   |                | -           |   |                |   | -         |   |   |   | 3,402,901 |   |   |   | 3,455,057 |   |   |   | 3,402,901 |   |   |   | 3,455,057 |   |
| State and municipals                |   |                | 32,161,960  |   |                |   | 1,707,993 |   |   |   | - |   |   |   | - |   |   |   | 32,161,960 |   |   |   | 1,707,993 |   |
| Small Business Administration       |   |                | 2,930,457   |   |                |   | 91,225    |   |   |   | 5,537 |   |   |   | 22 |   |   |   | 2,935,994 |   |   |   | 91,247 |   |
| Fannie Mae                          |   |                | 22,785,826  |   |                |   | 511,260   |   |   |   | - |   |   |   | - |   |   |   | 22,785,826 |   |   |   | 511,260 |   |
| Freddie Mac                         |   |                | 10,255,793  |   |                |   | 150,777   |   |   |   | - |   |   |   | - |   |   |   | 10,255,793 |   |   |   | 150,777 |   |
| Government National Mortgage Assoc  |   |                | 11,530,435  |   |                |   | 307,353   |   |   |   | - |   |   |   | - |   |   |   | 11,530,435 |   |   |   | 307,353 |   |
| Collateralized Mortgage Obligations |   |                | -           |   |                |   | -         |   |   |   | 2,745,753 |   |   |   | 231,804 |   |   |   | 2,745,753 |   |   |   | 231,804 |   |
| Total available-for-sale            |   | $                   | 138,986,968 |   |                | $      | 4,069,881 |   |   | $ | 10,197,391 |   |   | $ | 4,633,497 |   |   | $ | 149,184,359 |   |   | $ | 8,703,378 |   |
| Held-to-Maturity                    |   |                |        |   |                |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Small Business Administration       |   | $                   | -           |   |                | $      | -         |   |   | $ | 663,146 |   |   | $ | 123 |   |   | $ | 663,146 |   |   | $ | 123 |   |
| Total held-to-maturity              |   | $                   | -           |   |                | $      | -         |   |   | $ | 663,146 |   |   | $ | 123 |   |   | $ | 663,146 |   |   | $ | 123 |   |

| December 31, 2009                   |   | Less than 12 Months |       |   | More than 12 Months |   |    | Total  |   |
|-------------------------------------|--------|---------------------|------------|--------|---------------------|--------|---------|--------|--------|
|                                |   | Fair                |       |   | Unrealized          |   |    | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Description of Securities           |   | Value               |       |   | Loss                |   |    | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
| Available-for-Sale                  |   |                |       |   |                |   |    |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                      |   | $                   | 15,767,782 |   |                | $      | 230,648 |   |   | $ | - |   |   | $ | - |   |   | $ | 15,767,782 |   |   | $ | 230,648 |   |
| Corporate                           |   |                | -          |   |                |   | -       |   |   |   | 7,167,660 |   |   |   | 779,971 |   |   |   | 7,167,660 |   |   |   | 779,971 |   |
| Trust preferreds                    |   |                |       |   |                |   |    |   |   |   | 5,920,764 |   |   |   | 3,515,126 |   |   |   | 5,920,764 |   |   |   | 3,515,126 |   |
| State and municipals                |   |                | 1,914,637  |   |                |   | 17,465  |   |   |   | 2,921,616 |   |   |   | 125,090 |   |   |   | 4,836,253 |   |   |   | 142,555 |   |
| Small Business Administration       |   |                | 12,100     |   |                |   | 143     |   |   |   | - |   |   |   | - |   |   |   | 12,100 |   |   |   | 143 |   |
| Fannie Mae                          |   |                | 2,621,059  |   |                |   | 42,357  |   |   |   | - |   |   |   | - |   |   |   | 2,621,059 |   |   |   | 42,357 |   |
| Freddie Mac                         |   |                | 464,352    |   |                |   | 5,833   |   |   |   | - |   |   |   | - |   |   |   | 464,352 |   |   |   | 5,833 |   |
| Government National Mortgage Assoc  |   |                | 1,418,705  |   |                |   | 15,243  |   |   |   | - |   |   |   | - |   |   |   | 1,418,705 |   |   |   | 15,243 |   |
| Collateralized Mortgage Obligations |   |                | 1,400,904  |   |                |   | 37,314  |   |   |   | 3,544,626 |   |   |   | 941,277 |   |   |   | 4,945,530 |   |   |   | 978,591 |   |
| Total available-for-sale            |   | $                   | 23,599,539 |   |                | $      | 349,003 |   |   | $ | 19,554,666 |   |   | $ | 5,361,464 |   |   | $ | 43,154,205 |   |   | $ | 5,710,467 |   |
| Held-to-Maturity                    |   |                |       |   |                |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Agencies                      |   | $                   | 11,812,292 |   |                | $      | 164,311 |   |   | $ | - |   |   | $ | - |   |   | $ | 11,812,292 |   |   | $ | 164,311 |   |
| State and municipals                |   |                | 2,157,214  |   |                |   | 25,410  |   |   |   | - |   |   |   | - |   |   |   | 2,157,214 |   |   |   | 25,410 |   |
| Small Business Administration       |   |                | 882,681    |   |                |   | 3,865   |   |   |   | - |   |   |   | - |   |   |   | 882,681 |   |   |   | 3,865 |   |
| Government National Mortgage Assoc  |   |                | 3,015,496  |   |                |   | 27,276  |   |   |   | - |   |   |   | - |   |   |   | 3,015,496 |   |   |   | 27,276 |   |
| Total held-to-maturity              |   | $                   | 17,867,683 |   |                | $      | 220,862 |   |   | $ | - |   |   | $ | - |   |   | $ | 17,867,683 |   |   | $ | 220,862 |   |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

| Description         |   | Class  |   |   | Book Value (2) |      |   | Fair Value |   |      | Unrealized Loss |   |   | Realized Loss (2) (3) |   |   | Lowest Rating (1) |      |   | Number ofBanks andInsuranceCompaniesCurrently Performing |   |   | ActualDeferrals andDefaultsas % ofOriginal Collateral |   |   | ExpectedAdditionalDeferrals andDefaultsas % ofPerforming Collateral |   |   | ExcessSubordinationDefaultsas % ofPerforming Collateral |   |
|---------------------|--------|--------|--------|--------|----------------|-----------|--------|------------|--------|-----------|-----------------|--------|--------|-----------------------|--------|--------|-------------------|-----------|--------|----------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|
|                |   |   |   |   |           |      |   |       |   |      |            |   |   |                  |   |   |              |      |   |                                                     |   |   |                                                  |   |   |                                                                |   |   |                                                    |   |
| Preferred Term Ltd  |   | Mezz   |   |   | $              | 819,351   |   |       | $      | 532,358   |            |   | $      | (286,993              | )      |   | $                 | 337,591   |   |                                                     | Ca     |   |                                                  |   | 21     |                                                                |   |   | 38.15                                                   | %      |   |   | 20.66 | % |   |   | -31.21 | % |
| Preferred Term Ltd  |   | Mezz   |   |   |           | 1,637,935 |   |       |   | 1,022,128 |            |   |   | (615,807              | )      |   |              | 683,159   |   |                                                     | Ca     |   |                                                  |   | 21     |                                                                |   |   | 38.15                                                   | %      |   |   | 20.66 | % |   |   | -31.21 | % |
| Preferred Term Ltd  |   | Mezz   |   |   |           | 1,091,956 |   |       |   | 681,418   |            |   |   | (410,538              | )      |   |              | 455,440   |   |                                                     | Ca     |   |                                                  |   | 21     |                                                                |   |   | 38.15                                                   | %      |   |   | 20.66 | % |   |   | -31.21 | % |
| Preferred Term X    |   | B-3    |   |   |           | 813,166   |   |       |   | 483,951   |            |   |   | (329,215              | )      |   |              | 1,163,085 |   |                                                     | C      |   |                                                  |   | 34     |                                                                |   |   | 45.49                                                   | %      |   |   | 10.51 | % |   |   | -66.92 | % |
| Preferred Term XV   |   | B-2    |   |   |           | 750,295   |   |       |   | 251,302   |            |   |   | (498,993              | )      |   |              | 249,705   |   |                                                     | C      |   |                                                  |   | 52     |                                                                |   |   | 35.38                                                   | %      |   |   | 18.11 | % |   |   | -41.00 | % |
| Preferred Term XV   |   | B-3    |   |   |           | 759,368   |   |       |   | 255,740   |            |   |   | (503,628              | )      |   |              | 240,632   |   |                                                     | C      |   |                                                  |   | 52     |                                                                |   |   | 35.38                                                   | %      |   |   | 18.11 | % |   |   | -41.00 | % |
| Preferred Term XXVI |   | C-1    |   |   |           | 673,434   |   |       |   | 119,994   |            |   |   | (553,440              | )      |   |              | 311,757   |   |                                                     | C      |   |                                                  |   | 50     |                                                                |   |   | 30.23                                                   | %      |   |   | 14.82 | % |   |   | -25.66 | % |
| Preferred Term XXVI |   | D-1    |   |   |           | -         |   |       |   | -         |            |   |   | -                     |   |   |              | 496,788   |   |                                                     | N/R    |   |                                                  |   | 50     |                                                                |   |   | 30.23                                                   | %      |   |   | 14.82 | % |   |   | -35.45 | % |
| MMCF IX             |   | B-2    |   |   |           | 312,453   |   |       |   | 56,010    |            |   |   | (256,443              | )      |   |              | 652,806   |   |                                                     | Caa3   |   |                                                  |   | 19     |                                                                |   |   | 42.95                                                   | %      |   |   | 20.28 | % |   |   | -60.34 | % |
|                |   |   |   |   |           |      |   |       |   |      |            |   |   |                  |   |   |              |      |   |                                                     |   |   |                                                  |   |   |                                                                |   |   |                                                    |   |   |   |   |   |   |   |   |   |
|                |   |   |   |   | $              | 6,857,958 |   |       | $      | 3,402,901 |            |   | $      | (3,455,057            | )      |   | $                 | 4,590,963 |   |                                                     |   |   |                                                  |   |   |                                                                |   |   |                                                    |   |   |   |   |   |   |   |   |   |

|   | (1) | The table above presents ratings information as of December 31, 2010.  The securities had "investment grade" ratings by Moody's (Baa2 or better) at the time of purchase, but have since been downgraded by the ratings agencies |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Book value has been reduced by realized losses to reflect a new amortized cost basis. |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (3) | Represents life to date cumulative loss recognized in the income statement. |
|--------|-----|-----------------------------------------------------------------------------|

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

|                                              | Significant inputs at December 31, 2010 |
|---------------------------------------------------|-----------------------------------------|
|                                              |                                    |
| Annual prepayment                                 | 1% annually                             |
| Projected severity of loss on current defaults    | 85% - 100%                              |
| Projected severity of loss on current deferrals   | 0% - 80%                                |
| Projected severity of loss on specific deferrals  | 0% - 80%                                |
| Projected additional defaults:                    |                                    |
| Thereafter                                        | 0.375% applied annually                 |
| Projected severity of loss on additional defaults | 60 - 75%                                |
| Present value discount rates for OTTI             | 5.45% - 9.48%                           |
| Present value discount rates for fair value       | 15%                                     |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

|                                                                           |   | 2010   |      |   | 2009   |   |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Beginning Balance                                                              |   | $      | 3,316,686 |   |   | $      | 1,021,845 |   |
| Amounts related to credit loss for which an other-than temporary impairment    |   |   | 2,423,111 |   |   |   | 2,294,841 |   |
| was previously recognized                                                      |   |   |      |   |   |   |   |   |
| Additions/Subtractions                                                         |   |   |      |   |   |   |   |   |
| Amounts realized for securities sold during the period                         |   |   | -         |   |   |   | - |   |
| Amounts related to securities for which the company intends to sell or that it |   |   | -         |   |   |   | - |   |
| will be more likely than not that the company will be required to sell         |   |   |      |   |   |   |   |   |
| prior to recovery of amortized cost basis                                      |   |   |      |   |   |   |   |   |
| Reductions for increases in cash flows expected to be collected that are       |   |   | -         |   |   |   | - |   |
| recognized over the remaining life of the security                             |   |   |      |   |   |   |   |   |
| Increases to the amount related to the credit  loss for which        |   |   | -         |   |   |   | - |   |
| other-than-temporary was previously recognized                                 |   |   |      |   |   |   |   |   |
| Ending Balance                                                                 |   | $      | 5,739,797 |   |   | $      | 3,316,686 |   |

----

----

| 2. | Investment Securities and Mortgage-Backed Securities (Continued) |
|----|------------------------------------------------------------------|

| 3. | Loans Receivable |
|----|------------------|

|                      |   | 2010   |        |   | 2009   |   |
|---------------------------|--------|--------|-------------|--------|--------|--------|
|                      |   |   |        |   |   |   |
| Residential mortgages     |   | $      | 90,033,471  |   |   | $      | 101,104,101 |   |
| Home equity loans         |   |   | 42,121,588  |   |   |   | 43,013,956 |   |
| Consumer loans            |   |   | 35,879,455  |   |   |   | 43,010,889 |   |
| Commercial real estate    |   |   | 77,850,512  |   |   |   | 72,127,037 |   |
| Commercial loans          |   |   | 40,964,882  |   |   |   | 38,796,600 |   |
|                      |   |   | 286,849,908 |   |   |   | 298,052,583 |   |
| Allowance for loan losses |   |   | (4,276,449  | )      |   |   | (2,900,587 | ) |
| Net loans                 |   | $      | 282,573,459 |   |   | $      | 295,151,996 |   |

|                         |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                         |   |   |      |   |   |   |      |   |   |
| Balance at beginning of year |   | $      | 2,900,587 |   |   | $      | 2,624,283 |   |   | $ | 2,511,310 |   |
| Loans charged off            |   |   | (608,701  | )      |   |   | (693,336  | )      |   |   | (526,196 | ) |
| Recoveries                   |   |   | 334,563   |   |   |   | 209,640   |   |   |   | 114,169 |   |
| Provision for loan losses    |   |   | 1,650,000 |   |   |   | 760,000   |   |   |   | 525,000 |   |
| Balance at end of year       |   | $      | 4,276,449 |   |   | $      | 2,900,587 |   |   | $ | 2,624,283 |   |

