UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

            |X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2005

                                       OR

            |_| TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934 [ NO FEE REQUIRED ]

                  For the Transition Period from ___________ to

                        Commission File Number: 001-31896

                             THE WILBER CORPORATION
                             ----------------------
           (Exact Name of the Registrant as Specified in its Charter)

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

                       245 Main Street, Oneonta, NY 13820
                       ----------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                  607 432-1700
                                  ------------
               (Registrant's Telephone Number Including Area Code)

           Securities Registered Pursuant to Section 12(b) of the Act:
                     Common Stock, $0.01 par value per share
                     ---------------------------------------
                                (Title of Class)

           Securities Registered Pursuant to Section 12(g) of the Act:
                                      None
                                      ----

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

YES |X|       NO |_|

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES |_|       NO |X|

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

YES |_|       NO |X|

As of November 8, 2005, there were issued and outstanding 11,163,092 shares of
the Registrant's Common Stock.

<PAGE>

                             THE WILBER CORPORATION
                                    FORM 10-Q
                                      INDEX

                         PART I - FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

ITEM 1:  Financial Statements (Unaudited)
------

         Consolidated Statements of Condition
         Consolidated Statements of Income
         Consolidated Statements of Changes in Stockholders' Equity and
             Comprehensive Income
         Consolidated Statements of Cash Flows
         Notes to Unaudited Consolidated 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 September 30, 2005
               and December 31, 2004
         D. Comparison of Results of Operations for the Three Months
               Ended September 30, 2005 and  2004
         E. Comparison of Results of Operations for the Nine
            Months Ended September 30, 2005 and 2004
         F. Liquidity
         G. Capital Resources and Dividends

ITEM 3:  Quantitative and Qualitative Disclosures about Market Risk
------

ITEM 4:  Controls and Procedures
------

                           PART II - OTHER INFORMATION

ITEM 1:  Legal Proceedings
------

ITEM 2:  Unregistered Sales of Equity Securities and Use of Proceeds
------
         A. Changes in the Rights of Holders of Our Registered Securities
         B. Issuances or Modifications of Other Classes of Securities
         C. Sale of Unregistered Securities
         D. Stock Repurchases

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


                                       i
<PAGE>

                           FORWARD-LOOKING STATEMENTS

When we use words or phrases like "will  probably  result,"  "we expect,"  "will
continue," "we anticipate,"  "estimate,"  "project,"  "should cause," or similar
expressions  in this  report or in any  press  releases,  public  announcements,
filings  with the  Securities  and  Exchange  Commission  (the  "SEC")  or other
disclosures,  we are making  "forward-looking  statements"  as  described in the
Private  Securities  Litigation  Reform  Act  of  1995.  In  addition,   certain
information  we provide,  such as analysis of the adequacy of our  allowance for
loan losses or an analysis of the interest  rate  sensitivity  of our assets and
liabilities, is always based on predictions of the future. From time to time, we
may also publish other  forward-looking  statements about anticipated  financial
performance, business prospects, and similar matters.

The Private Securities  Litigation Reform Act of 1995 provides a safe harbor for
forward-looking  statements. We want you to know that a variety of future events
and  uncertainties  could  cause our actual  results  and  experience  to differ
materially from what we anticipate when we make our forward-looking  statements.
Factors  that  could  cause  future  results  to vary  from  current  management
expectations  include,  but are not limited  to,  general  economic  conditions,
legislative and regulatory changes,  monetary and fiscal policies of the federal
government, changes in tax policies, tax rates and regulations of federal, state
and local tax authorities,  changes in consumer preferences, changes in interest
rates,  deposit  flows,  cost of funds,  demand  for loan  products,  demand for
financial  services,  competition,  changes in the quality or composition of the
Company's  loan and  investment  portfolios,  changes in accounting  principles,
policies  or  guidelines  and  other  economic,  competitive,  governmental  and
technological  factors affecting the Company's  operations,  markets,  products,
services and fees.

Please do not rely  unduly on any  forward-looking  statements,  which are valid
only as of the date made. Many factors,  including those described above,  could
affect  our  financial  performance  and  could  cause  our  actual  results  or
circumstances for future periods to differ materially from what we anticipate or
project.  We have no  obligation  to update any  forward-looking  statements  to
reflect  future  events  which  occur  after the  statements  are  made,  and we
specifically disclaim such obligation.


                                       ii
<PAGE>

ITEM 1: Financial Statements (Unaudited)
------

The Wilber Corporation
Consolidated Statements of Condition (Unaudited)

<TABLE>
<CAPTION>
                                                                      September 30,      December 31,
dollars in thousands except share and per share data                      2005               2004
-----------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>
Assets
Cash and Due from Banks                                                $    13,452       $    10,440
Time Deposits with Other Banks                                               8,299            10,099
Federal Funds Sold                                                           5,100                --
                                                                       -----------       -----------
   Total Cash and Cash Equivalents                                          26,851            20,539
Securities
   Trading, at Fair Value                                                    1,530             1,504
   Available-for-Sale, at Fair Value                                       242,214           249,415
    Held-to-Maturity, Fair Value of $53,146 at September 30, 2005
        and $59,324 at December 31, 2004                                    53,982            59,463
Loans                                                                      398,387           391,043
   Allowance for Loan Losses                                                (6,597)           (6,250)
                                                                       -----------       -----------
   Loans, Net                                                              391,790           384,793
                                                                       -----------       -----------
Premises and Equipment, Net                                                  6,364             5,860
Bank Owned Life Insurance                                                   15,388            14,975
Goodwill                                                                     4,518             2,682
Intangible Assets, Net                                                         743               377
Other Assets                                                                13,493            11,253
                                                                       -----------       -----------
   Total Assets                                                        $   756,873       $   750,861
                                                                       ===========       ===========

Liabilities and Stockholders' Equity
Deposits:
   Demand                                                              $    72,119       $    63,746
   Savings, NOW and Money Market Deposit Accounts                          251,614           241,151
   Certificates of Deposit (Over $100M)                                     62,682            76,346
   Certificates of Deposit (Under $100M)                                   181,664           165,194
   Other Time Deposits                                                      27,008            25,492
                                                                       -----------       -----------
   Total Deposits                                                          595,087           571,929
                                                                       -----------       -----------
Short-Term Borrowings                                                       28,687            37,559
Long-Term Borrowings                                                        57,051            65,379
Other Liabilities                                                            7,789             8,389
                                                                       -----------       -----------
   Total Liabilities                                                       688,614           683,256
                                                                       -----------       -----------

Stockholders' Equity:
   Common Stock, $.01 Par Value, 16,000,000 Shares Authorized,
     and 13,961,664 Shares Issued at September 30, 2005,
     and December 31, 2004                                                     140               140
   Additional Paid in Capital                                                4,224             4,224
   Retained Earnings                                                        86,367            83,402
   Accumulated Other Comprehensive (Loss) Income                            (1,527)              396
   Treasury Stock at Cost, 2,798,572 Shares at September 30, 2005
     and 2,767,072 Shares at December 31, 2004                             (20,945)          (20,557)
                                                                       -----------       -----------
   Total Stockholders' Equity                                               68,259            67,605
                                                                       -----------       -----------
   Total Liabilities and Stockholders' Equity                          $   756,873       $   750,861
                                                                       ===========       ===========
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       1
<PAGE>

The Wilber Corporation
Consolidated Statements of Income (Unaudited)

<TABLE>
<CAPTION>
                                                                         Three Months Ended               Nine Months Ended
                                                                             September 30,                   September 30,
dollars in thousands except share and per share data                     2005             2004             2005            2004
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>              <C>              <C>
Interest and Dividend Income
Interest and Fees on Loans                                          $      7,002     $      6,197     $     20,430     $     18,158
Interest and Dividends on Securities:
    U.S. Government and Agency Obligations                                 2,216            2,141            6,805            6,308
    State and Municipal Obligations                                          625              658            1,966            1,946
    Other                                                                     54               92              154              379
Interest on Federal Funds Sold and Time Deposits                             253              155              555              441
                                                                    ------------     ------------     ------------     ------------
    Total Interest and Dividend Income                                    10,150            9,243           29,910           27,232
                                                                    ------------     ------------     ------------     ------------

Interest Expense
Interest on Deposits:
    Savings, NOW and Money Market Deposit Accounts                           751              473            2,036            1,420
    Certificates of Deposit (Over $100M)                                     593              552            1,775            1,646
    Certificates of Deposit (Under $100M)                                  1,488            1,200            4,207            3,541
    Other Time                                                               193              131              567              389
Interest on Short-Term Borrowings                                            169               25              433               79
Interest on Long-Term Borrowings                                             541              791            1,785            2,303
                                                                    ------------     ------------     ------------     ------------
    Total Interest Expense                                                 3,735            3,172           10,803            9,378
                                                                    ------------     ------------     ------------     ------------
Net Interest Income                                                        6,415            6,071           19,107           17,854
Provisions for Loan Losses                                                   300              300              780              960
                                                                    ------------     ------------     ------------     ------------
Net Interest Income After Provision for Loan Losses                        6,115            5,771           18,327           16,894
                                                                    ------------     ------------     ------------     ------------

