2001  CNB  Annual  Report

Financial  Services  for  Every  Stage  of  Life

2001  Annual  Report  and  Financial  Statements

Annual  Meeting:
The  Annual  Meeting  of  Stockholders
will  be  held  at  the  Main  Office  of
The  Canandaigua  National  Bank
and  Trust  Company
72  South  Main  Street
Canandaigua,  New  York  14424
March  13,  2002,  at  1:00  P.M.


Form  10-K:

A  copy  of  the  Corporation's  Form  10-K  Annual  Report
is  available  without  charge  to  stockholders  upon
written  request  to:
Robert  G.  Sheridan,  Secretary
72  South  Main  Street
Canandaigua,  New  York  14424


Canandaigua  National  Corporation

72  South  Main  Street
Canandaigua,  New  York  14424
Phone:  585-394-4260  or  1-800-724-2621
Fax:  585-394-4001
Internet:  www.cnbank.com

Table  of  Contents
President's  Message                                               4
Board  of  Directors                                               6
Financial  Highlights                                              7
Independent  Auditors'  Report                                     8
Consolidated  Financial  Statements                                9
Notes  to  Consolidated  Financial  Statements                    13
Common  Stock  Data                                               33
The  Canandaigua  National  Bank  and  Trust  Company  Officers   34
Community  Banking  Offices  Community  Advisory  Committees      35
The  Arthur  S.  Hamlin  Award  for  Excellence                   36
A  Tribute  to  Frank  H.  Hamlin,  II                            37

<PAGE>

February  1,  2002

To  Our  Shareholders:

Is  there  a  cognitive  person  alive  who  will  not  remember  the year 2001?

Last  January,  we  commenced  the third year of our five-year plan of expansion
quietly  enough  with  a realistic budget target of $29.17 earnings per share in
the  face  of  a  stretch  goal  for  the  end  of  the third year of $34.60 set
originally  three  years  ago.  We  had  our  work  cut  out  for  us, given the
uncertainty in the economy as the bubble burst of the .com market was resonating
throughout  the  economy. We pressed on, nonetheless, with the completion of our
permanent  site  in  Honeoye  Falls and secured, after considerable effort, firm
approvals for construction of our Brighton branch at the site of the old Don and
Bob's Restaurant near the Twelve Corners. We also purchased our Pittsford office
location  during  the  summer.

The markets continued to slide, and the Federal Reserve continued to react in an
effort to stimulate the economy by making no less than 11 reductions in interest
rates  during  the  year,  reaching  a historic 40-year low of 13/4% for Federal
Funds  at  the  close.  Somehow  the consumer continued to spend, in spite of an
abundance  of  doom  and  gloom.

Then,  on  September  11th,  terrorist attacks on the World Trade Center and the
Pentagon  stunned  the world! Everyone was reminded that pure evil still exists,
and  a generation of Americans lost its innocence. Approximately 4,800 airplanes
over  the  Continental  United States left the skies in less than two hours that
day,  all  landing  at sites unintended! The world all but stopped spinning. Our
antagonists  once  again  mistook  the quarreling of a free society as a sign of
weakness and lack of discipline. In an instant, the resolve of a free people was
galvanized,  and  with the world beside us, a war was declared on terrorism. The
principal  players  were effectively eradicated within two short months, and the
hunt  will  continue  until  every  last  one  has  been  routed.

If  this  were  not  enough,  a  second shock presented by the meltdown of Enron
closed  out  the  year  with  what promises to be a monumental business scandal,
which  will  forever  change  the  world  of accounting. Remarkably, the markets
remained  orderly and resilient, recovering by the end of the year despite these
two events, either one of which would have historically plunged the country into
a  recession  of  a  year  or so. Much of this resiliency comes from the role of
technology,  which  may not make us any better forecasters, but it does allow us
to  react  to  a  developing  situation  in  nearly  real time, thus eliminating
protracted festering of imbalances, which is at the root of so much of the havoc
caused  in  economic  downturns. What a year! Despite it all, our plan worked to
deliver  record  earnings  above  our  original  targets!

I am pleased to report earnings per share of $35.42 compared with $21.86 for the
previous year, representing a 62% increase. This exceeded our budgeted figure by
$6.25 per share. These numbers were driven by higher asset growth, an aggressive
management  of the net interest margin, a record year for CNB Mortgage driven by
the  refinancing  frenzy,  and  continued  improvement  of  expense  management.
Moreover,  I am especially pleased that this year's performance exceeded by $.82
the earnings per share target for the third year of $34.60 set out originally in
our  five-year  expansion  plan.

Total  footings  grew 22% funded by deposit growth of 25%. Our dividend increase
kept  pace  with  inflation,  and  our book value after dividends and taxes grew
8.7%.  That  the  Trust  Department  book  managed any growth at all in the most
precipitous  down market in over a decade is nothing short of spectacular. It is
the  down  market  which  is  the  true  test  of  an  investment  manager.

Of  profound  significance,  though  maybe not as immediately evident during the
year,  have  been the great strides we have made in developing the last critical
element  of  our  Plan  for  Value  2010 - that being the development of a sales
management function and the reorganization of the Bank in order to give life and
vitality  to  this  critical  new approach to our business. Thus, we developed a
program  of  customer  value  management  (CVM) encompassing the entire company.
During  the course of the year, CNB Options (three distinctive accounts based on
behaviors) were introduced after an extensive amount of research involving focus
groups,  operational  testing,  training and marketing coordination. The guiding
principle was to develop checking accounts directed at customers who represented
valuable  revenue  sources,  namely those who borrow money or those who purchase
investment  management  services.  In  addition,  those  who  have  deposits  of
sufficient size to support and underwrite the first two revenue activities above
were  targeted.  For these customers, we present account options which result in
no  maintenance  charges  in  view  of the level of business those relationships
represent to us. This was a critical precondition to enter a large, urban market
where  anything  less  than  a  "free account" would be ignored. No business can
afford  to  offer  a  "free  account," of course. These accounts are designed to
facilitate  and  benefit  those customers meeting a specific behavioral pattern.
CVM  now  permeates  the  very  fiber  of  the  bank.

<PAGE>

Over the last three years, much has been put in place and accomplished to enable
us  to  execute  upon our Strategic Plan for Value 2010. Our performance to date
has  been on target; indeed, ahead of projections. Our focus for the near future
is  to continue to flesh out and grow the concept as applied to broader affinity
groups  organized  around  the  workplace,  community  or  associations.  Our
effectiveness  in  this  effort  depends upon the assembling of our products and
services  in the context of a financial plan presented effectively at each stage
of our customer's life, be they growing a family or a business. It is this which
will  distinguish us as a value-added enterprise from our competition. Sales and
sales  management  leading  to the appropriate integration of financial services
focused  upon  an  individual  customer's needs, wants, and behaviors is no mean
feat to achieve, given the abject failure of the industry to deliver on the much
advertised slogan and promise. We, I am happy to say, are showing early signs of
actually  being  able to deliver on the CVM model. So the slowing of the economy
will  allow  us  to  be  highly selective regarding the origination of loans and
mortgages  at  a time when caution is advised and will give us an opportunity to
focus  upon  integrating our operations, sales, and sales management efforts. It
is  axiomatic  that  it  is  difficult  for  a  banking institution to grow in a
contracting  economy.  Notwithstanding our apparent ability to do so anyway, the
coming  year,  with a budget goal of earnings per share at $36.52, may be one of
more  gradual growth with the result that it may take us six years to accomplish
our  original  five-year  plan.  None  of us could have anticipated the shocking
events  of  the last year and the profound disruptions they have caused in every
corner  of  the  economy.

There  are  many to be thanked who bring their time and talent to our enterprise
and give force and effect to its Strategic Plan. Among them was Frank H. Hamlin,
II, whose association with our Company dates from 1948 as a Director through his
Chairmanship  (January 1966 - February 1986) and then Director again until April
17, 2001, when he died quietly at the age of 95. Only weeks before his death, he
was  chairing  the  Discount Committee at the Bank. All who came in contact with
him  benefited.  He  was  progressive,  always  looking ahead and supporting new
ideas.  He  was  in  the  best  sense  a  gentleman, scholar, friend and father;
certainly  a  treasure and inspiration for all seasons. We were all so fortunate
to  have  known  him  -  I  know  he  loved  us  all.

On  a  personal  note,  I  am  grateful for the associations of this enterprise,
indeed  family,  and the strength and support they represent. During the week of
Armistice  Day,  I was operated on for cancer which had overwhelmed my appendix,
without  noticeable symptoms except a trace of blood in the colon. Thanks to the
persistence  of my primary care physician and skill of my surgeon and others, in
three-and-one-half  short  days  I was out of the hospital and having dinner out
with my family - safe, with a good surgical result and excellent prognosis, even
if  a  bit  bruised.  The  outpouring  of well wishes and concerns for me and my
family  offered  by associates and the community-at-large was truly overwhelming
and instructive as to the importance of family, friends and community. Be it the
country  as  a whole or we as individuals, it is good to remember the importance
of these things and how the freedom we enjoy is an essential part of the success
and  sense  of  well  being  in  our lives. We have much to be thankful for as a
company  and  individually,  and  our  prospects  are  bright.

Very  truly  yours,




George  W.  Hamlin,  IV
President  and  CEO

<PAGE>

Board  of  Directors
The  Canandaigua  National  Bank  and
Trust  Company  is  honored  to  have  so
many  distinguished  community  leaders
on  its  board  of  directors.

Picture  of  Board  of  Directors

Board  of  Directors  (back row) James S. Fralick, Robert G. Sheridan, George W.
Hamlin,  IV,  David  Hamlin,  Jr., Daniel P. Fuller, Sue S. Stewart, (front row)
Caroline  C.  Shipley,  Stephen  D.  Hamlin,  Alan J. Stone, Patricia A. Boland,
Richard  P.  Miller,  Jr.

    Patricia  A.  Boland         Retired  Executive  Director,
                                  Granger  Homestead
    James  S.  Fralick           Adjunct  Professor,
                                  Syracuse  University
    Daniel  P.  Fuller           Owner,  Bristol  Mountain
    David  Hamlin,  Jr.          Farmer
    Frank  H.  Hamlin,  II       Investor  (Deceased  4/17/01)
    George  W.  Hamlin,  IV      President,  CEO,
                                  Trust  and  CRA  Officer,
                                  The  Canandaigua  National
                                  Bank  and  Trust  Company
    Stephen  D.  Hamlin          Consultant
    Richard  P.  Miller,  Jr.    Vice  Chancellor  and  Chief
                                  Operating  Officer,
                                  State  University  of  New  York
    Robert  G.  Sheridan         Retail  Senior  Vice  President
                                  and  Cashier,
                                  The  Canandaigua  National  Bank
                                  and  Trust  Company
   Caroline  C.  Shipley         Educator,  Past  Director  New
                                  York  State  School  Boards
                                  Association
   Sue  S.  Stewart              Partner,  Nixon  Peabody  LLP
   Alan  J.  Stone               Chairman  of  the  Board  of
                                  Directors,  The  Canandaigua
                                  National  Bank  and  Trust
                                  Company;  Managing  Partner,
                                  Stone  Properties


Emeritus  Board  Members
   Arthur  S.  Hamlin            Retired  Banker
   Eldred  M.  Sale              Retired  Banker
   Willis  F.  Weeden,  MD       Retired  Surgeon

Officers
   George  W.  Hamlin,  IV       President
   Robert  G.  Sheridan          Secretary
   Gregory  S.  MacKay           Treasurer

<PAGE>

Canandaigua  National  Corporation  is  a  one-bank  holding  company  providing
comprehensive  financial  services.  Its  wholly  owned subsidiaries include The
Canandaigua  National  Bank and Trust Company and CNB Mortgage Company. The Bank
engages  in  full-service  commercial  and  consumer banking, trust business and
insurance  services.  Its  market  area  is generally Western Ontario County and
Monroe  County.