----

----

| 3. | Loans Receivable (Continued) |
|----|------------------------------|

|                                            |   |   |        |   | Commercial Real |   |       | Commercial |   |   | Consumer   |   |   | Home   |       |   | Residential |   |       |        |   |
|-------------------------------------------------|--------|--------|-------------|--------|-----------------|--------|------------|------------|--------|--------|------------|--------|--------|--------|------------|--------|-------------|--------|------------|-------------|--------|
|                                            |   | Total  |        |   | Estate          |   |       | Loans      |   |   | Loans      |   |   | Equity |       |   | Mortgages   |   |       | Unallocated |   |
| Allowance for loan losses:                      |   |   |        |   |            |   |       |       |   |   |       |   |   |   |       |   |        |   |       |        |   |
| Ending allowance balance attributable to loans: |   |   |        |   |            |   |       |       |   |   |       |   |   |   |       |   |        |   |       |        |   |
| Individually evaluated for impairment           |   | $      | 2,141,135   |   |            | $      | 98,221     |       |   | $      | 2,042,914  |   |   | $      | -          |   |        | $      | -          |        |   | $ | - |   |   | $ | - |   |
| Collectively evaluated for impairment           |   |   | 2,135,313   |   |            |   | 477,289    |       |   |   | 625,667    |   |   |   | 337,181    |   |        |   | 264,500    |        |   |   | 430,676 |   |   |   | - |   |
| Acquired with deteriorated credit quality       |   |   | -           |   |            |   | -          |       |   |   | -          |   |   |   | -          |   |        |   | -          |        |   |   | - |   |   |   | - |   |
| Total ending allowance balance                  |   | $      | 4,276,449   |   |            | $      | 575,510    |       |   | $      | 2,668,581  |   |   | $      | 337,181    |   |        | $      | 264,500    |        |   | $ | 430,676 |   |   | $ | - |   |
| Loans:                                          |   |   |        |   |            |   |       |       |   |   |       |   |   |   |       |   |        |   |       |        |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment           |   | $      | 3,425,676   |   |            | $      | 1,382,762  |       |   | $      | 2,042,914  |   |   | $      | -          |   |        | $      | -          |        |   | $ | - |   |   | $ | - |   |
| Collectively evaluated for impairment           |   |   | 283,424,232 |   |            |   | 76,467,750 |       |   |   | 38,921,968 |   |   |   | 35,879,455 |   |        |   | 42,121,588 |        |   |   | 90,033,471 |   |   |   | - |   |
| Acquired with deteriorated credit quality       |   |   | -           |   |            |   | -          |       |   |   | -          |   |   |   | -          |   |        |   | -          |        |   |   | - |   |   |   | - |   |
| Total ending loan balance                       |   | $      | 286,849,908 |   |            | $      | 77,850,512 |       |   | $      | 40,964,882 |   |   | $      | 35,879,455 |   |        | $      | 42,121,588 |        |   | $ | 90,033,471 |   |   | $ | - |   |

|                                      |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                      |   |   |      |   |   |   |      |   |   |
| Impaired loans                            |   | $      | 3,425,676 |   |   | $      | 2,158,500 |   |   | $ | - |   |
| Allocated allowance for loan losses       |   | $      | 2,141,135 |   |   | $      | 569,978   |   |   | $ | - |   |
|                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Average of impaired loans during the year |   | $      | 3,527,128 |   |   | $      | 1,060,019 |   |   | $ | - |   |
| Cash-basis interest income recognized     |   | $      | 102,062   |   |   | $      | 106,862   |   |   | $ | - |   |

|                               |   | Unpaid    |      |   |       |   |      | Allowance for Loan |   |
|------------------------------------|--------|-----------|-----------|--------|------------|--------|-----------|--------------------|--------|
|                               |   | Principal |      |   | Recorded   |   |      | Losses             |   |
|                               |   | Balance   |      |   | Investment |   |      | Allocated          |   |
|                               |   |      |      |   |       |   |      |               |   |
| With no related allowance recorded |   |      |      |   |       |   |      |               |   |
| Commercial real estate             |   | $         | -         |   |       | $      | -         |               |   | $ | - |   |
| Commercial loans                   |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Consumer loans                     |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Home equity                        |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Residential mortgages              |   |      | -         |   |       |   | -         |               |   |   | - |   |
| With an allowance recorded:        |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Commercial real estate             |   |      | 1,382,762 |   |       |   | 1,382,762 |               |   |   | 98,221 |   |
| Commercial loans                   |   |      | 2,042,914 |   |       |   | 2,042,914 |               |   |   | 2,042,914 |   |
| Consumer loans                     |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Home equity                        |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Residential mortgages              |   |      | -         |   |       |   | -         |               |   |   | - |   |
| Total                              |   | $         | 3,425,676 |   |       | $      | 3,425,676 |               |   | $ | 2,141,135 |   |

----

----

| 3. | Loans Receivable (Continued) |
|----|------------------------------|

|                                         |   | 2010   |      |   | 2009   |   |
|----------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                         |   |   |      |   |   |   |
| Loans past due over 90 days still on accrual |   | $      | -         |   |   | $      | - |   |
| Nonaccrual loans                             |   | $      | 3,977,022 |   |   | $      | 551,409 |   |

|                   |   | Nonaccrual |      |   | Loans Past Due Over 90 days Still Accruing |   |
|------------------------|--------|------------|-----------|--------|--------------------------------------------|--------|
|                   |   |       |      |   |                                       |   |
| Commercial real estate |   | $          | 1,555,411 |   |                                       | $      | - |   |
| Commercial loans       |   |       | 2,174,444 |   |                                       |   | - |   |
| Consumer loans         |   |       | -         |   |                                       |   | - |   |
| Home equity            |   |       | -         |   |                                       |   | - |   |
| Residential mortgages  |   |       | 247,167   |   |                                       |   | - |   |
|                   |   |       |      |   |                                       |   |   |   |
| Total                  |   | $          | 3,977,022 |   |                                       | $      | - |   |

|                   |   | Total  |        |   | 30 - 59Days Past Due |   |    | 60 - 89Days Past Due |   |   | Greater than 90 Days Past Due |   |   | Total Past Due |    |   | Loans Not Past Due |   |
|------------------------|--------|--------|-------------|--------|----------------------|--------|---------|----------------------|--------|--------|-------------------------------|--------|--------|----------------|---------|--------|--------------------|--------|
|                   |   |   |        |   |                 |   |    |                 |   |   |                          |   |   |           |    |   |               |   |
| Commercial real estate |   | $      | 77,850,512  |   |                 | $      | 98,915  |                 |   | $      | 1,521,430                     |   |   | $              | 90,206  |   |               | $      | 1,710,551 |   |   | $ | 76,139,961 |   |
| Commercial loans       |   |   | 40,964,882  |   |                 |   | 10,978  |                 |   |   | 275,022                       |   |   |           | 52,636  |   |               |   | 338,636 |   |   |   | 40,626,246 |   |
| Consumer loans         |   |   | 35,879,455  |   |                 |   | 89,897  |                 |   |   | -                             |   |   |           | -       |   |               |   | 89,897 |   |   |   | 35,789,558 |   |
| Home equity            |   |   | 42,121,588  |   |                 |   | 5,411   |                 |   |   | -                             |   |   |           | -       |   |               |   | 5,411 |   |   |   | 42,116,177 |   |
| Residential mortgages  |   |   | 90,033,471  |   |                 |   | -       |                 |   |   | 95,275                        |   |   |           | 247,167 |   |               |   | 342,442 |   |   |   | 89,691,029 |   |
| Total                  |   | $      | 286,849,908 |   |                 | $      | 205,201 |                 |   | $      | 1,891,727                     |   |   | $              | 390,009 |   |               | $      | 2,486,937 |   |   | $ | 284,362,971 |   |

----

----

| 3. | Loans Receivable (Continued) |
|----|------------------------------|

|                   |   | Not    |       |   |   |   |       | Special |   |   |        |   |   |     |      |
|------------------------|--------|--------|------------|--------|--------|--------|------------|---------|--------|--------|-------------|--------|--------|----------|-----------|
|                   |   | Rated  |       |   | Pass   |   |       | Mention |   |   | Substandard |   |   | Doubtful |      |
|                   |   |   |       |   |   |   |       |    |   |   |        |   |   |     |      |
|                   |   |   |       |   |   |   |       |    |   |   |        |   |   |     |      |
| Commercial real estate |   | $      | 15,590,481 |   |   | $      | 59,250,451 |    |   | $      | 435,870     |   |   | $        | 339,527   |   |   | $ | 2,234,183 |   |
| Commercial loans       |   |   | 14,556,404 |   |   |   | 24,858,057 |    |   |   | -           |   |   |     | 1,550,421 |   |   |   | - |   |
| Total                  |   | $      | 30,146,885 |   |   | $      | 84,108,508 |    |   | $      | 435,870     |   |   | $        | 1,889,948 |   |   | $ | 2,234,183 |   |

| 4. | Fair Value |
|----|------------|

----

----

| 4. | Fair Value (Continued) |
|----|------------------------|

----

----

| 4. | Fair Value (Continued) |
|----|------------------------|

|                                   |   |          |        |   | Fair Value Measurements                                     |   |
|----------------------------------------|--------|---------------|-------------|--------|-------------------------------------------------------------|--------|
|                                   |   |          |        |   | at December 31, 2010 Using                                  |   |
|                                   |   | CarryingValue |        |   | Quoted Prices in Active Marketsfor IdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Assets:                                |   |          |        |   |                                                        |   |   |   |   |   |   |   |
| Trading securities                     |   |          |        |   |                                                        |   |   |   |   |   |   |   |
| Common and preferred equities          |   | $             | 7,691,331   |   |                                                        | $      | - |   |   | $ | 5,790,079 |   |   | $ | 1,901,252 |   |
| Available for sale securities          |   |          |        |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Agency                            |   |          | 69,145,413  |   |                                                        |   | - |   |   |   | 69,145,413 |   |   |   | - |   |
| Corporate                              |   |          | 24,253,423  |   |                                                        |   | - |   |   |   | 24,253,423 |   |   |   | - |   |
| Trust preferreds                       |   |          | 3,402,901   |   |                                                        |   | - |   |   |   | - |   |   |   | 3,402,901 |   |
| State and municipal                    |   |          | 49,070,220  |   |                                                        |   | - |   |   |   | 49,070,220 |   |   |   | - |   |
| Small Business Administration          |   |          | 2,935,994   |   |                                                        |   | - |   |   |   | 2,935,994 |   |   |   | - |   |
| Residential mortgage-backed securities |   |          | 75,192,353  |   |                                                        |   | - |   |   |   | 75,192,353 |   |   |   | - |   |
| Collateralized mortgage obligations    |   |          | 3,477,563   |   |                                                        |   | - |   |   |   | 3,477,563 |   |   |   | - |   |
| Total                                  |   | $             | 235,169,198 |   |                                                        | $      | - |   |   | $ | 229,865,045 |   |   | $ | 5,304,153 |   |

|                                   |   |          |        |   | Fair Value Measurements                                    |   |
|----------------------------------------|--------|---------------|-------------|--------|------------------------------------------------------------|--------|
|                                   |   |          |        |   | at December 31, 2009 Using                                 |   |
|                                   |   | CarryingValue |        |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Assets:                                |   |          |        |   |                                                       |   |   |   |   |   |   |   |
| Trading securities                     |   |          |        |   |                                                       |   |   |   |   |   |   |   |
| Common and preferred equities          |   | $             | 7,627,280   |   |                                                       | $      | - |   |   | $ | 5,568,437 |   |   | $ | 2,058,843 |   |
| Available for sale securities          |   |          |        |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Agency                            |   |          | 23,883,734  |   |                                                       |   | - |   |   |   | 23,883,734 |   |   |   | - |   |
| Corporate                              |   |          | 16,205,547  |   |                                                       |   | - |   |   |   | 13,955,547 |   |   |   | 2,250,000 |   |
| Trust preferreds                       |   |          | 5,920,764   |   |                                                       |   | - |   |   |   | - |   |   |   | 5,920,764 |   |
| State and municipal                    |   |          | 17,988,002  |   |                                                       |   | - |   |   |   | 17,988,002 |   |   |   | - |   |
| Small Business Administration          |   |          | 12,100      |   |                                                       |   | - |   |   |   | 12,100 |   |   |   | - |   |
| Residential mortgage-backed securities |   |          | 44,692,794  |   |                                                       |   | - |   |   |   | 44,692,794 |   |   |   | - |   |
| Collateralized mortgage obligations    |   |          | 5,829,637   |   |                                                       |   | - |   |   |   | 5,829,637 |   |   |   | - |   |
| Total                                  |   | $             | 122,159,858 |   |                                                       | $      | - |   |   | $ | 111,930,251 |   |   | $ | 10,229,607 |   |

----

----

| 4. | Fair Value (Continued) |
|----|------------------------|

|                                            |   | Fair Value Measurements Using Significant |      |
|-------------------------------------------------|--------|-------------------------------------------|-----------|
|                                            |   | Unobservable Inputs (Level 3)             |      |
|                                            |   | Trading                                   |      |   |   |   |   | Trust |   |   |   |   |
|                                            |   | Securities                                |      |   | Corporate |   |   | Preferreds |   |   | Total |   |
|                                            |   |                                      |      |   |   |   |   |   |   |   |   |   |
| Beginning balance, January 1, 2010              |   | $                                         | 2,058,843 |   |   | $ | 2,250,000 |   |   | $ | 5,920,764 |   |   | $ | 10,229,607 |   |
| Total gains or losses (realized/unrealized)     |   |                                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                            |   |                                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income on securities                   |   |                                      | (39,228   | ) |   |   | 3,033 |   |   |   | - |   |   |   | (36,195 | ) |
| Other changes in fair value                     |   |                                      | (118,363  | ) |   |   | - |   |   |   | - |   |   |   | (118,363 | ) |
| Net impairment losses recognized in earnings    |   |                                      | -         |   |   |   | - |   |   |   | (2,309,222 | ) |   |   | (2,309,222 | ) |
| Included in other comprehensive income          |   |                                      | -         |   |   |   | (678,033 | ) |   |   | 60,068 |   |   |   | (617,965 | ) |
| Interest payments applied to principal          |   |                                      |      |   |   |   |   |   |   |   | (268,709 | ) |   |   | (268,709 | ) |
| Purchases, sales, issuances and settlement, net |   |                                      | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Transfers in and/or out of Level 3              |   |                                      | -         |   |   |   | (1,575,000 | ) |   |   | - |   |   |   | (1,575,000 | ) |
| Ending balance, December 31, 2010               |   | $                                         | 1,901,252 |   |   | $ | - |   |   | $ | 3,402,901 |   |   | $ | 5,304,153 |   |

|                                         |   |                                                                   |      |
|----------------------------------------------|--------|------------------------------------------------------------------------|-----------|
|                                         |   | Fair Value Measurements Using SignificantUnobservable Inputs (Level 3) |      |
|                                         |   | Trading Securities                                                     |      |   | Corporate |   |   | Trust Preferreds |   |   | Collateralized Mortgage Obligations |   |   | Total |   |
|                                         |   |                                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance, January 1, 2009           |   | $                                                                      | 2,020,380 |   |   | $ | 1,500,000 |   |   | $ | 9,207,927 |   |   | $ | 768,169 |   |   | $ | 13,496,476 |   |
| Total gains or losses (realized/unrealized)  |   |                                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                         |   |                                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income on securities                |   |                                                                   | (39,228   | ) |   |   | 440 |   |   |   | (18,890 | ) |   |   | 6,948 |   |   |   | (50,730 | ) |
| Other changes in fair value                  |   |                                                                   | 77,691    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 77,691 |   |
| Net impairment losses recognized in earnings |   |                                                                   | -         |   |   |   | - |   |   |   | (2,281,741 | ) |   |   | (13,100 | ) |   |   | (2,294,841 | ) |
| Included in other comprehensive income       |   |                                                                   | -         |   |   |   | 749,560 |   |   |   | (986,532 | ) |   |   | (184,769 | ) |   |   | (421,741 | ) |
| Purchases, issuances, and settlements        |   |                                                                   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Transfers in and/or out of Level 3           |   |                                                                   | -         |   |   |   | - |   |   |   | - |   |   |   | (577,248 | ) |   |   | (577,248 | ) |
| Ending balance, December 31, 2009            |   | $                                                                      | 2,058,843 |   |   | $ | 2,250,000 |   |   | $ | 5,920,764 |   |   | $ | - |   |   | $ | 10,229,607 |   |

