| New York                                                       | 15-6018501                              |
|----------------------------------------------------------------|-----------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |

| Large accelerated filer o                                             | Accelerated filer ý         |
|-----------------------------------------------------------------------|----------------------------------|
| Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company ý |

----

D

| FORWARD-LOOKING STATEMENTS        |
|-----------------------------------|
|                              |   |
| RECENT DEVELOPMENTS               |
|                              |   |   |
| ITEM 1:                           | Interim Financial Statements (Unaudited) |
|                              |   |   |
|                              | Consolidated Statements of Condition |
|                              | Consolidated Statements of Income |
|                              | Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income |
|                              | Consolidated Statements of Cash Flows |
|                              | Notes to Unaudited Consolidated Interim Financial Statements |
|                              |   |   |
| ITEM 2:                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|                              |   |   |
|                              | A. | General |
|                              | B. | Financial Condition and Performance Overview |
|                              | C. | Comparison of Financial Condition at June 30, 2009 and December 31, 2008 |
|                              | D. | Comparison of Results of Operations for the Three Months Ended June 30, 2009 and 2008 |
|                              | E. | Comparison of Results of Operations for the Six Months Ended June 30, 2009 and 2008 |
|                              | F. | Liquidity |
|                              | G. | Capital Resources and Dividends |
|                              |   |   |
| ITEM 3:                           | Quantitative and Qualitative Disclosures about Market Risk |
|                              |   |   |
| ITEM 4:                           | Controls and Procedures |
|                              |   |   |
| ITEM 4T:                          | Controls and Procedures |
|                              |   |   |
|                              |   |   |
| PART II – OTHER INFORMATION |
|                              |   |   |
| ITEM 1:                           | Legal Proceedings |
|                              |   |   |
| ITEM 1A:                          | Risk Factors |
|                              |   |   |
| ITEM 2:                           | Unregistered Sales of Equity Securities and Use of Proceeds |
|                              |   |   |
| ITEM 3:                           | Defaults Upon Senior Securities |
|                              |   |   |
| ITEM 4:                           | Submission of Matters to a Vote of Security Holders |
|                              |   |   |
| ITEM 5:                           | Other Information |
|                              |   |   |
| ITEM 6:                           | Exhibits |
|                              |   |   |
|                              |   |   |
| Signature Page                    |
|                              |   |   |
| Index to Exhibits                 |

----

----

----

E

| The Wilber Corporation                                                         |   |     |    |   |         |   |
|--------------------------------------------------------------------------------|--------|----------|---------|--------|--------------|--------|
| Consolidated Statements of Condition (Unaudited)                               |   |     |    |   |         |   |
|                                                                           |   |     |    |   |         |   |
|                                                                           |   | June 30, |    |   | December 31, |   |
| in thousands except share and per share data                                   |   | 2009     |    | 2008   |         |
| Assets                                                                         |   |     |    |   |         |   |
| Cash and Due from Banks                                                        |   | $        | 8,827   |   |         | $      | 8,467 |   |
| Interest Bearing Balances with Banks                                           |   |     | 15,039  |   |         |   | 35,475 |   |
| Federal Funds Sold                                                             |   |     | 663     |   |         |   | 479 |   |
| Total Cash and Cash Equivalents                                                |   |     | 24,529  |   |         |   | 44,421 |   |
| Securities                                                                     |   |     |    |   |         |   |   |   |
| Trading, at Fair Value                                                         |   |     | 1,044   |   |         |   | 1,155 |   |
| Available-for-Sale, at Fair Value                                              |   |     | 205,531 |   |         |   | 216,744 |   |
| Held-to-Maturity, Fair Value of $64,434 at June 30, 2009                       |   |     |    |   |         |   |   |   |
| and $45,009 at December 31, 2008                                               |   |     | 63,760  |   |         |   | 44,454 |   |
| Other Investments                                                              |   |     | 5,819   |   |         |   | 5,693 |   |
| Loans Held for Sale                                                            |   |     | 809     |   |         |   | 118 |   |
| Loans                                                                          |   |     | 607,225 |   |         |   | 583,861 |   |
| Allowance for Loan Losses                                                      |   |     | (8,838  | )      |         |   | (7,564 | ) |
| Loans, Net                                                                     |   |     | 598,387 |   |         |   | 576,297 |   |
| Premises and Equipment, Net                                                    |   |     | 6,350   |   |         |   | 6,482 |   |
| Bank Owned Life Insurance                                                      |   |     | 16,695  |   |         |   | 16,402 |   |
| Goodwill                                                                       |   |     | 4,619   |   |         |   | 4,619 |   |
| Intangible Assets, Net                                                         |   |     | 57      |   |         |   | 107 |   |
| Other Assets                                                                   |   |     | 7,764   |   |         |   | 8,382 |   |
| Total Assets                                                                   |   | $        | 935,364 |   |         | $      | 924,874 |   |
|                                                                           |   |     |    |   |         |   |   |   |
| Liabilities and Shareholders’ Equity                                     |   |     |    |   |         |   |   |   |
| Deposits:                                                                      |   |     |    |   |         |   |   |   |
| Demand                                                                         |   | $        | 74,531  |   |         | $      | 72,168 |   |
| Savings, NOW and Money Market Deposit Accounts                                 |   |     | 399,298 |   |         |   | 330,158 |   |
| Certificates of Deposit (Over $100M)                                           |   |     | 116,813 |   |         |   | 149,332 |   |
| Certificates of Deposit (Under $100M)                                          |   |     | 168,687 |   |         |   | 192,119 |   |
| Other Deposits                                                                 |   |     | 25,595  |   |         |   | 22,096 |   |
| Total Deposits                                                                 |   |     | 784,924 |   |         |   | 765,873 |   |
| Short-Term Borrowings                                                          |   |     | 14,565  |   |         |   | 21,428 |   |
| Long-Term Borrowings                                                           |   |     | 57,794  |   |         |   | 59,970 |   |
| Pension Liability                                                              |   |     | 867     |   |         |   | 869 |   |
| Other Liabilities                                                              |   |     | 8,400   |   |         |   | 9,275 |   |
| Total Liabilities                                                              |   |     | 866,550 |   |         |   | 857,415 |   |
|                                                                           |   |     |    |   |         |   |   |   |
| Shareholders’ Equity:                                                    |   |     |    |   |         |   |   |   |
| Common Stock, $.01 Par Value, 16,000,000 Shares Authorized,                    |   |     |    |   |         |   |   |   |
| and 13,961,664 Shares Issued at June 30, 2009                                  |   |     |    |   |         |   |   |   |
| and December 31, 2008                                                          |   |     | 140     |   |         |   | 140 |   |
| Additional Paid in Capital                                                     |   |     | 4,224   |   |         |   | 4,224 |   |
| Retained Earnings                                                              |   |     | 95,003  |   |         |   | 93,966 |   |
| Accumulated Other Comprehensive Loss                                           |   |     | (2,242  | )      |         |   | (2,560 | ) |
| Treasury Stock at Cost, 3,457,960 Shares at June 30, 2009                      |   |     |    |   |         |   |   |   |
| and December 31, 2008                                                          |   |     | (28,311 | )      |         |   | (28,311 | ) |
| Total Shareholders’ Equity                                               |   |     | 68,814  |   |         |   | 67,459 |   |
| Total Liabilities and Shareholders’ Equity                               |   | $        | 935,364 |   |         | $      | 924,874 |   |
|                                                                           |   |     |    |   |         |   |   |   |
| See accompanying notes to interim unaudited consolidated financial statements. |   |