Non Interest Income
Trust Fees                                                                   404              337            1,095              978
Service Charges on Deposit Accounts                                          380              413            1,196            1,134
Commissions Income                                                            90              147              402              433
Investment Security Gains, Net                                                71              223              463              921
Increase in Cash Surrender Value of Bank Owned Life Insurance                141              145              413              426
Other Service Fees                                                           135               66              355              190
Other Income                                                                 158              151              320              281
                                                                    ------------     ------------     ------------     ------------
    Total Non Interest Income                                              1,379            1,482            4,244            4,363
                                                                    ------------     ------------     ------------     ------------

Non Interest Expense
Salaries and Employee Benefits                                             3,109            2,642            9,005            7,916
Net Occupancy Expense of Bank Premises                                       377              358            1,156            1,110
Furniture and Equipment Expense                                              191              196              552              552
Computer Service Fees                                                        160              260              474              464
Advertising and Marketing                                                    120              140              365              352
Professional Fees                                                            185               65              511              362
Other Miscellaneous Expenses                                                 670              668            2,147            1,999
                                                                    ------------     ------------     ------------     ------------
    Total Non Interest Expense                                             4,812            4,329           14,210           12,755
                                                                    ------------     ------------     ------------     ------------
Income Before Taxes                                                        2,682            2,924            8,361            8,502
Income Taxes                                                                (700)            (760)          (2,210)          (2,203)
                                                                    ------------     ------------     ------------     ------------
Net Income                                                          $      1,982     $      2,164     $      6,151     $      6,299
                                                                    ============     ============     ============     ============

Weighted Average Shares Outstanding                                   11,163,092       11,208,037       11,173,409       11,208,937
Basic Earnings Per Share                                            $       0.18     $       0.19     $       0.55     $       0.56
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       2
<PAGE>

The Wilber Corporation
Consolidated Statements of Changes in Stockholders' Equity and Comprehensive
Income (Unaudited)


<TABLE>
<CAPTION>
                                                                                            Accumulated
                                                                 Additional                    Other
                                                     Common       Paid in      Retained    Comprehensive   Treasury
dollars in thousands except share and per share      Stock        Capital      Earnings    Income (Loss)     Stock         Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>           <C>           <C>           <C>           <C>
Balance at December 31, 2003                       $     140     $   4,224     $  79,043     $   1,272     $ (20,375)    $  64,304
Comprehensive Income:
  Net Income                                              --            --         6,299            --            --         6,299
  Change in Net Unrealized Gain (Loss)
    on Securities, Net of Taxes                           --            --            --            16            --            16
                                                                                                                         ---------
Total Comprehensive Income                                                                                                   6,315
                                                                                                                         ---------
Cash Dividends ($.285 per share)                          --            --        (3,195)           --            --        (3,195)
Purchase of Treasury Stock (4,300 shares)                                                                        (52)          (52)
                                                   ---------     ---------     ---------     ---------     ---------     ---------
Balance at September 30, 2004                      $     140     $   4,224     $  82,147     $   1,288     $ (20,427)    $  67,372
                                                   ---------     ---------     ---------     ---------     ---------     ---------

Balance at December 31, 2004                       $     140     $   4,224     $  83,402     $     396     $ (20,557)    $  67,605
Comprehensive Income:
  Net Income                                              --            --         6,151            --            --         6,151
  Change in Net Unrealized Gain (Loss)
    on Securities, Net of Taxes                           --            --            --        (1,923)           --        (1,923)
                                                                                                                         ---------
Total Comprehensive Loss                                                                                                     4,228
                                                                                                                         ---------
Cash Dividends ($.285 per share)                          --            --        (3,186)           --            --        (3,186)
Purchase of Treasury Stock (31,500 shares)                                                                      (388)         (388)
                                                   ---------     ---------     ---------     ---------     ---------     ---------
Balance at September 30, 2005                      $     140     $   4,224     $  86,367     $  (1,527)    $ (20,945)    $  68,259
                                                   ---------     ---------     ---------     ---------     ---------     ---------
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       3
<PAGE>

The Wilber Corporation
Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
dollars in thousands                                                               2005             2004
-----------------------------------------------------------------------------------------------------------
<S>                                                                            <C>              <C>
Cash Flows from Operating Activities:
  Net Income                                                                   $     6,151      $     6,299
  Adjustments to Reconcile Net Income to Net Cash
  Used by Operating Activities:
    Provision for Loan Losses                                                          780              960
    Depreciation and Amortization                                                      829              747
    Net Amortization of Premiums and Accretion of Discounts on Investments             799            1,830
    Available-for-Sale Investment Security Gains, net                                 (369)            (875)
    Other Real Estate Losses                                                            --               21
    Increase in Cash Surrender Value of Bank Owned Life Insurance                     (413)            (426)
    Net Decrease (Increase) in Trading Securities                                       68             (309)
    Net Gains on Trading Securities                                                    (94)             (46)
    Increase in Other Assets                                                        (1,037)             (21)
    Decrease in Other Liabilities                                                     (658)            (631)
                                                                               -----------      -----------
    Net Cash Provided by Operating Activities                                        6,056            7,549
                                                                               -----------      -----------

Cash Flows from Investing Activities:
  Net Cash Acquired from Acquisition of a Branch                                    22,521               --
  Proceeds from Maturities of Held-to-Maturity Investment Securities                 7,152           17,491
  Purchases of Held-to-Maturity Investment Securities                               (1,749)         (35,286)
  Proceeds from Maturities of Available-for-Sale Investment Securities              51,254          122,609
  Proceeds from Sales of Available-for-Sale Investment Securities                    9,945           12,986
  Purchases of Available-for-Sale Investment Securities                            (57,500)        (107,469)
  Net Increase in Loans                                                               (142)         (20,935)
  Proceeds from Sale of Loans                                                           --              294
  Purchase of Premises and Equipment, Net of Disposals                                (642)            (826)
  Proceeds from Sale of Other Real Estate                                               --               58
                                                                               -----------      -----------
    Net Cash Provided by (Used by) Investing Activities                             30,839          (11,078)
                                                                               -----------      -----------

Cash Flows from Financing Activities:
  Net Decrease in Demand Deposits, Savings, NOW,
    Money Market and Other Time Deposits                                              (454)          (5,439)
  Net (Decrease) Increase in Certificates of Deposit                                (9,355)           3,534
  Net Decrease in Short-Term Borrowings                                             (8,872)          (3,997)
  Increase in Long-Term Borrowings                                                  16,900           15,000
  Repayment of Long-Term Borrowings                                                (25,228)          (2,634)
  Purchase of Treasury Stock                                                          (388)             (52)
  Cash Dividends Paid                                                               (3,186)          (3,195)
                                                                               -----------      -----------
    Net Cash (Used by) Provided by Financing Activities                            (30,583)           3,217
                                                                               -----------      -----------
      Net Increase (Decrease) in Cash and Cash Equivalents                           6,312             (312)
Cash and Cash Equivalents at Beginning of Period                                    20,539           19,890
                                                                               -----------      -----------
  Cash and Cash Equivalents at End of Period                                   $    26,851      $    19,578
                                                                               ===========      ===========

Supplemental Disclosures of Cash Flow Information:
  Cash Paid during Period for:
    Interest                                                                   $    10,834      $     9,383
    Income Taxes                                                               $     3,085      $     2,874
  Non Cash Investing Activities:
    Change in Unrealized (Loss) Gain on Securities                             $    (3,150)     $        25
    Transfer of Loans to Other Real Estate                                     $        --      $        94
  Fair Value of Tangible Assets Acquired                                       $     8,119      $        --
  Fair Value of Liabilities Assumed                                            $    32,967      $        --
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       4
<PAGE>

Note 1. Basis of Presentation

The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of The Wilber Corporation (the "Company"),  its wholly owned subsidiary
Wilber National Bank (the "Bank") and the Bank's wholly owned subsidiaries.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation. The accompanying unaudited consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information  and footnotes  required by GAAP for complete
financial statements.

The  preparation  of  financial  statements  in  conformity  with GAAP  required
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements,  and the reported amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.  In the opinion of management,  the unaudited  consolidated financial
statements  include all necessary  adjustments,  consisting of normal  recurring
accruals,  necessary  for a fair  presentation  for the periods  presented.  The
results for the periods  presented are not necessarily  indicative of results to
be expected for the entire fiscal year or any other interim period.