----

----

| 4. | Fair Value (Continued) |
|----|------------------------|

|                                      |   | 2010                   |    |   | 2009       |   |
|-------------------------------------------|--------|------------------------|---------|--------|------------|--------|
|                                      |   | Carrying               |    |   | Estimated  |   |   | Carrying |   |   | Estimated |   |
|                                      |   | Amount                 |    |   | Fair Value |   |   | Amount |   |   | Fair Value |   |
| Financial assets:                         |   | (Amounts in thousands) |    |
| Cash and cash equivalents                 |   | $                      | 33,741  |   |       | $      | 33,741 |   |   | $ | 39,537 |   |   | $ | 39,537 |   |
| Trading securities                        |   | $                      | 7,691   |   |       | $      | 7,691 |   |   | $ | 7,627 |   |   | $ | 7,627 |   |
| Investment securities, available for sale |   | $                      | 227,478 |   |       | $      | 227,478 |   |   | $ | 114,532 |   |   | $ | 114,532 |   |
| Investment securities, held-to-maturity   |   |                   | 24,144  |   |       |   | 25,070 |   |   |   | 47,692 |   |   |   | 47,966 |   |
| Loans held for sale                       |   |                   | 857     |   |       |   | 865 |   |   |   | 687 |   |   |   | 700 |   |
| Loans receivable, net                     |   |                   | 282,573 |   |       |   | 297,342 |   |   |   | 295,152 |   |   |   | 297,331 |   |
| Federal Home Loan Bank stock              |   |                   | 2,109   |   |       |   | N/A |   |   |   | 2,665 |   |   |   | N/A |   |
| Accrued interest receivable               |   |                   | 2,455   |   |       |   | 2,455 |   |   |   | 2,469 |   |   |   | 2,469 |   |
| Financial liabilities:                    |   |                   |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                  |   | $                      | 552,164 |   |       | $      | 560,226 |   |   | $ | 489,365 |   |   | $ | 481,735 |   |
| Federal Home Loan Bank advances           |   |                   | 12,000  |   |       |   | 17,437 |   |   |   | 31,000 |   |   |   | 31,335 |   |
| Accrued interest payable                  |   |                   | 53      |   |       |   | 53 |   |   |   | 117 |   |   |   | 117 |   |

|               |   | Changes in Fair Values for the year ended December 31, 2010for Items Measured at Fair ValuePursuant to Election of the Fair Value Option |    |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------|---------|
|               |   | OtherGains andLosses                                                                                                                     |    |   | InterestIncome |   |   | InterestExpense |   |   | Total Changesin Fair ValuesIncluded inCurrent PeriodEarnings |   |
|               |   |                                                                                                                                     |    |   |   |   |   |   |   |   |   |   |
| Trading securities |   | $                                                                                                                                        | 103,280 |   |   | $ | (39,229 | ) |   | $ | - |   |   | $ | 64,051 |   |

----

----

| 4. | Fair Value (Continued) |
|----|------------------------|

|               |   | Changes in Fair Values for the year ended December 31, 2009for Items Measured at Fair ValuePursuant to Election of the Fair Value Option |      |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|               |   | OtherGains andLosses                                                                                                                     |      |   | InterestIncome |   |   | InterestExpense |   |   | Total Changesin Fair ValuesIncluded inCurrent PeriodEarnings |   |
|               |   |                                                                                                                                     |      |   |   |   |   |   |   |   |   |   |
| Trading securities |   | $                                                                                                                                        | 1,725,032 |   |   | $ | (39,228 | ) |   | $ | - |   |   | $ | 1,685,804 |   |

| 5. | Secondary Mortgage Market Activities |
|----|--------------------------------------|

|                                   |   | 2010   |        |   | 2009   |   |        | 2008   |   |
|----------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| Mortgage loan portfolios serviced for: |   |   |        |   |   |   |        |   |   |
| Freddie Mac                            |   | $      | 114,974,199 |   |   | $      | 111,043,793 |   |   | $ | 83,133,952 |   |
| Federal Home Loan Bank                 |   | $      | 21,157,900  |   |   | $      | 15,252,193  |   |   | $ | 18,970,092 |   |

|                         |   | 2010   |     |   | 2009   |   |     | 2008   |   |
|------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                         |   |   |     |   |   |   |     |   |   |
| Balance at beginning of year |   | $      | 500,750  |   |   | $      | 320,210  |   |   | $ | 332,987 |   |
| Additions                    |   |   | 203,176  |   |   |   | 331,104  |   |   |   | 95,935 |   |
| Disposals                    |   |   | -        |   |   |   | -        |   |   |   | - |   |
| Amortized to expense         |   |   | (168,721 | )      |   |   | (150,564 | )      |   |   | (108,712 | ) |
| Balance at end of year       |   | $      | 535,205  |   |   | $      | 500,750  |   |   | $ | 320,210 |   |
| Valuation Allowance          |   | $      | -        |   |   | $      | -        |   |   | $ | - |   |

| 2011 |   | $      | 153,547 |   |
|------|--------|--------|---------|--------|
| 2012 |   |   | 111,760 |   |
| 2013 |   |   | 80,895  |   |
| 2014 |   |   | 58,162  |   |
| 2015 |   |   | 41,451  |   |

----

----

| 6. | Premises and Equipment |
|----|------------------------|

|                     |   | 2010   |        |   | 2009   |   |
|--------------------------|--------|--------|-------------|--------|--------|--------|
| Land                     |   | $      | 2,394,542   |   |   | $      | 2,814,483 |   |
| Buildings                |   |   | 22,744,244  |   |   |   | 23,803,681 |   |
| Equipment and fixtures   |   |   | 8,968,017   |   |   |   | 10,605,092 |   |
| Construction in progress |   |   | -           |   |   |   | 44,312 |   |
|                     |   |   | 34,106,803  |   |   |   | 37,267,568 |   |
| Accumulated depreciation |   |   | (14,204,173 | )      |   |   | (15,993,052 | ) |
| Net book value           |   | $      | 19,902,630  |   |   | $      | 21,274,516 |   |

| 7. | Goodwill and Other Intangible Assets |
|----|--------------------------------------|

|                             |   | As of December 31, 2010 |      |
|----------------------------------|--------|-------------------------|-----------|
|                             |   | GrossCarryingValue      |      |   | AccumulatedAmortization |   |   | Net |   |
| Core deposit intangible          |   | $                       | 2,705,391 |   |   | $ | (1,786,368 | ) |   | $ | 919,023 |   |
| Customer relationship intangible |   |                    | 1,265,543 |   |   |   | (966,625 | ) |   |   | 298,918 |   |
| Total                            |   | $                       | 3,970,934 |   |   | $ | (2,752,993 | ) |   | $ | 1,217,941 |   |

|                             |   | As of December 31, 2009 |      |
|----------------------------------|--------|-------------------------|-----------|
|                             |   | GrossCarryingValue      |      |   | AccumulatedAmortization |   |   | Net |   |
| Core deposit intangible          |   | $                       | 2,705,391 |   |   | $ | (1,485,828 | ) |   | $ | 1,219,563 |   |
| Customer relationship intangible |   |                    | 1,265,543 |   |   |   | (855,175 | ) |   |   | 410,368 |   |
| Total                            |   | $                       | 3,970,934 |   |   | $ | (2,341,003 | ) |   | $ | 1,629,931 |   |

| 2011 |   | $      | 361,307 |   |
|------|--------|--------|---------|--------|
| 2012 |   |   | 312,507 |   |
| 2013 |   |   | 263,014 |   |
| 2014 |   |   | 125,946 |   |
| 2015 |   |   | 90,881  |   |

----

----

| 7. | Goodwill and Other Intangible Assets (Continued) |
|----|--------------------------------------------------|

|                            |   | Banking    |       |   | Insurance  |   |       | Benefit Consulting |   |   |      |   |
|---------------------------------|--------|------------|------------|--------|------------|--------|------------|--------------------|--------|--------|-----------|--------|
|                            |   | Activities |       |   | Activities |   |       | Activities         |   |   | Total     |   |
| Balance as of December 31, 2007 |   | $          | 10,035,905 |   |       | $      | 10,111,454 |               |   | $      | 2,645,243 |   |   | $ | 22,792,602 |   |
| Goodwill acquired               |   |       | (30,774    | )      |       |   | 72,567     |               |   |   | 129,044   |   |   |   | 170,837 |   |
| Balance as of December 31, 2008 |   |       | 10,005,131 |   |       |   | 10,184,021 |               |   |   | 2,774,287 |   |   |   | 22,963,439 |   |
| Goodwill acquired               |   |       | -          |   |       |   | 84,245     |               |   |   | 135,417   |   |   |   | 219,662 |   |
| Balance as of December 31, 2009 |   |       | 10,005,131 |   |       |   | 10,268,266 |               |   |   | 2,909,704 |   |   |   | 23,183,101 |   |
| Goodwill acquired               |   |       | -          |   |       |   | -          |               |   |   | 117,520   |   |   |   | 117,520 |   |
| Balance as of December 31, 2010 |   | $          | 10,005,131 |   |       | $      | 10,268,266 |               |   | $      | 3,027,224 |   |   | $ | 23,300,621 |   |

----

----

| 8. | Due to Depositors |
|----|-------------------|

|                                       |   | 2010   |        |   | 2009   |   |
|--------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                       |   |   |        |   |   |   |
| Non-interest bearing demand                |   | $      | 65,179,106  |   |   | $      | 62,996,738 |   |
| Savings                                    |   |   | 89,524,824  |   |   |   | 81,889,687 |   |
| Money market and interest-bearing checking |   |   | 244,230,823 |   |   |   | 186,526,234 |   |
| Time deposits                              |   |   | 152,194,901 |   |   |   | 156,903,181 |   |
| Mortgage escrow funds                      |   |   | 1,034,160   |   |   |   | 1,048,567 |   |
| Total due to depositors                    |   | $      | 552,163,814 |   |   | $      | 489,364,407 |   |

|                |   | 2010   |        |   | 2009    |   |
|---------------------|--------|--------|-------------|--------|---------|--------|
| Maturity            |   | Amount |        |   | Percent |   |   | Amount |   |   | Percent |   |
|                |   |   |        |   |    |   |   |   |   |   |   |   |
| One year or less    |   | $      | 116,262,311 |   |    |   | 76.4 | % |   | $ | 123,357,912 |   |   |   | 78.6 | % |
| One to two years    |   |   | 16,981,836  |   |    |   | 11.2 |   |   |   | 16,630,577 |   |   |   | 10.6 |   |
| Two to three years  |   |   | 6,013,705   |   |    |   | 3.9 |   |   |   | 5,754,751 |   |   |   | 3.7 |   |
| Three to four years |   |   | 7,002,939   |   |    |   | 4.6 |   |   |   | 3,669,521 |   |   |   | 2.3 |   |
| Four to five years  |   |   | 5,866,443   |   |    |   | 3.9 |   |   |   | 7,485,961 |   |   |   | 4.8 |   |
| Over five years     |   |   | 67,667      |   |    |   | 0.0 |   |   |   | 4,459 |   |   |   | 0.0 |   |
|                |   | $      | 152,194,901 |   |    |   | 100.0 | % |   | $ | 156,903,181 |   |   |   | 100.0 | % |

| 9. | Borrowings |
|----|------------|

|                                            |   | 2010   |       |   | 2009   |   |
|-------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Short-term borrowings:                          |   |   |       |   |   |   |
| Federal Home Loan Bank overnight line of credit |   | $      | -          |   |   | $      | - |   |
| Federal Home Loan Bank advances                 |   |   | 1,000,000  |   |   |   | 19,000,000 |   |
| Long-term borrowings:                           |   |   |       |   |   |   |   |   |
| Federal Home Loan Bank advances                 |   |   | 11,000,000 |   |   |   | 12,000,000 |   |
|                                            |   | $      | 12,000,000 |   |   | $      | 31,000,000 |   |

|   |   | Range of Rates |   |   | Average Rate |   |   |   |   |
|--------|--------|----------------|--------|--------|--------------|--------|--------|--------|--------|
|   |   |           |   |   |         |   |   |   |   |
| 2011   |   |           | 5.74   | %      |         |   | 5.74   | %      |   |   | 1,000,000 |   |
| 2012   |   |           | 3.34   | %      |         |   | 3.34   | %      |   |   | 5,000,000 |   |
| 2013   |   |           | 5.00   | %      |         |   | 5.00   | %      |   |   | 5,000,000 |   |
| 2014   |   |           | 5.33   | %      |         |   | 5.33   | %      |   |   | 1,000,000 |   |
|   |   |           |   |   |         |   |   |   |   | $ | 12,000,000 |   |

----

----

| 9. | Borrowings (Continued) |
|----|------------------------|

| 10. | Income Taxes |
|-----|--------------|

|      |   | 2010   |       |   | 2009   |   |      | 2008   |   |
|-----------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Current:  |   |   |       |   |   |   |      |   |   |
| Federal   |   | $      | 2,073,533  |   |   | $      | 865,283   |   |   | $ | 626,812 |   |
| State     |   |   | 334,875    |   |   |   | (3,547    | )      |   |   | 4,086 |   |
| Deferred: |   |   |       |   |   |   |      |   |   |   |   |   |
| Federal   |   |   | (1,206,333 | )      |   |   | 299,057   |   |   |   | (2,322,612 | ) |
| State     |   |   | (287,875   | )      |   |   | 50,127    |   |   |   | (531,086 | ) |
|      |   | $      | 914,200    |   |   | $      | 1,210,920 |   |   | $ | (2,222,800 | ) |

|                                    |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                    |   |   |   |   |   |   |   |   |   |
| Federal statutory income tax rate       |   |   | 34     | %      |   |   | 34     | %      |   |   | 34 | % |
| State tax, net of federal benefit       |   |   | 1      | %      |   |   | 1      | %      |   |   | 9 | % |
| Tax exempt investment income            |   |   | (10    | )%     |   |   | (7     | )%     |   |   | 7 | % |
| Earnings from bank owned life insurance |   |   | (4     | )%     |   |   | (4     | )%     |   |   | 5 | % |
| Other                                   |   |   | (1     | )%     |   |   | (1     | )%     |   |   | 2 | % |
| Effective tax rate expense              |   |   | 20     | %      |   |   | 23     | %      |   |   | 57 | % |