----

| The Wilber Corporation                                                         |   |               |       |   |             |   |       |   |   |   |       |   |
|--------------------------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|------------|--------|--------|--------|------------|--------|
| Consolidated Statements of Income (Unaudited)                                  |   | Three Months Ended |       |   | Six Months Ended |   |
|                                                                           |   | June 30,           |       |   | June 30,         |   |
| in thousands except share and per share data                                   |   | 2009               |       |   | 2008             |   |       | 2009   |   |   | 2008       |   |
| Interest and Dividend Income                                                   |   |               |       |   |             |   |       |   |   |   |       |   |
| Interest and Fees on Loans                                                     |   | $                  | 8,841      |   |             | $      | 7,735      |   |   | $      | 17,737     |   |   | $ | 15,649 |   |
| Interest and Dividends on Securities:                                          |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| U.S. Government and Agency Obligations                                         |   |               | 2,342      |   |             |   | 2,699      |   |   |   | 4,702      |   |   |   | 5,200 |   |
| State and Municipal Obligations                                                |   |               | 408        |   |             |   | 596        |   |   |   | 848        |   |   |   | 1,204 |   |
| Other                                                                          |   |               | 156        |   |             |   | 96         |   |   |   | 213        |   |   |   | 197 |   |
| Interest on Federal Funds Sold and Interest Bearing                            |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Balances at Other Banks                                                        |   |               | 18         |   |             |   | 172        |   |   |   | 32         |   |   |   | 448 |   |
| Total Interest and Dividend Income                                             |   |               | 11,765     |   |             |   | 11,298     |   |   |   | 23,532     |   |   |   | 22,698 |   |
|                                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Interest Expense                                                               |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Interest on Deposits:                                                          |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Savings, NOW and Money Market Deposit Accounts                                 |   |               | 835        |   |             |   | 973        |   |   |   | 1,791      |   |   |   | 2,067 |   |
| Certificates of Deposit (Over $100M)                                           |   |               | 800        |   |             |   | 1,188      |   |   |   | 1,824      |   |   |   | 2,443 |   |
| Certificates of Deposit (Under $100M)                                          |   |               | 1,395      |   |             |   | 2,038      |   |   |   | 3,062      |   |   |   | 4,176 |   |
| Other Deposits                                                                 |   |               | 124        |   |             |   | 133        |   |   |   | 250        |   |   |   | 302 |   |
| Interest on Short-Term Borrowings                                              |   |               | 15         |   |             |   | 40         |   |   |   | 53         |   |   |   | 129 |   |
| Interest on Long-Term Borrowings                                               |   |               | 657        |   |             |   | 567        |   |   |   | 1,321      |   |   |   | 1,077 |   |
| Total Interest Expense                                                         |   |               | 3,826      |   |             |   | 4,939      |   |   |   | 8,301      |   |   |   | 10,194 |   |
| Net Interest Income                                                            |   |               | 7,939      |   |             |   | 6,359      |   |   |   | 15,231     |   |   |   | 12,504 |   |
| Provision for Loan Losses                                                      |   |               | 950        |   |             |   | 175        |   |   |   | 2,150      |   |   |   | 400 |   |
| Net Interest Income After Provision for Loan Losses                            |   |               | 6,989      |   |             |   | 6,184      |   |   |   | 13,081     |   |   |   | 12,104 |   |
|                                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Non-Interest Income                                                            |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Trust Fees                                                                     |   |               | 388        |   |             |   | 426        |   |   |   | 712        |   |   |   | 821 |   |
| Service Charges on Deposit Accounts                                            |   |               | 563        |   |             |   | 530        |   |   |   | 1,081      |   |   |   | 991 |   |
| Commission Income                                                              |   |               | -          |   |             |   | 153        |   |   |   | -          |   |   |   | 246 |   |
| Investment Security Gains (Losses), Net                                        |   |               | 1,009      |   |             |   | (19        | )      |   |   | 1,450      |   |   |   | 164 |   |
| Net Gain on Sale of Loans                                                      |   |               | 125        |   |             |   | 91         |   |   |   | 180        |   |   |   | 174 |   |
| Increase in Cash Surrender Value of Bank Owned Life Insurance                  |   |               | 147        |   |             |   | 157        |   |   |   | 294        |   |   |   | 308 |   |
| Other Service Fees                                                             |   |               | 59         |   |             |   | 43         |   |   |   | 124        |   |   |   | 107 |   |
| Gain on Sale of Insurance Agency Subsidiary                                    |   |               | -          |   |             |   | 628        |   |   |   | -          |   |   |   | 628 |   |
| Other Income                                                                   |   |               | 136        |   |             |   | 94         |   |   |   | 217        |   |   |   | 194 |   |
| Total Non-Interest Income                                                      |   |               | 2,427      |   |             |   | 2,103      |   |   |   | 4,058      |   |   |   | 3,633 |   |
|                                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Non-Interest Expense                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Salaries                                                                       |   |               | 3,202      |   |             |   | 2,941      |   |   |   | 5,933      |   |   |   | 5,651 |   |
| Employee Benefits                                                              |   |               | 820        |   |             |   | 643        |   |   |   | 1,675      |   |   |   | 1,293 |   |
| Occupancy Expense of Company Premises                                          |   |               | 473        |   |             |   | 492        |   |   |   | 1,060      |   |   |   | 997 |   |
| Furniture and Equipment Expense                                                |   |               | 262        |   |             |   | 299        |   |   |   | 513        |   |   |   | 540 |   |
| Computer Service Fees                                                          |   |               | 426        |   |             |   | 379        |   |   |   | 838        |   |   |   | 592 |   |
| Advertising and Marketing                                                      |   |               | 126        |   |             |   | 163        |   |   |   | 282        |   |   |   | 355 |   |
| Professional Fees                                                              |   |               | 222        |   |             |   | 216        |   |   |   | 503        |   |   |   | 467 |   |
| FDIC Premium Assessment                                                        |   |               | 574        |   |             |   | 19         |   |   |   | 665        |   |   |   | 38 |   |
| Loan Related Collection Expense                                                |   |               | 213        |   |             |   | 23         |   |   |   | 286        |   |   |   | 44 |   |
| Net Loss on Impairment/Sale of Fixed Assets and Other                          |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Real Estate                                                                    |   |               | -          |   |             |   | 285        |   |   |   | 134        |   |   |   | 276 |   |
| Other Miscellaneous Expenses                                                   |   |               | 868        |   |             |   | 921        |   |   |   | 1,678      |   |   |   | 1,751 |   |
| Total Non-Interest Expense                                                     |   |               | 7,186      |   |             |   | 6,381      |   |   |   | 13,567     |   |   |   | 12,004 |   |
| Income Before Taxes                                                            |   |               | 2,230      |   |             |   | 1,906      |   |   |   | 3,572      |   |   |   | 3,733 |   |
| Income Taxes                                                                   |   |               | (637       | )      |             |   | (499       | )      |   |   | (906       | )      |   |   | (888 | ) |
| Net Income                                                                     |   | $                  | 1,593      |   |             | $      | 1,407      |   |   | $      | 2,666      |   |   | $ | 2,845 |   |
|                                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| Weighted Average Shares Outstanding                                            |   |               | 10,503,704 |   |             |   | 10,503,704 |   |   |   | 10,503,704 |   |   |   | 10,503,704 |   |
| Basic Earnings Per Share                                                       |   | $                  | 0.15       |   |             | $      | 0.13       |   |   | $      | 0.25       |   |   | $ | 0.27 |   |
|                                                                           |   |               |       |   |             |   |       |   |   |   |       |   |   |   |   |   |
| See accompanying notes to interim unaudited consolidated financial statements. |   |

----

| The Wilber Corporation                                                                         |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |
|------------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|--------|----------|--------|--------|---------------|--------|--------|----------|--------|--------|--------|--------|
| Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income(Unaudited) |   |   |   |   |       |   |   |     |   |   |          |   |   |
|                                                                                           |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |
|                                                                                           |   |   |   |   |       |   |   |     |   |   | Accumulated   |   |   |     |   |   |   |   |
|                                                                                           |   |   |   |   | Additional |   |   |     |   |   | Other         |   |   |     |   |   |   |   |
|                                                                                           |   | Common |   |   | Paid in    |   |   | Retained |   |   | Comprehensive |   |   | Treasury |   |   |   |   |
| in thousands except share and per share data                                                   |   | Stock  |   |   | Capital    |   |   | Earnings |   |   | Income (Loss) |   |   | Stock    |   |   | Total  |   |
| Balance December 31, 2007                                                                      |   | $      | 140    |   |       | $      | 4,224  |     |   | $      | 93,618        |   |   | $        | (272   | )      |   | $      | (28,311 | ) |   | $ | 69,399 |   |
| Comprehensive Income:                                                                          |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                                                     |   |   | -      |   |       |   | -      |     |   |   | 2,845         |   |   |     | -      |   |   |   | - |   |   |   | 2,845 |   |
| Change in Net Unrealized Gain (Loss) on Securities, Net of Taxes                               |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | 541    |   |   |   | - |   |   |   | 541 |   |
| Effect of Change in Measurement Date of Pension Plan                                           |   |   | -      |   |       |   | -      |     |   |   | 98            |   |   |     | -      |   |   |   | - |   |   |   | 98 |   |
| Adoption of EITF Issue No. 06-4, "Accounting for Deferred                                      |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Compensation and Postretirement Benefit Aspects of Endorsement                                 |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Split-Dollar Life Insurance Agreements"                                                        |   |   | -      |   |       |   | -      |     |   |   | (1,537        | )      |   |     | -      |   |   |   | - |   |   |   | (1,537 | ) |
| Total Comprehensive Income                                                                     |   |   | -      |   |       |   | -      |     |   |   |          |   |   |     | -      |   |   |   | - |   |   |   | 1,947 |   |
| Cash Dividends ($0.19 per share)                                                               |   |   | -      |   |       |   | -      |     |   |   | (1,995        | )      |   |     | -      |   |   |   | - |   |   |   | (1,995 | ) |
| Balance June 30, 2008                                                                          |   | $      | 140    |   |       | $      | 4,224  |     |   | $      | 93,029        |   |   | $        | 269    |   |   | $      | (28,311 | ) |   | $ | 69,351 |   |
|                                                                                           |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Balance December 31, 2008                                                                      |   | $      | 140    |   |       | $      | 4,224  |     |   | $      | 93,966        |   |   | $        | (2,560 | )      |   | $      | (28,311 | ) |   | $ | 67,459 |   |
| Comprehensive Income:                                                                          |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                                                     |   |   | -      |   |       |   | -      |     |   |   | 2,666         |   |   |     | -      |   |   |   | - |   |   |   | 2,666 |   |
| Change in Net Unrealized Gain (Loss) on Securities, Net of Taxes                               |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | 172    |   |   |   | - |   |   |   | 172 |   |
| Change in the Net Actuarial Loss on Defined Benefit Plan, Net of Taxes                         |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | 146    |   |   |   | - |   |   |   | 146 |   |
| Total Comprehensive Income                                                                     |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |   |   |   |   |   |   | 2,984 |   |
| Cash Dividends ($0.155 per share)                                                              |   |   | -      |   |       |   | -      |     |   |   | (1,629        | )      |   |     | -      |   |   |   | - |   |   |   | (1,629 | ) |
| Balance June 30, 2009                                                                          |   | $      | 140    |   |       | $      | 4,224  |     |   | $      | 95,003        |   |   | $        | (2,242 | )      |   | $      | (28,311 | ) |   | $ | 68,814 |   |