Financial  Highlights

Years  ended  December  31,  2001  and  2000
(dollars  in  thousands,  except  per  share  data)
                                        2001             2000
                                     -------          -------
Net Income                          $  5,662         $  3,487
Cash Dividends                      $  1,921         $  1,887
Diluted Earnings Per Share          $  35.42         $  21.86
Dividends Per Share                 $  12.10         $  11.90
Book Value Per Share                $ 302.93         $ 278.89
Total Assets                        $725,718         $594,737
Investment Securities               $118,983         $ 80,942
Loans - Net                         $529,481         $455,259
Deposits                            $670,843         $533,513
Stockholders' Equity                $ 48,132         $ 44,269
Weighted  Average  Shares  Outstanding
-  diluted                           159,857          159,488
Return on Average Assets                .84%             .61%
Return on Beginning Equity            12.79%            8.21%

Trust  Department

Years  ended  December  31,  2001  and  2000
(at  cost,  in  thousands  of  dollars)
                                        2001          2000
                                      ------        ------
Estate,  Trust  and  Guardianship
Assets                              $239,205      $231,009
Custodian Account Assets             389,581       379,389
The Canandaigua Funds' Assets         25,705        34,675
                                     -------       -------
Total Assets Under Administration   $654,491      $645,073
                                     =======       =======

Below  are  the  tables  representing  the  graphs  which  are  inserted  here.

Balance  Sheets  Millions                     Trust  Assets  Millions

         Assets   Departures    Loans         Market     Book
        -------   ----------    -------       -------   -------
2001    725,718    670,843      529,481       745,857   654,491
2000    594,737    533,513      455,259       796,917   645,073
1999    522,135    454,096      394,227       772,133   586,815
1998    448,047    376,507      308,486       581,047   423,580
1997    418,942    324,761      305,991       452,892   357,686

<PAGE>

Independent  Auditors'  Report

The  Stockholders  and  Board  of  Directors
Canandaigua  National  Corporation:

We  have  audited  the  accompanying  consolidated balance sheets of Canandaigua
National  Corporation and subsidiaries as of December 31, 2001 and 2000, and the
related  consolidated  statements of income, stockholders' equity and cash flows
for  each  of  the years in the three-year period ended December 31, 2001. These
consolidated  financial  statements  are  the  responsibility  of  the Company's
management.  Our  responsibility  is to express an opinion on these consolidated
financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Canandaigua National
Corporation  and  subsidiaries at December 31, 2001 and 2000, and the results of
their  operations  and  their cash flows for each of the years in the three-year
period  ended  December  31,  2001,  in  conformity  with  accounting principles
generally  accepted  in  the  United  States  of  America.


February  1,  2002
Rochester,  New  York



<PAGE>

<TABLE>

<CAPTION>

Consolidated  Balance  Sheets
December  31,  2001  and  2000  (dollars  in  thousands,  except  share  data)


Assets                                                 2001        2000
------                                              -------    --------


                                                <C>         <C>
Cash and due from banks                             $30,248      28,157
Interest bearing deposits with other
financial institutions
                                                      8,293          97
Federal funds sold                                    8,100           -
Securities:
- Available for sale, at fair value                     534         450
Held to maturity (fair value of
     $119,971 in 2001 and $80,881 in 2000)          118,449      80,492
Loans -  net of allowance of $5,480 in 2001
     and $4,712 in 2000                             529,481     455,259
Premises and equipment - net                         17,062      15,949
Accrued interest receivable                           3,201       3,371
Federal Home Loan Bank stock and Federal
Reserve Bank stock                                    2,013       3,032
Other assets                                          8,337       7,930
                                                    -------     -------
Total Assets                                       $725,718     594,737
                                                    =======     =======
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
 Demand
  Non-interest bearing                              $93,931      87,201
  Interest bearing                                   69,156      53,665
  Savings and money market                          276,689     162,975
  Certificates of deposit                           231,067     229,672
                                                    -------     -------
   Total deposits                                   670,843     533,513
 Borrowings                                           1,097      12,644
 Accrued interest payable
  and other liabilities                               5,646       4,311
                                                    -------     -------

           Total Liabilities                       $677,586     550,468
                                                    -------     -------

Commitments and contingencies (Notes 14 and 15)

Stockholders' Equity:
  Common stock, $50 par value;
   240,000 shares authorized,
   162,208 shares issued in 2001
   and 2000 (note 20)                                 8,110       8,110
  Additional paid-in capital                          8,553       8,532
  Retained earnings                                  32,428      28,687
  Treasury stock, at cost
   (3,321 shares in 2001
   and 3,476 shares in 2000)                         (1,218)     (1,268)
  Accumulated other comprehensive income                259         208
                                                    -------     -------
     Total Stockholders' Equity                      48,132      44,269
                                                    -------     -------

Total Liabilities and Stockholders'Equity          $725,718      594,737
                                                    =======      =======
<FN>

See  accompanying  notes  to  consolidated  financial  statements.

</TABLE>


<PAGE>
<TABLE>

<CAPTION>


Consolidated  Statements  of  Income
Years  ended  December  31,  2001,  2000,  and  1999
(dollars  in  thousands,  except  per  share  data)


Interest income:                            2001        2000        1999
                                          ------      ------      ------


                                      <c>         <c>         <c>
     Loans, including fees               $39,408      37,406      28,683
     Securities                            4,574       4,353       3,756
     Other                                   109          76         233
                                          ------      ------      ------
        Total interest income             44,091      41,835      32,672
                                          ------      ------      ------

Interest expense:
     Deposits                             17,587      17,434      12,727
     Borrowings                              390       1,367         527
                                          ------      ------      ------
          Total interest expense          17,977      18,801      13,254
                                          ------      ------      ------
          Net interest income             26,114      23,034      19,418
Provision for loan losses                  1,431       1,028       1,239
                                          ------      ------      ------
          Net interest income
          after provision for
          loan losses                     24,683      22,006       18,179
                                          ------      ------       ------
Other income:
     Service charges on deposit accounts   4,548       3,805        2,741
     Trust income                          3,531       3,314        2,783
     Net gain on sale of mortgage loans       66           8           88
     Mortgage banking income               1,143       1,081        1,230
     Other operating income                1,257       1,244        1,136
                                          ------      ------       ------
Total other income                        10,545       9,452        7,978
                                          ------      ------       ------
Operating expenses:
     Salaries and employee benefits       15,157      14,432       13,055
     Occupancy                             5,098       4,812        3,763
     Marketing and public relations        1,002         966        1,103
     Office supplies, printing
       and postage                         1,021         927          966
     FDIC insurance                          102          94           43
     Other operating expenses              4,767       5,525        3,974
                                          ------      ------       ------
          Total operating expenses        27,147      26,756       22,904
                                          ------      ------       ------

          Income before income taxes       8,081       4,702        3,253
Income taxes                               2,419       1,215          896
                                          ------      ------       ------
        Net income                        $5,662       3,487        2,357
                                          ======      ======       ======
Basic earnings per share (note 20)        $35.67       22.00        14.82
                                           =====       =====        =====
Diluted earnings per share (note 20)      $35.42       21.86        14.78
                                           =====       =====        =====
<FN>

See  accompanying  notes  to  consolidated  financial  statements.

</TABLE>


<PAGE>

<TABLE>

<CAPTION>


Consolidated  Statements  of  Stockholders'  Equity
Years  ended  December  31,  2001,  2000,  and  1999
(dollars  in  thousands,  except  share  data)


                                                                              Accumulated
                                          Additional                                Other
                                   Common    Paid in   Retained  Treasury   Comprehensive
                                    Stock    Capital    Earnings    Stock          Income     Total
                                   ------   --------   ---------  -------    -------------    -----

                             <c>         <c>        <c>        <c>        <c>             <c>
Balance at December 31, 1998       $8,110      8,495     26,563      (835)            145    42,478

Comprehensive income:
   Change in unrealized gain on
   securities available for sale,
   net of taxes of ($16)                 -          -           -        -             (23)      (23)

   Net income                                              2,357                               2,357
                                                                                               -----
   Total comprehensive income                                                                  2,334
                                                                                               -----
   Cash dividend -
     $11.50 per share                    -          -     (1,833)        -               -    (1,833)
   Sale of 176 shares
     of treasury stock                   -         11          -        56               -        67
   Purchase of 1,422
     shares of
     treasury stock                      -          -          -      (569)              -      (569)
                                     -----      -----     ------     -----            ----    ------
Balance at December 31, 1999         8,110      8,506     27,087    (1,348)            122    42,477
                                     -----      -----     ------     -----            ----    ------

    Comprehensive income:
      Change in
        unrealized gain on
        securities available for sale,
        net of taxes of $56              -          -          -         -              86        86

      Net income                         -          -      3,487         -               -     3,487
                                                                                              ------
    Total comprehensive income                                                                 3,573
                                                                                              ------
    Cash dividend - $11.90
      per share                          -          -     (1,887)        -               -    (1,887)
    Sale of 249 shares
      of treasury stock                  -         26          -        80               -       106
                                     -----      -----     ------     -----            ----    ------
Balance at December 31, 2000         8,110      8,532     28,687    (1,268)            208    44,269
                                     -----      -----     ------     -----            ----    ------

    Comprehensive income:
      Change in unrealized gain on
        securities available for sale,
        net of taxes of $33              -          -          -         -              51        51

      Net income                         -          -      5,662         -               -     5,662
                                                                                              ------
    Total comprehensive income                                                                 5,713
                                                                                              ------
    Cash dividend -
      $12.10 per share                   -          -     (1,921)        -               -    (1,921)
    Sale of 155 shares
      of treasury stock                  -         21          -        50               -        71
                                     -----      -----     ------     -----            ----    ------
Balance at December 31, 2001        $8,110      8,553     32,428    (1,218)            259    48,132
                                     =====      =====     ======     =====            ====    ======

<FN>

See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>



<PAGE>
<TABLE>

<CAPTION>


Consolidated  Statements  of  Cash  Flows
Years  ended  December  31,  2001,  2000  and  1999  (dollars  in  thousands)



                                                          2001         2000        1999
                                                       -------      -------     -------


                                                  <c>           <c>        <c>
Cash flows from operating activities:
    Net income                                          $5,662        3,487       2,357
    Adjustments to reconcile net income to net
          cash provided by (used in) operating
          activities:
      Depreciation, amortization and accretion           1,695        2,119       2,084
      Provision for loan losses                          1,431        1,028       1,239
      Writedown of other real estate                        45          100           -
      Deferred income tax benefit                         (819)        (334)       (482)
      Loss (income) from minority owned entities            47         (173)       (144)
      Contract termination costs                          (223)         433           -
      Originations of loans held for sale             (117,164)     (70,459)   (106,988)
      Proceeds from sales of loans held for sale       105,051       68,725     109,464
      Decrease (increase) in accrued
        interest receivable and other assets             1,192       (2,495)       (175)
      Increase in accrued interest
        payable and other liabilities                    1,558          534       1,230
      Writedown of security                                  -          105           -
                                                       -------      -------     -------
          Net cash provided by (used in)
            operating activities                        (1,525)       3,070       8,585
                                                       -------      -------     -------
Cash flows from investing activities:
    Purchase of FHLB and FRB stock                         (27)         (42)          -
    Sale of FHLB stock                                   1,046          558           -
    Securities held to maturity:
      Proceeds from maturities and calls
      of securities                                    194,296       78,270      38,303
      Purchase of securities                          (231,439)     (82,926)    (41,180)
    Loans originated - net                             (63,706)     (60,326)    (89,985)
    Fixed asset purchases - net                         (3,486)      (4,940)     (3,990)
    Investment in minority owned entities                 (884)        (391)       (158)
    Proceeds from sale of other real estate                179           85         529
                                                       -------      -------     -------
          Net cash used by
              investing activities                    (104,021)     (69,712)    (96,481)
                                                       -------      -------     -------
Cash flows from financing activities:
    Net increase in demand, savings
     and money market deposits                         135,935       26,807       46,667
    Net increase in time deposits                        1,395       52,610       31,116
    Proceeds from borrowings                            30,000        6,770       16,600
    Principal repayments on borrowings                 (41,547)     (16,344)      (1,524)
    Proceeds from sale of treasury
     Stock                                                  71          106           67
    Purchase of treasury stock                               -            -         (569)
    Dividends paid                                      (1,921)      (1,887)      (1,833)
                                                       -------      -------      -------
       Net cash provided by financing activities       123,933       68,062       90,524
                                                       -------      -------      -------
    Net increase in cash and cash equivalents           18,387        1,420        2,628
Cash and cash equivalents - beginning of year           28,254       26,834       24,206
                                                       -------      -------      -------
Cash and cash equivalents - end of year              $  46,641       28,254       26,834
                                                       =======      =======      =======

Supplemental disclosures of cash flow information:
     Cash paid during the year for:
        Interest                                      $ 17,929       18,399       13,074
                                                       =======      =======      =======

        Income taxes                                  $  2,677        1,459        1,020
                                                       =======      =======      =======

Supplemental disclosure of non-cash
investing activities:
     Additions to other real estate
      acquired through foreclosure,
      net of loans to facilitate sales                $     166            -          536
                                                       =======      =======      =======

<FN>

See  accompanying  notes  to  consolidated  financial  statements.