----

----

| 10. | Income Taxes (Continued) |
|-----|--------------------------|

|                                               |   | 2010              |       |   | 2009   |   |
|----------------------------------------------------|--------|-------------------|------------|--------|--------|--------|
|                                               |   | Asset (Liability) |       |
| Allowance for loan losses                          |   | $                 | 1,646,000  |   |   | $      | 1,093,000 |   |
| Deferred compensation                              |   |              | 255,000    |   |   |   | 296,000 |   |
| Investment security charges/adjustments            |   |              | 5,171,000  |   |   |   | 4,162,000 |   |
| Unrealized losses on securities available for sale |   |              | 2,854,000  |   |   |   | 1,324,000 |   |
| Pension benefits                                   |   |              | 451,000    |   |   |   | 514,000 |   |
| Other                                              |   |              | 66,000     |   |   |   | 15,000 |   |
| subtotal deferred tax assets                       |   |              | 10,443,000 |   |   |   | 7,404,000 |   |
|                                               |   |              |       |   |   |   |   |   |
| Depreciation                                       |   |              | (443,000   | )      |   |   | (388,000 | ) |
| Mortgage related fees                              |   |              | (382,000   | )      |   |   | (389,000 | ) |
| Intangible amortization                            |   |              | (367,000   | )      |   |   | (257,000 | ) |
| Purchase accounting adjustments                    |   |              | (250,000   | )      |   |   | (314,000 | ) |
| Prepaid expenses                                   |   |              | (278,000   | )      |   |   | (316,000 | ) |
| Other                                              |   |              | (84,000    | )      |   |   | (87,000 | ) |
| subtotal deferred tax liability                    |   |              | (1,804,000 | )      |   |   | (1,751,000 | ) |
| Total deferred income tax asset, net               |   | $                 | 8,639,000  |   |   | $      | 5,653,000 |   |

----

----

| 11. | Benefit Plans |
|-----|---------------|

|                                                            |   | Oneida Savings Bank |      |   | State Bank of Chittenango |   |
|-----------------------------------------------------------------|--------|---------------------|-----------|--------|---------------------------|--------|
|                                                            |   | 2010                |      |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Change in benefit obligation:                                   |   |                |      |   |                      |   |   |   |   |   |   |   |
| Benefit obligation at beginning of year                         |   | $                   | 4,288,665 |   |                      | $      | 4,253,399 |   |   | $ | 2,332,039 |   |   | $ | 2,351,556 |   |
| Service cost                                                    |   |                | -         |   |                      |   | - |   |   |   | 21,899 |   |   |   | 26,716 |   |
| Interest cost                                                   |   |                | 211,573   |   |                      |   | 163,330 |   |   |   | 131,694 |   |   |   | 135,800 |   |
| Actuarial gain (loss)                                           |   |                | 46,726    |   |                      |   | 58,741 |   |   |   | 123,779 |   |   |   | 39,755 |   |
| Benefits paid                                                   |   |                | (175,065  | )      |                      |   | (186,805 | ) |   |   | (213,641 | ) |   |   | (221,788 | ) |
| Benefit obligation at end of year                               |   | $                   | 4,371,899 |   |                      | $      | 4,288,665 |   |   | $ | 2,395,770 |   |   | $ | 2,332,039 |   |
| Change in plan assets, at fair value:                           |   |                |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Beginning plan assets                                           |   | $                   | 3,233,423 |   |                      | $      | 2,747,228 |   |   | $ | 2,169,447 |   |   | $ | 1,952,609 |   |
| Actual return                                                   |   |                | 316,171   |   |                      |   | 509,000 |   |   |   | 177,294 |   |   |   | 370,819 |   |
| Benefits paid                                                   |   |                | (175,065  | )      |                      |   | (186,805 | ) |   |   | (211,605 | ) |   |   | (213,981 | ) |
| Employer contributions                                          |   |                | 200,000   |   |                      |   | 164,000 |   |   |   | - |   |   |   | 60,000 |   |
| Settlements                                                     |   |                | -         |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Ending plan assets                                              |   | $                   | 3,574,529 |   |                      | $      | 3,233,423 |   |   | $ | 2,135,136 |   |   | $ | 2,169,447 |   |
| Funded status at year end (plan assets less benefit obligation) |   | $                   | (797,370  | )      |                      | $      | (1,055,242 | ) |   | $ | (260,634 | ) |   | $ | (162,592 | ) |

|                        |   | Oneida Savings Bank |      |   | State Bank of Chittenango |   |
|-----------------------------|--------|---------------------|-----------|--------|---------------------------|--------|
|                        |   | 2010                |      |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Net actuarial loss (gain)   |   | $                   | 2,284,174 |   |                      | $      | 2,436,186 |   |   | $ | 911,315 |   |   | $ | 854,151 |   |
| Prior service cost (credit) |   |                | -         |   |                      |   | - |   |   |   | - |   |   |   | - |   |
|                        |   | $                   | 2,284,174 |   |                      | $      | 2,436,186 |   |   | $ | 911,315 |   |   | $ | 854,151 |   |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

|                                           |   | Oneida Savings Bank |     |   | State Bank of Chittenango |   |
|------------------------------------------------|--------|---------------------|----------|--------|---------------------------|--------|
|                                           |   | 2010                |     |   | 2009                      |   |   | 2008 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                           |   |                |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost benefits earned during the period |   | $                   | -        |   |                      | $      | - |   |   | $ | - |   |   | $ | 21,899 |   |   | $ | 26,716 |   |   | $ | 27,200 |   |
| Interest cost on projected benefit obligation  |   |                | 211,573  |   |                      |   | 163,330 |   |   |   | 212,080 |   |   |   | 131,694 |   |   |   | 135,800 |   |   |   | 134,793 |   |
| Expected return on plan assets                 |   |                | (243,442 | )      |                      |   | (205,187 | ) |   |   | (291,424 | ) |   |   | (155,498 | ) |   |   | (139,125 | ) |   |   | (208,914 | ) |
| Net amortization and deferral                  |   |                | 126,009  |   |                      |   | 146,753 |   |   |   | 65,736 |   |   |   | 42,783 |   |   |   | 56,480 |   |   |   | - |   |
| Net periodic pension cost (benefit)            |   |                | 94,140   |   |                      |   | 104,896 |   |   |   | (13,608 | ) |   |   | 40,878 |   |   |   | 79,871 |   |   |   | (46,921 | ) |
| Net (gain) loss                                |   |                | (152,012 | )      |                      |   | (391,825 | ) |   |   | 1,300,942 |   |   |   | 99,947 |   |   |   | (199,746 | ) |   |   | 1,074,694 |   |
| Prior service cost (credit)                    |   |                | -        |   |                      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of prior service cost             |   |                | -        |   |                      |   | - |   |   |   | - |   |   |   | (42,783 | ) |   |   | (56,480 | ) |   |   | - |   |
| Total recognized in other comprehensive        |   |                | (152,012 | )      |                      |   | (391,825 | ) |   |   | 1,300,942 |   |   |   | 57,164 |   |   |   | (256,226 | ) |   |   | 1,074,694 |   |
| income                                         |   |                |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total recognized in net periodic benefit       |   |                |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cost and other comprehensive income            |   | $                   | (57,872  | )      |                      | $      | (286,929 | ) |   | $ | 1,287,334 |   |   | $ | 98,042 |   |   | $ | (176,355 | ) |   | $ | 1,027,773 |   |

|                                           |   | Oneida Savings Bank |   |   | State Bank of Chittenango |   |
|------------------------------------------------|--------|---------------------|--------|--------|---------------------------|--------|
| Assumptions                                    |   | 2010                |   |   | 2009                      |   |   | 2008 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                           |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average assumptions used to determine |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| benefit obligation at year-end                 |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                  |   |                | 5.05   | %      |                      |   | 3.97 | % |   |   | 5.06 | % |   |   | 5.38 | % |   |   | 5.89 | % |   |   | 6.03 | % |
|                                           |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average assumptions used to           |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| determine net cost                             |   |                |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                  |   |                | 3.97   | %      |                      |   | 5.06 | % |   |   | 5.18 | % |   |   | 5.89 | % |   |   | 6.03 | % |   |   | 6.25 | % |
| Expected return on plan assets                 |   |                | 7.50   | %      |                      |   | 7.50 | % |   |   | 7.50 | % |   |   | 7.50 | % |   |   | 7.50 | % |   |   | 7.50 | % |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

| Equity securities       |   | Dividend discount model, the smoothed earnings yield model |
|-------------------------|--------|------------------------------------------------------------|
|                    |   | and the equity risk premium model                          |
|                    |   |                                                       |
| Fixed income securities |   | Current yield to maturity and forecasts of future yields   |

|              |   | Target Allocation |   |   | Percentage of Plan Assets at December 31 |   |   | Weighted-Average Expected Long Term Rate |   |
|-------------------|--------|-------------------|--------|--------|-----------------------------------------------|--------|--------|------------------------------------------|--------|
| Asset Category    |   | 2011              |   |   | 2010                                          |   |   | 2009                                     |   |   | of Return |   |
|              |   |              |   |   |                                          |   |   |                                     |   |   |   |   |
| Equity Securities |   |              | 60     | %      |                                          |   | 49     | %                                        |   |   | 29 | % |   |   | 10 | % |
| Debt Securities   |   |              | 40     | %      |                                          |   | 51     | %                                        |   |   | 71 | % |   |   | 5 | % |
| Other             |   |              | 0      | %      |                                          |   | 0      | %                                        |   |   | 0 | % |   |   |   |   |
| Total             |   |              | 100    | %      |                                          |   | 100    | %                                        |   |   | 100 | % |   |   | 8 | % |

|                              |   |     |      |   | Fair Value Measurements    |   |
|-----------------------------------|--------|----------|-----------|--------|----------------------------|--------|
|                              |   |     |      |   | at December 31, 2010 Using |   |
|                              |   |     |      |   | Quoted Prices in           |   |   | Significant |   |   |   |   |
|                              |   |     |      |   | Active Markets             |   |   | Other |   |   | Significant |   |
|                              |   |     |      |   | for Identical              |   |   | Observable |   |   | Unobservable |   |
|                              |   | Carrying |      |   | Assets                     |   |   | Inputs |   |   | Inputs |   |
|                              |   | Value    |      |   | (Level 1)                  |   |   | (Level 2) |   |   | (Level 3) |   |
| Plan Assets:                      |   |     |      |   |                       |   |   |   |   |   |   |   |
| Cash                              |   | $        | 141,186   |   |                       | $      | 141,186 |   |   | $ | - |   |   | $ | - |   |
| Equities                          |   |     |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                      |   |     | 1,762,177 |   |                       |   | 1,762,177 |   |   |   | - |   |   |   | - |   |
| Fixed income securities           |   |     |      |   |                       |   |   |   |   |   | - |   |   |   |   |   |
| Corporate bonds                   |   |     | 349,918   |   |                       |   | - |   |   |   | 349,918 |   |   |   | - |   |
| Government issues (US Treasuries) |   |     | 973,885   |   |                       |   | - |   |   |   | 973,885 |   |   |   | - |   |
| FHLMC                             |   |     | 150,539   |   |                       |   | - |   |   |   | 150,539 |   |   |   | - |   |
| FNMA                              |   |     | 196,824   |   |                       |   | - |   |   |   | 196,824 |   |   |   | - |   |
|                              |   |     |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Total                             |   | $        | 3,574,529 |   |                       | $      | 1,903,363 |   |   | $ | 1,671,166 |   |   | $ | - |   |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

|                          |   |          |      |   | Fair Value Measurementsat December 31, 2009 Using          |   |
|-------------------------------|--------|---------------|-----------|--------|------------------------------------------------------------|--------|
|                          |   | CarryingValue |      |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Plan Assets:                  |   |          |      |   |                                                       |   |   |   |   |   |   |   |
| Equities                      |   |          |      |   |                                                       |   |   |   |   |   |   |   |
| Common stock                  |   | $             | 948,360   |   |                                                       | $      | 948,360 |   |   | $ | - |   |   | $ | - |   |
| Fixed income securities       |   |          |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds               |   |          | 581,348   |   |                                                       |   | - |   |   |   | 581,348 |   |   |   | - |   |
| Government issues             |   |          | 1,277,704 |   |                                                       |   | - |   |   |   | 1,277,704 |   |   |   | - |   |
| FHLMC                         |   |          | 142,795   |   |                                                       |   | - |   |   |   | 142,795 |   |   |   | - |   |
| FNMA                          |   |          | 133,939   |   |                                                       |   | - |   |   |   | 133,939 |   |   |   | - |   |
| Other fixed income securities |   |          | 149,277   |   |                                                       |   | - |   |   |   | 149,277 |   |   |   | - |   |
| Total                         |   | $             | 3,233,423 |   |                                                       | $      | 948,360 |   |   | $ | 2,285,063 |   |   | $ | - |   |

| Equity securities           |   | Dividend discount model, the smoothed earnings yield model          |
|-----------------------------|--------|---------------------------------------------------------------------|
|                        |   | and the equity risk premium model                                   |
|                        |   |                                                                |
| Fixed income securities     |   | Current yield to maturity and forecasts of future yields            |
|                        |   |                                                                |
| Other financial instruments |   | Comparison of the specific investment’s risk to that of fixed |
|                        |   | income and equity instruments and using judgment                    |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

|                        |   | TargetAllocation |    |   | Percentage ofPlan Assetsat December 31, |   |   | Weighted-Average ExpectedLong Term Rate |   |
|-----------------------------|--------|------------------|---------|--------|-----------------------------------------|--------|--------|-----------------------------------------|--------|
| Asset Category              |   | 2011             |    |   | 2010                                    |   |   | 2009                                    |   |   | of Return |   |
| Cash equivalents            |   |             | 0 - 20  | %      |                                    |   | 11     | %                                       |   |   | 14 | % |   |   | 0 | % |
| Equity securities           |   |             | 40 - 60 | %      |                                    |   | 48     | %                                       |   |   | 46 | % |   |   | 4.6 | % |
| Fixed income securities     |   |             | 40 - 60 | %      |                                    |   | 41     | %                                       |   |   | 40 | % |   |   | 1.9 | % |
| Other financial instruments |   |             | 0 - 5   | %      |                                    |   | 0      | %                                       |   |   | 0 | % |   |   | 0 | % |
| Total                       |   |             |    |   |                                    |   | 100    | %                                       |   |   | 100 | % |   |   | 6.5 | % |