----

| The Wilber Corporation                                                             |   |             |    |   |   |   |
|------------------------------------------------------------------------------------|--------|------------------|---------|--------|--------|--------|
| Consolidated Statements of Cash Flows (Unaudited)                                  |   |             |    |   |   |   |
|                                                                               |   | Six Months Ended |    |
|                                                                               |   | June 30,         |    |
| in thousands                                                                       |   | 2009             |    |   | 2008   |   |
| Cash Flows from Operating Activities:                                              |   |             |    |   |   |   |
| Net Income                                                                         |   | $                | 2,666   |   |   | $      | 2,845 |   |
| Adjustments to Reconcile Net Income to Net Cash                                    |   |             |    |   |   |   |   |   |
| Provided by Operating Activities:                                                  |   |             |    |   |   |   |   |   |
|   Provision for Loan Losses                                              |   |             | 2,150   |   |   |   | 400 |   |
|   Depreciation and Amortization                                          |   |             | 862     |   |   |   | 749 |   |
|   Net Amortization of Premiums and Accretion of Discounts on Investments |   |             | 242     |   |   |   | 229 |   |
|   Loss on Disposal of Fixed Assets                                       |   |             | -       |   |   |   | 185 |   |
|   Available-for Sale Investment Security Gains, Net                      |   |             | (1,432  | )      |   |   | (260 | ) |
|   Other Real Estate Losses                                               |   |             | 134     |   |   |   | 91 |   |
|   Increase in Cash Surrender Value of Bank Owned Life Insurance          |   |             | (294    | )      |   |   | (308 | ) |
|   Net Decrease (Increase) in Trading Securities                          |   |             | 129     |   |   |   | (262 | ) |
|   Net (Gains)Losses on Trading Securities                                |   |             | (18     | )      |   |   | 96 |   |
|   Gain on Sale of Insurance Agency Subsidiary                            |   |             | -       |   |   |   | (628 | ) |
|   Net Gain on Sale of Mortgage Loans                                     |   |             | (180    | )      |   |   | (174 | ) |
|   Originations of Mortgage Loans Held for Sale                           |   |             | (8,836  | )      |   |   | (3,910 | ) |
|   Proceeds from Sale of Mortgage Loans Held for Sale                     |   |             | 8,325   |   |   |   | 4,235 |   |
|   Increase in Other Assets                                               |   |             | (189    | )      |   |   | (33 | ) |
|   Decrease in Other Liabilities                                          |   |             | (81     | )      |   |   | (920 | ) |
| Net Cash Provided by Operating Activities                                          |   |             | 3,478   |   |   |   | 2,335 |   |
|                                                                               |   |             |    |   |   |   |   |   |
| Cash Flows from Investing Activities:                                              |   |             |    |   |   |   |   |   |
| Proceeds from Maturities of Held-to-Maturity Investment Securities                 |   |             | 3,892   |   |   |   | 3,230 |   |
| Proceeds from Maturities of Available-for-Sale Investment Securities               |   |             | 28,390  |   |   |   | 25,923 |   |
| Proceeds from Sales and Calls of Available-for-Sale Investment Securities          |   |             | 54,889  |   |   |   | 10,992 |   |
| Purchases of Held-to Maturity Investment Securities                                |   |             | (23,256 | )      |   |   | - |   |
| Purchases of Available-for-Sale Investment Securities                              |   |             | (70,536 | )      |   |   | (52,486 | ) |
| Net Increase in Other Investments                                                  |   |             | (126    | )      |   |   | (737 | ) |
| Net Increase in Loans                                                              |   |             | (24,659 | )      |   |   | (55,069 | ) |
| Purchase of Premises and Equipment, Net of Disposals                               |   |             | (348    | )      |   |   | (1,403 | ) |
| Proceeds from Sale of Premises and Equipment                                       |   |             | -       |   |   |   | 28 |   |
| Proceeds from Sale of Insurance Agency Subsidiary                                  |   |             | -       |   |   |   | 1,250 |   |
| Proceeds from Sale of Other Real Estate                                            |   |             | -       |   |   |   | 68 |   |
|    Net Cash Used by Investing Activities                            |   |             | (31,754 | )      |   |   | (68,204 | ) |
|                                                                               |   |             |    |   |   |   |   |   |
| Cash Flows from Financing Activities:                                              |   |             |    |   |   |   |   |   |
| Net Increase in Demand Deposits, Savings, NOW,                                     |   |             |    |   |   |   |   |   |
|    Money Market and Other Deposits                                  |   |             | 75,002  |   |   |   | 53,835 |   |
| Net (Decrease) Increase in Certificates of Deposit                                 |   |             | (55,951 | )      |   |   | 15,103 |   |
| Net Decrease in Short-Term Borrowings                                              |   |             | (6,863  | )      |   |   | (2,818 | ) |
| Increase in Long-Term Borrowings                                                   |   |             | -       |   |   |   | 16,000 |   |
| Repayment of Long-Term Borrowings                                                  |   |             | (2,176  | )      |   |   | (1,428 | ) |
| Cash Dividends Paid                                                                |   |             | (1,628  | )      |   |   | (1,995 | ) |
|    Net Cash Provided by Financing Activities                        |   |             | 8,384   |   |   |   | 78,697 |   |
|      Net (Decrease)Increase in Cash and Cash Equivalents  |   |             | (19,892 | )      |   |   | 12,828 |   |
| Cash and Cash Equivalents at Beginning of Period                                   |   |             | 44,421  |   |   |   | 18,942 |   |
| Cash and Cash Equivalents at End of Period                                         |   | $                | 24,529  |   |   | $      | 31,770 |   |
|                                                                               |   |             |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:                                 |   |             |    |   |   |   |   |   |
| Cash Paid during Period for:                                                       |   |             |    |   |   |   |   |   |
| Interest                                                                           |   | $                | 8,522   |   |   | $      | 9,988 |   |
| Income Taxes                                                                       |   |             | 726     |   |   |   | 2,025 |   |
| Non-Cash Investing Activities:                                                     |   |             |    |   |   |   |   |   |
| Change in Unrealized Gain on Securities, Net of Tax                                |   |             | 172     |   |   |   | 541 |   |
| Transfer of Loans to Other Real Estate                                             |   |             | 203     |   |   |   | 70 |   |
|                                                                               |   |             |    |   |   |   |   |   |
| See accompanying notes to interim unaudited consolidated financial statements.     |   |

----

----

----

----

| Note 4.  Investment Securities                                                                                                                                                                                                                        |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                                                            |   |   |   |   |   |   |
| The amortized cost and fair value of investment securities are shown in the table below.  The trading securities are comprised of mutual funds and individual equity and debt securities held for the Company's executive deferred compensation plan. |

|                                             |   | June 30, 2009 |    |
|--------------------------------------------------|--------|---------------|---------|
|                                             |   |          |    |   | Gross |   |   | Gross |   |   | Estimated |   |
|                                             |   | Amortized     |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
| in thousands                                     |   | Cost          |    |   | Gains |   |   | Losses |   |   | Value |   |
| Available-for-Sale Portfolio                     |   |          |    |   |   |   |   |   |   |   |   |   |
| Obligations of States and Political Subdivisions |   | $             | 27,934  |   |   | $ | 494 |   |   | $ | 6 |   |   | $ | 28,422 |   |
| Mortgage-Backed Securities                       |   |          | 166,789 |   |   |   | 3,082 |   |   |   | 276 |   |   |   | 169,595 |   |
| Corporate Securities                             |   |          | 7,170   |   |   |   | 240 |   |   |   | 5 |   |   |   | 7,405 |   |
| Equity Securities                                |   |          | 109     |   |   |   | - |   |   |   | - |   |   |   | 109 |   |
|                                             |   | $             | 202,002 |   |   | $ | 3,816 |   |   | $ | 287 |   |   | $ | 205,531 |   |
|                                             |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trading Portfolio                                |   | $             | 1,228   |   |   | $ | - |   |   | $ | 184 |   |   | $ | 1,044 |   |
|                                             |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-Maturity Portfolio                       |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of States and Political Subdivisions |   | $             | 15,365  |   |   | $ | 247 |   |   | $ | 12 |   |   | $ | 15,600 |   |
| Mortgage-Backed Securities                       |   |          | 48,395  |   |   |   | 779 |   |   |   | 340 |   |   |   | 48,834 |   |
|                                             |   | $             | 63,760  |   |   | $ | 1,026 |   |   | $ | 352 |   |   | $ | 64,434 |   |