</TABLE>



<PAGE>
(1)  Summary  of  Significant  Accounting  Policies

    Business

    Canandaigua  National  Corporation  (the  Company)  provides a full range of
financial  services,  including  banking,  trust,  and  insurance  services  to
individual,  corporate,  and  municipal  customers.  The  Company  is subject to
competition  from other financial institutions. The Company and its subsidiaries
are subject to the regulations of certain federal and state agencies and undergo
periodic  examinations  by  those  regulatory  authorities.

    Basis  of  Presentation

     The  consolidated  financial statements include the accounts of the Company
and  its  wholly  owned  subsidiaries,  The  Canandaigua National Bank and Trust
Company  (the Bank), Greater Funding of New York, Inc. (GFNYI), and CNB Mortgage
Company  (CMC). All significant intercompany accounts and transactions have been
eliminated  in  consolidation.  The Company accounts for investments in minority
owned  entities  under  the  equity  method.  The financial statements have been
prepared  in  conformity  with  accounting  principles generally accepted in the
United  States  of  America  and  conform  with predominant practices within the
banking  industry.

    In  preparing  the  consolidated  financial  statements,  management  made
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  reported  amounts of revenues and expenses
during  the  reporting period. Actual results could differ from those estimates.

    Amounts  in  prior years' consolidated financial statements are reclassified
whenever  necessary  to  conform  with  the  current  year's  presentation.

    Securities

    The  Company  classifies its debt securities as either available for sale or
held  to  maturity  as  the  Company  does  not  hold  any  securities
considered to be trading. Held to maturity securities are those that the Company
has  the  ability and intent to hold until maturity. Held to maturity securities
are  recorded  at  amortized  cost. All other securities not included as held to
maturity  are  classified  as  available  for  sale.

    Available for sale securities are recorded at fair value. Unrealized holding
gains  and  losses,  net  of  the  related  tax  effect,  on  available for sale
securities  are  excluded  from  earnings  and are included in accumulated other
comprehensive  income  in  stockholders'  equity  until  realized.
A  decline  in fair value of any available for sale or held to maturity security
below  cost that is deemed other than temporary is charged to earnings resulting
in  the  establishment  of  a  new  cost  basis  for  the  security.

    Premiums  and  discounts  are  amortized  or  accreted  over the life of the
related  security  as an adjustment to yield using the interest method. Dividend
and  interest  income  are recognized when earned. Realized gains and losses are
included  in  earnings  and  are  determined  using  the specific identification
method.

    Loans

    Loans,  other  than  loans  designated  as  held for sale, are stated at the
principal  amount  outstanding  net  of deferred origination costs. Interest and
costs  on  loans  are credited to income based on the effective interest method.

    The  accrual of interest on commercial and real estate loans is discontinued
and  previously  accrued  interest  is  reversed  when  the loans become 90 days
delinquent  or  when,  in management's judgment, the collection of principal and
interest is uncertain. Loans are returned to accrual status when doubt no longer
exists about the loan's collectibility. Consumer loans are generally charged off
upon  becoming  120  days  past  due.

    Loans  held  for sale are carried at the lower of cost or market value on an
aggregate  basis.  Market  value  is  estimated  based  on  outstanding investor
commitments,  or  in  the  absence  of  such commitments, based on current yield
requirements  or  quoted  market  prices.

    The  Company  services  residential mortgage loans for the Federal Home Loan
Mortgage  Corporation  (Freddie  Mac)  and  earns  servicing  fees,  which  are
recognized  when  payments  are  received,  based upon the outstanding principal
balance  of  the  loans.

<PAGE>
(1)  Summary  of  Significant  Accounting  Policies  (continued)

    Allowance  for  Loan  Losses

    The  allowance  for  loan losses is a valuation reserve available for losses
incurred  or  inherent in the loan portfolio. Credit losses arise primarily from
the  loan  portfolio, but may also be derived from other credit-related sources,
when  drawn  upon,  such  as,  commitments,  guarantees
and  standby  letters  of  credit.  Additions  are made to the allowance through
periodic  provisions,  which are charged to expense. All losses of principal are
charged  to  the  allowance when incurred or when a determination is made that a
loss  is expected. Subsequent recoveries, if any, are credited to the allowance.

    The  Company  has  established  a  process  to  assess  the  adequacy of the
allowance  for  loan  losses  and  to  identify  the  risks inherent in the loan
portfolio.  This process consists of the identification of specific reserves for
identified  problem  loans  and  the calculation of general reserves, which is a
formula-driven  allocation.  Specific reserves are determined through assessment
of  the  borrower's  ability  to  repay  and  the  fair  value of the underlying
collateral,  for  collateral  dependent  loans.  If the carrying value of a loan
exceeds  the  discounted  expected  cash  flows  or  the value of the underlying
collateral,  the  excess  is  specifically reserved or charged off. The level of
specific  reserves is generally the smallest component of the allowance for loan
losses.

    The  calculation of the general reserve involves several steps. A historical
loss factor is applied to each loan by business segment and loan classification.
The  historical loss factors are calculated using a loan-by-loan, trailing eight
quarter  loss  migration  analysis  for  commercial
loans.  For  all  other  loans  a  portfolio-wide,  trailing  eight quarter loss
migration  analysis  is  used.  Adjustments  are  then  made  to  the historical
loss  factors  based  on  quantitative  objective  elements  (delinquency,
non-performing  assets,  classified/criticized  loan  trends,  charge-offs,
concentrations  of  credit  and  recoveries,  etc.)  and the subjective elements
(economic  conditions,  portfolio  growth  rate,  portfolio  management,  credit
policy,  and others). This methodology is applied to the commercial, residential
mortgage,  and  consumer  portfolios.

    While  management  uses  available information to recognize losses on loans,
future  additions  to  the  allowance  may  be  necessary.  In addition, various
regulatory  agencies,  as  an  integral  part  of  their  examination  process,
periodically  review  the  Company's  allowance  for  loan  losses.
Such  agencies  may  require the Company to recognize additions to the allowance
based  on  their  judgments  about  information  available  to
them  at  the  time  of  their  examination.

    Management,  considering  current  information  and  events  regarding  the
borrower's  ability  to repay their obligations, considers a loan to be impaired
when  it  is probable that the Company will be unable to collect all amounts due
according  to  the  contractual  terms  of  the  loan  agreement. When a loan is
considered to be impaired, the amount of the impairment is measured based on the
present  value  of expected future cash flows discounted at the loan's effective
interest  rate,  or  as  a  practical expedient, at the loan's observable market
price  or  the  fair  value  of  collateral if the loan is collateral dependent.
Impairment losses are included in the allowance for loan losses through a charge
to the provision for loan losses. Cash receipts on impaired loans are applied to
reduce the principal balance outstanding. In considering loans for evaluation of
impairment,  management  generally excludes smaller balance, homogeneous loans -
residential  mortgage  loans,  home  equity  loans and all consumer loans. These
loans  are  collectively  evaluated  for  impairment  as  discussed  above.

    Premises  and  Equipment

    Land  is  carried  at cost. Buildings, equipment, and leasehold improvements
are  carried  at  cost,  less  accumulated  depreciation  and  amortization.
Depreciation  is  computed  using straight-line and accelerated methods over the
estimated  useful  lives  of  the  assets, 3-25 years. Amortization of leasehold
improvements  is  provided  over  the  lesser  of  the  term of the lease or the
estimated  useful  lives  of  the  assets.

    Other  Real  Estate

    Real  estate  acquired  through  foreclosure  or deed in lieu of foreclosure
(other  real  estate) is recorded at the lower of the unpaid loan balance on the
property  at  the date of transfer, or fair value. Adjustments made to the value
at  transfer  are  charged to the allowance for loan losses. After transfer, the
property  is carried at the lower of cost or estimated fair value less estimated
costs  to  sell.  Adjustments  to  the  carrying
values  of  such  properties  that  result from subsequent declines in value are
charged  to  operations  in  the  period  in which the declines occur. Operating
earnings  and  costs  associated  with  the properties are charged to expense as
incurred.  Gains  on  the  sale  of other real estate are included in results of
operations  when  title has passed and the sale has met the minimum down payment
and other requirements prescribed by accounting principles generally accepted in
the  United  States  of  America.

<PAGE>
(1)  Summary  of  Significant  Accounting  Policies  (continued)

    Stock-Based  Compensation

    The  Company  applies  the  intrinsic  value-based  method  of  accounting
prescribed  by  APB  Opinion  No.  25,  "Accounting  for  Stock  Issued
to  Employees"  for  its  stock-based  compensation plans and discloses in these
footnotes  pro  forma  net  income  and  earnings  per  share
information  as  if  the  fair  value  based  method  had  been  adopted.

    Income  Taxes

    The  Company  and  its  subsidiaries  file a consolidated Federal income tax
return. Deferred income tax assets and liabilities are recognized for the future
tax  consequences  attributable  to  differences between the financial statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the years in which those temporary
differences  are expected to be recovered or settled. The effect on deferred tax
assets  and  liabilities of a change in tax rates is recognized in income in the
period  that  includes  the  enactment  date.

    Accumulated  Other  Comprehensive  Income

    The  Company's  comprehensive income consists of only net income and the net
unrealized  holding  gains  and  losses  of  securities  available
for  sale, net of the related tax effect. Accumulated other comprehensive income
on  the  consolidated  statements  of  stockholders'  equity is presented net of
taxes.

    Trust  Department  Income

    Assets,  at  cost,  held  in  fiduciary  or  agency  capacity for customers,
amounting  to  $654,000,000  and  $645,000,000  at  December  31, 2001 and 2000,
respectively,  are not included in the accompanying consolidated balance sheets,
since such assets are not assets of the Company. Fee income is recognized on the
accrual  method.

    Cash  Equivalents

    For  the  purpose of reporting cash flows, cash and cash equivalents include
cash  on  hand,  interest  bearing  deposits  with  other  financial
institutions  and  Federal  funds  sold.