----

----

| 11.  | Benefit Plans (Continued) |
|-----------|---------------------------|

|                                |   |          |      |   | Fair Value Measurementsat December 31, 2010 Using          |   |
|-------------------------------------|--------|---------------|-----------|--------|------------------------------------------------------------|--------|
|                                |   | CarryingValue |      |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Plan Assets:                        |   |          |      |   |                                                       |   |   |   |   |   |   |   |
| Cash equivalents                    |   |          |      |   |                                                       |   |   |   |   |   |   |   |
| Foreign currencies                  |   | $             | 4,621     |   |                                                       | $      | 4,621 |   |   | $ | - |   |   | $ | - |   |
| Short term investment funds         |   |          | 235,193   |   |                                                       |   | - |   |   |   | 235,193 |   |   |   | - |   |
| Equities                            |   |          |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Large cap                      |   |          | 595,347   |   |                                                       |   | 595,347 |   |   |   | - |   |   |   | - |   |
| U.S. Mid cap                        |   |          | 60,815    |   |                                                       |   | 60,815 |   |   |   | - |   |   |   | - |   |
| U.S. Small cap                      |   |          | 4,500     |   |                                                       |   | 4,500 |   |   |   | - |   |   |   | - |   |
| International                       |   |          | 369,267   |   |                                                       |   | 369,267 |   |   |   | - |   |   |   | - |   |
| Fixed income securities             |   |          |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds                     |   |          |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Rated single A or higher by S&P |   |          | 116,467   |   |                                                       |   | - |   |   |   | 116,467 |   |   |   | - |   |
| Rated below single A by S&P     |   |          | 81,774    |   |                                                       |   | - |   |   |   | 81,774 |   |   |   | - |   |
| Government issues                   |   |          | 620,696   |   |                                                       |   | - |   |   |   | 620,696 |   |   |   | - |   |
| Collateralized mortgage obligations |   |          |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Rated single A or higher by S&P |   |          | 32,069    |   |                                                       |   | - |   |   |   | 32,069 |   |   |   | - |   |
| Rated below single A by S&P     |   |          | 14,387    |   |                                                       |   | - |   |   |   | 14,387 |   |   |   | - |   |
| Total                               |   | $             | 2,135,136 |   |                                                       | $      | 1,034,550 |   |   | $ | 1,100,586 |   |   | $ | - |   |

|                                |   |           |      |   | Fair Value Measurementsat December 31, 2009 Using             |   |
|-------------------------------------|--------|----------------|-----------|--------|---------------------------------------------------------------|--------|
|                                |   | Carrying Value |      |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Plan Assets:                        |   |           |      |   |                                                          |   |   |   |   |   |   |   |
| Cash equivalents                    |   |           |      |   |                                                          |   |   |   |   |   |   |   |
| Foreign currencies                  |   | $              | 7,492     |   |                                                          | $      | 7,492 |   |   | $ | - |   |   | $ | - |   |
| Short term investment funds         |   |           | 286,579   |   |                                                          |   | - |   |   |   | 286,579 |   |   |   | - |   |
| Equities                            |   |           |      |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Large cap                      |   |           | 530,707   |   |                                                          |   | 530,707 |   |   |   | - |   |   |   | - |   |
| U.S. Mid cap                        |   |           | 18,979    |   |                                                          |   | 18,979 |   |   |   | - |   |   |   | - |   |
| U.S. Small cap                      |   |           | 5,452     |   |                                                          |   | 5,452 |   |   |   | - |   |   |   | - |   |
| International                       |   |           | 440,065   |   |                                                          |   | 440,065 |   |   |   |   |   |   |   |   |   |
| Fixed income securities             |   |           |      |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds                     |   |           |      |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Rated single A or higher by S&P |   |           | 112,904   |   |                                                          |   | - |   |   |   | 112,904 |   |   |   | - |   |
| Rated below single A by S&P     |   |           | 93,979    |   |                                                          |   | - |   |   |   | 93,979 |   |   |   | - |   |
| Government issues                   |   |           | 608,492   |   |                                                          |   | - |   |   |   | 608,492 |   |   |   | - |   |
| Collateralized mortgage obligations |   |           |      |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Rated single A or higher by S&P |   |           | 40,442    |   |                                                          |   | - |   |   |   | 40,442 |   |   |   | - |   |
| Rated below single A by S&P     |   |           | 12,124    |   |                                                          |   | - |   |   |   | 12,124 |   |   |   | - |   |
| Other fixed income securities       |   |           | 12,232    |   |                                                          |   | - |   |   |   | 12,232 |   |   |   | - |   |
| Total                               |   | $              | 2,169,447 |   |                                                          | $      | 1,002,695 |   |   | $ | 1,166,752 |   |   | $ | - |   |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

| Fiscal year ending December 31: |   | Oneida Savings Bank |      |   | State Bank Of Chittenango |   |
|---------------------------------|--------|---------------------|-----------|--------|---------------------------|--------|
| 2011                            |   | $                   | 350,000   |   |                      | $      | 189,037 |   |
| 2012                            |   |                | 368,000   |   |                      |   | 184,064 |   |
| 2013                            |   |                | 386,000   |   |                      |   | 180,589 |   |
| 2014                            |   |                | 405,000   |   |                      |   | 180,289 |   |
| 2015                            |   |                | 425,000   |   |                      |   | 177,636 |   |
| Years 2016 - 2020               |   |                | 2,468,000 |   |                      |   | 843,301 |   |

|                          |   | 2010   |    |
|-------------------------------|--------|--------|---------|
|                          |   |   |    |
| Allocated to participants     |   |   | 39,272  |   |
| Unearned                      |   |   | 118,228 |   |
| Total ESOP shares             |   |   | 157,500 |   |
| Fair value of unearned shares |   | $      | 928,090 |   |

----

----

| 11. | Benefit Plans (Continued) |
|-----|---------------------------|

| 12. | Stock Based Compensation Plans |
|-----|--------------------------------|

|                            |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Risk-free interest rate         |   |   | 0.50   | %      |   |   | 0.50   | %      |   |   | N/A |   |
| Expected stock price volatility |   |   | 66.32  | %      |   |   | 62.09  | %      |   |   | N/A |   |
| Expected dividend rate          |   |   | 3.00   | %      |   |   | 3.00   | %      |   |   | N/A |   |
| Expected life                   |   |   | 0.17   |   |   |   | 0.94   |   |   |   | N/A |   |

----

----

| 12. | Stock Based Compensation Plans (Continued) |
|-----|--------------------------------------------|

|                             |   | OptionsOutstandingAnd Exercisable |    |   | Range ofOptionPricePer Share |   |             | Weighted AverageExercise PriceSharesOutstanding |   |   | IntrinsicValue |   |
|----------------------------------|--------|-----------------------------------|---------|--------|------------------------------|--------|------------------|-------------------------------------------------|--------|--------|----------------|--------|
|                             |   |                              |    |   |                         |   |             |                                            |   |   |           |   |
| Outstanding at December 31, 2009 |   |                              | 111,619 |   |                         | $      | 5.169 - $19.885  |                                            |   | $      | 11.385         |   |   | $ | 152,346 |   |
| Granted                          |   |                              | 12,396  |   |                         | $      | 10.103 - $10.398 |                                            |   |   |           |   |   |   |   |   |
| Exercised                        |   |                              | (32,898 | )      |                         | $      | 5.169            |                                            |   |   |           |   |   |   |   |   |
| Forfeited                        |   |                              | (91,117 | )      |                         | $      | 10.103 - 19.885  |                                            |   |   |           |   |   |   |   |   |
| Outstanding at December 31, 2010 |   |                              | -       |   |                         |   |             |                                            |   |   |           |   |   |   |   |   |

|                                           |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                           |   |   |    |   |   |   |    |   |   |
| Intrinsic value of options exercised           |   | $      | 163,977 |   |   | $      | 489,449 |   |   | $ | 26,164 |   |
| Cash received from option exercises            |   |   | 34,835  |   |   |   | 9,326   |   |   |   | 32,348 |   |
| Shares received from option exercises          |   |   | 12,396  |   |   |   | 31,839  |   |   |   | - |   |
| Tax benefit realized from option exercises     |   |   | 25,644  |   |   |   | -       |   |   |   | - |   |
| Weighted average fair value of options granted |   |   | 1.057   |   |   |   | 2.467   |   |   |   | - |   |

|                           |   |   |    |   | Weighted Average |   |
|--------------------------------|--------|--------|---------|--------|------------------|--------|
|                           |   |   |    |   | Grant-Date       |   |
| Nonvested Shares               |   | Shares |    |   | Fair Value       |   |
|                           |   |   |    |   |             |   |
| Nonvested at January 1, 2010   |   |   | 14,973  |   |             | $      | 12.52 |   |
| Granted                        |   |   | 730     |   |             |   | 9.83 |   |
| Vested                         |   |   | (15,703 | )      |             |   | 12.19 |   |
| Forfeited                      |   |   | -       |   |             |   |   |   |
| Nonvested at December 31, 2010 |   |   | -       |   |             |   |   |   |

----

----

| 13. | Non-Interest Income and Expenses |
|-----|----------------------------------|

|                                |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Non-interest income:                |   |   |       |   |   |   |       |   |   |
| Service charges on deposit accounts |   | $      | 2,635,334  |   |   | $      | 2,615,542  |   |   | $ | 2,775,053 |   |
| Commissions and fees on sales       |   |   |       |   |   |   |       |   |   |   |   |   |
| of non-banking products             |   |   | 17,498,748 |   |   |   | 15,836,266 |   |   |   | 13,618,392 |   |
| Cash surrender value increase       |   |   | 601,684    |   |   |   | 696,916    |   |   |   | 587,602 |   |
| Other                               |   |   | 2,152,544  |   |   |   | 1,735,606  |   |   |   | 1,337,208 |   |
| Total non-interest income           |   | $      | 22,888,310 |   |   | $      | 20,884,330 |   |   | $ | 18,318,255 |   |
|                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Non-interest expenses:              |   |   |       |   |   |   |       |   |   |   |   |   |
| Salaries and employee benefits      |   | $      | 21,445,701 |   |   | $      | 20,425,328 |   |   | $ | 18,127,522 |   |
| Building occupancy and equipment    |   |   | 4,996,850  |   |   |   | 4,748,134  |   |   |   | 4,739,353 |   |
| FDIC and N.Y.S. assessment          |   |   | 860,121    |   |   |   | 1,121,204  |   |   |   | 121,300 |   |
| Advertising                         |   |   | 529,901    |   |   |   | 542,817    |   |   |   | 551,311 |   |
| Postage and telephone               |   |   | 672,276    |   |   |   | 681,307    |   |   |   | 697,763 |   |
| Director compensation               |   |   | 297,021    |   |   |   | 243,185    |   |   |   | 220,609 |   |
| Professional fees                   |   |   | 294,875    |   |   |   | 386,333    |   |   |   | 462,027 |   |
| Travel and meetings                 |   |   | 814,600    |   |   |   | 752,836    |   |   |   | 826,206 |   |
| Insurance                           |   |   | 321,423    |   |   |   | 344,388    |   |   |   | 257,052 |   |
| Dues and subscriptions              |   |   | 207,287    |   |   |   | 167,944    |   |   |   | 185,356 |   |
| Service fees                        |   |   | 795,712    |   |   |   | 720,755    |   |   |   | 597,377 |   |
| ORE expenses                        |   |   | 57,476     |   |   |   | 38,423     |   |   |   | 11,898 |   |
| Contributions                       |   |   | 109,341    |   |   |   | 87,497     |   |   |   | 59,020 |   |
| Sales tax                           |   |   | 4,602      |   |   |   | 4,279      |   |   |   | 6,783 |   |
| Other                               |   |   | 1,787,862  |   |   |   | 1,455,056  |   |   |   | 1,239,498 |   |
| Intangible amortization             |   |   | 411,990    |   |   |   | 470,070    |   |   |   | 540,585 |   |
| Total non-interest expenses         |   | $      | 33,607,038 |   |   | $      | 32,189,556 |   |   | $ | 28,643,660 |   |

| 14. | Commitments |
|-----|-------------|

|                                 |   | 2010   |      |   | 2009     |   |
|--------------------------------------|--------|--------|-----------|--------|----------|--------|
|                                 |   | Fixed  |      |   | Variable |   |   | Fixed |   |   | Variable |   |
| Financial instruments whose contract |   | Rate   |      |   | Rate     |   |   | Rate |   |   | Rate |   |
| amounts represent credit risk:       |   |   |      |   |     |   |   |   |   |   |   |   |
| Commitments to extend credit         |   | $      | 2,214,374 |   |     | $      | 4,371,771 |   |   | $ | 10,373,320 |   |   | $ | 2,034,200 |   |
| Unused lines of credit               |   |   | 3,371,847 |   |     |   | 47,571,131 |   |   |   | 1,663,317 |   |   |   | 48,880,467 |   |

----

----

| 14. | Commitments (Continued) |
|-----|-------------------------|

| 15. | Dividends and Restrictions |
|-----|----------------------------|

| 16. | Regulatory Matters |
|-----|--------------------|

----

----

| 16. | Regulatory Matters |
|-----|--------------------|

|                      |   | Actual |       |   | For CapitalAdequacy Purposes |   |   | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions |   |
|---------------------------|--------|--------|------------|--------|------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                      |   | Amount |       |   | Ratio                        |   |   | Amount                                                        |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2010:  |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Total Capital             |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| (to Risk Weighted Assets) |   | $      | 61,963,691 |   |                         |   | 15.15  | %                                                             |   | $ | 32,714,122 |   |   |   | 8 | % |   | $ | 40,892,652 |   |   |   | 10 | % |
| Tier I Capital            |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Risk Weighted Assets) |   | $      | 57,687,242 |   |                         |   | 14.11  | %                                                             |   | $ | 16,357,061 |   |   |   | 4 | % |   | $ | 24,535,591 |   |   |   | 6 | % |
| Tier I Capital            |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Average Assets)       |   | $      | 57,687,242 |   |                         |   | 9.17   | %                                                             |   | $ | 25,155,277 |   |   |   | 4 | % |   | $ | 31,444,096 |   |   |   | 5 | % |
|                      |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:  |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital             |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Risk Weighted Assets) |   | $      | 42,634,376 |   |                         |   | 10.73  | %                                                             |   | $ | 31,799,429 |   |   |   | 8 | % |   | $ | 39,749,286 |   |   |   | 10 | % |
| Tier I Capital            |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Risk Weighted Assets) |   | $      | 39,733,789 |   |                         |   | 10.00  | %                                                             |   | $ | 15,899,714 |   |   |   | 4 | % |   | $ | 23,849,572 |   |   |   | 6 | % |
| Tier I Capital            |   |   |       |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Average Assets)       |   | $      | 39,733,789 |   |                         |   | 7.19   | %                                                             |   | $ | 22,101,172 |   |   |   | 4 | % |   | $ | 27,626,465 |   |   |   | 5 | % |

|                                                |   | December 31, |        |
|-----------------------------------------------------|--------|--------------|-------------|
|                                                |   | 2010         |        |   | 2009 |   |
| GAAP equity                                         |   | $            | 75,132,251  |   |   | $ | 59,735,244 |   |
| Accumulated other comprehensive income              |   |         | 6,157,097   |   |   |   | 3,960,866 |   |
| Goodwill, net of applicable deferred taxes          |   |         | (22,728,230 | ) |   |   | (22,754,115 | ) |
| Intangible assets, net of applicable deferred taxes |   |         | (820,356    | ) |   |   | (1,158,131 | ) |
| Disallowed portion of mortgage servicing rights     |   |         | (53,520     | ) |   |   | (50,075 | ) |
| Tier 1 Capital                                      |   | $            | 57,687,242  |   |   | $ | 39,733,789 |   |
|                                                |   |         |        |   |   |   |   |   |
| General regulatory allowance for loan losses        |   |         | 4,276,449   |   |   |   | 2,900,587 |   |
| Total Capital                                       |   | $            | 61,963,691  |   |   | $ | 42,634,376 |   |