The data in the  consolidated  balance  sheet for  December 31, 2004 was derived
from the Company's  2004 Annual  Report on Form 10-K.  The Annual Report on Form
10-K includes the Company's audited  consolidated  statements of condition as of
December  31,  2004  and  2003,  and  the  consolidated  statements  of  income,
consolidated statements of cash flows,  consolidated statements of stockholders'
equity and  comprehensive  income for each of the years in the three-year period
ended December 31, 2004. That data, along with the interim  unaudited  financial
information  presented  in  the  consolidated  statements  of  condition  as  of
September  30,  2005  and the  statements  of  income  for the  three-month  and
nine-month  periods  ending  September  30, 2005,  the  statements of changes in
stockholders' equity and comprehensive income and cash flows for the nine months
ended September 30, 2005 and 2004,  should be read in conjunction  with the 2004
consolidated financial statements, including the notes thereto.

Amounts in prior period consolidated  financial statements are reclassified when
necessary to conform to the current period's presentation.

Note 2. Earnings Per Share

Basic earnings per share (EPS) are  calculated by dividing net income  available
to  common  shareholders  by  the  weighted  average  number  of  common  shares
outstanding  during the period.  Entities with complex  capital  structures must
also present diluted EPS, which reflects the potential dilution that could occur
if  securities  or other  contracts  to issue  common  stock were  exercised  or
converted  into  common  shares.  The  Company  does not have a complex  capital
structure and, accordingly, has presented only basic EPS.

Note 3. Guarantees

Standby letters of credit written are conditional commitments issued by the Bank
to guarantee the  performance of a customer to a third party.  Those  guarantees
are  primarily  issued to support  public and  private  borrowing  arrangements,
including bond financing and similar  transactions.  The credit risk involved in
issuing  letters of credit is essentially the same as that involved in extending
loan  facilities to customers.  Since some of the letters of credit are expected
to expire  without  being  drawn  upon,  the  total  commitment  amounts  do not
necessarily represent future cash requirements.

The  estimated  fair value of the Company's  stand-by  letters of credit was $11
thousand  and  $22  thousand  at  September  30,  2005  and  December  31,  2004
respectively.  The estimated  fair value of stand-by  letters of credit at their
inception  is equal to the fee that is charged to the  customer by the  Company.
Generally,  the Company's stand-by letters of credit have a term of one year. In
determining  the fair  values  disclosed  above,  the  fees  were  reduced  on a
straight-line  basis from the inception of each stand-by letter of credit to the
respective dates above.


                                       5
<PAGE>

Note 4. Employee Benefit Plans

The Company, through its bank subsidiary, has a non-contributory defined benefit
pension  plan  covering  employees  who  have  attained  the age of 21 and  have
completed one year of service.  The Company's  funding practice is to contribute
at least the minimum  amount  annually  to meet  minimum  funding  requirements.
Contributions  are  intended  to provide  not only for  benefits  attributed  to
service to date, but for those expected to be earned in the future.  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 Cost (Benefit),  based on a September 30,
2004 and 2003 measurement date, respectively, are:

<TABLE>
<CAPTION>
                                           Three Months Ended              Nine Months Ended
                                              September 30,                  September 30,
dollars in thousands                        2005          2004            2005           2004
------------------------------------------------------------------     ------------------------
<S>                                      <C>            <C>            <C>            <C>
      Service Cost                       $     171      $     161      $     510      $     484
      Interest Cost                            231            210            693            630
      Expected Return on Plan Assets          (312)          (286)          (933)          (857)
      Net Amortization                          54             50            159            150
                                         ---------      ---------      ---------      ---------
                                         $     144      $     135      $     429      $     407
                                         =========      =========      =========      =========
</TABLE>

Note 5. Other Comprehensive (Loss) Income

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

<TABLE>
<CAPTION>
                                                                              Three Months Ended            Nine Months Ended
                                                                                 September 30,                 September 30,
dollars in thousands                                                          2005           2004           2005          2004
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>            <C>            <C>
Unrealized Holding (Losses) Gains Arising During the Period Net of Tax
  (Pre-tax Amount of ($2,045), $4,778, ($2,781) and $900)                  $  (1,247)     $   2,917      $  (1,700)     $     550
Reclassification Adjustment for (Gains) Realized in Net Income
  During the Period, Net of Tax (Pre-tax Amount of ($1), ($224),
  ($369) and ($875))                                                              (1)          (136)          (223)          (534)
                                                                           ---------      ---------      ---------      ---------
Other Comprehensive (Loss) Income, Net of Tax of ($796), $1,773
  ($1,227) and $9                                                          $  (1,248)     $   2,781      $  (1,923)     $      16
                                                                           ---------      ---------      ---------      ---------
</TABLE>

Note 6. Goodwill and Intangible Assets

In February 2005 the Company acquired two branches,  which were accounted for as
a business  combination  in accordance  with  Statement on  Accounting  Standard
(SFAS) No. 141, "Business Combinations".

The following is a summary of the  transaction  and the related assets  acquired
and liabilities assumed:

dollars in thousands
--------------------------------------------------------------------------------
Deposits Assumed                                                       $  32,967
  Less Tangible Assets Acquired:
       Loans                                                               7,635
       Property Plant and Equipment                                          440
       Other Assets                                                           44
  Less Goodwill                                                            1,835
  Less Core Deposit Intangible                                               492
                                                                       ---------
          Net Cash Acquired from Acquisition                           $  22,521
                                                                       =========


                                       6
<PAGE>

Note 7. Recent Accounting Pronouncements

In May 2005,  the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
154,  "Accounting  Changes  and  Error  Corrections."  This  statement  replaces
Accounting Principles Board (APB) Opinion No. 20, "Accounting Changes," and FASB
Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements."
It also changes the  requirements for the accounting for and reporting of change
in an accounting  principle.  This Statement applies to all voluntary changes in
accounting  principle  and to changes  required by  accounting  principle.  This
statement  requires  retrospective   application  to  prior  periods'  financial
statements of changes in accounting  principle,  unless it is  impracticable  to
determine  period-specific  effects  of and  accounting  change  on one or  more
individual prior periods presented.  The effective date of this statement is for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after  December  15, 2005.  Accordingly,  this  statement  is effective  for the
Company as of January 1, 2006.  Adoption of this statement  could have an impact
on future financial  statements if there are future voluntary accounting changes
and / or correction of errors.


                                       7
<PAGE>

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

A. General

The objectives of this quarterly  report are to provide:  (i) an overview of the
material  changes in our financial  condition,  including  liquidity and capital
resources,  at  September  30, 2005,  as compared to December  31, 2004;  (ii) a
comparison  of our  results  of  operations  for the  three-month  period  ended
September 30, 2005, as compared to the  three-month  period ended  September 30,
2004;  and (iii) a comparison  on our results of operations  for the  nine-month
period ended  September  30, 2005,  as compared to the  nine-month  period ended
September 30, 2004.

Our financial  performance is heavily dependent upon net interest income,  which
is the difference between the interest income earned on our loans and investment
securities  less the interest  paid on our deposits and  borrowings.  Results of
operations  are also  affected  by the  provision  for loan  losses,  investment
securities gains (losses), service charges and penalty fees on deposit accounts,
fees collected for trust and investment  services,  insurance commission income,
the increase in the cash  surrender  value on bank owned life  insurance,  other
service fees and other income.  Our non-interest  expenses  primarily consist of
employee  salaries  and  benefits,  net  occupancy  expense  on  bank  premises,
furniture and equipment  expense,  advertising and marketing  expense,  computer
service fees,  professional fees and other  miscellaneous  expenses.  Results of
operations are also influenced by general  economic and  competitive  conditions
(particularly  changes  in  interest  rates),  government  policies,  changes in
Federal or State tax law, and the actions of our regulatory authorities.

Critical  Accounting  Policies.  Our management  considers the accounting policy
relating to the  allowance  for loan losses to be a critical  accounting  policy
given the uncertainty in evaluating the level of the allowance required to cover
credit losses  inherent in the loan portfolio and the material  effect that such
judgments can have on the results of operations.  While  management's  September
30,  2005  evaluation  of the  allowance  for  loan  losses  indicated  that the
allowance was adequate, under adversely different conditions or assumptions, the
allowance  would need to be  increased.  For  example,  if loan loss  experience
significantly   worsened  or  if  current  economic   conditions   significantly
deteriorated,  additional  provisions  for  loan  losses  would be  required  to
increase the allowance.  In addition,  the assumptions and estimates used in our
internal  reviews of  non-performing  loans and  potential  problem loans have a
significant  impact on the overall analysis of the adequacy of the allowance for
loan losses.  While we have concluded that the September 30, 2005  evaluation of
collateral  values  was  reasonable  under  the  circumstances,   if  collateral
valuations were significantly  lowered, our allowance for loan losses would also
require additional provisions for loan losses.