    Financial  Instruments  With  Off-Balance-Sheet  Risk

    The  Company does not engage in the use of derivative financial instruments.
The  Company's  only  financial  instruments  with  off-balance-sheet  risk  are
commercial  letters of credit and committed mortgages and lines of credit. These
off-balance-sheet  items  are shown on the Company's balance sheet upon funding.

    Treasury  Stock

    Treasury  stock  is  shown  on  the  consolidated balance sheet at cost as a
reduction  of  stockholders'  equity.  Shares are released from treasury at fair
value,  with  any  gain  on  the  sale  reflected as an adjustment to additional
paid-in  capital.  Losses  are  reflected as an adjustment to additional paid-in
capital to the extent of gains previously recognized, otherwise as an adjustment
to  retained  earnings.

    Earnings  Per  Share

    Basic  earnings  per share is calculated by dividing net income available to
common  shareholders  by  the  weighted  average  number  of
shares  outstanding  during  the  year.  Diluted earnings per share includes the
maximum  dilutive  effect  of  stock  issuable  upon  conversion
of  stock  options.

<PAGE>
(1)  Summary  of  Significant  Accounting  Policies  (continued)

    Segment  Reporting

    During 1998, the Company adopted SFAS No. 131 "Disclosures about Segments of
an  Enterprise  and  Related  Information." SFAS No. 131 requires the Company to
report  financial  and other information about key revenue-producing segments of
the Company for which such information is available and is utilized by the chief
operating  decision  maker.  Specific  information to be reported for individual
segments  include  profit and loss, certain revenue and expense items, and total
assets. A reconciliation of segment financial information to amounts reported in
the  financial  statements  is  also  provided. Adoption of SFAS No. 131 did not
result  in  significant  changes  in  the  Company's  reporting.  The  Company's
operations  are  solely  in  the  financial  service  industry  and  include the
provision  of  traditional  commercial  banking services, which includes payment
services, credit services, investment and trust services, and insurance services
to  individual,  corporate  and municipal customers. The Company operates in the
geographical regions of Western Ontario County and Monroe County and surrounding
areas in New York State. The Company has identified separate operating segments;
however,  these  segments  did not meet the quantitative thresholds for separate
disclosure.

    Other  Recently  Issued  Accounting  Standards

    The Company implemented the provisions of FASB Statement No. 133 "Accounting
for  Derivative  Instruments  and Hedging Activities", as amended, on January 1,
2001.  This  Statement  establishes  comprehensive  accounting  and  reporting
requirements for derivative instruments and hedging activities. The Company held
no  freestanding derivative instruments during the year; therefore, the adoption
of  the  new  standard  had  no  effect  on the Company's financial condition or
results  of  operations.

    The  Company  was  required  to  adopt  Statement  No.  140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
in 2000. This statement replaced Statement No. 125 and revised the standards for
accounting  for  securitizations  and  other  transfers
of  financial  assets  and  collateral  and  required  certain  disclosures. The
adoption  of the standard had no impact on its financial condition or results of
operations.

    In  June  2001,  the  Financial  Accounting  Standards  Board  issued  three
accounting  standards:

    Statement 141, "Business Combinations," requires that the purchase method of
accounting  be used for all business combinations initiated after June 30, 2001.
Use  of  the  pooling-of-interests  method  will  be  prohibited. Because of its
prospective  adoption,  the  standard  had  no impact on the Company's financial
condition  or  results of operations in 2001.  Its impact on the Company will be
dependent  upon  future  business  combinations,  if  any.

    Statement  142,  "Goodwill  and  Other  Intangible  Assets,"  changes  the
accounting  for  goodwill  from  an  amortization  method  to an impairment-only
approach.  Thus,  amortization  of goodwill, including goodwill recorded in past
business  combinations,  will cease upon adoption of this standard on January 1,
2002.  Amortization  is  replaced  by  periodic  assessments  of  impairment. At
December  31,  2001,  the  Company  had  no  unamortized  goodwill.

    Statement  143,  "Accounting  for  Asset  Retirement  Obligations," requires
entities  to  record  the  fair  value  of  a  liability for an asset retirement
obligation  in the period in which it is incurred and accrete the liability over
time.  Upon settlement of the liability, an entity either settles the obligation
for  its recorded amount or incurs a gain or loss upon settlement. The standard,
effective  for  the  Company's  2003  fiscal year, is not expected to impact the
Company's  financial  position  or  results  of  operations.

    In August 2001, Statement 144, "Accounting for the Impairment or Disposal of
Long-Lived  Assets,"  which replaced FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" was
issued.  Statement  144  requires  long-lived  assets for sale or disposal to be
measured  at  the  lower  of  carrying  amount or fair value less costs to sell,
whether  reported  in  continuing  operations  or  in  discontinued  operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value  or  include  amounts for operating losses that have not yet occurred. The
Statement also broadens the reporting of discontinued operations. The provisions
of  statement  144  are  effective  for  the  Company in 2002. Its impact on the
Company  cannot  be  determined,  and  will  be  dependent upon any future asset
disposal  decisions.

<PAGE>
(2)  Contract  Termination  Costs

    During  the  fourth  quarter of 2000, contract termination costs of $433,000
pre-tax  ($264,000  or  $1.65  per  diluted  share,  after  tax) was recorded in
conjunction  with  the  realignment  of  the  Company's  credit card activities.
Substantially  all  the  cost  of  the  realignment  was  associated  with early
termination  penalties from processing contracts with credit card vendors. Minor
amounts were associated with employee severance. The realignment was expected to
be  completed in 2001, and costs were to be funded through normal operations and
fully  paid  in  2001.

    Since  the  Company's  credit card portfolios sales will occur approximately
one  year  later than originally estimated by management, the estimated contract
termination  costs  will  be  lower.  As a result, the Company reversed $223,000
pre-tax  ($135,000  or  $.85  per  diluted  share,  after  tax)  of the contract
termination  reserve  to  "Other  operating  expenses"  in the 2001 Consolidated
Statement of Income. In 2001, the Company paid $60,000 from the accrued contract
termination  liability.  The  balance of the liability at December 31, 2001, was
$145,000  and  is expected to be fully paid and funded through normal operations
in  2002.  The portfolios are expected to be sold in the second quarter of 2002.

(3)  Federal  Funds  Sold

    Income  from Federal funds sold for the years ended December 31, 2001, 2000,
and  1999  was  $86,000,  $71,000,  and  $225,000,  respectively.

(4)  Securities

<TABLE>

<CAPTION>


    The aggregate amortized cost and fair value of Securities Available for Sale and Securities Held
to  Maturity  at  December  31,  2001  and  2000,  follow  (in  thousands):


                                                              2001                      2000
                                                     ---------------------      --------------------
                                                     Amortized        Fair      Amortized       Fair
                                                          Cost       Value           Cost      Value
                                                     ---------     -------      ---------     ------

                                                 <c>            <c>          <c>          <c>
Securities Available for Sale:
Common stock                                        $      103         534            103        450
                                                       =======     =======         ======     ======

Securities Held to Maturity:
  U.S. Treasury obligations and agencies            $   55,456      55,837         36,949     37,065
  Mortgage-backed securities                               482         485            493        495
  Obligations of state and municipal subdivisions       61,918      63,059         42,062     42,334
  Other securities                                         593         590            988        987
                                                       -------     -------         ------     ------
     Total                                          $  118,449     119,971         80,492     80,881
                                                       =======     =======         ======     ======
</TABLE>




(4)  Securities  (continued)

<TABLE>

<CAPTION>


Gross  unrealized  gains  and gross unrealized losses on Securities Available for Sale and Securities
Held  to  Maturity  at  December  31,  2001  and  2000,  follow  (in  thousands):


                                                                2001                     2000
                                                         -----------------         -----------------
                                                             Unrealized                 Unrealized
                                                         Gains      Losses          Gains     Losses
                                                         -----      ------          -----     ------

                                                     <c>         <c>             <c>       <c>
Securities Available for Sale:
     Common stock                                       $  431           -            347          -
                                                         =====      ======          =====     ======

Securities Held to Maturity:
   U.S. Treasury obligations and agencies               $  390          (9)           135        (19)
  Mortgage-backed securities                                 3           -              2          -
  Obligations of state and municipal subdivisions        1,352        (211)           428       (156)
  Other securities                                           -          (3)             1         (2)
                                                         -----      ------          -----     ------
     Total                                              $1,745        (223)           566       (177)
                                                         =====      ======          =====     ======
</TABLE>


<PAGE>

<TABLE>

<CAPTION>


     The  amortized  cost and fair value of securities Held to Maturity by years
to  maturity  as  of  December  31,  2001,  follow  (in  thousands):


                                                    Amortized         Fair
Years                                                    Cost        Value
-----------                                         ---------      -------

                                                 <c>            <c>
      Under 1                                       $  56,958       57,291
      1 to 5                                           48,672       49,808
      5 to 10                                          12,200       12,177
      10 and over                                         619          695
                                                      -------      -------
      Total                                         $ 118,449      119,971
                                                      =======      =======
</TABLE>



     Maturities  of mortgage-backed securities are classified in accordance with
the  contractual  repayment  schedules.  Expected  maturities  will  differ from
contracted  maturities  since  issuers  may  have  the  right  to call or prepay
obligations  without  penalties.

     Securities  Held  to  Maturity  with  carrying  values of $113,805,000 were
pledged  as  collateral  against  municipal  deposits  at  December  31,  2001.

     The  Bank  had  no  sales  of  securities  in  2001,  2000,  or  1999.

<TABLE>

<CAPTION>


     Interest  on  securities segregated between taxable interest and tax-exempt
interest  for  the  years  ended  December 31, 2001, 2000, and 1999, follows (in
thousands):


                                          2001         2000         1999
                                         -----        -----        -----

                                   <c>             <c>          <c>
     Taxable                          $  2,613        2,355        2,015
     Tax-exempt                          1,961        1,998        1,741
                                         -----        -----        -----
       Total                          $  4,574        4,353        3,756
                                         =====        =====        =====

</TABLE>

<PAGE>
(5)    Loans

<TABLE>

<CAPTION>


The  major  classifications  of  loans at December 31, 2001 and 2000, follow (in
thousands):


                                                           2001           2000
                                                        -------        -------

                                                  <c>              <c>
Commercial, financial, and agricultural              $   79,304         65,324
Mortgages:
        Residential                                      85,402         81,475
        Commercial                                      245,915        195,153
Consumer
        Auto - indirect                                  85,243         93,746
        Other                                            23,093         20,214
Other                                                     1,603          1,833
Loans held for sale                                      14,401          2,226
                                                        -------        -------
       Total                                            534,961        459,971
Less - allowance for loan losses                         (5,480)        (4,712)
                                                        -------        -------
       Loans - net                                   $  529,481        455,259
                                                        =======        =======
</TABLE>



<TABLE>

<CAPTION>


Interest  and  fees  on  loans  follow  (in  thousands):


                                                               Years Ended December 31
                                                         ------------------------------------
                                                           2001           2000           1999
                                                         ------         ------         ------

                                                  <c>               <c>            <c>
Commercial                                           $    5,292          5,700          4,416
Mortgage                                                 25,709         21,678         14,670
Consumer and other                                        8,407         10,028          9,597
                                                         ------         ------         ------
       Total                                         $   39,408         37,406         28,683
                                                         ======         ======         ======

</TABLE>

<TABLE>

<CAPTION>

A  summary  of  the  changes  in  the  allowance  for  loan  losses  follows  (in  thousands):

                                                              Years Ended December 31,
                                                         ------------------------------------
                                                           2001           2000           1999
                                                         ------         ------         ------

                                                   <c>               <c>            <c>
Balance at beginning of year                          $   4,712          4,136          3,283
Provision charged to operations                           1,431          1,028          1,239
Loans charged off                                        (1,043)          (957)          (875)
Recoveries of loans charged off                             380            505            489
                                                         ------         ------         ------
Balance at end of year                                $   5,480          4,712          4,136
                                                         ======         ======         ======
</TABLE>



     The principal balance of loans not accruing interest totaled $4,988,000 and
$3,169,000 at December 31, 2001 and 2000, respectively. The effect of nonaccrual
loans  on interest income for the years ended December 31, 2001, 2000, and 1999,
was  approximately  $279,000,  $245,000,  and $138,000, respectively. Other real
estate  amounted  to  $1,408,000,  and $1,466,000 at December 31, 2001 and 2000,
respectively,  and  is  included  in  other  assets  in the consolidated balance
sheets.  At December 31, 2001, the Company had no commitments to lend additional
funds  to  borrowers
with  loans  in  non-accrual  status.