----

----

| 17. | Parent Company Statements |
|-----|---------------------------|

| Condensed Balance Sheets                   |   |
|--------------------------------------------|--------|
|                                       |   |   |   |   |   |   |
|                                       |   | December 31, |   |
|                                       |   | 2010 |   |   | 2009 |   |
| Assets:                                    |   |   |   |   |   |   |
| Cash                                       |   | $ | 8,556,062 |   |   | $ | 149,797 |   |
| Investments in and advances to subsidiary  |   |   | 75,132,251 |   |   |   | 59,735,244 |   |
| ESOP loan receivable                       |   |   | 929,858 |   |   |   | - |   |
| Securities available for sale              |   |   | 1,931,430 |   |   |   | - |   |
| Other assets                               |   |   | 303,427 |   |   |   | 187,772 |   |
| Total assets                               |   | $ | 86,853,028 |   |   | $ | 60,072,813 |   |
|                                       |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity:      |   |   |   |   |   |   |   |   |
| Other liabilities                          |   | $ | 909,849 |   |   | $ | 139,500 |   |
| Due to related parties                     |   |   | 22,883 |   |   |   | 817,140 |   |
| Shareholders' equity                       |   |   | 85,920,296 |   |   |   | 59,116,173 |   |
| Total liabilities and shareholders' equity |   | $ | 86,853,028 |   |   | $ | 60,072,813 |   |

| Condensed Statements of Income               |   |
|----------------------------------------------|--------|
|                                         |   |   |   |   |   |   |   |   |   |
|                                         |   | Years Ended December 31, |   |
|                                         |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Revenue:                                     |   |   |   |   |   |   |   |   |   |
| Dividends from subsidiary                    |   | $ | - |   |   | $ | 2,000,000 |   |   | $ | - |   |
| Interest on investments and deposits         |   |   | 41,288 |   |   |   | 725 |   |   |   | 13,571 |   |
| Rental income                                |   |   | - |   |   |   | - |   |   |   | 51,322 |   |
| Total revenue                                |   |   | 41,288 |   |   |   | 2,000,725 |   |   |   | 64,893 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensations and benefits                   |   |   | 53,084 |   |   |   | 139,500 |   |   |   | 23,360 |   |
| Other expenses                               |   |   | 168,150 |   |   |   | 171,436 |   |   |   | 153,620 |   |
| Total expenses                               |   |   | 221,234 |   |   |   | 310,936 |   |   |   | 176,980 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income before taxes and equity        |   |   |   |   |   |   |   |   |   |   |   |   |
| in undistributed net income of subsidiary    |   |   | (179,946 | ) |   |   | 1,689,789 |   |   |   | (112,087 | ) |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit for income taxes                     |   |   | (82,000 | ) |   |   | (120,000 | ) |   |   | (35,000 | ) |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income before equity in undistributed |   |   |   |   |   |   |   |   |   |   |   |   |
| net income of subsidiary                     |   |   | (97,946 | ) |   |   | 1,809,789 |   |   |   | (77,087 | ) |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in undistributed net income (loss):   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subsidiary bank                              |   |   | 3,858,634 |   |   |   | 2,303,568 |   |   |   | (1,600,003 | ) |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                            |   | $ | 3,760,688 |   |   | $ | 4,113,357 |   |   | $ | (1,677,090 | ) |

----

----

| 17.  | Parent Company Statements (Continued) |
|-----------|---------------------------------------|

| Condensed Statements of Cash Flow                                   |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |
|                                                                |   | Years Ended December 31, |   |
|                                                                |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Operating activities:                                               |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                   |   | $ | 3,760,688 |   |   | $ | 4,113,357 |   |   | $ | (1,677,090 | ) |
| Adjustments to reconcile net income (loss) to                       |   |   |   |   |   |   |   |   |   |   |   |   |
| net cash provided by operating activities:                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation expense                                                |   |   | - |   |   |   | - |   |   |   | 16,976 |   |
| ESOP shares earned                                                  |   |   | 302,739 |   |   |   | - |   |   |   | - |   |
| Other assets/liabilities, net                                       |   |   | 79,787 |   |   |   | 281,707 |   |   |   | (57,382 | ) |
| Equity in undistributed net loss (income) of subsidiary bank        |   |   | (3,858,634 | ) |   |   | (2,303,568 | ) |   |   | 1,600,003 |   |
| Net cash provided by  (used by) operating activities      |   |   | 284,580 |   |   |   | 2,091,496 |   |   |   | (117,493 | ) |
| Investing activities:                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase of securities available for sale                           |   |   | (2,000,000 | ) |   |   | - |   |   |   | - |   |
| Investment in subsidiary bank                                       |   |   | (13,539,341 | ) |   |   | - |   |   |   | - |   |
| (Increase) in ESOP loan                                             |   |   | (929,858 | ) |   |   | - |   |   |   | - |   |
| Disposition of premises and equipment                               |   |   | - |   |   |   | - |   |   |   | 3,204,282 |   |
| Change in due from  related parties                       |   |   | (794,257 | ) |   |   | (33,655 | ) |   |   | (2,155,199 | ) |
| Net cash (used in) provided by investing activities                 |   |   | (17,263,456 | ) |   |   | (33,655 | ) |   |   | 1,049,083 |   |
| Financing activities:                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase of treasury stock                                          |   |   | (155,877 | ) |   |   | (379,976 | ) |   |   | (20,277 | ) |
| Dividends paid                                                      |   |   | (2,108,687 | ) |   |   | (1,673,714 | ) |   |   | (1,662,053 | ) |
| Dividends on preferred stock of subsdiary held by minority interest |   |   | (257,438 | ) |   |   | (255,950 | ) |   |   | (68,500 | ) |
| Exercise of stock options (using treasury stock)                    |   |   | 170,035 |   |   |   | 364,211 |   |   |   | 32,347 |   |
| Net proceeds of stock offering and conversion                       |   |   | 27,737,108 |   |   |   | - |   |   |   | - |   |
| Net cash provided (used in) by financing activities                 |   |   | 25,385,141 |   |   |   | (1,945,429 | ) |   |   | (1,718,483 | ) |
| Net increase (decrease) in cash and cash equivalents                |   |   | 8,406,265 |   |   |   | 112,412 |   |   |   | (786,893 | ) |
| Cash and cash equivalents at beginning of year                      |   |   | 149,797 |   |   |   | 37,385 |   |   |   | 824,278 |   |
| Cash and cash equivalents at end of year                            |   | $ | 8,556,062 |   |   | $ | 149,797 |   |   | $ | 37,385 |   |

----

----

| 18. | Earnings per Share |
|-----|--------------------|

|                                                      |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|-----------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Net income (loss) per consolidated statements of income   |   | $      | 3,760,688 |   |   | $      | 4,113,357 |   |   | $ | (1,677,090 | ) |
| Net earnings (loss) allocated to participating securities |   |   | (11,192   | )      |   |   | (18,958   | )      |   |   | (8,722 | ) |
| Net earnings (loss) allocated to common stock             |   | $      | 3,749,496 |   |   | $      | 4,094,399 |   |   | $ | (1,685,812 | ) |
| Basic                                                     |   |   |      |   |   |   |      |   |   |   |   |   |
| Distributed earnings allocated to common stock            |   | $      | 2,100,986 |   |   | $      | 1,659,891 |   |   | $ | 1,640,933 |   |
| Undistributed earnings (loss) allocated to common stock   |   |   | 1,648,510 |   |   |   | 2,434,508 |   |   |   | (3,326,745 | ) |
| Net earnings (loss) allocated to common stock             |   | $      | 3,749,496 |   |   | $      | 4,094,399 |   |   | $ | (1,685,812 | ) |
| Weighted average common shares outstanding                |   |   |      |   |   |   |      |   |   |   |   |   |
| including shares considered participating securities      |   |   | 7,085,131 |   |   |   | 7,115,633 |   |   |   | 7,086,575 |   |
| Less: Average participating securities                    |   |   | (14,973   | )      |   |   | (26,882   | )      |   |   | (41,660 | ) |
| Weighted average shares                                   |   |   | 7,070,158 |   |   |   | 7,088,751 |   |   |   | 7,044,915 |   |
| Basic earnings (loss) per share                           |   | $      | 0.53      |   |   | $      | 0.58      |   |   | $ | (0.24 | ) |
| Diluted                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net earnings (loss) allocated to common stock             |   | $      | 3,749,496 |   |   | $      | 4,094,399 |   |   | $ | (1,685,812 | ) |
| Weighted average common shares outstanding for basic      |   |   | 7,070,158 |   |   |   | 7,088,751 |   |   |   | 7,044,915 |   |
| Dilutive effect of stock options                          |   |   | 1,860     |   |   |   | 24,753    |   |   |   | - |   |
| Weighted average shares                                   |   |   | 7,072,018 |   |   |   | 7,113,504 |   |   |   | 7,044,915 |   |
| Diluted earnings (loss) per share                         |   | $      | 0.53      |   |   | $      | 0.58      |   |   | $ | (0.24 | ) |

----

----

| 19. | Other Comprehensive Income (Loss) |
|-----|-----------------------------------|

|                                                         |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Unrealized (losses) gains on available for sale securities   |   |   |       |   |   |   |       |   |   |
| Available for sale securities:                               |   |   |       |   |   |   |       |   |   |
| Unrealized holding (losses) gains on securities arising      |   |   |       |   |   |   |       |   |   |
| during period                                                |   | $      | (2,511,240 | )      |   | $      | 3,810,506  |   |   | $ | (3,979,420 | ) |
| Less: reclassification adjustment for (gains)                |   |   |       |   |   |   |       |   |   |   |   |   |
| realized in income                                           |   |   | (1,522,260 | )      |   |   | (787,842   | )      |   |   | (62,854 | ) |
| Net unrealized (losses) gains                                |   |   | (4,033,500 | )      |   |   | 3,022,664  |   |   |   | (4,042,274 | ) |
| Tax effect                                                   |   |   | 1,613,400  |   |   |   | (1,209,066 | )      |   |   | 1,616,910 |   |
| Net-of-tax amount                                            |   |   | (2,420,100 | )      |   |   | 1,813,598  |   |   |   | (2,425,364 | ) |
| Other-than-temporary impaired securities:                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Unrealized holding (losses)  on securities arising |   |   |       |   |   |   |       |   |   |   |   |   |
| during period                                                |   | $      | (2,213,414 | )      |   | $      | (3,296,198 | )      |   | $ | (1,021,845 | ) |
| Less: reclassification adjustment for losses                 |   |   |       |   |   |   |       |   |   |   |   |   |
| realized in income                                           |   |   | 2,423,111  |   |   |   | 2,294,841  |   |   |   | 1,021,845 |   |
| Net unrealized (losses)                                      |   |   | 209,697    |   |   |   | (1,001,357 | )      |   |   | - |   |
| Tax effect                                                   |   |   | (83,879    | )      |   |   | 400,543    |   |   |   | - |   |
| Net-of-tax amount                                            |   |   | 125,818    |   |   |   | (600,814   | )      |   |   | - |   |
| Change in unrealized loss on  pension liability    |   |   | 94,848     |   |   |   | 648,051    |   |   |   | (2,375,636 | ) |
| Tax effect                                                   |   |   | (37,939    | )      |   |   | (259,220   | )      |   |   | 950,254 |   |
| Net-of-tax amount                                            |   |   | 56,909     |   |   |   | 388,831    |   |   |   | (1,425,382 | ) |
|                                                         |   | $      | (2,237,373 | )      |   | $      | 1,601,615  |   |   | $ | (3,850,746 | ) |

|                                                       |   | Balance at12/31/2009 |       |   | Current Period Change |   |       | Balance at12/31/2010 |   |
|------------------------------------------------------------|--------|----------------------|------------|--------|-----------------------|--------|------------|----------------------|--------|
|                                                       |   |                 |       |   |                  |   |       |                 |   |
| Unrealized (losses) gains on securities available for sale |   | $                    | (1,986,664 | )      |                  | $      | (2,294,282 | )                    |   | $ | (4,280,946 | ) |
| Unrealized loss on pension benefits                        |   |                 | (1,974,202 | )      |                  |   | 56,909     |                 |   |   | (1,917,293 | ) |
|                                                       |   |                 |       |   |                  |   |       |                 |   |   |   |   |
| Total                                                      |   | $                    | (3,960,866 | )      |                  | $      | (2,237,373 | )                    |   | $ | (6,198,239 | ) |

|                                                       |   | GrossBalance at12/31/2010 |        |   | TaxEffect |   |      | Balance at12/31/2010net of tax |   |
|------------------------------------------------------------|--------|---------------------------|-------------|--------|-----------|--------|-----------|--------------------------------|--------|
|                                                       |   |                      |        |   |      |   |      |                           |   |
| Unrealized (losses) gains on securities available for sale |   | $                         | (7,134,905  | )      |      | $      | 2,853,959 |                           |   | $ | (4,280,946 | ) |
| Unrealized loss on pension benefits                        |   |                      | (3,195,489  | )      |      |   | 1,278,196 |                           |   |   | (1,917,293 | ) |
|                                                       |   |                      |        |   |      |   |      |                           |   |   |   |   |
| Total                                                      |   | $                         | (10,330,394 | )      |      | $      | 4,132,155 |                           |   | $ | (6,198,239 | ) |