B. Financial Condition and Performance Overview

During the nine-month  period ended  September 30, 2005,  our overall  financial
condition changed modestly.  Specifically, our total assets increased by 0.8% or
$6.012 million,  from $750.861  million at December 31, 2004 to $756.873 million
at September 30, 2005. The slight net increase in total assets was substantially
caused by the  acquisition of two branch offices during the first quarter.  More
specifically,  on  February  4,  2005,  we  assumed  $32.967  million of deposit
liabilities  and acquired  $7.635 million of loans from HSBC Bank USA,  National
Association ("HSBC") for their Walton, New York and Sidney, New York offices. As
a result of the  acquisition,  we recorded $2.327 million of intangible  assets,
consisting  of $1.835  million of goodwill  and $492  thousand  of core  deposit
intangible.  We also acquired the Walton office  building for $425 thousand from
HSBC. Due to our already existing presence in Sidney,  New York, HSBC closed its
Sidney office simultaneously with our acquisition.

The net proceeds  obtained  from the HSBC branch  acquisition  totaling  $22.521
million were primarily used to reduce short-term and long-term borrowings during
the first  quarter.  Between  December  31,  2004 and  September  30, 2005 total
deposits  increased  $23.158 million from $571.929 million to $595.087  million,
while  total  borrowings  (both  short-term  and  long-term)  decreased  $17.200
million,  from  $102.938  million at  December  31,  2004 to $85.738  million at
September 30, 2005.

Total loans  increased  $7.344  million or 1.9%  between  December  31, 2004 and
September 30, 2005.  Total loans  outstanding  were $391.043 million at December
31,  2004,  as compared to $398.387  million at September  30, 2005.  Due to the
general lack of economic growth in our primary markets,  the net growth in loans
between the periods was primarily due to the HSBC branch acquisition.

The overall credit quality of the loan portfolio  deteriorated  since the end of
2004. Total  non-performing loans and delinquent loans that were 30 or more days
past due  (excluding  loans  placed on  non-accrual  status)  increased  between
December 31, 2004 and September  30, 2005.  Conversely,  the  potential  problem
loans, which are loans that are performing, but where information about possible
credit problems exists,  decreased slightly between the


                                       8
<PAGE>

periods. Similarly, the allowance for loan losses increased between periods from
$6.250 million or 1.60% of total loans at December 31, 2004 to $6.597 million or
1.66% of total loans at September 30, 2005.

Net income for the third  quarter of 2005 was $1.982  million,  as  compared  to
$2.164  million for the third quarter of 2004, a $182 thousand or 8.4% decrease.
A significant improvement in net interest income between the comparable quarters
was offset by a significant increase in non-interest expense.  Specifically, net
interest  income  increased  by  $344  thousand  between  the  quarters,   while
non-interest  expense  increased by $483 thousand.  Net interest income improved
due to a  significant  increase in the prime  lending  rate, an index to which a
significant  portion of our loan  portfolio was tied, as well as, an increase in
earning  assets.  The increase in non interest  expense was primarily  caused by
significant  increases in (i) salaries and benefits expense due to our expansion
and acquisition activities,  increases in health insurance costs, overtime wages
paid due to our core computer system conversion, general wage increases, and new
incentive  plans,  and (ii)  professional  fees due to our  Sarbanes - Oxley Act
compliance efforts.

Our net income and earnings  per share  decreased  slightly  for the  nine-month
period ended  September  30, 2005,  as compared to the  nine-month  period ended
September 30, 2004.  Earnings per share and net income for the nine-month period
ended  September  30,  2005 were  $0.55 and  $6.151,  million  respectively,  as
compared to $0.56 and $6.299 million for the nine-month  period ended  September
30,  2004,  respectively.  Similar to the  comparable  three-month  period ended
September 30, 2005, a significant  improvement in net interest income was offset
by a significant increase in non-interest expense. Net interest income increased
by $1.253 million between  comparable  nine-month  periods,  while  non-interest
expense  increased by $1.455 million.  Additional costs related to our expansion
and acquisition  activities,  computer  system  upgrades and software  licensing
costs, and professional fees due to our Sarbanes - Oxley Act compliance  efforts
have caused a significant increase in non-interest expense.

The  following  tables  set forth in this  quarterly  financial  report  provide
readers with supplementary  information,  which is not directly  obtainable from
the unaudited financial  statements provided in PART I, Item 1 of this quarterly
report.  These  tables  are  to be  read  in  conjunction  with  our  management
discussion and analysis narrative regarding the financial condition,  results of
operations, liquidity and capital resources contained within this report.

Asset and Yield Summary Table:

The following  tables set forth the total dollar amount and resultant  yields of
interest income from average earning assets,  as well as the interest expense on
average interest bearing  liabilities for the periods stated.  No tax equivalent
adjustments were made. Average balances are daily averages.


                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                               For the Three Months Ended September 30,
                                                           -------------------------------------------------------------------------
                                                                            2005                                   2004
                                                           -------------------------------------------------------------------------
                                                             Average      Interest                 Average      Interest
                                                           Outstanding     Earned                Outstanding     Earned      Yield /
                                                             Balance       /Paid   Yield / Rate    Balance       /Paid        Rate
                                                           -------------------------------------------------------------------------
                                                                                      (Dollars in thousands)
<S>                                                         <C>           <C>           <C>       <C>           <C>           <C>
Earning Assets:
   Federal funds sold                                       $ 15,311      $    132      3.42%     $  7,462      $     28      1.49%
   Interest bearing deposits                                   9,766           121      4.92%        7,520           127      6.72%
   Securities(1)                                             291,091         2,895      3.95%      302,601         2,891      3.80%
   Loans, Net(2)                                             391,676         7,002      7.09%      371,007         6,197      6.64%
                                                            ----------------------                ----------------------
              Total earning assets                           707,844        10,150      5.69%      688,590         9,243      5.34%
   Non-earning assets                                         48,991                                44,875
                                                            --------                              --------
                 Total assets                               $756,835                              $733,465
                                                            ========                              ========
Liabilities:
   Savings accounts                                         $ 99,622      $    169      0.67%     $ 97,239      $    146      0.60%
   Money market accounts                                      44,428           307      2.74%       26,959            86      1.27%
   NOW accounts                                              109,962           275      0.99%      120,582           241      0.80%
   Time accounts                                             275,676         2,275      3.27%      272,675         1,883      2.75%
   Borrowings                                                 80,700           709      3.49%       80,291           816      4.04%
                                                            ----------------------                ----------------------
           Total interest bearing liabilities                610,388         3,735      2.43%      597,746         3,172      2.11%

   Non-interest bearing deposits                              73,060                                64,408
   Other non-interest bearing liabilities                      5,239                                 6,910
                                                            --------                              --------
   Total liabilities                                         688,687                               669,064
   Stockholders' equity                                       68,148                                64,401
                                                            --------                              --------
        Total liabilities and stockholders' equity          $756,835                              $733,465
                                                            ========                              ========
   Net interest income                                                    $  6,415                              $  6,071
                                                                          ========                              ========

   Net interest rate spread (3)                                                         3.26%                                 3.23%
                                                                                        ====                                  ====

   Net earning assets                                       $ 97,456                             $  90,844
                                                            ========                             =========

   Net interest margin (4)                                                              3.60%                                 3.51%
                                                                                        ====                                  ====

Ratio of earning assets to interest bearing liabilities       115.97%                               115.20%
                                                            ========                              ========
</TABLE>

(1) Securities 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 net loans equal average total loans less the average allowance for
loan losses. However, for purposes of these computations, non-accrual loans are
included in average loan balances outstanding.

(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.