     The  recorded  investments  in  loans  that  are  considered to be impaired
totaled  $8,084,000, and $3,169,000 at December 31, 2001 and 2000, respectively.
Included  in  2001's amount was $273,000 of impaired loans for which the related
allowance  for  loan  losses  was  $229,000  and  included  in 2000's amount was
$105,000  of  impaired loans for which the related allowance for loan losses was
$105,000.  The  average recorded investment in impaired loans during 2001, 2000,
and  1999,  was  $3,033,000,  $2,778,000,  and $1,583,000, and respectively. The
effect  of  not  accruing  interest  income  on impaired loans was approximately
$278,000  in  2001,  $245,000  in  2000,  and  $138,000  in  1999.

<PAGE>
(5)    Loans  (continued)

     At  December  31, 2001, residential mortgage loans with a carrying value of
approximately $5,447,000 were pledged as collateral for the Bank's advances from
the  Federal  Home  Loan  Bank,  and an additional $40,682,000 was available for
pledging.  Indirect  automobile  loans  with  a  carrying value of approximately
$83,587,000 were pledged as collateral for a $66,869,000 line of credit from the
Federal  Reserve  Bank  of  New  York  at  December  31,  2001.

     Loans  serviced  for  others,  amounting  to $98,065,000 and $77,477,000 at
December  31,  2001 and 2000, respectively, are not included in the consolidated
financial  statements.

     The  Company's  market  area is generally Western Ontario County and Monroe
County  of  New  York  State.  Virtually  all loans are made in its market area.
Accordingly,  the  ultimate  collectibility  of  a  substantial  portion  of the
Company's loan portfolio is susceptible to changes in the economic conditions in
this  area.

     The  Company's  concentrations  of  credit  risk  are  as  disclosed in the
schedule  of  loan  classifications.  The  concentrations of credit risk in loan
commitments  and  letters of credit parallel the loan classifications reflected.
Other  than  general  economic  risks,  management  is not aware of any material
concentrations  of  credit  risk  to  any  industry  or  individual  borrower.

(6)   Premises  and  Equipment

<TABLE>

<CAPTION>

      A  summary of premises and equipment at December 31, 2001 and 2000 follows
(in  thousands):


                                                 2001            2000
                                               ------          ------

                                         <c>               <c>
Land and land improvements                  $   1,087           1,055
Buildings and leasehold improvements           19,837          17,527
Furniture, fixtures, equipment,
  and vehicles                                 14,326          13,539
                                               ------          ------
                                               35,250          32,121
Less accumulated depreciation and
   amortization                                18,188          16,172
                                               ------          ------
Premises and equipment - net                $  17,062          15,949
                                               ======          ======
</TABLE>


Depreciation  and  amortization expense amounted to $2,373,000, $2,429,0000, and
$2,020,000  for the years ended December 31, 2001, 2000, and 1999, respectively.

(7)    Certificates  of  Deposit

Certificates  of deposit of $100,000 or more amounted to $96,789,000 at December
31,  2001  and  $131,387,000  at  December  31,  2000. Interest expense on these
certificates  of deposit was as follows: $5,582,000 in 2001, $7,263,000 in 2000,
and  $3,032,000  in  1999.

At  December  31,  2001,  the  scheduled  maturity of certificates of deposit of
$100,000  or  more  was  as  follows  (in  thousands):

     2002      $  80,285
     2003         13,454
     2004          3,050
                  ------
               $  96,789
                  ======

<PAGE>
(8)  Borrowings

<TABLE>

<CAPTION>


    Borrowings  consisted  of  the  following  at December 31, 2001 and 2000 (in
thousands):


                                                 2001            2000
                                                -----          ------

                                         <c>               <c>
    FHLB Line of Credit                     $       -          10,400
    FHLB Term Advances                            866           1,992
    Other                                         231             252
                                                -----          ------
                                            $   1,097          12,644
                                                =====          ======
</TABLE>



In 1995, the Bank borrowed $1,023,000 from the FHLB at an effective rate of 2.5%
to  fund  low-income  housing  projects.

<TABLE>

<CAPTION>

Scheduled maturity of the Company's borrowings at December 31, 2001, follows (in
thousands):


                                                         Weighted Average
                                      Amount                Interest Rate
                                      ------                -------------

                               <c>                     <c>
2002                              $      36                         3.83%
2003                                     36                         3.83%
2004                                     36                         3.83%
2005                                     36                         3.83%
2006                                     36                         3.83%
after 2006                              917                         3.83%
                                      -----
          Total                   $   1,097                         3.83%
                                      =====                         ====
</TABLE>



     The  Company maintains a $33,700,000 overnight line of credit with the FHLB
of  New  York. Advances are payable on demand and generally bear interest at the
federal  funds  rate  plus .10 %. The Company also has access to the FHLB's Term
Advance  Program,  which  allows the Bank to borrow up to $33,700,000 at various
terms  and  rates.  Under  the  terms of a blanket collateral agreement with the
FHLB,  these outstanding balances are collateralized by the Company's investment
in  FHLB  stock  and  certain  other  qualifying  assets  not  otherwise pledged
(primarily  first  mortgage  loans).

<PAGE>
(9)    Income  Taxes

<TABLE>

<CAPTION>


     Total  income taxes for the years ended December 31, 2001, 2000, and 1999, were allocated
as  follows  (in  thousands):


                                                           2001           2000           1999
                                                          -----          -----           ----

                                                   <c>                <c>             <c>
     Income from operations                           $   2,419          1,215            896
     Change in stockholders'equity for unrealized
        gain on securities available for sale                33             56            (16)
                                                          -----          -----            ---
                                                      $   2,452          1,271            880
                                                          =====          =====            ===
</TABLE>



<TABLE>

<CAPTION>


     The components of income tax expense (benefit) relating to income from operations follows
(in  thousands):


                                                              Years ended December 31,
                                                          -----------------------------------
Current:                                                   2001           2000           1999
                                                          -----          -----          -----

                                                    <c>              <c>            <c>
        Federal                                        $  2,745          1,353          1,033
        State                                               493            196            345
                                                          -----          -----          -----
                                                          3,238          1,549          1,378
                                                          -----          -----          -----
     Deferred:

       Federal                                             (746)          (304)          (478)
       State                                                (73)           (30)            (4)
                                                          -----          -----          -----
                                                           (819)          (334)          (482)
                                                          -----          -----          -----
                                                        $ 2,419          1,215            896
                                                          =====          =====          =====
</TABLE>

<TABLE>

<CAPTION>


Income  tax  expense differed from the amounts computed by applying the applicable U.S. Federal
corporate  tax  rates  to  pretax  income  from  operations  as  follows  (in  thousands):


                                                               Years ended December 31,
                                                          -----------------------------------
                                                           2001           2000           1999
                                                          -----          -----          -----

                                                    <c>              <c>            <c>
     Tax expense at statutory rate of 34%              $  2,747          1,599          1,106
     Tax-exempt interest                                   (667)          (683)          (591)
     Nondeductible interest expense                          80             97             76
     State taxes, net of Federal benefit                    277            110            228
     Change in valuation allowance for
       deferred tax assets                                  (24)            10            (22)
     Other                                                    6             82             99
                                                          -----          -----          -----
       Total                                            $ 2,419          1,215            896
                                                          =====          =====          =====


     Effective tax rate                                    29.9%          25.8 %         27.5 %
                                                          =====          =====          =====
</TABLE>



<PAGE>
(9)  Income  Taxes  (continued)

<TABLE>

<CAPTION>


The  tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 2001 and
2000  are  presented  below:


Deferred tax assets:                                       2001           2000
                                                         ------         ------

                                                   <c>               <c>
         Allowance for loan losses - books            $   2,133          1,839
         Incentive stock plan and retirement                783            441
         Excess servicing                                    27             34
         NOL credits from subsidiaries                      148            160
         State NOL arising from nonconsolidation
           for state tax purpose only                        51             79
         Interest on non-accrual loans                      217            186
         Minority owned entities                            122              -
         Other                                              182            123
                                                          -----          -----
           Deferred tax assets before allowance           3,663          2,862
         Valuation allowance                                (51)           (75)
                                                          -----          -----
           Deferred tax assets                            3,612          2,787
                                                          -----          -----
     Deferred tax liabilities:
          Allowance for loan losses - tax                   236            292
          Depreciation                                      343            277
          Net unrealized gains on available
            for sale securities                             172            139
          Accretion on bonds                                 14             18
                                                          -----          -----
             Deferred tax liabilities                       765            726
                                                          -----          -----
             Net deferred tax asset                   $   2,847          2,061
                                                          =====          =====

</TABLE>


     Realization  of  deferred  tax  assets  is dependent upon the generation of
future  taxable  income or the existence of sufficient taxable income within the
carryback  period. A valuation allowance is provided when it is more likely than
not  that  some  portion  of  the  deferred  tax assets will not be realized. In
assessing the need for a valuation allowance, management considers the scheduled
reversal  of  deferred  tax liabilities, the level of historical taxable income,
and  projected  future  taxable  income  over  the  periods  which the temporary
differences  comprising  the  deferred  tax  assets are deductible. Based on its
assessment,  management  determined  that  a  valuation  allowance  against  its
non-bank  subsidiaries'  Net  Operating Loss (NOL) was necessary. As of December
31, 2001, there were approximately $100,000 of mortgage tax credits available to
offset  future  state  tax  liabilities  of  GFNYI.

(10)  Stockholders'  Equity

    Payment  of dividends by the Bank to the Company is limited or restricted in
certain  circumstances.  According  to  federal banking law, the approval of the
Office  of the Comptroller of the Currency (OCC) is required for the declaration
of  dividends  in any year in which dividends exceed the total of net income for
that  year  plus  retained  income  for the preceding two years. At December 31,
2001, $6,348,000 was available for dividends to the Company without the approval
of  the  OCC.

<PAGE>
(11)  Earnings  Per  Share

<TABLE>

<CAPTION>


     Basic  and  diluted  earnings per share for the years ended December 31, 2001, 2000, and
1999,  were  computed  as  follows  (dollars  in  thousands,  except  share  data)


                                                           2001           2000           1999
                                                        -------        -------        -------
Basic Earnings Per Share

                                                   <c>              <c>           <c>
       Net income applicable to common shareholders   $   5,662          3,487          2,357
       Weighted average common shares outstanding       158,737        158,503        159,029
                                                        -------        -------        -------
       Basic earnings per share                       $   35.67          22.00          14.82
                                                        =======        =======        =======
     Diluted Earnings Per Share

       Net income applicable to
        common shareholders                           $   5,662          3,487          2,357
                                                        -------        -------        -------
       Weighted average common shares outstanding       158,737        158,503        159,029
       Effect of dilutive securities:
         Stock options                                    1,120            985            492
                                                        -------        -------        -------
         Total                                          159,857        159,488        159,521
                                                        -------        -------        -------
       Diluted earnings per share                     $   35.42          21.86          14.78
                                                        =======        =======        =======

</TABLE>


(12)  Employee  Benefits

     Profit  Sharing  Plan

     The  Company  has  a  profit  sharing  plan covering substantially all Bank
employees  upon  completion  of 1,000 hours of service with respect to full-time
employees,  and  870  hours of service for part-time employees. Contributions to
the  plan  are  determined  by  a  mathematical formula which takes into account
average  net income of the Bank for the current and prior year, and the level of
the  Bank's  stockholders'  equity.  It  is the Company's policy to fund current
costs  as  they  accrue.  Profit  sharing  plan  expense amounted to $1,386,000,
$832,000,  and  $974,000  for the years ended December 31, 2001, 2000, and 1999,
respectively.