----

----

| 20. | Segment Information |
|-----|---------------------|

|                                |   | 2010              |        |
|-------------------------------------|--------|-------------------|-------------|
|                                |   | BankingActivities |        |   | InsuranceActivities |   |   | ConsultingActivities |   |   | RiskManagementActivities |   |   | Total |   |
|                                |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                 |   | $                 | 18,098,625  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 18,098,625 |   |
| Provision for loan losses           |   |              | 1,650,000   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,650,000 |   |
| Net interest income after provision |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for loan losses                     |   |              | 16,448,625  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,448,625 |   |
| Non-interest income                 |   |              | 4,591,991   |   |   |   | 10,515,421 |   |   |   | 5,936,999 |   |   |   | 1,046,328 |   |   |   | 22,090,739 |   |
| Non-interest expenses               |   |              | 16,380,671  |   |   |   | 9,428,009 |   |   |   | 4,729,998 |   |   |   | 1,086,395 |   |   |   | 31,625,073 |   |
| Depreciation and amortization       |   |              | 1,685,384   |   |   |   | 169,131 |   |   |   | 125,486 |   |   |   | 1,964 |   |   |   | 1,981,965 |   |
| Income (loss) before taxes          |   |              | 2,974,561   |   |   |   | 918,281 |   |   |   | 1,081,515 |   |   |   | (42,031 | ) |   |   | 4,932,326 |   |
| Income tax expense (benefit)        |   |              | 78,800      |   |   |   | 404,000 |   |   |   | 447,000 |   |   |   | (15,600 | ) |   |   | 914,200 |   |
| Net income (loss)                   |   |              | 2,895,761   |   |   |   | 514,281 |   |   |   | 634,515 |   |   |   | (26,431 | ) |   |   | 4,018,126 |   |
| Less: net income attributable to    |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| noncontrolling interest             |   |              | 257,438     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 257,438 |   |
| Net income (loss) attributable to   |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oneida Financial Corp.              |   | $                 | 2,638,323   |   |   | $ | 514,281 |   |   | $ | 634,515 |   |   | $ | (26,431 | ) |   | $ | 3,760,688 |   |
| Total Assets                        |   | $                 | 643,116,251 |   |   | $ | 20,184,212 |   |   | $ | 5,509,696 |   |   | $ | 150,903 |   |   | $ | 668,961,062 |   |

----

----

| 20. | Segment Information (Continued) |
|-----|---------------------------------|

|                                |   | 2009       |        |
|-------------------------------------|--------|------------|-------------|
|                                |   |       |        |   |   |   |   |   |   |   | Risk |   |   |   |   |
|                                |   | Banking    |        |   | Insurance |   |   | Consulting |   |   | Management |   |   |   |   |
|                                |   | Activities |        |   | Activities |   |   | Activities |   |   | Activities |   |   | Total |   |
|                                |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                 |   | $          | 17,427,420  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 17,427,420 |   |
| Provision for loan losses           |   |       | 760,000     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 760,000 |   |
| Net interest income after provision |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for loan losses                     |   |       | 16,667,420  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,667,420 |   |
| Non-interest income                 |   |       | 5,266,097   |   |   |   | 9,694,191 |   |   |   | 5,650,646 |   |   |   | 491,429 |   |   |   | 21,102,363 |   |
| Non-interest expenses               |   |       | 16,289,195  |   |   |   | 8,580,478 |   |   |   | 4,532,450 |   |   |   | 709,346 |   |   |   | 30,111,469 |   |
| Depreciation and amortization       |   |       | 1,699,210   |   |   |   | 223,847 |   |   |   | 153,430 |   |   |   | 1,600 |   |   |   | 2,078,087 |   |
| Income (loss) before taxes          |   |       | 3,945,112   |   |   |   | 889,866 |   |   |   | 964,766 |   |   |   | (219,517 | ) |   |   | 5,580,227 |   |
| Income tax expense (benefit)        |   |       | 517,720     |   |   |   | 378,000 |   |   |   | 405,200 |   |   |   | (90,000 | ) |   |   | 1,210,920 |   |
| Net income (loss)                   |   |       | 3,427,392   |   |   |   | 511,866 |   |   |   | 559,566 |   |   |   | (129,517 | ) |   |   | 4,369,307 |   |
| Less: net income attributable to    |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| noncontrolling interest             |   |       | 255,950     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 255,950 |   |
| Net income (loss) attributable to   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oneida Financial Corp.              |   | $          | 3,171,442   |   |   | $ | 511,866 |   |   | $ | 559,566 |   |   | $ | (129,517 | ) |   | $ | 4,113,357 |   |
| Total Assets                        |   | $          | 571,983,646 |   |   | $ | 19,962,553 |   |   | $ | 4,389,768 |   |   | $ | 89,526 |   |   | $ | 596,425,493 |   |

|                                            |   | 2008       |        |
|-------------------------------------------------|--------|------------|-------------|
|                                            |   |       |        |   |   |   |   |   |   |   | Risk |   |   |   |   |
|                                            |   | Banking    |        |   | Insurance |   |   | Consulting |   |   | Management |   |   |   |   |
|                                            |   | Activities |        |   | Activities |   |   | Activities |   |   | Activities |   |   | Total |   |
|                                            |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                             |   | $          | 15,652,705  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 15,652,705 |   |
| Provision for loan losses                       |   |       | 525,000     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 525,000 |   |
| Net interest income after provision             |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for loan losses                                 |   |       | 15,127,705  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,127,705 |   |
| Non-interest (loss) income                      |   |       | (3,933,827  | ) |   |   | 8,483,321 |   |   |   | 5,015,527 |   |   |   | 119,544 |   |   |   | 9,684,565 |   |
| Non-interest expenses                           |   |       | 14,428,515  |   |   |   | 7,620,924 |   |   |   | 4,052,298 |   |   |   | 391,934 |   |   |   | 26,493,671 |   |
| Depreciation and amortization                   |   |       | 1,714,045   |   |   |   | 249,640 |   |   |   | 185,224 |   |   |   | 1,080 |   |   |   | 2,149,989 |   |
| (Loss) Income before taxes                      |   |       | (4,948,682  | ) |   |   | 612,757 |   |   |   | 778,005 |   |   |   | (273,470 | ) |   |   | (3,831,390 | ) |
| Income tax (benefit) expense                    |   |       | (2,773,000  | ) |   |   | 330,500 |   |   |   | 325,000 |   |   |   | (105,300 | ) |   |   | (2,222,800 | ) |
| Net (loss) income                               |   |       | (2,175,682  | ) |   |   | 282,257 |   |   |   | 453,005 |   |   |   | (168,170 | ) |   |   | (1,608,590 | ) |
| Less:  net income (loss) attributable |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to noncontrolling interest                      |   |       | 68,500      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 68,500 |   |
| Net income (loss) attributable to               |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oneida Financial Corp                           |   | $          | (2,244,182  | ) |   | $ | 282,257 |   |   | $ | 453,005 |   |   | $ | (168,170 | ) |   | $ | (1,677,090 | ) |
| Total Assets                                    |   | $          | 523,447,403 |   |   | $ | 15,607,987 |   |   | $ | 4,857,175 |   |   | $ | 57,552 |   |   | $ | 543,970,117 |   |

----

----

| 20. | Segment Information (Continued) |
|-----|---------------------------------|

| Assets                                    |   | 2010   |        |   | 2009   |   |
|-------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                      |   |   |        |   |   |   |
| Total assets for reportable segments      |   | $      | 668,961,062 |   |   | $      | 596,425,493 |   |
| Elimination of intercompany cash balances |   |   | (7,382,533  | )      |   |   | (5,919,162 | ) |
| Consolidated total                        |   | $      | 661,578,529 |   |   | $      | 590,506,331 |   |

| 21. | Quarterly Financial Data (Unaudited) |
|-----|--------------------------------------|

|           |   | Interest               |   |   | Net Interest |   |   | Net    |   |   |   |   |   |    |   |
|----------------|--------|------------------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| 2010           |   | Income                 |   |   | Income       |   |   | Income |   |   | Basic  |   |   | Diluted |   |
|           |   |                   |   |   |         |   |   |   |   |   |   |   |   |    |   |
|           |   | (Dollars in thousands) |   |   |         |   |   |   |   |
| First Quarter  |   | $                      | 5,837  |   |         | $      | 4,281  |   |   | $      | 627    |   |   | $       | 0.09   |   |   | $ | 0.09 |   |
| Second Quarter |   |                   | 5,924  |   |         |   | 4,448  |   |   |   | 814    |   |   |    | 0.11   |   |   |   | 0.11 |   |
| Third Quarter  |   |                   | 6,021  |   |         |   | 4,628  |   |   |   | 815    |   |   |    | 0.12   |   |   |   | 0.12 |   |
| Fourth Quarter |   |                   | 5,997  |   |         |   | 4,742  |   |   |   | 1,505  |   |   |    | 0.21   |   |   |   | 0.21 |   |
|           |   |                   |   |   |         |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
|           |   |                   |   |   |         |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
| 2009           |   |                   |   |   |         |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
|           |   |                   |   |   |         |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
| First Quarter  |   | $                      | 6,232  |   |         | $      | 4,059  |   |   | $      | 1,114  |   |   | $       | 0.16   |   |   | $ | 0.16 |   |
| Second Quarter |   |                   | 6,225  |   |         |   | 4,291  |   |   |   | 1,069  |   |   |    | 0.15   |   |   |   | 0.15 |   |
| Third Quarter  |   |                   | 6,234  |   |         |   | 4,442  |   |   |   | 696    |   |   |    | 0.10   |   |   |   | 0.10 |   |
| Fourth Quarter |   |                   | 6,311  |   |         |   | 4,635  |   |   |   | 1,234  |   |   |    | 0.17   |   |   |   | 0.17 |   |

| 22. | Conversion and Reorganization |
|-----|-------------------------------|

----

----

| 22. | Conversion and Reorganization (Continued) |
|-----|-------------------------------------------|

----

----

|   | · | Community Banking.   We continue to actively market our core banking products to attract new fee-based deposit accounts and checking account related services to new and existing customers.  We offer our customers internet banking, an account overdraft program, e-commerce capabilities and debit cards as an account retention tool and to increase non-interest income.  These products and services represent continuing sources of fee income. We also emphasize our trust department services with the expectation that fees generated by the trust department will increase as the assets under management grow.  In addition, we receive fee income from servicing loans sold in the secondary market. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Financial Service Subsidiaries. In recent years, we have increased the services and products we offer through our insurance agency, benefits consulting, and risk management subsidiaries. We initially entered the insurance and financial services business with the acquisition in October 2000 of Bailey & Haskell Associates, Inc., which operates as an insurance agency subsidiary of Oneida Savings Bank with six New York offices and an office in South Carolina.   We acquired Benefit Consulting Group LLC, an employee benefits consulting and retirement plan administration firm in 2006.  The resulting company, Benefit Consulting Group Inc., is also a wholly owned subsidiary of Oneida Savings Bank. The expansion of our financial services business has continued to provide an increasing revenue source.  During 2008, we established Workplace Health Solutions, Inc. a wholly owned subsidiary of Oneida Savings Bank, to develop a series of risk management services to help mitigate and prevent work related injuries, and to assist injured workers and their employers when a workplace injury occurs.  This subsidiary was designed to complement our other subsidiaries with an overall philosophy of innovative risk management services. We intend to continue to expand our financial services businesses to increase our earnings and diversify our revenue sources. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Emphasizing Origination of Commercial Real Estate, Consumer and Commercial Business Loans. We have sought to increase commercial real estate, consumer and commercial business lending in a controlled, safe and sound manner.  Because these loans generally have higher yields and shorter terms than one-to-four family residential mortgage loans, our goal is to increase the origination of these loans consistent with safety and soundness considerations.  At December 31, 2010, our loan portfolio was composed of 27.0% commercial real estate loans, 12.5% consumer loans and 14.2% commercial business loans. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continuing the Origination of One-to-Four Family Real Estate Loans.  Historically, Oneida Savings Bank has emphasized the origination of one-to-four family residential mortgage loans within Madison and Oneida counties and the surrounding counties.  During 2010, our one-to-four family mortgage loan originations have been primarily fixed-rate loans.  We generally sell our fixed-rate one-to-four family loan originations and such loans are sold without recourse and on a servicing-retained basis. During the years ended December 31, 2010 and 2009, we sold $36.7 million and $55.9 million, respectively, in fixed-rate one-to-four family mortgage loans.  In addition, adjustable-rate mortgage (“ARM”) loans and hybrid ARM loans, which have a fixed rate of interest for the first three to five years and adjust annually thereafter, represented a lower percentage of total originations.  Residential real estate loan origination volume, particularly fixed-rate originations, decreased significantly during 2010 compared with 2009 due to a reduction in the volume of refinancing and new loan origination. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                               |   | For the Years Ending December 31, |    |
|------------------------------------|--------|-----------------------------------|---------|
|                               |   | 2010                              |    |   | 2009 |   |   | 2008 |   |
|                               |   | Average                           |    |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                               |   | Balance                           |    |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
|                               |   | ( dollars in thousands )          |    |
| Interest-earning assets:           |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable                   |   | $                                 | 293,711 |   |   | $ | 16,791 |   |   |   | 5.72 | % |   | $ | 298,449 |   |   | $ | 17,761 |   |   |   | 5.95 | % |   | $ | 293,499 |   |   | $ | 18,535 |   |   |   | 6.32 | % |
| Investment and MBS securities      |   |                              | 202,742 |   |   |   | 6,648 |   |   |   | 3.28 | % |   |   | 154,151 |   |   |   | 6,905 |   |   |   | 4.48 | % |   |   | 143,987 |   |   |   | 7,379 |   |   |   | 5.12 | % |
| Federal funds                      |   |                              | 31,919  |   |   |   | 39 |   |   |   | 0.12 | % |   |   | 13,723 |   |   |   | 37 |   |   |   | 0.27 | % |   |   | 7,342 |   |   |   | 169 |   |   |   | 2.30 | % |
| Equity securities                  |   |                              | 7,385   |   |   |   | 302 |   |   |   | 4.09 | % |   |   | 6,290 |   |   |   | 298 |   |   |   | 4.74 | % |   |   | 12,814 |   |   |   | 651 |   |   |   | 5.08 | % |
| Total interest-earning assets      |   |                              | 535,757 |   |   |   | 23,780 |   |   |   | 4.44 | % |   |   | 472,613 |   |   |   | 25,001 |   |   |   | 5.29 | % |   |   | 457,642 |   |   |   | 26,734 |   |   |   | 5.84 | % |
|                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non interest-earning assets:       |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks            |   |                              | 11,108  |   |   |   |   |   |   |   |   |   |   |   | 13,188 |   |   |   |   |   |   |   |   |   |   |   | 11,725 |   |   |   |   |   |   |   |   |   |
| Other assets                       |   |                              | 77,013  |   |   |   |   |   |   |   |   |   |   |   | 75,112 |   |   |   |   |   |   |   |   |   |   |   | 74,999 |   |   |   |   |   |   |   |   |   |
| Total Assets                       |   | $                                 | 623,878 |   |   |   |   |   |   |   |   |   |   | $ | 560,913 |   |   |   |   |   |   |   |   |   |   | $ | 544,366 |   |   |   |   |   |   |   |   |   |
|                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:      |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money market deposits              |   | $                                 | 158,842 |   |   | $ | 1,465 |   |   |   | 0.92 | % |   | $ | 117,472 |   |   | $ | 1,516 |   |   |   | 1.29 | % |   | $ | 83,115 |   |   | $ | 1,654 |   |   |   | 1.99 | % |
| Savings accounts                   |   |                              | 87,483  |   |   |   | 508 |   |   |   | 0.58 | % |   |   | 80,714 |   |   |   | 488 |   |   |   | 0.60 | % |   |   | 77,266 |   |   |   | 603 |   |   |   | 0.78 | % |
| Interest-bearing checking          |   |                              | 55,853  |   |   |   | 106 |   |   |   | 0.19 | % |   |   | 46,359 |   |   |   | 139 |   |   |   | 0.30 | % |   |   | 40,459 |   |   |   | 238 |   |   |   | 0.59 | % |
| Time deposits                      |   |                              | 152,734 |   |   |   | 2,606 |   |   |   | 1.71 | % |   |   | 153,870 |   |   |   | 3,734 |   |   |   | 2.43 | % |   |   | 159,933 |   |   |   | 6,020 |   |   |   | 3.76 | % |
| Borrowings                         |   |                              | 21,072  |   |   |   | 996 |   |   |   | 4.73 | % |   |   | 36,235 |   |   |   | 1,697 |   |   |   | 4.68 | % |   |   | 56,194 |   |   |   | 2,561 |   |   |   | 4.56 | % |
| Notes payable                      |   |                              | 0       |   |   |   | 0 |   |   |   | 0.00 | % |   |   | 1 |   |   |   | 0 |   |   |   | 0.00 | % |   |   | 88 |   |   |   | 5 |   |   |   | 5.68 | % |
| Total interest-bearing liabilities |   |                              | 475,984 |   |   |   | 5,681 |   |   |   | 1.19 | % |   |   | 434,651 |   |   |   | 7,574 |   |   |   | 1.74 | % |   |   | 417,055 |   |   |   | 11,081 |   |   |   | 2.66 | % |
|                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non interest-bearing liabilities:  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                    |   |                              | 63,798  |   |   |   |   |   |   |   |   |   |   |   | 60,024 |   |   |   |   |   |   |   |   |   |   |   | 63,711 |   |   |   |   |   |   |   |   |   |
| Other liabilities                  |   |                              | 10,928  |   |   |   |   |   |   |   |   |   |   |   | 10,740 |   |   |   |   |   |   |   |   |   |   |   | 6,867 |   |   |   |   |   |   |   |   |   |
| Total liabilities                  |   |                              | 550,710 |   |   |   |   |   |   |   |   |   |   |   | 505,415 |   |   |   |   |   |   |   |   |   |   |   | 487,633 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity               |   |                              | 73,168  |   |   |   |   |   |   |   |   |   |   |   | 55,498 |   |   |   |   |   |   |   |   |   |   |   | 56,733 |   |   |   |   |   |   |   |   |   |
| Total Liabilities and              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' Equity               |   | $                                 | 623,878 |   |   |   |   |   |   |   |   |   |   | $ | 560,913 |   |   |   |   |   |   |   |   |   |   | $ | 544,366 |   |   |   |   |   |   |   |   |   |
|                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                |   |                              |    |   |   | $ | 18,099 |   |   |   |   |   |   |   |   |   |   | $ | 17,427 |   |   |   |   |   |   |   |   |   |   | $ | 15,653 |   |   |   |   |   |
| Net interest spread                |   |                              |    |   |   |   |   |   |   |   | 3.25 | % |   |   |   |   |   |   |   |   |   |   | 3.55 | % |   |   |   |   |   |   |   |   |   |   | 3.18 | % |
| Net earning assets                 |   | $                                 | 59,773  |   |   |   |   |   |   |   |   |   |   | $ | 37,962 |   |   |   |   |   |   |   |   |   |   | $ | 40,587 |   |   |   |   |   |   |   |   |   |
| Net interest margin                |   |                              |    |   |   |   | 3.38 | % |   |   |   |   |   |   |   |   |   |   | 3.69 | % |   |   |   |   |   |   |   |   |   |   | 3.42 | % |   |   |   |   |
| Ratio of interest-earning assets   |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to interest-bearing liabilities    |   |                              |    |   |   |   | 112.56 | % |   |   |   |   |   |   |   |   |   |   | 108.73 | % |   |   |   |   |   |   |   |   |   |   | 109.73 | % |   |   |   |   |