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                            For the Nine Months Ended September 30,
                                                         -------------------------------------------------------------------------
                                                                            2005                                  2004
                                                         -------------------------------------------------------------------------
                                                           Average        Interest                Average       Interest
                                                         Outstanding       Earned      Yield /  Outstanding      Earned    Yield /
                                                           Balance         /Paid        Rate      Balance        /Paid       Rate
                                                         -------------------------------------------------------------------------
                                                                                        (Dollars in thousands)
<S>                                                        <C>           <C>            <C>       <C>           <C>          <C>
Earning Assets:
  Federal funds sold                                       $  8,428      $    199       3.16%     $  7,065      $     61     1.15%
  Interest bearing deposits                                   9,792           356       4.86%        7,513           380     6.76%
  Securities(1)                                             298,770         8,925       3.99%      306,626         8,633     3.76%
  Loans, Net(2)                                             391,975        20,430       6.97%      364,580        18,158     6.65%
                                                           ----------------------                 ----------------------
            Total earning assets                            708,965        29,910       5.64%      685,784        27,232     5.30%

  Non-earning assets                                         48,149                                 44,959
                                                           --------                               --------
                Total assets                               $757,114                               $730,743
                                                           ========                               ========

Liabilities:
  Savings accounts                                         $ 99,005      $    482       0.65%     $ 95,163      $    457     0.64%
  Money market accounts                                      39,245           700       2.38%       28,298           202     0.95%
  NOW accounts                                              116,632           854       0.98%      123,489           761     0.82%
  Time accounts                                             277,117         6,550       3.16%      272,976         5,576     2.73%
  Borrowings                                                 83,936         2,217       3.53%       78,576         2,382     4.05%
                                                           ----------------------                 ----------------------
          Total interest bearing liabilities                615,935        10,803       2.34%      598,502         9,378     2.09%
  Non-interest bearing deposits                              67,010                                 60,723
  Other non-interest bearing liabilities                      6,050                                  6,321
                                                           --------                               --------
  Total liabilities                                         688,995                                665,546
  Stockholders' equity                                       68,119                                 65,197
                                                           --------                               --------
      Total liabilities and stockholders' equity           $757,114                               $730,743
                                                           ========                               ========

  Net interest income                                                    $ 19,107                                $17,854
                                                                         ========                                =======

  Net interest rate spread(3)                                                           3.30%                                3.21%
                                                                                        ====                                 ====
  Net earning assets                                       $ 93,030                               $ 87,282
                                                           ========                               ========

  Net interest margin(4)                                                                3.60%                                3.48%
                                                                                        ====                                 ====

Ratio of earning assets to interest bearing liabilities      115.10%                                114.58%
                                                           ========                               ========
</TABLE>

(1) Securities 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 net loans equal average total loans less the average allowance for
loan losses. However, for purposes of these computations, non-accrual loans are
included in average loan balances outstanding.

(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.


                                       11
<PAGE>

Table of Non-performing Assets:

The following table sets forth information regarding non-performing loans and
assets as of the periods indicated.

<TABLE>
<CAPTION>
                                                  ----------------------------------
                                                  At September 30,   At December 31,
              Dollars in Thousands                      2005              2004
                                                  ----------------------------------
<S>                                               <C>                  <C>
      Loans in Non-Accrual Status:
         Residential real estate(1)               $        297         $     141
         Commercial real estate                          2,527             2,168
         Commercial(2)                                     555               243
         Consumer                                            3                 9
                                                  ----------------------------------
            Total non-accruing loans                     3,382             2,561
      Loans Contractually Past Due 90 Days or
      More and Still Accruing Interest                     276               190
      Troubled Debt Restructured Loans                     871                --
                                                  ----------------------------------
            Total non-performing loans                   4,529             2,751
      Other real estate owned                               79                78
                                                  ----------------------------------
      Total non-performing assets                 $      4,608         $   2,829
                                                  ==================================
      Total non-performing assets as a
      percentage of total assets                          0.61%             0.38%
                                                  ==================================
      Total non-performing loans as a
      percentage of total loans                           1.14%             0.70%
                                                  ==================================
</TABLE>

      (1) Includes home equity loans

      (2) Includes agricultural loans and obligations (other than securities and
      leases) of states and political subdivisions in the United States


                                       12
<PAGE>

Analysis of the Allowance for Loan Losses Table:

The following table sets forth changes in the allowance for loan losses for the
periods indicated:

<TABLE>
<CAPTION>
                                                                  Three months ended              Nine months ended
                                                                      September 30,                 September 30,
                                                                ------------------------      ------------------------
                                                                   2005           2004           2005           2004
                                                                ------------------------      ------------------------
                                                                 (Dollars in thousands)        (Dollars in thousands)
<S>                                                             <C>            <C>            <C>            <C>
      Balance at beginning of period                            $   6,368      $   6,113      $   6,250      $   5,757

      Residential real estate (1)                                      --             20             18            133
      Commercial real estate                                           --             --             --             43
      Commercial (2)                                                   --             64             28            111
      Consumer                                                        128            153            597            390
                                                                ------------------------      ------------------------
        Total charge offs                                             128            237            643            677
                                                                ------------------------      ------------------------

      Recoveries:
      Residential real estate (1)                                       2              1             38             20
      Commercial real estate                                           --             --             --             --
      Commercial (2)                                                    1              5             29             31
      Consumer                                                         54             36            143            127
                                                                ------------------------      ------------------------
        Total recoveries                                               57             42            210            178
                                                                ------------------------      ------------------------

      Net charge-offs                                                  71            195            433            499
      Provision for loan losses                                       300            300            780            960
                                                                ------------------------      ------------------------
      Balance at end of period                                  $   6,597      $   6,218      $   6,597      $   6,218
                                                                ========================      ========================

      Ratio of net charge-offs during the period to average
      loans outstanding during the period (annualized)               0.07%          0.21%          0.15%          0.18%
                                                                ========================      ========================

      Allowance for loan losses to total loans                       1.66%          1.63%          1.66%          1.63%
                                                                ========================      ========================

      Allowance for loan losses to non-performing loans               146%           448%           146%           448%
                                                                ========================      ========================
</TABLE>

      (1) Includes home equity loans

      (2) Includes agricultural loans and obligations (other than securities and
      leases) of states and political subdivisions in the United States


                                       13
<PAGE>

C. Comparison of Financial Condition at September 30, 2005 and December 31, 2004

Overview. Our financial condition changed modestly between December 31, 2004 and
September  30,  2005.  During the first  three  quarters of 2005,  total  assets
increased by less than 1% in spite of acquiring two branch  offices in the first
quarter.  Specifically,  total assets  increased by $6.012 million or 0.8%, from
$750.861 million at December 31, 2004 to $756.873 million at September 30, 2005.
We  experienced  only slight growth in our total assets because the net proceeds
obtained in the HSBC branch  acquisition were primarily used to reduce short and
long-term  borrowings rather than acquire additional earning assets.  During the
fourth  quarter of 2004, we borrowed  $15.000  million from a large money center
bank  to  purchase  investment  securities  in  anticipation  of  replacing  the
borrowing  with  deposit  liabilities  assumed  in the  HSBC  transaction.  Upon
assuming  the branch  deposits  from HSBC during the first  quarter of 2005,  we
repaid the $15.000  million  short-term  borrowing  and, in effect,  substituted
deposit liabilities for short-term borrowings.

Between  December 31, 2004 and September 30, 2005 the  composition of our assets
changed   slightly.    Total   investment    securities    (including   trading,
available-for-sale  and held-to-maturity)  decreased by $12.656 million or 4.1%,
while  total cash and cash  equivalents  increased  by $6.312  million or 30.7%.
Total  loans  increased  by $7.344  million or 1.9%  between the  periods,  from
$391.043  million at December  31,  2004,  as  compared  to $398.387  million at
September  30, 2005.  The increase in total loans was  primarily due to the HSBC
branch acquisition.

Asset Quality.  We use several  measures to determine the overall credit quality
of our loan portfolio. These include the level of delinquent loans, the level of
non-performing loans, the level of potential problem loans and the dollar amount
and type of loan  charge-offs  we  experience.  Between  December  31,  2004 and
September  30, 2005,  the credit  quality of our loan  portfolio  declined.  The
levels of  delinquent  loans and  non-performing  loans  increased  between  the
periods, while potential problem loans and net charge-offs decreased.

Total non-performing loans,  including non-accruing loans, loans 90 days or more
past due and still  accruing  interest and  troubled  debt  restructured  loans,
increased  $1.778  million,  from $2.751  million at December 31, 2004 to $4.529
million at September 30, 2005. The significant  increase in non-performing loans
was  primarily  due to (i) one borrower  with four loans  totaling $718 thousand
being placed into  non-accrual  status  during the first  quarter,  and (ii) the
restructuring of a troubled loan during the third quarter with a balance of $871
thousand.  The four loans totaling $718 thousand  placed on  non-accrual  status
during the first  quarter were  identified  as potential  problem loans prior to
being placed into non-accrual  status.  For this reason,  we allocated  adequate
reserves  in our  allowance  for loan  losses for these  loans prior to reaching
non-accrual status.

Potential  problem  loans are loans which are  currently  performing,  but where
information  about  possible  credit  problems  exists.  The amount of potential
problem  loans  may  vary  significantly  from  quarter  to  quarter  due to our
significant  volume of commercial loans with balances in excess of $1.0 million.
Through the nine-month period ended September 30, 2005,  potential problem loans
decreased  $610  thousand or 7.0%,  from $8.662  million at December 31, 2004 to
$8.052 million at September 30, 2005.

At September  30, 2005,  loans that were 30 or more days  delinquent  (excluding
non-performing  loans) totaled $6.954 million or 1.75% of loans outstanding.  By
comparison,  at  December  31,  2004 we had  $2.267  million  or  0.58% of loans
outstanding in this same category,  a net increase of $4.687 million between the
periods. A significant portion of the increase in delinquent loans was caused by
a disruption  in our billing and  collection  practices  due to a core  computer
system  conversion we completed in the third quarter.  Management  believes that
upon resumption of our normal billing and collection practices during the fourth
quarter, the level of delinquent loans will decrease.