     Employee  Stock  Ownership  Plan

     The  Company  has  an employee stock ownership plan (ESOP) for employees of
the  Bank.  Annual  contributions  are  made  at  the discretion of the Board of
Directors.  ESOP expense amounted to $98,000, $97,000, and $76,000 for the years
ended  December  31, 2001, 2000, and 1999, respectively. Shares distributed to a
participant  upon termination of service are subject to a put option whereby the
participant  may  cause  the  Company  to  purchase the shares at fair value. At
December  31,  2001  and  2000, the plan held 2,013 and 2,012 shares with a fair
value,  at  the  respective  dates,  of  $952,000  and  $921,000.

<PAGE>
(13)  Incentive  Stock  Plans

      Stock  Option  Plan

      The  Company's  incentive  stock  option  program for employees authorizes
grants  of  options to purchase up to 16,000 shares of common stock. The options
are  granted  with  an  exercise  price equal to the estimated fair value of the
common  stock  on  the  grant date. The options are exercisable at times varying
from  five  years  to seventeen years from the grant date. The options are fully
vested  and  have  no  set  expiration  date.

<TABLE>

<CAPTION>


      The  following  summarizes  outstanding and exercisable options at December 31, 2001, 2000
and  1999:


                                  2001                      2000                     1999
                         ---------------------        -----------------        -----------------
                                      Weighted                 Weighted                 Weighted
                                       Average                  Average                  Average
                                #        Price            #       Price            #       Price
                            -----     --------        -----    --------        -----    --------

                         <c>       <c>             <c>      <c>             <c>      <c>
     Options outstanding,
     January 1              6,057     $ 379.33        4,571    $ 360.52            -           -
     Granted                2,393     $ 450.83        1,486    $ 437.18        4,571    $ 360.52
     Exercised                  -            -            -           -            -           -
     Expired                    -            -            -           -            -           -
                            -----     --------        -----    --------        -----     -------
     Options outstanding,
     December 31            8,450     $ 399.58        6,057    $ 379.33        4,571    $ 360.52
                            =====     ========        =====    ========        =====    ========

     Options exercisable,
     December 31            3,752     $ 381.63        2,615    $ 370.97        1,853    $ 360.52
                            =====     ========        =====    ========        =====    ========

     Options available for
     future grants          7,550                     9,943                   11,429
                            =====                     =====                   ======
</TABLE>



Options  outstanding  (both exercisable and unexercisable) at December 31, 2001,
have  exercise  prices  ranging  from  $360.52  to $450.83. The weighted average
expected  life  of  the  options  is 9.5 years. Since the options have no stated
expiration  date,  the  expected  life is calculated as the number of years from
grant  date  to  the  grantee's  65th  birthday.

<TABLE>

<CAPTION>


The  Company  applies  APB  Opinion  No.  25  in  accounting  for  its  stock option plan, and
accordingly, no compensation cost has been recognized for its fixed-award stock options in the
consolidated  statement  of  income.  Had  compensation cost been determined based on the fair
value at the grant date of the stock options using option valuation models consistent with the
approach  of  FASB  Statement No. 123, the Company's net income and earnings per share for the
years ended December 31, 2001, 2000 and 1999, would have been reduced to the pro forma amounts
indicated  below  (net  income  in  thousands):



                               2001                      2000                       1999
                        ------------------       -------------------       -------------------

                    <c>         <c>            <c>        <c>          <c>          <c>
Net income
   As reported                     $ 5,662                   $ 3,487                   $ 2,357
   Pro forma                       $ 5,497                   $ 3,355                   $ 2,118


Earnings per share       Basic     Diluted         Basic     Diluted         Basic     Diluted
                         -----      ------         -----      ------         -----      ------
   As reported         $ 35.67     $ 35.42       $ 22.00    $  21.86       $ 14.82     $ 14.78

   Pro forma           $ 34.63     $ 34.39       $ 21.17     $ 21.04       $ 13.32     $ 13.28
</TABLE>



<TABLE>

<CAPTION>


The  per  share fair value of stock options granted during 2001 and 2000 was $97.52 and $122.56,
respectively, and was determined using the Black-Scholes option-pricing model with the following
weighted  average  assumptions  for  each  year:


                                    2001                      2000                      1999
                                 ----------                ----------                ----------

                             <c>                       <c>                      <c>
Expected dividend yield               2.61%                     2.72 %                    3.09 %
Risk free interest rate               4.92%                     6.45 %                    4.92 %
Expected life                    10.4 years                11.4 years                12.3 years
Volatility                           13.81%                    14.39 %                   14.73 %
</TABLE>



<PAGE>
(13)  Incentive  Stock  Plans  (continued)

Phantom  Stock  and  Stock  Appreciation  Rights  Plan

The  Company also has an incentive stock plan for senior management which allows
for  the  issuance  of  Phantom Stock Awards (PSA) and Stock Appreciation Rights
(SAR)  to  key employees based upon performance factors established by the Board
of  Directors,  which  are  generally  tied  to  increases  in  the value of the
Company's  common  stock.  PSAs represent the right to receive, for each phantom
share  of  common  stock  covered by the PSA, payment equal to the higher of the
book  value  or  market value per share of common stock on the date of exercise.
Payment can be made in cash, shares of the Company, or both at the discretion of
the  Board of Directors. PSAs are exercisable at the later of age 55 or 15 years
of continuous employment with the Company or at normal retirement age (65). SARs
represent the right to receive payment equal to the amount, if any, by which the
higher  of  the book value or market value per share of common stock on the date
of  exercise  exceeds the SARs grant value. SARs are exercisable five years from
the  date  of  grant.  At December 31, 2001, 1,816 PSAs were outstanding and 410
SARs  were  outstanding  at  prices  ranging  from  $114  to  $242.

The  maximum  value of the PSAs and SARs was frozen as of December 31, 1998, and
future  appreciation  associated  with  increases  in  the  market  value of the
Company's  common stock was replaced with stock options. The Company has accrued
a liability of $539,000 at December 31, 2001, representing the vested obligation
under the plan. Expenses of the plan amounted to $61,000, $65,000, and $269,000,
for  the  years  ended  December  31,  2001,  2000,  and  1999,  respectively.

There  is  no difference between the Company's previous method of accounting for
its  incentive  plan and the provisions of SFAS No. 123; therefore, no pro forma
information  is  provided.

(14)  Leases

The  Company  leases  certain  buildings  and office space under operating lease
arrangements.  Rent  expense  under  these  arrangements amounted to $934,000 in
2001,  $754,000  in  2000,  and  $376,000 in 1999. Real estate taxes, insurance,
maintenance,  and  other operating expenses associated with leased buildings and
office  space  are  generally  paid  by  the  Company.

<TABLE>

<CAPTION>


A summary of noncancellable long-term operating lease commitments as of December
31,  2001,  follows  (in  thousands):


Years ending December 31,                   Amount
-------------------------                   ------


                                        <c>
2002                                       $   967
2003                                           943
2004                                           796
2005                                           711
2006                                           723
2007 and after                               3,855
                                             -----
Total                                      $ 7,995
                                             =====
</TABLE>



<PAGE>
(15)  Commitments  and  Contingencies
 In  the  normal course of business there are various outstanding commitments to
extend credit which are not reflected in the accompanying consolidated financial
statements.  Because  many  commitments  and almost all letters of credit expire
without being funded in whole or in part, the contract amounts are not estimates
of  future  cash  flows.  Loan  commitments  have  off-balance-sheet credit risk
because  only  origination  fees  are  recognized  in  the  balance  sheet until
commitments  are  fulfilled  or expire. The credit risk amounts are equal to the
contractual amounts, assuming that the amounts are fully advanced and collateral
or  other  security  is  of  no  value.  The Company's policy generally requires
customers  to  provide  collateral,  usually in the form of customers' operating
assets  or  property,  prior to the disbursement of approved loans. The contract
amounts  of  these commitments at December 31, 2001, were: Commercial letters of
credit  $9,954,000  and  unused commitments $67,548,000. The contract amounts of
these  commitments  at  December  31,  2000,  were: Commercial letters of credit
$8,380,000  and  unused  commitments $48,994,000. Commitments to fund fixed rate
residential  mortgage  loans,  which  are  expected to be funded within 90 days,
amounted  to  $4,287,000  at  December  31,  2001.

 The  Bank  has  committed $1,000,000 for an investment in Monroe Fund LLC. This
venture capital fund is a community-backed initiative in support of new business
and  jobs  growth in the Monroe County region. At December 31, 2001, the Company
had  funded  $750,000  of this commitment and carries the investment at lower of
cost  or  market  in  other  assets.

 The  Bank is required to maintain reserve balances in cash on hand and with the
Federal  Reserve  Bank. The average amount of such reserve balances for the year
ended  December  31,  2001,  was  approximately  $9,892,000.

 In  the  normal  course  of  business,  the  Company  has  various  contingent
liabilities  outstanding  that  are  not  included in the consolidated financial
statements.  Management  does  not anticipate any material losses as a result of
these  contingent  liabilities.

<PAGE>
(16)  Regulatory  Matters

 The  Bank is subject to various regulatory capital requirements administered by
the  federal  banking agencies. Failure to meet minimum capital requirements can
initiate  certain mandatory - and possibly additional discretionary - actions by
regulators  that,  if  undertaken,  could  have  a direct material effect on the
Bank's  financial  statements.  Under  capital  adequacy  guidelines  and  the
regulatory  framework  for prompt corrective action, the Bank must meet specific
capital  guidelines  that  involve  quantitative  measures of the Bank's assets,
liabilities,  and  certain  off-balance-sheet  items calculated under regulatory
accounting  practices.  The  Bank's capital amounts and classifications are also
subject  to  qualitative  judgments  by  regulators  about  components,  risk
weightings,  and  other  factors.

 Quantitative  measures  established  by  regulation  to ensure capital adequacy
require  the  Bank  to  maintain minimum amounts and ratios (as set forth in the
table  below)  of  total  and  Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 2001, that the Bank
meets  all  capital  adequacy  requirements  to  which  it  is  subject.

<TABLE>

<CAPTION>


 As  of December 31, 2001, the most recent notification from the Office of the Comptroller of the Currency
categorized  the  Bank  as  adequately-capitalized  under  the  regulatory framework for prompt corrective
action.  To  be categorized as well-capitalized, the Bank must maintain a minimum total risk-based, Tier I
risk-based,  and Tier I leverage ratios as set forth in the table. There are no conditions or events since
that  notification  that  management  believes  have  changed  the  Bank's  category.