----

|                                      |   | Years Ended December 31, |   |
|-------------------------------------------|--------|--------------------------|--------|
|                                      |   | 2010 vs. 2009            |   |   | 2009 vs. 2008 |   |
|                                      |   | Increase / (Decrease)    |   |   | Total |   |   | Increase / (Decrease) |   |   | Total |   |
|                                      |   | Due to                   |   |   | Increase/ |   |   | Due to |   |   | Increase/ |   |
|                                      |   | Volume                   |   |   | Rate |   |   | (Decrease) |   |   | Volume |   |   | Rate |   |   | (Decrease) |   |
|                                      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | ( In thousands)          |   |
| Interest-earning assets:                  |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable                          |   | $                        | (271   | ) |   | $ | (699 | ) |   | $ | (970 | ) |   | $ | 295 |   |   | $ | (1,069 | ) |   | $ | (774 | ) |
| Investment and mortgage-backed securities |   |                     | 1,593  |   |   |   | (1,850 | ) |   |   | (257 | ) |   |   | 455 |   |   |   | (929 | ) |   |   | (474 | ) |
| Federal funds                             |   |                     | 22     |   |   |   | (20 | ) |   |   | 2 |   |   |   | 17 |   |   |   | (149 | ) |   |   | (132 | ) |
| Equity securities                         |   |                     | 45     |   |   |   | (41 | ) |   |   | 4 |   |   |   | (309 | ) |   |   | (44 | ) |   |   | (353 | ) |
| Total interest-earning assets             |   | $                        | 1,389  |   |   | $ | (2,610 | ) |   | $ | (1,221 | ) |   | $ | 458 |   |   | $ | (2,191 | ) |   | $ | (1,733 | ) |
|                                      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:             |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money market deposits                     |   | $                        | 382    |   |   | $ | (433 | ) |   | $ | (51 | ) |   | $ | 443 |   |   | $ | (581 | ) |   | $ | (138 | ) |
| Savings accounts                          |   |                     | 39     |   |   |   | (19 | ) |   |   | 20 |   |   |   | 21 |   |   |   | (136 | ) |   |   | (115 | ) |
| Interest-bearing checking                 |   |                     | 18     |   |   |   | (51 | ) |   |   | (33 | ) |   |   | 18 |   |   |   | (117 | ) |   |   | (99 | ) |
| Time deposits                             |   |                     | (19    | ) |   |   | (1,109 | ) |   |   | (1,128 | ) |   |   | (147 | ) |   |   | (2,139 | ) |   |   | (2,286 | ) |
| Borrowings                                |   |                     | (717   | ) |   |   | 16 |   |   |   | (701 | ) |   |   | (935 | ) |   |   | 71 |   |   |   | (864 | ) |
| Notes payable                             |   |                     | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5 | ) |   |   | (5 | ) |
| Total interest-bearing liabilities        |   | $                        | (297   | ) |   | $ | (1,596 | ) |   | $ | (1,893 | ) |   | $ | (600 | ) |   | $ | (2,907 | ) |   | $ | (3,507 | ) |
|                                      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase in net interest income       |   |                     |   |   |   |   |   |   |   | $ | 672 |   |   |   |   |   |   |   |   |   |   | $ | 1,774 |   |

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|                                               |   |   | Net Interest Income    |   |   | Net Portfolio Value |   |
|----------------------------------------------------|--------|--------|------------------------|--------|--------|---------------------|--------|
| Change inInterest RatesIn Basis Points(Rate Shock) |   |   | Dollars Amount    |   |   | DollarChange        |   |   | PercentChange |   |   | Dollars Amount |   |   | DollarChange |   |   | PercentChange |   |
|                                               |   |   | (Dollars in thousands) |   |
| +500                                               |   |   | $                      | 19,227 |   |                | $      | 1,128 |   |   |   | 6.23 | % |   | $ | 25,187 |   |   | $ | (47,138 | ) |   |   | (65.18 | )% |
| +400                                               |   |   | $                      | 19,122 |   |                | $      | 1,023 |   |   |   | 5.65 | % |   | $ | 32,358 |   |   | $ | (39,967 | ) |   |   | (55.26 | )% |
| +300                                               |   |   | $                      | 19,009 |   |                | $      | 910 |   |   |   | 5.03 | % |   | $ | 43,178 |   |   | $ | (29,147 | ) |   |   | (40.30 | )% |
| +200                                               |   |   | $                      | 18,684 |   |                | $      | 585 |   |   |   | 3.23 | % |   | $ | 55,673 |   |   | $ | (16,652 | ) |   |   | (23.02 | )% |
| +100                                               |   |   | $                      | 18,446 |   |                | $      | 347 |   |   |   | 1.92 | % |   | $ | 65,897 |   |   | $ | (6,428 | ) |   |   | (8.89 | )% |
| Static                                             |   |   | $                      | 18,099 |   |                | $      | - |   |   |   | - | % |   | $ | 72,325 |   |   | $ | - |   |   |   | - | % |
| -100                                               |   |   | $                      | 17,527 |   |                | $      | (527 | ) |   |   | (3.16 | )% |   | $ | 79,190 |   |   | $ | 6,865 |   |   |   | 9.49 | % |

|                                               |   |   | Net Interest Income    |   |   | Net Portfolio Value |   |
|----------------------------------------------------|--------|--------|------------------------|--------|--------|---------------------|--------|
| Change inInterest RatesIn Basis Points(Rate Shock) |   |   | Dollars Amount    |   |   | DollarChange        |   |   | PercentChange |   |   | Dollars Amount |   |   | DollarChange |   |   | PercentChange |   |
|                                               |   |   | (Dollars in thousands) |   |
|                                               |   |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| +300                                               |   |   | $                      | 16,732 |   |                | $      | (695 | ) |   |   | (3.99 | )% |   | $ | 39,089 |   |   | $ | (19,109 | ) |   |   | (32.83 | )% |
| +200                                               |   |   | $                      | 17,054 |   |                | $      | (373 | ) |   |   | (2.14 | )% |   | $ | 48,239 |   |   | $ | (9,960 | ) |   |   | (17.11 | )% |
| +100                                               |   |   | $                      | 17,281 |   |                | $      | (146 | ) |   |   | (0.84 | )% |   | $ | 54,597 |   |   | $ | (3,602 | ) |   |   | (6.19 | )% |
| Static                                             |   |   | $                      | 17,427 |   |                | $      | - |   |   |   | - | % |   | $ | 58,198 |   |   | $ | - |   |   |   | - | % |

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|                                   |   | Minimum  |   |   | To Be Well capitalized Under prompt Corrective Action |   |   |   |   |
|----------------------------------------|--------|----------|--------|--------|-------------------------------------------------------|--------|--------|--------|--------|
|                                   |   | Required |   |   | Provisions                                            |   |   | Actual |   |
| Tier I Capital to Average Assets       |   |     | 4      | %      |                                                  |   | 5      | %      |   |   | 9.27 | % |
| Tier I Capital to Risk-Weighted Assets |   |     | 4      | %      |                                                  |   | 6      | %      |   |   | 14.11 | % |
| Total Capital to Risk-Weighted Assets  |   |     | 8      | %      |                                                  |   | 10     | %      |   |   | 15.15 | % |

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| (Dollars in thousands)  |   |           | Payments Due In |   |
|-------------------------|--------|----------------|-----------------|--------|
| Contractual Obligation  |   | Note Reference |            |   | One Year or Less |   |   | One to Three Years |   |   | Three to Five Years |   |   | Over Five Years |   |   | Total |   |
| Certificates of Deposit |   |           | 8               |   |   | $ | 116,262 |   |   | $ | 22,996 |   |   | $ | 12,869 |   |   | $ | 68 |   |   | $ | 152,195 |   |
| Borrowings              |   |           | 9               |   |   | $ | 1,000 |   |   | $ | 10,000 |   |   | $ | 1,000 |   |   |   | — |   |   | $ | 12,000 |   |

| Commitments to extend credit:                  |   | One Yearor Less |   |   | One toThree years |   |    | Three toFive years |   |   | OverFive years |   |   | Total  |    |
|------------------------------------------------|--------|-----------------|--------|--------|-------------------|--------|---------|--------------------|--------|--------|----------------|--------|--------|--------|---------|
|                                           |   | (In thousands)  |   |
| Commercial real estate and commercial business |   | $               | 34,907 |   |              | $      | 1,249   |               |   | $      | —        |   |   | $      | — |   |   | $ | 36,156 |   |
| Residential real estate                        |   |            | 2,204  |   |              |   | — |               |   |   | —        |   |   |   | — |   |   |   | 2,204 |   |
| Revolving home equity lines                    |   |            | 270    |   |              |   | 1,966   |               |   |   | 3,098          |   |   |   | 12,216  |   |   |   | 17,550 |   |
| Consumer revolving credit                      |   |            | 1,305  |   |              |   | — |               |   |   | —        |   |   |   | — |   |   |   | 1,305 |   |
| Standby letters of credit                      |   |            | 195    |   |              |   | 118     |               |   |   | —        |   |   |   | — |   |   |   | 313 |   |

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|           |   | Price Per Share |   |   | Cash Dividend Per |   |
|----------------|--------|-----------------|--------|--------|-------------------|--------|
|           |   | High            |   |   | Low               |   |   | Share |   |
| 2010           |   |            |   |   |              |   |   |   |   |
|           |   |            |   |   |              |   |   |   |   |
| Fourth quarter |   | $               | 8.24   |   |              | $      | 7.06 |   |   | $ | 0.12 |   |
|           |   |            | 8.25   |   |              |   | 7.18 |   |   |   | 0.06 |   |
| Second quarter |   |            | 10.95  |   |              |   | 7.80 |   |   |   | — |   |
| First quarter  |   |            | 10.95  |   |              |   | 9.34 |   |   |   | 0.12 |   |
|           |   |            |   |   |              |   |   |   |   |   |   |   |
| 2009           |   |            |   |   |              |   |   |   |   |   |   |   |
|           |   |            |   |   |              |   |   |   |   |   |   |   |
| Fourth quarter |   | $               | 10.89  |   |              | $      | 9.03 |   |   | $ | — |   |
| Third quarter  |   |            | 12.86  |   |              |   | 7.73 |   |   |   | 0.12 |   |
| Second quarter |   |            | 12.31  |   |              |   | 8.05 |   |   |   | — |   |
| First quarter  |   |            | 9.85   |   |              |   | 7.66 |   |   |   | 0.12 |   |

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|                   |   | Period Ending |   |
|------------------------|--------|---------------|--------|
| Index                  |   | 12/31/05      |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |   | 12/31/10 |   |
| Oneida Financial Corp. |   |          | 100.00 |   |   |   | 122.82 |   |   |   | 104.17 |   |   |   | 85.54 |   |   |   | 108.02 |   |   |   | 92.80 |   |
| S&P 500            |   |          | 100.00 |   |   |   | 113.62 |   |   |   | 117.63 |   |   |   | 72.36 |   |   |   | 89.33 |   |   |   | 100.75 |   |
| MHC Thrifts            |   |          | 100.00 |   |   |   | 133.04 |   |   |   | 113.09 |   |   |   | 116.17 |   |   |   | 101.72 |   |   |   | 91.64 |   |
| Nasdaq Bank Index      |   |          | 100.00 |   |   |   | 111.01 |   |   |   | 86.51 |   |   |   | 65.81 |   |   |   | 53.63 |   |   |   | 60.01 |   |

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