|                                             |   | December 31, 2008 |    |
|--------------------------------------------------|--------|-------------------|---------|
|                                             |   |              |    |   | Gross |   |   | Gross |   |   | Estimated |   |
|                                             |   | Amortized         |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
| in thousands                                     |   | Cost              |    |   | Gains |   |   | Losses |   |   | Value |   |
| Available-for-Sale Portfolio                     |   |              |    |   |   |   |   |   |   |   |   |   |
| Obligations of States and Political Subdivisions |   | $                 | 36,205  |   |   | $ | 582 |   |   | $ | 11 |   |   | $ | 36,776 |   |
| Mortgage-Backed Securities                       |   |              | 176,116 |   |   |   | 2,815 |   |   |   | 103 |   |   |   | 178,828 |   |
| Corporate Securities                             |   |              | 1,047   |   |   |   | - |   |   |   | 35 |   |   |   | 1,012 |   |
| Equity Securities                                |   |              | 128     |   |   |   | - |   |   |   | - |   |   |   | 128 |   |
|                                             |   | $                 | 213,496 |   |   | $ | 3,397 |   |   | $ | 149 |   |   | $ | 216,744 |   |
|                                             |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trading Portfolio                                |   | $                 | 1,391   |   |   | $ | - |   |   | $ | 236 |   |   | $ | 1,155 |   |
|                                             |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-Maturity Portfolio                       |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of States and Political Subdivisions |   | $                 | 13,961  |   |   | $ | 194 |   |   | $ | 9 |   |   | $ | 14,146 |   |
| Mortgage-Backed Securities                       |   |              | 30,493  |   |   |   | 430 |   |   |   | 60 |   |   |   | 30,863 |   |
|                                             |   | $                 | 44,454  |   |   | $ | 624 |   |   | $ | 69 |   |   | $ | 45,009 |   |

| The following tables provide information on temporarily impaired securities: |
|------------------------------------------------------------------------------|

|                                                              |   | June 30, 2009       |   |
|-------------------------------------------------------------------|--------|---------------------|--------|
|                                                              |   | Less Than 12 Months |   |   | 12 Months or Longer |   |   | Total |   |
|                                                              |   | Estimated           |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| in thousands                                                      |   | Fair Value          |   |   | Losses |   |   | Fair Value |   |   | Losses |   |   | Fair Value |   |   | Losses |   |
| Obligations of States and Political   Subdivisions |   | $                   | 983    |   |   | $ | 12 |   |   | $ | 65 |   |   | $ | 6 |   |   | $ | 1,048 |   |   | $ | 18 |   |
| Mortgage-Backed Securities                                        |   |                | 53,545 |   |   |   | 616 |   |   |   | - |   |   |   | - |   |   |   | 53,545 |   |   |   | 616 |   |
| Corporate Securities                                              |   |                | -      |   |   |   | - |   |   |   | 1,033 |   |   |   | 5 |   |   |   | 1,033 |   |   |   | 5 |   |
|                                                              |   | $                   | 54,528 |   |   | $ | 628 |   |   | $ | 1,098 |   |   | $ | 11 |   |   | $ | 55,626 |   |   | $ | 639 |   |

----

| Note 4.  Investment Securities, Continued |
|-----------------------------------------------------|

|                                                                    |   |  December 31, 2008 |   |
|-------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                    |   | Less Than 12 Months     |   |   | 12 Months or Longer |   |   | Total |   |
|                                                                    |   | Estimated               |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| in thousands                                                            |   | Fair Value              |   |   | Losses |   |   | Fair Value |   |   | Losses |   |   | Fair Value |   |   | Losses |   |
| Obligations of States and Political    Subdivisions |   | $                       | 1,625  |   |   | $ | 20 |   |   | $ | - |   |   | $ | - |   |   | $ | 1,625 |   |   | $ | 20 |   |
| Mortgage-Backed Securities                                              |   |                    | 32,052 |   |   |   | 106 |   |   |   | 1,976 |   |   |   | 57 |   |   |   | 34,028 |   |   |   | 163 |   |
| Corporate Securities                                                    |   |                    | 1,012  |   |   |   | 35 |   |   |   | - |   |   |   | - |   |   |   | 1,012 |   |   |   | 35 |   |
|                                                                    |   | $                       | 34,689 |   |   | $ | 161 |   |   | $ | 1,976 |   |   | $ | 57 |   |   | $ | 36,665 |   |   | $ | 218 |   |

| The above unrealized losses are considered temporary, based on the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| Obligations of states and political subdivisions, and corporate securities: The unrealized losses on these investments were caused by market interest rate increases since the time of purchase.  The contractual terms of these investments require the issuer to settle the securities at par upon maturity of the investment.  Becausethe decline in fair value is attributed to market interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery, which may be to maturity, these investments are not considered other than temporarily impaired.                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| Mortgage-backed securities: The unrealized losses on investments in mortgage-backed securities were caused by market interest rate differences between the time of purchase and the measurement date.  All of the contractual cash flows of these securities are issued or backed by various government agencies or government sponsoredenterprises such as Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation.  Because the decline in fair value is attributed to market interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or to maturity, these investments are not considered other than temporarily impaired. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| The amortized cost and fair value of debt securities by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  Mortgage-backed securities are included based on thefinal contractual maturity date, while equity securities have no stated maturity and are excluded from the following tables.                                                                                                                                                                                                                                                                                                                                |

|                                   |   | Amortized |    |   | Estimated  |   |
|----------------------------------------|--------|-----------|---------|--------|------------|--------|
| in thousands                           |   | Cost      |    |   | Fair Value |   |
| Available-for-Sale Securities          |   |      |    |   |       |   |
| Due in One Year or Less                |   | $         | 6,623   |   |       | $      | 6,716 |   |
| Due After One Year Through Five Years  |   |      | 30,749  |   |       |   | 31,464 |   |
| Due After Five Years Through Ten Years |   |      | 44,303  |   |       |   | 45,638 |   |
| Due After Ten Years                    |   |      | 120,218 |   |       |   | 121,604 |   |
|                                   |   | $         | 201,893 |   |       | $      | 205,422 |   |

|                                   |   | Amortized |   |   | Estimated  |   |
|----------------------------------------|--------|-----------|--------|--------|------------|--------|
| in thousands                           |   | Cost      |   |   | Fair Value |   |
| Held-to-Maturity Securities            |   |      |   |   |       |   |
| Due in One Year or Less                |   | $         | 8,026  |   |       | $      | 8,144 |   |
| Due After One Year Through Five Years  |   |      | 6,139  |   |       |   | 6,347 |   |
| Due After Five Years Through Ten Years |   |      | 18,911 |   |       |   | 19,518 |   |
| Due After Ten Years                    |   |      | 30,684 |   |       |   | 30,425 |   |
|                                   |   | $         | 63,760 |   |       | $      | 64,434 |   |

----

| Note 4.  Investment Securities, Continued                                                                                                                                                                                                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |
| Proceeds from sales and calls of available-for sale investment securities were $54.889 million and $10.992 million for the six months ended June 30, 2009 and 2008, respectively.  For the three months ended June 30, 2009, the Company recorded proceeds of $38.330 million and $510 thousand for the three months ended June 30, 2008. |
|                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |
| The following table sets forth information with regard to securities gains and losses realized on sales or calls of available-for-sale and held-to-maturity securities:                                                                                                                                                                             |

|                                         |   | Three Month Ended |   |   | Six Month Ended |   |
|----------------------------------------------|--------|-------------------|--------|--------|-----------------|--------|
|                                         |   | June 30,          |   |   | June 30,        |   |
| in thousands                                 |   | 2009              |   |   | 2008            |   |   | 2009 |   |   | 2008 |   |
| Gross Gains                             |   | $                 | 913    |   |            | $      | - |   |   | $ | 1,433 |   |   | $ | 263 |   |
| Gross Losses                            |   |              | 1      |   |            |   | - |   |   |   | 1 |   |   |   | 3 |   |
|    Net Securities Gains  |   | $                 | 912    |   |            | $      | - |   |   | $ | 1,432 |   |   | $ | 260 |   |

| Federal Home Loan Bank of New York and Federal Reserve Bank stock of $3.986 million at June 30, 2009 and $3.860 million at December 31, 2008 is carried at cost as fair values are not readily determinable.  Both investments are classified in other investments on the Company's consolidated statements of condition and are requiredfor membership.  The Federal Home Loan Bank of New York common stock we own enables us to borrow funds under the Federal Home Loan Bank of New York advance program and qualify for membership.  Recent published reports indicate that certain member banks of the Federal Home Loan Bank system, which include eleven other regionally based Federal Home Loan Banks, may be subject to accounting rules and asset quality risks that could result in materially lower regulatory capital levels.  Inan extreme situation, it is possible that the capitalization of one of the banks in the Federal Home Loan Bank system, including the Federal Home Loan Bank of New York could be substantially diminished or reduced to zero.  Consequently, given that there is no market for our Federal Home Loan Bank of New York common stock, we believe that there is a risk that our investment could be deemed other than temporarily impaired at some time in the future.  In addition, it is possible that the FederalHome Loan Bank of New York will discontinue or suspend its dividend payments to members in the event its regulatory capital levels diminish.  If either of these events occur, it may adversely affect our results of operations and financial condition. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
| At June 30, 2009, investment securities with an amortized cost of $221.106 million and an estimated fair value of $224.764 million were pledged as collateral for certain public deposits, borrowings, and other purposes as required or permitted by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