                                                                                         To Be Well-
                                                              For Capital                Capitalized
                                                               Adequacy               Prompt Corrective
(dollars in thousands)                  Actual                 Purposes               Action Provisions:
                                   ---------------          ----------------          ----------------
                                   Amount    Ratio          Amount     Ratio          Amount     Ratio
                                   ------    -----          ------     -----          ------     -----

                               <c>        <c>        <c>           <c>         <c>         <c>
As of December 31, 2001
     Total Capital                $51,135     9.4%       $  43,602      8.0%        $  54,503     10.0%
       (to risk weighted assets)
     Tier I Capital               $45,461     8.3%       $  21,801      4.0%        $  32,702      6.0%
       (to risk weighted assets)
     Tier I Capital               $45,461     6.6%       $  27,748      4.0%        $  34,685      5.0%
       (to average assets)

As of December 31, 2000
     Total Capital                $45,904    10.1%       $  36,253      8.0%        $  45,317     10.0%
       (to risk weighted assets)
     Tier I Capital               $41,192     9.1%       $  18,127      4.0%        $  27,190      6.0%
       (to risk weighted assets)
     Tier I Capital               $41,192     6.9%       $  23,751      4.0%        $  29,688      5.0%
       (to average assets)

</TABLE>



<PAGE>
(17)  Loans  to  Directors  and  Officers

Certain  executive  officers,  directors,  and  their  business  interests  are
customers  of  the  Company.  Transactions  with  these  parties  are  based  on
substantially  the  same  terms  as  similar transactions with others and do not
carry  more  than  normal  credit risk. At December 31, 2001 and 2000, loans and
unused  commitments  to  these  related  parties  amounted  to  $5,142,000  and
$5,199,000,  respectively.

(18)  Condensed  Financial  Information  -  Parent  Company  Only

<TABLE>

<CAPTION>


The  following  are  the  condensed  balance  sheets,  statements of income, and
statements  of  cash  flows  for  Canandaigua  National Corporation, (dollars in
thousands).


Balance Sheets
                                                      December 31,
                                                 -----------------------
                                                   2001             2000
                                                 ------           ------

                                            <c>               <c>
Assets:
  Cash                                          $   175              235
  Securities available for sale                      93               93
  Premises and equipment, net                       660              685
  Investment in subsidiaries                     47,180           43,459
  Other assets                                       53               60
                                                 ------           ------
    Total assets                               $ 48,161           44,532
                                                 ======           ======
Liabilities:
  Other liabilities                            $     29              263
Stockholders' Equity:
  Common stock                                    8,110            8,110
  Additional paid-in capital                      8,553            8,532
  Retained earnings                              32,428           28,687
  Treasury stock (3,321 shares in 2001
    and 3,476 shares in 2000)                    (1,218)          (1,268)
  Accumulated other comprehensive income            259              208
                                                 ------           ------
    Total Stockholders' Equity                   48,132           44,269
                                                 ------           ------
    Total Liabilities and
      Stockholders' Equity                     $ 48,161           44,532
                                                 ======           ======
</TABLE>



<TABLE>

<CAPTION>


Statements  of  Income


                                                          Years ended December 31,
                                                  ---------------------------------------
                                                   2001             2000             1999
                                                  -----            -----            -----

                                           <c>                 <c>               <c>
Income - Dividends from The Canandaigua
   National Bank and Trust Company            $   1,776              640             2,025
Other income                                         80               90                91
Other expense                                      (112)            (192)              (48)
                                                  -----            -----             -----
Income before undistributed
  income of subsidiaries                          1,744              538             2,068
Undistributed current year
  income of subsidiaries                          3,725            2,881               330
                                                  -----            -----             -----
Income before taxes                               5,469            3,419             2,398
Income tax (expense) benefit                        193               68               (41)
                                                  -----            -----             -----
  Net income                                  $   5,662            3,487             2,357
                                                  =====            =====             =====
</TABLE>



<PAGE>
(18)  Condensed  Financial  Information  -  Parent  Company  Only  (continued)

<TABLE>

<CAPTION>


Statements  of  Cash  Flows


                                                         Years ended December 31,
                                                  ----------------------------------------
                                                   2001             2000              1999
                                                  -----            -----             -----

                                            <c>                <c>               <c>
Cash flows from operating activities:
  Net income                                   $  5,662            3,487             2,357
     Adjustments to reconcile net income
     to net cash from operating activities:
        Depreciation and amortization                25               25                25
        Undistributed current year
         earnings of subsidiaries                (3,725)          (2,881)             (330)
        Writedown of security                       -                105                 -
        Other                                      (172)             (62)                5
                                                  -----            -----             -----
  Net cash provided by operating activities       1,790              674             2,057
                                                  -----            -----             -----

Cash flows from investing activities:
     Sale of subsidiaries                             -                -             1,564
     Decrease in other real estate                    -                -               105
     Additional capital investment in subsidiaries (900)          (1,400)             (158)
     Return of capital from subsidiary              900            1,400                 -
     Fixed assets purchased, net                      -                -                (5)
                                                  -----            -----             -----
        Net cash provided by investing activities     -                -             1,506
                                                  -----            -----             -----

Cash flows from financing activities:
     Proceeds from sale of treasury stock            71              106                67
     Purchase of treasury stock                       -                -              (569)
     Dividends paid                              (1,921)          (1,887)           (1,833)
                                                  -----            -----             -----
        Net cash used by financing activities    (1,850)          (1,781)           (2,335)
                                                  -----            -----             -----

     Net increase (decrease) in cash                (60)          (1,107)            1,228
Cash at beginning of year                           235            1,342               114
                                                  -----            -----             -----
Cash at end of year                            $    175              235             1,342
                                                  =====            =====             =====
</TABLE>



<PAGE>
(19)  Fair  Values  of  Financial  Instruments

The  following  methods  and assumptions were used to estimate the fair value of
each  class  of  financial  instrument:

Cash  and  Cash  Equivalents

For  these  short-term  instruments  that  generally mature 90 days or less, the
carrying  value  approximates  fair  value.

Securities

Fair  values  for securities are based on quoted market prices or dealer quotes,
where  available.  Where quoted market prices are not available, fair values are
based on quoted market prices of comparable instruments. Included herein are the
Bank's  required  investments  in  stock  of  the Federal Home Loan Bank and the
Federal  Reserve  Bank.

Loans

Fair  values  are  estimated  for  portfolios  of  loans  with similar financial
characteristics. Loans are segregated by type such as loans adjustable by prime,
commercial,  mortgages,  installment,  and  other  consumer.

The  fair  value of performing loans is calculated by discounting scheduled cash
flows  through the estimated maturity using estimated market discount rates that
reflect  the  credit  and  interest rate risk inherent in the loan category. The
estimate  of  maturity  is  based  on  the  average  maturity  for  each  loan
classification.

Delinquent  loans  (not in foreclosure) are valued using the method noted above.
While  credit  risk  is  a  component  of the discount rate used to value loans,
delinquent  loans  are  presumed  to  possess  additional  risk.  Therefore, the
calculated  fair  value  of  loans delinquent more than 30 days but less than 91
days  delinquent,  is  reduced  by an allocated amount of the allowance for loan
losses.  The  fair  value  of  loans  currently  in  foreclosure is estimated to
approximate  carrying  value, as such loans are generally carried at fair value.

Deposits

The  fair  value of demand deposits, savings accounts, and money market accounts
is  the  amount payable on demand at the reporting date. The fair value of fixed
maturity  certificates  of  deposit  is  estimated  using a discounted cash flow
approach  that  applies current market rates (prevailing CD rates) to a schedule
of  aggregated  expected  maturities  on  time  deposits.

<PAGE>
(19)  Fair  Values  of  Financial  Instruments  (continued)

Borrowings:

The  fair  value of borrowings is calculated by discounting scheduled cash flows
through  the  estimated  maturity using market rates presently available for new
borrowings.

<TABLE>

<CAPTION>


The  estimated fair values of the Company's financial instruments are as follows (dollars in
thousands):


                                    December 31, 2001                  December 31,2000
                                   -------------------             ------------------------
                                   Carrying     Fair               Carrying          Fair
                                     Amount    Value(1)              Amount         Value(1)
                                    -------    -------              -------         -------

                                <c>          <c>                 <c>             <c>
Financial Assets:
   Cash and equivalents            $ 46,641      46,641              28,254          28,254
   Securities                      $120,996     122,518              83,974          84,363
   Loans, net                      $529,481     534,052             455,259         447,624

Financial Liabilities:
   Deposits:
   Demand accounts, savings and
     money market accounts         $439,776     439,776             303,841         303,841
   Certificates of deposit         $231,067     233,658             229,672         229,496
   Borrowings                      $  1,097       1,009              12,644          12,156

Off-balance-sheet commitments:
   Commercial letters
     of credit                     $      -         149                   -             126
   Unused lines of credit          $      -           -                   -               -

<FN>

 (1)Fair  value  estimates  are  made  at a specific point in time, based on relevant market
information  and  information  about  the  financial
instrument.  These  estimates are subjective in nature and involve uncertainties and matters
of  significant  judgment  and,  therefore,
cannot  be  determined with precision. Changes in assumptions could significantly affect the
estimates.

</TABLE>


Fair  value of commitments to extend credit approximates the fee charged to make
the  commitments.

(20)  Subsequent  Event-Stock  Split

On January 9, 2002, the Board of Directors declared a three-for-one common stock
split,  subject  to the approval of stockholders of an increase in the number of
common shares authorized from 240,000 to 2,000,000. The record date of the split
is  January 9, 2002 with a distribution of the split shares expected after March
13,  2002.  Earnings  per share calculations and other share-related disclosures
included  in  this  report  have
not  been  restated  to  reflect  this  proposed  stock  split.

<TABLE>

<CAPTION>


The  Company's historical earnings per share for the years ended December 31, on
a  pro  forma  basis  assuming the stock split had occurred, would be as follows
(unaudited).


                                      2001        2000         1999
                                     -----        ----         ----

                                 <c>          <c>          <c>
Basic earnings per share            $11.89       $7.33        $4.94
Diluted earnings per share          $11.81       $7.29        $4.93
</TABLE>



Common  Stock  Data

<TABLE>

<CAPTION>


The  Company's  stock  is  not  actively  traded  nor  is  it  traded  in  the
over-the-counter  market.  In  addition,  it  is  not  listed  with  a  national
securities  exchange.  Due  to  the limited number of transactions, the weighted
average  sale  price  may  not  be  indicative of the actual market value of the
Company's  stock.  The  following  table  sets  forth  a summary of the weighted
average  (known  open-market)  sales  price,  book  value  at  quarter  end, and
semi-annual  dividends  paid  per  share  since  the  first  quarter  of  1996.