Net loan charge-offs for the nine-month period ended September 30, 2005, totaled
$433 thousand,  as compared to $499 thousand for the same  nine-month  period in
2004, a $66 thousand or 13.2% decrease. An increase in consumer loan charge-offs
between  the  periods  was  offset by  decreases  in  residential  real  estate,
commercial real estate and commercial loan charge-offs.

The allowance for loan losses increased from $6.250 million at December 31, 2004
to $6.597  million at September  30, 2005.  The  allowance  for loan losses as a
percentage  of total  loans  outstanding  was  fairly  stable  at 1.60% of loans
outstanding  at December 31, 2004,  as compared to 1.66% at September  30, 2005.
Our  management  and Board of Directors  deemed the allowance for loan losses as
adequate at September 30, 2005.

The credit  quality of the  investment  securities  portfolios  remained  strong
during the first three  quarters of 2005.  At September  30, 2005,  99.8% of the
investment  securities  held in the Company's  bond  portfolio were rated "A" or
better by Moody's credit rating service; 95.3% were rated AAA. By comparison, at
December 31, 2004, 99.8% were rated "A" or better and 94.1% were rated AAA.


                                       14
<PAGE>

D.  Comparison of Results of Operations for the Three Months Ended September 30,
2005 and 2004

Overview.  During the third  quarter of 2005,  our net income and  earnings  per
share were $1.982  million and $0.18  respectively.  This was a $182 thousand or
8.4%  decrease  in net  income and a $0.01  decrease  in  earnings  per share as
compared to the third quarter of 2004,  during which we earned $2.164 million in
net income and $0.19 per share.  Significant improvements in net interest income
between the quarters were offset by a modest decrease in non interest income and
a significant increase in non-interest  expense. The significant  improvement in
net interest  income  between the comparable  periods  totaling $344 thousand or
5.7% was  largely  driven by  increased  loan  volumes and yields (due to higher
interest rates),  as well as an increase in investment  securities yields due to
slower prepayments on mortgage-backed  securities.  The significant  increase in
non-interest  expense  between  comparable  periods  totaling $483 thousand,  or
11.2%,  was  primarily  driven by increases  in salaries  and employee  benefits
expense and professional fees.

The decrease in net income  resulted in a decrease in both our return on average
assets and return on average stockholders' equity. More specifically, during the
third quarter of 2005 our return on average  assets and return on average equity
were 1.04% and 11.54%, respectively,  as compared to 1.17% and 13.16% during the
third quarter of 2004.

Net Interest  Income.  Net  interest  income is our most  significant  source of
revenue.  During  the third  quarter  of 2005 and  third  quarter  of 2004,  net
interest  income  comprised 82% and 80% of net revenue (net interest income plus
non-interest  income),  respectively.  In the three-month period ended September
30,  2005,  net  interest  income was $6.415  million.  By  comparison,  for the
three-month  period ended  September 30, 2004 our net interest income was $6.071
million.  The $344 thousand or 5.7%  improvement in net interest  income between
the periods was driven by a $907 thousand increase in interest income on earning
assets  offset by a $563  thousand  increase  in  interest  expense on  interest
bearing  liabilities.  The primary  contributing  factors,  which  caused  these
changes are explained below.

During the second half of 2004 and  throughout the first three quarters of 2005,
the Federal Open Market Committee raised the target federal funds rate 275 basis
points  (eleven  increases of 25 basis  points),  from 1.00% on June 30, 2004 to
3.75% on September 20, 2005.  These actions  prompted  eleven  corresponding  25
basis point increases in the prime lending rate, an index to which a significant
portion of our  variable  rate loan  portfolio  was tied.  These  interest  rate
increases,  along with a $20.669  million  or 5.8%  increase  in  average  loans
outstanding, increased the interest and fees on loans from $6.197 million in the
three-month period ended September 30, 2004 to $7.002 million in the three-month
period ended  September  30, 2005.  This  represents  an $805  thousand or 13.0%
increase between the periods.

In addition,  between  comparable periods we increased the average volume of our
federal funds sold to improve our  liquidity  position.  The average  volume and
average rate on federal funds sold during the third quarter of 2005 were $15.311
million and 3.42%, respectively,  as compared to $7.462 million and 1.49% during
the third  quarter of 2004.  These  increases  contributed  an  additional  $104
thousand of interest income period over period.

The  increase  in both the yield on  earning  assets  and the  volume of earning
assets that drove the  improvement  in  interest  income of $907  thousand  were
partially  offset  by higher  funding  costs.  On a  comparable  quarter  basis,
interest expense increased $563 thousand or 17.7%. As short-term  interest rates
increased  during the last two quarters of 2004 and the first three  quarters of
2005, we raised the rates of interest paid on interest-bearing deposit accounts,
particularly savings, money market, NOW and time accounts.

Rate and Volume  Analysis:  The purpose of a rate volume analysis is to identify
the dollar  amount of change in net  interest  income due to changes in interest
rates  versus  changes  in the volume of earning  assets  and  interest  bearing
liabilities.

Rate and Volume Table:

The following  table presents  changes in interest  income and interest  expense
attributable to changes in volume (change in average balance multiplied by prior
year rate),  changes in rate (change in rate  multiplied  by prior year volume),
and the net change in net interest  income.  The net change  attributable to the
combined  impact of volume and rate has been  allocated to each in proportion to
the  absolute  dollar  amount of  change.  The table has not been  adjusted  for
tax-exempt interest.


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                       For the Three Months Ended                  For the Nine Months Ended
                                                              September 30,                                September 30,
                                               ---------------------------------------      ---------------------------------------
                                                             2005 vs. 2004                                 2005 vs. 2004
                                               ---------------------------------------      ---------------------------------------
                                                 Rate            Volume       Total            Rate         Volume          Total
                                               ---------------------------------------      ---------------------------------------
                                                             (In thousands)                              (In thousands)
<S>                                            <C>            <C>            <C>            <C>            <C>            <C>
      Earning assets:
      Federal Funds Sold                       $      58      $      46      $     104      $     124      $      14      $     138
      Interest Bearing Deposits                      (39)            33             (6)          (122)            98            (24)
      Securities                                     116           (112)             4            517           (225)           292
      Loans                                          449            356            805            868          1,404          2,272
                                               ---------------------------------------      ---------------------------------------
      Total earning assets                           584            323            907          1,387          1,291          2,678
                                               ---------------------------------------      ---------------------------------------

      Interest bearing liabilities:
      Savings accounts                                20              3             23              7             18             25
      Money market accounts                          142             79            221            396            102            498
      NOW accounts                                    57            (23)            34            138            (45)            93
      Time accounts                                  361             31            392            853            121            974
      Borrowings                                    (111)             4           (107)          (320)           155           (165)
                                               ---------------------------------------      ---------------------------------------
        Total interest bearing liabilities           469             94            563          1,074            351          1,425
                                               ---------------------------------------      ---------------------------------------

      Change in net interest income            $     115      $     229      $     344      $     313      $     940      $   1,253
                                               ---------------------------------------      ---------------------------------------
</TABLE>

Interest  income  increased  $907  thousand  between  the periods due to both an
increase  in the rate and an  increase  in the  volume of earning  assets.  More
specifically,  $584  thousand of the increase in interest  income was due to the
increase in the rate of earning  assets,  while $323 thousand of the increase in
interest  income  was due to the  increase  in the  volume  on  earning  assets.
Increases  in both the volume and rate on loans  contributed  $805  thousand  or
88.8% of the net increase in interest  income  period over  period.  The Federal
Open Market  Committee  raised the target  federal  funds rate 200 basis  points
during the 12-month  period  preceding  September  30, 2005,  which drove up the
prime  lending rate and our average  yield on loans by 45 basis  points  between
comparable periods. In addition, we successfully increased the average volume of
loans  outstanding by $20.669  million  (including  $7.635 million from the HSBC
branch  acquisition)  between the periods,  which  contributed  $356 thousand of
additional interest income quarter over quarter.