| The Company's defined benefit pension plan has been frozen since February 2006.  Under the frozen plan, no future benefits will be accrued for plan participants, nor will any new participants be enrolled in the plan.  This plan is sponsored by the Company's bank subsidiary.  Prior to being frozen, the plancovered employees who had attained the age of 21 and completed one year of service. Although the plan was frozen, the Company maintains the responsibility for funding the plan.  The Company's funding practice is to contribute at least the minimum amount annually to meet minimum funding requirements. The funded status of the Company’s defined benefit pension plan has and will continue to be affected by market conditions.  We expect to continue to fund this plan on an as needed basis anddo not foresee any issues or conditions that could negatively impact the payment of benefit obligations to plan participants.  Plan assets consist primarily of marketable fixed income securities and common stocks. Plan benefits are based on years of service and the employee’s average compensation during the five highest consecutive years of the last ten years of employment. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| The Components of Net Periodic Benefit Expense (Benefit) are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

|                           |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                           |   | June 30,           |   |   | June 30,         |   |
| in thousands                   |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Service Cost                   |   | $                  | 38     |   |             | $      | 38 |   |   | $ | 76 |   |   | $ | 77 |   |
| Interest Cost                  |   |               | 240    |   |             |   | 227 |   |   |   | 480 |   |   |   | 454 |   |
| Expected Return on Plan Assets |   |               | (279   | )      |             |   | (363 | ) |   |   | (558 | ) |   |   | (727 | ) |
| Net Amortization               |   |               | 119    |   |             |   | - |   |   |   | 237 |   |   |   | - |   |
|                           |   | $                  | 118    |   |             | $      | (98 | ) |   | $ | 235 |   |   | $ | (196 | ) |

| The Company recorded $73 thousand for the three months ended June 30, 2009 and $146 thousand for the six months ended June 30, 2009, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive income.  The Company did not recognize this amortization expense in 2008.                                                                                                                                                                                                                       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| Split-Dollar Life Insurance Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| The Company offers split-dollar life insurance benefits to fifteen current and former members of senior management.  For the three months ended June 30, 2009, the Company recorded a net benefit cost related to this plan totaling $21 thousand, as compared to $54 thousand for the three months ending June 30, 2008.  Forthe six months ended June 30, 2009, the Company recorded a net benefit cost related to this plan totaling $42 thousand, as compared to $61 thousand for the six months ending June 30, 2008. |

| The following is a summary of changes in other comprehensive income for the periods presented: |
|------------------------------------------------------------------------------------------------|

|                                                             |   | Three Months Ended |   |   | Six Months Ended |   |
|------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                             |   | June 30,           |   |   | June 30,         |   |
| in thousands                                                     |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Unrealized Holding Gains (Losses) Arising During the Period, Net |   |               |   |   |             |   |   |   |   |   |   |   |
| of Tax (Pre-tax Amount of $453, ($2,056), $1,714 and $1,143)     |   | $                  | 277    |   |             | $      | (1,261 | ) |   | $ | 1,050 |   |   | $ | 700 |   |
| Reclassification Adjustment for Gains Realized in Net Income     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| During the Period, Net of Tax (Pre-tax Amount of ($912),         |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  $0, ($1,432) and ($260))                                   |   |               | (559   | )      |             |   | - |   |   |   | (878 | ) |   |   | (159 | ) |
| Change in Pension Asset (Pre-tax Amount of $119, $0, $237        |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| and $0)                                                          |   |               | 73     |   |             |   | - |   |   |   |  146 |   |   |   | - |   |
| Other Comprehensive Income                                       |   | $                  | (209   | )      |             | $      | (1,261 | ) |   | $ | 318 |   |   | $ | 541 |   |

----

| The following are the major categories of assets measured at fair value on a recurring basis at June 30, 2009, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |   | Level 1        |   |   |        |   |    |         |   |   |     |   |
|-------------------------------|--------|----------------|--------|--------|-------------|--------|---------|--------------|--------|--------|----------|--------|
|                          |   | Quoted         |   |   | Level 2     |   |    |         |   |   |     |   |
|                          |   | Prices in      |   |   | Significant |   |    | Level 3      |   |   |     |   |
|                          |   | Active Markets |   |   | Other       |   |    | Significant  |   |   | Total at |   |
|                          |   | for Identical  |   |   | Observable  |   |    | Unobservable |   |   | June 30, |   |
| in thousands                  |   | Assets         |   |   | Inputs      |   |    | Inputs       |   |   | 2009     |   |
| Trading Securities            |   | $              | 1,044  |   |        | $      | -       |         |   | $      | -        |   |   | $ | 1,044 |   |
| Available-for-Sale Securities |   |           | -      |   |        |   | 205,531 |         |   |   | -        |   |   |   | 205,531 |   |
| Total                         |   | $              | 1,044  |   |        | $      | 205,531 |         |   | $      | -        |   |   | $ | 206,575 |   |

| Price evaluations for our level 1 trading securities portfolio, consisting of mutual funds and individual equity and debt securities held by the Company’s executive deferred compensation plan, are obtained from national exchanges and active secondary markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |
| The price evaluations for our level 2 available-for-sale securities are good faith opinions as to what a buyer in the marketplace would pay for a security (typically in an institutional round lot position) in a current sale.  The evaluation considers interest rate movements, new issue information, and other pertinent data.  Fairvalues for investments were based on quoted market prices, where available, as provided by third party vendors.  If quoted market prices were not available, fair values provided by the vendors were based on quoted market prices of comparable instruments in active markets and/or based on a matrix pricing methodology that employs the Securities Industry and Financial Markets Association standard calculations for cash flow and price/yield analysis, or live benchmark bond pricing, or terms/conditions dataavailable from major pricing sources.                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |
| SFAS No. 157 requires disclosure of assets and liabilities measured and recorded at fair value on a non-recurring basis.  For the Company, these include loans held for sale, collateral dependent impaired loans, other real estate owned, goodwill and other intangible assets.  In accordance with the provisions of SFAS No.114, “Accounting by Creditors for Impairment of a Loan - an amendment of FASB Statements No. 5 and 15” (“SFAS No. 114”), the Company had collateral-dependent impaired loans with a carrying value of approximately $10.870 million, which had specific reserves included in the allowance for loan and lease losses of $682 thousand at June 30, 2009.  The Company uses the fair value of underlying collateral to estimate the specific reserves for collateral-dependent impaired loans.  Basedon the valuation techniques used, the fair value measurements for collateral-dependent impaired loans are classified as Level 3. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |
| The Company currently has eight properties recorded as other real estate owned.  Seven of these properties were the result of debts previously contracted and are carried at cost, as it is lower than market value.  The eighth property was the result of land previously purchased with the intent of development for branchoperations, but development was later halted with the Company deciding to sell the property.  Through a third party appraisal performed in the first quarter of 2009, the Company recorded a $134 thousand charge to earnings related to this property.  The following table reports the fair value of this property as of June 30, 2009:                                                                                                                                                                                                                                                                                                                    |

|                    |   |           |   |   |        |   |   |         |   |   |     |   |
|-------------------------|--------|----------------|--------|--------|-------------|--------|--------|--------------|--------|--------|----------|--------|
|                    |   | Level 1        |   |   |        |   |   |         |   |   |     |   |
|                    |   | Quoted         |   |   | Level 2     |   |   |         |   |   |     |   |
|                    |   | Prices in      |   |   | Significant |   |   | Level 3      |   |   |     |   |
|                    |   | Active Markets |   |   | Other       |   |   | Significant  |   |   | Total at |   |
|                    |   | for Identical  |   |   | Observable  |   |   | Unobservable |   |   | June 30, |   |
| in thousands            |   | Assets         |   |   | Inputs      |   |   | Inputs       |   |   | 2009     |   |
| Other Real Estate Owned |   | $              | -      |   |        | $      | 277    |         |   | $      | -        |   |   | $ | 277 |   |

----

| Note 7.  Disclosures about Fair Value of Financial Instruments, Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated statement of condition, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values arebased on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and in many cases, could not be realized in immediate settlement of the instruments. SFAS No. 107 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements.Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Bank. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| The following methods and assumptions were used to estimate the fair value of each class of financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Short-Term Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The fair value of certain financial instruments is estimated to approximate their carrying value because the remaining term to maturity of the financial instrument is less than 90 days or the financial instrument reprices in 90 days or less. Such financial instruments include cash and due from banks, Federal Funds sold, accrued interestreceivable and accrued interest payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| The fair value of time deposits with other banks is estimated using discounted cash flow analysis based on the Company's current reinvestment rate for similar deposits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |
| Fair values for investments were based on quoted market prices, where available, as provided by third party vendors.  If quoted market prices were not available, fair values provided by the vendors were based on quoted market prices of comparable instruments in active markets and/or based on a matrix pricing methodology that employsthe Securities Industry and Financial Markets Association standard calculations for cash flow and price/yield analysis, or live benchmark bond pricing, or terms/conditions data available from major pricing sources.  The fair value of other investments is estimated at their carrying value.                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Loans Held for Sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |
| The fair value of loans held for sale approximates the carrying value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |
| The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |
| The fair value of demand deposits, savings accounts, and certain NOW and money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity time deposits is estimated using the rates currently offered for deposits of similar remaining maturities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |
| The fair value of repurchase agreements, short-term borrowings, and long-term borrowings is estimated using discounted cash flow analysis based on the Company's current incremental borrowing rate for similar borrowing arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |
| Off-Balance Sheet Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |
| The fair value of outstanding loan commitments and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the counter parties' credit standing and discounted cash flow analysis. The fair value of these instruments approximates the value ofthe related fees and is not material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