                                 Average                  Dividend
                             Sales Price    Book Value        Paid

                             <c>           <c>           <c>
            2001
            ----
            4th quarter         no sales      $302.93
            3rd quarter         $ 472.93      $295.38       $6.05
            2nd quarter         $ 458.19      $289.39
            1st quarter         no sales      $280.23       $6.05

            2000
            ----
            4th quarter         no sales      $278.89
            3rd quarter         no sales      $275.89       $5.95
            2nd quarter         $ 457.62      $272.69
            1st quarter         $ 454.20      $265.84       $5.95

           1999
           ----
           4th quarter          no sales      $268.02
           3rd quarter          $ 437.18      $262.86       $5.75
           2nd quarter          $ 413.98      $265.35
           1st quarter          $ 400.00      $263.51       $5.75

           1998
           ----
           4th quarter          no sales      $265.94
           3rd quarter          $ 360.52      $261.09       $5.50
           2nd quarter          no sales      $260.72
           1st quarter          $ 351.16      $255.68       $5.50

           1997
           ----
           4th quarter          no sales      $254.92
           3rd quarter          $ 335.87      $252.57       $5.25
           2nd quarter          $ 320.59      $251.25
           1st quarter          $ 326.61      $243.32       $4.75

           1996
           ----
           4th quarter          $ 320.31      $240.69
           3rd quarter          $ 326.74      $236.63       $4.50
           2nd quarter          $ 324.86      $237.41
           1st quarter          no sales      $232.52       $4.25

<FN>

 As  stated  above,  the  stock  of  the  Company  is not listed with a national
securities  exchange;  therefore,  no  formal  bid  and asked for quotations are
available.
</TABLE>



<PAGE>
Officers

Office  of  the  President
George  W.  Hamlin,  IV,  President,  CEO,  Trust  and  CRA  Officer
Jean  M.  Baldick,  Assistant  Vice  President,  Executive  Assistant  to
 the  President

Retail  Services
Robert  G.  Sheridan,  Senior  Vice  President  -  Cashier
Judith  M.  Stewart,  Vice  President  -  Training,  Community  Office
 Operations,  Bank  Security  Officer
Richard  T.  Wade,  Vice  President  -  Consumer  Loans
William  J.  Van  Damme,  Vice  President
Lori  R.  Ellis,  Assistant  Vice  President
Richard  J.  Ertel,  Assistant  Vice  President
Denise  J.  Salvatore,  Assistant  Branch  Administrator,
 Bank  Secrecy  Officer
G.  Karl  Smith,  Bank  Security  Officer
Cheryl  A.  Hurd,  Banking  Officer  -  Consumer  Loans
Brenda  W.  Stoker,  Banking  Officer

Commercial  Services
James  C.  Minges,  Senior  Vice  President
Wesley  L.  Talbett,  Vice  President
A.  Rosamond  Zatyko,  Vice  President  -  Credit  Administration
Robert  L.  Lowenthal,  Vice  President
Gary  L.  Babbitt,  Vice  President
Richard  A.  Szabat,  Vice  President
Michael  J.  Drexler,  Vice  President
Michael  S.  Mallaber,  Vice  President
JoAnn  N.  VanderSal,  Vice  President
Thomas  R.  Ecker,  Vice  President
Keith  J.  Goebel,  Assistant  Vice  President
Bernard  E.  Belcher,  Assistant  Vice  President
Timothy  A.  Stone,  Assistant  Vice  President
Sandra  J.  Holley,  Collateral  Control  Officer
Charleen  H.  Kalocsai,  Banking  Officer
Paul  J.  Zschoche,  Banking  Officer

Trust  and  Investment  Services
Richard  H.  Hawks,  Jr.,  Senior  Vice  President  -  Trust  Officer
Gregory  S.  MacKay,  Senior  Vice  President  -  Chief  Economist
James  M.  Exton,  Vice  President  -  Investment  Officer
Scott  B.  Trumbower,  Vice  President  -  Investment  Officer
Anthony  D.  Figueiredo,  Vice  President  -  Trust  Investment  Officer
Mary  Kay  Bashaw,  Vice  President  -  Government  Banking  Officer
Paul  R.  Callaway,  Vice  President  -  Trust  Officer
M.  Beth  Uhlen,  Vice  President  -  Manager  Trust  Operations
Sandra  A.  Lancer,  Vice  President  -  Employee  Benefits  Trust  Officer
Thomas  Christopher,  Vice  President  -  Investment  Officer
Sharon  E.  Greisberger,  Vice  President  -  Trust  Administration  Officer
Patricia  A.  McAuley,  Assistant  Vice  President  -  Investment  IRAs
Kevin  D.  Kinney,  Assistant  Vice  President  -  Trust  Development  Officer
Jay  J.  Bachstein,  Assistant  Vice  President  -  Investment  Officer
Joseph  P.  Coonan,  Trust  Development  Officer
Denise  A.  Kelly,  IRA  Officer

Operations
David  R.  Morrow,  Senior  Vice  President
Sandra  U.  Roberts,  Vice  President  -  Manager  Data  Processing
Susan  H.  Foose,  Vice  President  -  Retail  Operations
Gerald  E.  Terragnoli,  Assistant  Vice  President  -  Senior  Systems  Analyst
Michael  A.  Mandrino,  Assistant  Vice  President  -  Information  Systems
 Architect

Audit
Linda  M.  Rogers,  CFSA,  CBA,  Vice  President  -  Corporate  Audit  Manager
Gretchen  A.  Alles,  Assistant  Vice  President  -  Assistant  Auditor
Diane  B.  Savage,  Audit  Officer

Legal,  Finance  and  Compliance
Steven  H.  Swartout,  Esq.,  Vice  President  and  General  Counsel
Lawrence  A.  Heilbronner,  Vice  President  -  Chief  Financial  Officer
Kathleen  G.  Corry,  Vice  President  -  Bank  Operations
Vicki  B.  Mandrino,  Compliance  Officer
Robert  L.  Simpson,  Assistant  Vice  President  -  Finance
Dawn  C.  Phelps,  Assistant  Vice  President

Human  Resources
Mary  Ann  M.  Ridley,  Vice  President  -  Human  Resources
Marie  E.  Dastin,  Human  Resources  Officer

Sales  and  Marketing
Joseph  L.  Dugan,  Senior  Vice  President  -  Sales  Manager
Stephen  R.  Martin,  Vice  President  -  Marketing
Tamra  A.  B.  O'Donnell,  Assistant  Vice  President  -  Product  Manager,
 Assistant  CRA  Officer

<PAGE>
Community  Banking  Offices

Bloomfield
Barbara  A.  Thorpe,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Judy  A.  Reader,  Consumer  Services  Officer

Canandaigua
Michael  D.  O'Donnell,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
John  W.  Van  Vechten,  Vice  President

Canandaigua  -  Lakeshore
Dolores  J.  Reynolds,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Linda  M.  Keyes,  Consumer  Services  Officer

Chili
Mary  Anne  Burkhart,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Barbara  A.  Fitzsimmons,  Consumer  Services  Officer

Customer  Call  Center
Barbara  A.  Finch,  Call  Center  Manager

Eastview  Mall
Marcia  M.  Minges,  Assistant  Vice  President  -  Community  Office
 Sales  Manager

Farmington
Diane  C.  Mordue,  Assistant  Vice  President  -  Community  Office
 Sales  Manager

Greece
Laurel  L.  Harrington,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Peter  J.  Bevan,  Consumer  Services  Officer

Honeoye
Deborah  E.  Rought,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Sandra  L.  D'Angelo,  Consumer  Services  Officer

Honeoye  Falls
Christopher  M.  Keys,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Audrey  A.  Evangelist,  Consumer  Services  Officer

Irondequoit
Timi  L.  Wright,  Assistant  Vice  President  -  Community Office Sales Manager
Deborah  K.  C.  Keskula,  Consumer  Services  Officer

Manchester-Shortsville
Henry  A.  Trickey  Jr.,  Assistant  Vice  President  -  Community  Office
 Sales  Manager

Mendon
Dianne  M.  Tucker,  Consumer  Services  Officer

Perinton
Darrell  J.  Penlon,  Community  Office  Sales  Manager
Sonya  R.  Darlington,  Consumer  Services  Officer

Pittsford
Karen  C.  Serinis,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Donna  L.  Cator  -  Consumer  Services  Officer

Rochester
Louis  P.  Nau,  Assistant  Vice  President  -  Community  Office  Sales Manager

Victor
Lisa  J.  Blakesley,  Community  Office  Sales  Manager
Jason  W.  Fitzgerald,  Consumer  Services  Officer

Webster
Kathleen  Vasile,  Assistant  Vice  President  -  Community  Office
 Sales  Manager
Leslie  C.  O'Malley,  Consumer  Services  Officer

Community  Advisory  Committees

Bloomfield  Office
Joseph  Ferris,  DVM
David  Hamlin,  Jr.
Frank  J.  Marianacci
Judith  S.  Smith
Barbara  A.  Thorpe

Farmington  Office
Anne  P.  Fessler,  DVM
Diane  C.  Mordue
Lawrence  E.  Potter
Mary  Catherine  VanBortel

Honeoye  Office
Ralph  C.  Annechino
Earl  L.  Mastin
Deborah  E.  Rought
Herbert  E.  Treble
George  A.  Ward

Honeoye  Falls  Office
Thomas  H.  Green
Christopher  M.  Keys
Cyril  A.  Krenzer
Mary  Louise  Meisenzahl
Michael  J.  Tobin

Manchester-  Shortsville  Office
Gary  H.  Bliss
Mary  C.  Record
Henry  R.  Trickey,  Jr.
Charles  D.  Zonneville

Mendon  Office
Marvin  E.  Hogan
A.  Jack  Leckie
Charles  H.  Meisenzahl
Dianne  M.  Tucker
Clayton  G.  Zuber

Perinton  Office
Charles  A.  Beck
T  C  Lewis
Dr.  Anthony  W.  LoVerdi
Darrell  J.  Penlon

Victor  Office
Gary  L.  Bennett
Lisa  J.  Blakesley
Donald  J.  Culeton
Eldred  M.  Sale
William  J.  Turner

Webster  Office
David  W.  Nytch
Jeffrey  C.  Riedel
Kathleen  Vasile
Ross  J.  Willink

<PAGE>
The  Arthur  S.  Hamlin  Award  for  Excellence

Every  year,  the bank recognizes the outstanding contribution of one of its own
with  the  Arthur  S.  Hamlin award. Employees are encouraged to nominate one of
their  peers  who has demonstrated exceptional performance and dedication to the
bank.  Congratulations  to  this  year's  recipient:  Lena  Hayes.

"It  is  an  honor  to  be  recognized  by my fellow employees and chosen as the
recipient  of  the  2000  Arthur  S.  Hamlin  Award.  As a life-long resident of
Canandaigua,  it  is  a privilege to be associated with an organization that has
supported  our  community  for  over  115 years. Mr. Hamlin's involvement in our
community and charitable organizations serves as a powerful example to everyone.
It  is  an  honor  and  inspiration  to  receive  this  prestigious  award."
Lena  Hayes,  2000  Arthur  S.  Hamlin  Award  Recipient

2001  Nominees

Joan  Brown
Bonnie  Davies
Barbara  Fitzsimmons
Kelly  James
Shannon  Kay
Denise  Kelly
Chris  Keys
Lisa  Morse
Heidi  Pearsall
Lori  Phillips
Carol  Roe
Brenda  Stoker

Past  Recipients

Dawn  Phelps  1999
Beth  Uhlen  1998
Kathy  Lafler  1997

Jeannie  Baldick  1996
Amy  Eagley  1995
Regina  Kesel  1995

Susan  Foose  1994
Kathleen  Corry  1993
James  Roth  1992

Michael  O'Donnell  1991
Jerry  Drake  1990
Linda  Keyes  1989

<PAGE>
A  Great  Man.  A  Great  Leader
A  TRIBUTE

A  picture  of  Frank  H.  Hamlin,  II  here.

Frank  H.  Hamlin,  II
1905-2001

      Born  and  raised  in  Canandaigua and educated across the world, Frank H.
Hamlin,  II  spent  his life giving back to the neighbors and small town that he
loved.  Friends,  family and colleagues-including all of us at CNB-will remember
his  dedication,  wise  counsel,  outgoing  personality and generosity. He was a
disciplined  businessman,  honest  as  the  day  is  long,  and  kind.

      Mr.  Hamlin  resided on the Board of Directors of The Canandaigua National
Bank  and  Trust  Company  for  54  years,  serving
as  Chairman from January 1966 through February 1986.  He also made volunteering
a  life-long,  full-time  job.  After  joining the Board of Thompson Hospital in
1943,  he  continued to serve as Director and Chair for 55 years, completing his
service  as  an  active  emeritus.

      Mr.  Hamlin  was very active on behalf of his alma mater, Yale University,
and his adoptive alma mater, Keuka College, and led numerous agriculture, health
and  education organizations, as well as his church.  His drive and love of life
are  further  evidenced  by his 80-year participation in the Seneca Point Tennis
Tournament,  where  he  won  the  singles  competition  in  1993-at  age  88.

      Whether on the tennis court, in the boardroom, or the many other places he
touched  the  lives of those in his community and beyond, we will miss him-while
his  influence  will  be  everlasting.

<PAGE>
NOTES