The $907  thousand  increase  in interest  income was offset by a $563  thousand
increase in the cost of interest bearing  liabilities;  $469 thousand due to the
increase in rate and $94  thousand due to the increase in the volume of interest
bearing    liabilities.    The   interest   expense   recorded   on   our   most
interest-sensitive  liabilities,   including  time  accounts  and  money  market
accounts,  increased  due to both an increase in volume and an increase in rate.
Specifically,  interest  expense on time accounts and interest  expense on money
market accounts  increased $392 thousand and $221 thousand,  respectively,  over
the comparable periods. Between the end of the third quarter of 2004 and the end
of the  third  quarter  of  2005,  we  raised  the  interest  rates  paid on our
certificates of deposit to remain competitive  within our market.  This drove up
the cost of time  accounts  resulting  in a $361  thousand  increase in interest
expense due to rate. In addition,  a significant portion of money market account
balances were indexed to the 90-day  Treasury bill rate,  causing an increase in
the average  rate paid for money  market  deposits  from 1.27%  during the third
quarter of 2004 to 2.74%  during the third  quarter of 2005.  The rate  increase
resulted in an  additional  $142  thousand of interest  expense on a  comparable
quarter  basis.  The interest  expense on  borrowings  decreased  $107  thousand
between  comparable  quarters due to the repayment of two expensive Federal Home
Loan Bank of New York  ("FHLBNY")  advances  during  the first  quarter of 2005.
Specifically,  during the first quarter, we repaid two $10.000 million long-term
borrowings bearing interest rates of 6.52% and 6.55%. These expensive borrowings
were replaced by increased  average  volumes of short-term  borrowings  and less
expensive long-term borrowings.

Provision  for Loan  Losses.  We  recorded a  provision  for loan losses of $300
thousand for the three-month  period ended September 30, 2005. This represents a
$50 thousand  increase over the provision for loan losses recorded in the second
quarter of 2005.  Improvements  in the level of net  charge-offs  and  potential
problem  loans during the third  quarter were offset by an increase in the level
of delinquent and non-performing  loans. During the third quarter,  the level of
delinquent  loans increased to $6.954 million,  as compared to $2.967 million at
the end of the second  quarter.  At  September  30, 2005,  non-performing  loans
totaled $4.529 million, as compared to $3.330 million of non-performing loans at
June 30, 2005.


                                       16
<PAGE>

During the third  quarter of 2004,  we also recorded a provision for loan losses
of $300 thousand.  At that time delinquent and  non-performing  loans were lower
than the third quarter 2005 levels.  Conversely,  net  charge-offs and potential
problem loans were higher in the third quarter of 2004 than in the third quarter
of 2005.

Non-Interest  Income.  Non-interest income decreased during the third quarter of
2005, as compared to the third quarter of 2004.  Non-interest  income was $1.379
million during the  three-month  period ended September 30, 2005, as compared to
$1.482 million during the  three-month  period ended  September 30, 2004, a $103
thousand or 7.0% decrease.  On a comparable  quarter  basis,  increases in trust
fees,  other  service  fees and other income were offset by decreases in service
charges on deposit accounts, commissions income, net investment securities gains
and bank-owned life insurance income.

Trust fees  increased  from $337  thousand in the third  quarter of 2004 to $404
thousand in the third quarter of 2005, a $67 thousand or 19.9% increase.  During
the  third  quarter  of 2005,  we  recorded  a  significant  increase  in estate
settlement fees due to the closing of a large estate.

During  the third  quarter  of 2005,  we  recorded  other  service  fees of $135
thousand,  a $69 thousand or 104.5% increase over the third quarter of 2004. The
increase  was  primarily  attributable  to an increase in  residential  mortgage
origination revenues. In late 2004, we trained and developed sales professionals
to originate  residential  mortgage  products  through an agency  agreement with
another financial institution.  During the third quarter of 2004, we recorded $8
thousand of mortgage  origination  revenues,  as compared to $74 thousand during
the third quarter of 2005, a $66 thousand increase.

Commissions income decreased  substantially between comparable quarters.  During
the third quarter of 2004, we recorded $147 thousand of commissions  income,  as
compared to $90  thousand  during the third  quarter of 2005,  a $57 thousand or
38.8%  decrease.  This decrease was primarily due to a significant  reduction in
sales commissions  generated from a small  specialized  insurance agency held by
our insurance agency subsidiary, Mang - Wilber LLC.

Service  charges on deposit  accounts  decreased  $33  thousand or 8.0%  between
comparable quarters, from $413 thousand during the third quarter of 2004 to $380
thousand  during  the  third  quarter  of 2005.  At the  beginning  of the third
quarter, many of our business customers' transaction deposit accounts were moved
to our "preferred  business checking" account,  a service  charge-free  business
style checking account, causing a reduction in service fees.

During the third  quarter of 2005 we recorded  $71  thousand  of net  investment
securities  gains  related  to  unrealized  gains on  trading  securities.  This
compares to $223 thousand of net  investment  securities  gains during the third
quarter of 2004. Due to the historically  low interest rate  environment  during
the  third  quarter  of  2004,  we sold  $5.064  million  of  available-for-sale
investment  securities  netting a $224 thousand gain, as compared to no sales of
available-for-sale investment securities during the third quarter of 2005.

Non-Interest  Expense.  During the third  quarter of 2005,  we  recorded  $4.812
million of  non-interest  expense.  This  represents  a $483  thousand  or 11.2%
increase over the third  quarter of 2004.  The  substantial  majority of the net
increase was in salaries and employee  benefits expense and  professional  fees.
Several factors have  contributed to these  increases,  namely our expansion and
acquisition  activities,  our core computer  operating system conversion and our
Sarbanes - Oxley Act and other compliance efforts.

Salaries and employee  benefits expense increased $467 thousand or 17.7% between
comparable quarters. This increase can be attributed to several factors. In 2005
we instituted  new  commission  and  incentive  plans for personnel and provided
general  cost of  living  and  merit  salary  and wage  increases.  Between  the
quarters,  we increased our number of employees to serve the customers  acquired
in the HSBC branch  acquisition and to staff a loan production  office opened in
Syracuse,  New York. We incurred more overtime  wages for hourly wage  employees
and paid out special  bonus  payments to employees in the third  quarter of 2005
due to our core computer system conversion. And finally, the cost of our benefit
plans increased  significantly between quarters. The expense associated with our
partially  self-insured  health  insurance plan increased $22 thousand or 12.0%,
from $184 thousand  during the third quarter of 2004 to $206 thousand during the
third  quarter of 2005 due to an  increase  in claims.  Similarly,  our  defined
benefit  retirement  plan expense  increased  $24  thousand or 20.2%,  from $119
thousand  during  the third  quarter of 2004 to $143  thousand  during the third
quarter of 2005.

Professional  fees increased $120 thousand or 184.6%,  from $65 thousand  during
the  three-month  period ended  September 30, 2004 to $185  thousand  during the
three-month  period ended September 30, 2005. The increase in professional  fees
between  comparable  periods was  primarily  due to the  recording of additional
external  auditor fees and consulting  fees associated with our efforts to fully
comply  with  various  provisions  of the  Sarbanes - Oxley  Act,  (particularly
Section 404).


                                       17
<PAGE>

Computer  service  fee  expenses  decreased  $100  thousand  between  comparable
quarters,  from $260  thousand in the third  quarter of 2004 to $160 thousand in
the third  quarter of 2005.  During the third  quarter  of 2004,  we  recorded a
non-recurring  expense  totaling  $135  thousand  due  to the  termination  of a
contract to convert our core computer operating system.

Occupancy  expenses,  furniture and fixture expenses,  advertising and marketing
expense,  and other  miscellaneous  expenses  changed  slightly on a  comparable
quarter basis.  Although  several  components of these  expenses  varied between
comparable  quarters,  on a combined basis these expenses totaled $1.358 million
during the  three-month  period ended  September 30, 2005, as compared to $1.362
million during the  three-month  period ended  September 30, 2004, a $4 thousand
net decrease.

Income  Taxes.  Income  tax  expense  decreased  from $760  thousand  during the
three-month  period  ended  September  30,  2004 to  $700  thousand  during  the
three-month  period ended  September  30, 2005,  a $60  thousand  decrease.  The
decrease in income tax expense was primarily due to a $242 thousand  decrease in
pre-tax  income  between  comparable  periods.  Our  effective tax rate remained
relatively stable between comparable quarters,  specifically 26.1% for the third
quarter of 2005 versus 26.0% for third quarter of 2004.

E.  Comparison of the Results of Operations for the Nine Months Ended  September
30, 2005 and 2004

Overview.  During the nine-month period ended September 30, 2005, net income and
earnings per share were $6.151 million and $0.55,  respectively.  By comparison,
during the nine-month  period ended  September 30, 2004 we earned $6.299 million
in net income and earnings  per share of $0.56.  Although  income was  generally
flat  between  periods  (actually  a $148  thousand or 2.4%  decrease),  certain
categories  of  income  and  expense  varied   significantly   between  periods.
Specifically,  net interest income  increased $1.253 million between the periods
primarily due to increased  average loan volume and increased  rates of interest
on both loans and  investment  securities.  In addition,  the provision for loan
losses  decreased $180 thousand  between the periods.  These  improvements  were
offset  by  increases  in  almost  all  categories  of   non-interest   expense.
Non-interest expense increased $1.455 million or 11.4% between the periods, from
$12.755 million in the first nine months of 2004 to $14.210 million in the first
nine months of 2005. These increases were due to several factors including:  (i)
our  expansion  and  acquisition  activities,  (ii) our recently  executed  core
computer  system  conversion,  (iii)  an  increase  in  employee  benefits  cost
(particularly health insurance and pension costs), and (iv) increased regulatory
compliance  costs,  in particular our ongoing efforts to comply with Section 404
of the Sarbanes - Oxley Act.