| Note 7. Disclosures about Fair Value of Financial Instruments, Continued                              |   |
|------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| The carrying values and estimated fair values of the Company’s financial instruments are as follows: |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   | June 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                                       |   | Carrying |   |   | Fair |   |   | Carrying |   |   | Fair |   |
| dollars in thousands                                                                                       |   | Value |   |   | Value |   |   | Value |   |   | Value |   |
| Financial Assets:                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents                                                                                  |   | $ | 24,529 |   |   | $ | 24,529 |   |   | $ | 44,421 |   |   | $ | 44,421 |   |
| Securities                                                                                                 |   |   | 276,154 |   |   |   | 276,828 |   |   |   | 268,046 |   |   |   | 268,601 |   |
| Loans Held for Sale                                                                                        |   |   | 809 |   |   |   | 809 |   |   |   | 118 |   |   |   | 118 |   |
| Loans                                                                                                      |   |   | 607,225 |   |   |   | 604,551 |   |   |   | 583,861 |   |   |   | 591,511 |   |
| Allowance for Loan Losses                                                                                  |   |   | (8,838 | ) |   |   | (8,838 | ) |   |   | (7,564 | ) |   |   | (7,564 | ) |
| Net Loans                                                                                                  |   |   | 598,387 |   |   |   | 595,713 |   |   |   | 576,297 |   |   |   | 583,947 |   |
| Accrued Interest Receivable                                                                                |   |   | 3,362 |   |   |   | 3,362 |   |   |   | 3,340 |   |   |   | 3,340 |   |
| Financial Liabilities:                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                                                                                                     |   | $ | 74,531 |   |   | $ | 74,531 |   |   | $ | 72,168 |   |   | $ | 72,168 |   |
| Savings, NOW and Money                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Market Deposit Accounts                                                                                    |   |   | 399,298 |   |   |   | 399,298 |   |   |   | 330,158 |   |   |   | 330,158 |   |
| Certificates of Deposit                                                                                    |   |   | 285,500 |   |   |   | 291,472 |   |   |   | 341,452 |   |   |   | 345,774 |   |
| Other Deposits                                                                                             |   |   | 25,595 |   |   |   | 25,595 |   |   |   | 22,096 |   |   |   | 22,096 |   |
| Borrowings                                                                                                 |   |   | 72,359 |   |   |   | 74,159 |   |   |   | 81,398 |   |   |   | 83,269 |   |
| Accrued Interest Payable                                                                                   |   |   | 1,151 |   |   |   | 1,151 |   |   |   | 1,195 |   |   |   | 1,195 |   |

----

E

----

----

----

|                                                    |   | For the Three Months Ended June 30, |
|---------------------------------------------------------|--------|-------------------------------------|
|                                                    |   | 2009                                |   | 2008 |
|                                                    |   | AverageOutstandingBalance           |   |   | InterestEarned /Paid |   |   | Yield /Rate |   | AverageOutstandingBalance |   |   | InterestEarned /Paid |   |   | Yield /Rate |
|                                                    |   | (Dollars in thousands)              |
| Earning Assets:                                         |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold                                      |   | $                                   | 522 |   |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 18,776 |   |   | $ | 100 |   |   |   | 2.14 | % |
| Interest bearing deposits                               |   |                                | 27,879 |   |   |   | 18 |   |   |   | 0.26 | % |   |   | 13,942 |   |   |   | 72 |   |   |   | 2.08 | % |
| Securities 1                                       |   |                                | 274,432 |   |   |   | 2,906 |   |   |   | 4.25 | % |   |   | 308,171 |   |   |   | 3,391 |   |   |   | 4.43 | % |
| Loans 2                                            |   |                                | 602,911 |   |   | 8,841 |   |   |   | 5.88 | % |   |   | 474,612 |   |   | 7,735 |   |   |   | 6.55 | % |
| Total earning assets                                    |   |                                | 905,744 |   |   |   | 11,765 |   |   |   | 5.21 | % |   |   | 815,501 |   |   |   | 11,298 |   |   |   | 5.57 | % |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets                                      |   |                                | 35,384 |   |   |   |   |   |   |   |   |   |   |   | 40,215 |   |   |   |   |   |   |   |   |   |
| Total assets                                            |   | $                                   | 941,128 |   |   |   |   |   |   |   |   |   |   | $ | 855,716 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                            |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                        |   | $                                   | 69,830 |   |   | $ | 55 |   |   |   | 0.32 | % |   | $ | 70,034 |   |   | $ | 70 |   |   |   | 0.40 | % |
| Money market accounts                                   |   |                                | 204,906 |   |   |   | 525 |   |   |   | 1.03 | % |   |   | 131,748 |   |   |   | 630 |   |   |   | 1.92 | % |
| NOW accounts                                            |   |                                | 118,891 |   |   |   | 255 |   |   |   | 0.86 | % |   |   | 89,597 |   |   |   | 273 |   |   |   | 1.23 | % |
| Time & other deposit accounts                       |   |                                | 329,759 |   |   |   | 2,319 |   |   |   | 2.82 | % |   |   | 350,837 |   |   |   | 3,359 |   |   |   | 3.85 | % |
| Borrowings                                              |   |                                | 71,418 |   |   | 672 |   |   |   | 3.77 | % |   |   | 61,979 |   |   | 607 |   |   |   | 3.94 | % |
| Total interest bearing liabilities                      |   |                                | 794,804 |   |   |   | 3,826 |   |   |   | 1.93 | % |   |   | 704,195 |   |   |   | 4,939 |   |   |   | 2.82 | % |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing deposits                           |   |                                | 69,535 |   |   |   |   |   |   |   |   |   |   |   | 74,434 |   |   |   |   |   |   |   |   |   |
| Other non-interest bearing liabilities                  |   |                                | 8,398 |   |   |   |   |   |   |   |   |   |   |   | 7,036 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                       |   |                                | 872,737 |   |   |   |   |   |   |   |   |   |   |   | 785,665 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                    |   |                                | 68,391 |   |   |   |   |   |   |   |   |   |   |   | 70,051 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity              |   | $                                   | 941,128 |   |   |   |   |   |   |   |   |   |   | $ | 855,716 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                     |   |                                |   |   |   | $ | 7,939 |   |   |   |   |   |   |   |   |   |   | $ | 6,359 |   |   |   |   |   |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest rate spread 3                         |   |                                |   |   |   |   |   |   |   |   | 3.28 | % |   |   |   |   |   |   |   |   |   |   | 2.75 | % |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earning assets                                      |   | $                                   | 110,940 |   |   |   |   |   |   |   |   |   |   | $ | 111,306 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin 4                                   |   |                                |   |   |   |   |   |   |   |   | 3.52 | % |   |   |   |   |   |   |   |   |   |   | 3.14 | % |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin (tax-equivalent)                    |   |                                |   |   |   |   |   |   |   |   | 3.67 | % |   |   |   |   |   |   |   |   |   |   | 3.36 | % |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of earning assets to interest bearing liabilities |   |                                | 113.96 | % |   |   |   |   |   |   |   |   |   |   | 115.81 | % |   |   |   |   |   |   |   |   |
|                                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 1 Securities include trading, available-for-sale, held-to-maturity and other investments.  They are shown at average amortized cost with net unrealized gains or losses on securities available-for-sale included as a component of non-earning assets. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2 Average loans include loans held for sale, net deferred loan fees and costs and non-accrual loans and excludes the allowance for loan losses.                                                                                                                   |
| 3 Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.                                                                                 |
| 4 The net interest margin, also known as the net yield on average interest-earning assets, represents net interest income as a percentage of average interest-earning assets.                                                                                     |
||

----

|                                                    |   | For the Six Months Ended June 30, |
|---------------------------------------------------------|--------|-----------------------------------|
|                                                    |   | 2009                              |   | 2008 |
|                                                    |   | AverageOutstandingBalance         |   |   | InterestEarned /Paid |   |   | Yield /Rate |   | AverageOutstandingBalance |   |   | InterestEarned /Paid |   |   | Yield /Rate |
|                                                    |   | (Dollars in thousands)            |   |
| Earning Assets:                                         |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold                                      |   | $                                 | 482 |   |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 22,889 |   |   | $ | 298 |   |   |   | 2.62 | % |
| Interest bearing deposits                               |   |                              | 31,231 |   |   |   | 32 |   |   |   | 0.21 | % |   |   | 15,014 |   |   |   | 150 |   |   |   | 2.01 | % |
| Securities 1                                       |   |                              | 271,902 |   |   |   | 5,763 |   |   |   | 4.27 | % |   |   | 298,802 |   |   |   | 6,601 |   |   |   | 4.44 | % |
| Loans 2                                            |   |                              | 598,547 |   |   | 17,737 |   |   |   | 5.98 | % |   |   | 461,167 |   |   | 15,649 |   |   |   | 6.82 | % |
| Total earning assets                                    |   |                              | 902,162 |   |   |   | 23,532 |   |   |   | 5.26 | % |   |   | 797,872 |   |   |   | 22,698 |   |   |   | 5.72 | % |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets                                      |   |                              | 36,478 |   |   |   |   |   |   |   |   |   |   |   | 39,240 |   |   |   |   |   |   |   |   |   |
| Total assets                                            |   | $                                 | 938,640 |   |   |   |   |   |   |   |   |   |   | $ | 837,112 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                        |   | $                                 | 68,870 |   |   | $ | 119 |   |   |   | 0.35 | % |   | $ | 69,303 |   |   | $ | 151 |   |   |   | 0.44 | % |
| Money market accounts                                   |   |                              | 193,428 |   |   |   | 1,189 |   |   |   | 1.24 | % |   |   | 123,836 |   |   |   | 1,378 |   |   |   | 2.24 | % |
| NOW accounts                                            |   |                              | 110,742 |   |   |   | 483 |   |   |   | 0.88 | % |   |   | 85,845 |   |   |   | 538 |   |   |   | 1.26 | % |
| Time & other deposit accounts                       |   |                              | 344,449 |   |   |   | 5,136 |   |   |   | 3.01 | % |   |   | 346,646 |   |   |   | 6,921 |   |   |   | 4.02 | % |
| Borrowings                                              |   |                              | 75,259 |   |   | 1,374 |   |   |   | 3.68 | % |   |   | 61,916 |   |   | 1,206 |   |   |   | 3.92 | % |
| Total interest bearing liabilities                      |   |                              | 792,748 |   |   |   | 8,301 |   |   |   | 2.11 | % |   |   | 687,546 |   |   |   | 10,194 |   |   |   | 2.98 | % |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing deposits                           |   |                              | 68,913 |   |   |   |   |   |   |   |   |   |   |   | 72,206 |   |   |   |   |   |   |   |   |   |
| Other non-interest bearing liabilities                  |   |                              | 8,986 |   |   |   |   |   |   |   |   |   |   |   | 7,473 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                       |   |                              | 870,647 |   |   |   |   |   |   |   |   |   |   |   | 767,225 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                    |   |                              | 67,993 |   |   |   |   |   |   |   |   |   |   |   | 69,887 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity              |   | $                                 | 938,640 |   |   |   |   |   |   |   |   |   |   | $ | 837,112 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                     |   |                              |   |   |   | $ | 15,231 |   |   |   |   |   |   |   |   |   |   | $ | 12,504 |   |   |   |   |   |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest rate spread 3                         |   |                              |   |   |   |   |   |   |   |   | 3.15 | % |   |   |   |   |   |   |   |   |   |   | 2.74 | % |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earning assets                                      |   | $                                 | 109,414 |   |   |   |   |   |   |   |   |   |   | $ | 110,326 |   |   |   |   |   |   |   |   |   |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin 4                                   |   |                              |   |   |   |   |   |   |   |   | 3.40 | % |   |   |   |   |   |   |   |   |   |   | 3.15 | % |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin (tax-equivalent)                    |   |                              |   |   |   |   |   |   |   |   | 3.57 | % |   |   |   |   |   |   |   |   |   |   | 3.39 | % |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of earning assets to interest bearing liabilities |   |                              | 113.80 | % |   |   |   |   |   |   |   |   |   |   | 116.05 | % |   |   |   |   |   |   |   |   |
|                                                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 1 Securities include trading, available-for-sale, held-to-maturity and other investments.  They are shown at average amortized cost with net unrealized gains or losses on securities available-for-sale included as a component of non-earning assets. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
||

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|                                                                                                                                                                              |   |                   |   |   |                |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|
|                                                                                                                                                                              |   | At June 30,2009        |   |   | At December 31,2008 |   |
|                                                                                                                                                                              |   | (Dollars in thousands) |   |
| Loans in non-accrual status:                                                                                                                                                      |   |                   |   |   |                |   |
|    Residential real estate 1                                                                                                                                  |   | $                      | 330    |   |                | $      | 439 |   |
|    Commercial real estate                                                                                                                                          |   |                   | 9,418  |   |                |   | 4,516 |   |
|    Commercial 2                                                                                                                                               |   |                   | 1,339  |   |                |   | 843 |   |
|    Consumer                                                                                                                                                        |   |                   | 41     |   |                |   | 47 |   |
| Total non-accruing loans                                                                                                                                                          |   |                   | 11,128 |   |                |   | 5,845 |   |
| Loans contractually past due 90 days or more and still accruing interest                                                                                                          |   |                   | 888    |   |                |   | 1,366 |   |
| Troubled debt restructured loans                                                                                                                                                  |   |                   | -      |   |                |   | - |   |
| Total non-performing loans                                                                                                                                                        |   |                   | 12,016 |   |                |   | 7,211 |   |
| Other real estate owned 3                                                                                                                                                    |   |                   | 360    |   |                |   | 158 |   |
| Total non-performing assets                                                                                                                                                       |   | $                      | 12,376 |   |                | $      | 7,369 |   |
| Total non-performing assets as a percentage of total assets                                                                                                                       |   |                   | 1.32   | %      |                |   | 0.80 | % |
| Total non-performing loans as a percentage of total loans                                                                                                                         |   |                   | 1.98   | %      |                |   | 1.24 | % |
|                                                                                                                                                                              |   |                   |   |   |                |   |   |   |
| 1 Includes loans secured by 1-4 family dwellings, 5+ family residential dwellings, home equity loans and residential construction loans.                                     |   |
| 2 Includes commercial and industrial loans, agricultural loans and obligations (other than securities and leases) of states and political subdivisions in the United States. |   |
| 3 Includes properties acquired through foreclosure or similar proceedings.                                                                                                   |   |

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|                                                                                                   |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|--------------------------|--------|
|                                                                                                   |   | 2009                       |   |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
|                                                                                                   |   | (Dollars in thousands)     |   |   | (Dollars in thousands)   |   |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |
| Balance at beginning of period                                                                         |   | $                          | 8,491  |   |                     | $      | 6,965 |   |   | $ | 7,564 |   |   | $ | 6,977 |   |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                                                                                           |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Residential real estate 1                                                                         |   |                       | 0      |   |                     |   | 0 |   |   |   | 0 |   |   |   | 7 |   |
| Commercial real estate                                                                                 |   |                       | 475    |   |                     |   | 9 |   |   |   | 475 |   |   |   | 88 |   |
| Commercial 2                                                                                      |   |                       | 36     |   |                     |   | 49 |   |   |   | 68 |   |   |   | 78 |   |
| Consumer                                                                                               |   |                       | 323    |   |                     |   | 256 |   |   |   | 723 |   |   |   | 442 |   |
|        Total charge-offs                                            |   |                       | 834    |   |                     |   | 314 |   |   |   | 1,266 |   |   |   | 615 |   |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                                                                            |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Residential real estate 1                                                                         |   |                       | 8      |   |                     |   | 58 |   |   |   | 8 |   |   |   | 59 |   |
| Commercial real estate                                                                                 |   |                       | 69     |   |                     |   | 43 |   |   |   | 69 |   |   |   | 43 |   |
| Commercial 2                                                                                      |   |                       | 29     |   |                     |   | 1 |   |   |   | 35 |   |   |   | 17 |   |
| Consumer                                                                                               |   |                       | 125    |   |                     |   | 37 |   |   |   | 278 |   |   |   | 84 |   |
|         Total recoveries                                       |   |                       | 231    |   |                     |   | 139 |   |   |   | 390 |   |   |   | 203 |   |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net charge-offs                                                                                        |   |                       | 603    |   |                     |   | 175 |   |   |   | 876 |   |   |   | 412 |   |
| Provision for loan losses                                                                              |   |                       | 950    |   |                     |   | 175 |   |   |   | 2,150 |   |   |   | 400 |   |
| Balance at end of period                                                                               |   | $                          | 8,838  |   |                     | $      | 6,965 |   |   | $ | 8,838 |   |   | $ | 6,965 |   |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of net charge-offs during the period to average loans outstanding during the period (annualized) |   |                       | 0.40   | %      |                     |   | 0.15 | % |   |   | 0.30 | % |   |   | 0.18 | % |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to total loans                                                               |   |                       | 1.46   | %      |                     |   | 1.39 | % |   |   | 1.46 | % |   |   | 1.39 | % |
|                                                                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to non-performing loans                                                      |   |                       | 74     | %      |                     |   | 109 | % |   |   | 74 | % |   |   | 109 | % |

| 1 Includes loans secured by 1-4 family dwellings, 5+ family residential dwellings, home equity loans and residential construction loans. |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
||

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|                               |   | For the Three Months EndedJune 30, |   |   | For the Six Months EndedJune 30, |   |
|------------------------------------|--------|------------------------------------|--------|--------|----------------------------------|--------|
|                               |   | 2009 vs. 2008                      |   |   | 2009 vs. 2008                    |   |
|                               |   | Rate                               |   |   | Volume                           |   |   | Total |   |   | Rate |   |   | Volume |   |   | Total |   |
|                               |   | (Dollars in thousands)             |   |
| Earning assets:                    |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold                 |   | $                                  | (50    | )      |                             | $      | (50 | ) |   | $ | (100 | ) |   | $ | (148 | ) |   | $ | (150 | ) |   | $ | (298 | ) |
| Interest bearing deposits          |   |                               | (103   | )      |                             |   | 49 |   |   |   | (54 | ) |   |   | (223 | ) |   |   | 105 |   |   |   | (118 | ) |
| Securities                         |   |                               | (131   | )      |                             |   | (354 | ) |   |   | (485 | ) |   |   | (224 | ) |   |   | (614 | ) |   |   | (838 | ) |
| Loans                              |   |                               | (869   | )      |                             |   | 1,975 |   |   |   | 1,106 |   |   |   | (2,050 | ) |   |   | 4,138 |   |   |   | 2,088 |   |
| Total earning assets               |   |                               | (1,153 | )      |                             |   | 1,620 |   |   |   | 467 |   |   |   | (2,645 | ) |   |   | 3,479 |   |   |   | 834 |   |
|                               |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing liabilities:      |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                   |   |                               | (14    | )      |                             |   | (1 | ) |   |   | (15 | ) |   |   | (31 | ) |   |   | (1 | ) |   |   | (32 | ) |
| Money market accounts              |   |                               | (366   | )      |                             |   | 261 |   |   |   | (105 | ) |   |   | (766 | ) |   |   | 577 |   |   |   | (189 | ) |
| NOW accounts                       |   |                               | (93    | )      |                             |   | 75 |   |   |   | (18 | ) |   |   | (186 | ) |   |   | 131 |   |   |   | (55 | ) |
| Time & other deposit accounts  |   |                               | (833   | )      |                             |   | (207 | ) |   |   | (1,040 | ) |   |   | (1,696 | ) |   |   | (89 | ) |   |   | (1,785 | ) |
| Borrowings                         |   |                               | (25    | )      |                             |   | 90 |   |   |   | 65 |   |   |   | (70 | ) |   |   | 238 |   |   |   | 168 |   |
| Total interest bearing liabilities |   |                               | (1,331 | )      |                             |   | 218 |   |   |   | (1,113 | ) |   |   | (2,749 | ) |   |   | 856 |   |   |   | (1,893 | ) |
|                               |   |                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in net interest income      |   | $                                  | 178    |   |                             | $      | 1,402 |   |   | $ | 1,580 |   |   | $ | 104 |   |   | $ | 2,623 |   |   | $ | 2,727 |   |

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|                                       |   | For the SixMonths EndedJune 30, |   |   |   |   |
|--------------------------------------------|--------|---------------------------------|--------|--------|--------|--------|
| Description of other miscellaneous expense |   | 2009                            |   |   | 2008   |   |   | Increase /(Decrease) |   |
|                                       |   | ( Dollars in thousands)         |   |   |   |   |
| Fidelity insurance                         |   | $                               | 38     |   |   | $      | 62 |   |   | $ | (24 | ) |
| OCC assessment                             |   |                            | 105    |   |   |   | 91 |   |   |   | 14 |   |
| Correspondent bank services                |   |                            | 93     |   |   |   | 75 |   |   |   | 18 |   |
| Miscellaneous loan servicing expenses      |   |                            | 76     |   |   |   | 50 |   |   |   | 26 |   |
| Dues and memberships                       |   |                            | 38     |   |   |   | 67 |   |   |   | (29 | ) |
| Office supplies                            |   |                            | 195    |   |   |   | 172 |   |   |   | 23 |   |
| Postage and shipping                       |   |                            | 180    |   |   |   | 125 |   |   |   | 55 |   |
| Telephone and data communications          |   |                            | 227    |   |   |   | 214 |   |   |   | 13 |   |
| Travel and entertainment                   |   |                            | 98     |   |   |   | 149 |   |   |   | (51 | ) |
| Amortization of software                   |   |                            | 117    |   |   |   | 139 |   |   |   | (22 | ) |
| Other losses                               |   |                            | 28     |   |   |   | 82 |   |   |   | (54 | ) |
| Deferred reserves                          |   |                            | 9      |   |   |   | (5 | ) |   |   | 14 |   |
| Minority interest expense                  |   |                            | -      |   |   |   | 34 |   |   |   | (34 | ) |
| All other miscellaneous expense items, net |   |                            | 474    |   |   |   | 496 |   |   |   | (22 | ) |
| Total Other Miscellaneous Expense          |   | $                               | 1,678  |   |   | $      | 1,751 |   |   | $ | (73 | ) |

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|   | ● | maintaining the appropriate levels of currency throughout our branch system to meet the daily cash needs of our customers, |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------|

|   | ● | balancing our mandated deposit or “reserve” requirements at the Federal Reserve Bank of New York, |
|--------|---------|---------------------------------------------------------------------------------------------------------------|

|   | ● | maintaining adequate cash balances at our correspondent banks, and |
|--------|---------|--------------------------------------------------------------------|

|   | ● | assuring that adequate levels of federal funds sold, liquid assets, and borrowing resources are available to meet obligations, including reasonably anticipated daily fluctuations. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Sources of Funding                                           |
|--------------------------------------------------------------|
| • Currency*                                            |
| • Federal Reserve and Correspondent Bank Balances*     |
| • Federal Funds Sold*                                  |
| • Loan and Investment Principal and Interest Payments* |
| • Investment Security Maturities and Calls*            |
| • Demand Deposits and NOW Accounts*                    |
| • Savings and Money Market Deposits*                   |
| • Certificates of Deposit and Other Time Deposits*     |
| • Repurchase Agreements*                               |
| • FHLBNY Advances / Lines of Credit*                   |
| • Sale of Available-for-Sale Investment Securities     |
| • Brokered Deposits                                    |
| • Correspondent Lines of Credit                        |
| • Federal Reserve Discount Window Borrowings           |
| • Sale of Loans                                        |
| • Proceeds from Issuance of Equity Securities          |
| • Branch Acquisition                                   |

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|                                                                                                                                                          |   | June 30,2009           |   |   | December 31,2008 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|------------------|--------|
| Liquidity Measure                                                                                                                                             |   | (Dollars in thousands) |   |
| Cash and cash equivalents                                                                                                                                     |   | $                      | 24,529 |   |             | $      | 44,421 |   |
| Available-for-Sale and Held-to-Maturity investment securities at estimated fair value less securities pledged for state and municipal deposits and borrowings |   | $                      | 45,198 |   |             | $      | 29,404 |   |
| Total loan to total asset ratio                                                                                                                               |   |                   | 64.9   | %      |             |   | 63.1 | % |
| FHLBNY remaining borrowing capacity                                                                                                                           |   | $                      | 12,883 |   |             | $      | 7,032 |   |
| Available correspondent bank lines of credit                                                                                                                  |   | $                      | 15,000 |   |             | $      | 15,000 |   |
| Brokered certificate of deposit line of credit                                                                                                                |   | $                      | 92,000 |   |             | $      | 0 |   |
| Federal reserve bank discount window                                                                                                                          |   | $                      | 7,017  |   |             | $      | 8,435 |   |

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E

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M

T

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E

I

| Description of Matter                                                           |   | For    |      |   | Withheld/ Against |   |    | Abstentions |   |
|---------------------------------------------------------------------------------|--------|--------|-----------|--------|-------------------|--------|---------|-------------|--------|
|                                                                            |   |   |      |   |              |   |    |        |   |
| 1. To fix the number of directors of the Company at twelve (10)                 |   |   | 8,525,594 |   |              |   | 45,003  |        |   |   | 22,799 |   |
| 2. To elect the following four (4) nominees to the Company's Board of Directors |   |   |      |   |              |   |    |        |   |   |   |   |
|   Thomas J. Davis                                                     |   |   | 8,430,037 |   |              |   | 163,359 |        |   |   | 0 |   |
|   James L. Seward                                                     |   |   | 8,406,872 |   |              |   | 186,524 |        |   |   | 0 |   |
|   Geoffrey A. Smith                                                   |   |   | 8,422,642 |   |              |   | 170,754 |        |   |   | 0 |   |
|   Brian R. Wright                                                     |   |   | 8,386,429 |   |              |   | 206,967 |        |   |   | 0 |   |

E

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| THE WILBER CORPORATION                                                      |                   |   |   |
|-----------------------------------------------------------------------------|------------------------|--------|--------|
|                                                                        |                   |   |   |   |
|                                                                        |                   |   |   |   |
| By:                                                                         | /s/ Douglas C. Gulotty |   | Date:  | August 6, 2009 |
| Douglas C. Gulotty                                                          |                   |   |   |
| President and Chief Executive Officer                                       |                   |   |   |
|                                                                        |                   |   |   |   |
|                                                                        |                   |   |   |   |
|                                                                        |                   |   |   |   |
| By:                                                                         | /s/ Joseph E. Sutaris  |   | Date:  | August 6, 2009 |
| Joseph E. Sutaris                                                           |                   |   |   |
| Executive Vice President, Chief Financial Officer, Treasurer, and Secretary |

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| No.    | Document                                                                                   |
|--------|--------------------------------------------------------------------------------------------|
|   |                                                                                       |
| 31.1   | Certification of Chief Executive Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 |
|   |                                                                                       |
| 31.2   | Certification of Chief Financial Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 |
|   |                                                                                       |
| 32.1   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350                        |
|   |                                                                                       |
| 32.2   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350                        |
|   |                                                                                       |