The slight decrease in net income between the nine-month  period ended September
30, 2005 and the nine-month  period ended  September 30, 2004 resulted in modest
decreases   in  our  return  on  average   assets  and  our  return  on  average
stockholders'  equity.  More  specifically,  through the first three quarters of
2005 our return on average  assets and return on average  equity  were 1.09% and
12.07%,  respectively,  as compared to 1.15% and 12.91%  through the first three
quarters of 2004.

Net Interest  Income.  Net  interest  income is our most  significant  source of
revenue. During the first three quarters of 2005 and the first three quarters of
2004, net interest income comprised 82% and 80% of our net revenue (net interest
income plus non-interest income),  respectively.  In the nine-month period ended
September 30, 2005, net interest income was $19.107 million. By comparison,  for
the nine-month  period ended September 30, 2004, net interest income was $17.854
million.  The $1.253  million  improvement  in net interest  income  between the
periods was the result of several factors which are explained below.

Throughout the 12-month  period  preceding  September 30, 2005, the Federal Open
Market  Committee  raised the target  federal funds rate 200 basis points (eight
increases of 25 basis points).  These actions  prompted eight  corresponding  25
basis point  increases in the national  prime  lending rate, an index to which a
significant portion of our variable rate loan portfolio was tied. These interest
rate  increases,  along with a $27.395 million or 7.5% increase in average loans
outstanding,  increased  the interest and fees on loans from $18.158  million in
the  nine-month  period  ended  September  30,  2004 to  $20.430  million in the
nine-month  period ended September 30, 2005. This represents a $2.272 million or
12.5% increase and was the primary reason interest income increased  between the
periods.

The interest and dividends  earned on investment  securities also increased on a
comparable  period basis.  The total interest and dividends earned on investment
securities,   including   trading,   available-for-sale   and   held-to-maturity
securities,  increased  $292  thousand  or 3.4% from $8.633  million  during the
nine-month  period  ended  September  30,  2004 to  $8.925  million  during  the
nine-month  period ended  September 30, 2005.  The increase was primarily due to
improved investment  securities yields and the reduction of the net amortization
of premiums  and  accretion  of discounts  on  investment  securities.  Very low
residential  mortgage  interest  rates  in 2004  prompted  very  high  rates  of
residential mortgage refinancing activity,  which accelerated principal payments
on  our  mortgage-backed


                                       18
<PAGE>

investment securities reducing securities yields.  Although residential mortgage
rates  remained  low in 2005,  residential  mortgage  refinancing  activity  and
prepayment rates slowed significantly.

The  increase  in both the yield and  volume of  earning  assets  that drove the
improvement  in interest  income of $2.678  million,  were  partially  offset by
higher funding costs. As short-term interest rates increased during the 12-month
period preceding September 30, 2005, we raised the rates of interest paid on our
deposit accounts. These increases,  coupled with increases in the average volume
of savings,  money market and time accounts  offset by a slight  decrease in NOW
account balances,  resulted in a $1.590 million increase in the interest expense
on deposit liabilities between comparable nine-month periods.

The interest  expense for borrowings  (both long and short-term)  decreased $165
thousand or 6.9% on a  comparable  period  basis due to decrease in the weighted
average rate paid for borrowings, offset by an increase in the average volume of
borrowings.  During the first  quarter of 2005,  we repaid two  $10.000  million
FHLBNY advances upon their maturity,  one in January 2005 and the other in March
2005. One advance  carried a 6.52%  fixed-rate of interest and the other a 6.55%
fixed rate of interest.  Upon repaying each $10.000 million maturing advance, we
re-borrowed  $5.000  million  from the FHLBNY at a much lower rate of  interest,
3.62% and 3.85%, respectively. The average volume of borrowings increased during
the first three quarters of 2005 because we carried a $15.000 million short-term
borrowing  with  a  large  money  center  bank  during  the  first  quarter  and
experienced a significant  increase in repurchase  agreement balances throughout
2005.

Rate and Volume  Analysis:  The purpose of a rate volume analysis is to identify
the dollar  amount of change in net  interest  income due to changes in interest
rates  versus  changes  in the volume of earning  assets  and  interest  bearing
liabilities.

Net interest  income was $1.253 million  greater in the nine-month  period ended
September  30, 2005 than in the  nine-month  period  ended  September  30, 2004.
Interest income increased $2.678 million due to both an increase in the rate and
an increase in the volume of earning assets.  More specifically,  $1.291 million
of the  increase  in  interest  income was due to the  increase in the volume of
earning assets,  while $1.387 million of the increase in interest income was due
to the increase in the rate on earning assets.  Increases in both the volume and
rate on  loans  contributed  $2.272  million  or 84.8%  of the net  increase  in
interest income period over period. The interest income on investment securities
increased  $292  thousand  between the periods.  Although the average  volume of
investment  securities decreased between comparable periods,  interest income on
investment  securities  increased  as  the  net  amortization  of  premiums  and
accretion of discounts on investments declined.

Interest  income on federal  funds sold also  increased  $138  thousand  between
comparable  nine-month periods, $124 thousand of which was due to an increase in
rate.  The  average  rate  received on federal  funds sold was 1.15%  during the
nine-month  period ended  September 30, 2004 versus 3.16% during the  nine-month
period  ended  September  30,  2005 due to the Federal  Open Market  Committee's
interest rate hikes.

During the fourth quarter of 2004, we purchased  $3.900 million of  FDIC-insured
certificates of deposit as part of an investment strategy related to our pending
HSBC branch  acquisition.  These purchases  decreased the average  interest rate
earned  on  our  interest   bearing  deposit   portfolio  (due  to  their  short
maturities),  but  increased the average  volume of these assets,  netting a $24
thousand decrease in interest income.

The $2.678  million  increase in interest  income was offset by a $1.425 million
increase in the cost of interest bearing liabilities,  $1.074 million due to the
increase in rate and $351 thousand due to the increase in the volume of interest
bearing   liabilities.   The   interest   expense   recorded   on   all  of  our
interest-bearing  deposit liabilities,  including savings accounts, money market
accounts,   NOW  accounts  and  time  accounts,   increased  between  comparable
nine-month  periods by $1.590  million,  while the cost of borrowings  decreased
$165 thousand.

The most  significant  increase  in interest  expense was due to time  accounts.
Between the periods,  our competitors raised their certificate of deposit rates.
This prompted us to raise our certificate of deposit rates to remain competitive
and  resulted  in higher  levels of  interest  expense.  The total  increase  in
interest  expense on time  accounts  between  periods  was $974  thousand,  $853
thousand of which was due to increases in the average rate.

Between the  periods,  the key index for the  substantial  majority of our money
market deposit account balances,  the 90-day Treasury bill rate,  increased over
150  basis  points.  This,  coupled  with the  introduction  of our new  "Wealth
Management" account,  caused the interest expense on our money market deposit to
increase $498 thousand, $396 thousand due to an increase in the average rate and
$102 thousand due to an increase in the average volume.

Rising  short-term   interest  rates  throughout  the  nine-month  period  ended
September 30, 2005 prompted us to slightly  increase the interest  rates paid on
our  less  interest-sensitive  savings  accounts.  This  caused  a $25


                                       19
<PAGE>

thousand  increase in interest expense on savings  accounts,  $7 thousand due to
rate and $18 thousand due to volume.

Similarly,  we raised the  interest  rates paid on NOW  accounts  causing a $138
thousand increase in expense due to rate and a $45 thousand decrease in interest
expense due to a reduction in average volume.

Provision for Loan Losses.  Management analyzes several factors when determining
the  appropriate  amount to be recorded in the provision for loan losses.  These
factors include recent trends in net charge-offs, the level of delinquent loans,
the amount of potential problem loans and non-performing  loans, net loan growth
and other risk  factors and trends  inherent in the loan  portfolio.  During the
first three  quarters of 2005,  we recorded  $780  thousand in the provision for
loan losses.  This compares to $960 thousand  during the first three quarters of
2004, a $180 thousand or 18.8% decrease. On a comparable period basis, the level
of net charge-offs  and potential  problem loans  decreased,  while the level of
non-performing  loans and  delinquent  loans  increased.  During the first three
quarters of 2005 were  recorded  net  charge-offs  of $433  thousand or 0.14% of
average loans outstanding.  This compares to $499 thousand of net charge-offs or
0.18% of average  loans  outstanding  during the first  three  quarters of 2004.
Potential  problem loans decreased  slightly between  periods.  At September 30,
2005,  potential  problem loans were $8.052  million or 2.0% of gross loans,  as
compared  to  $9.019  million  or 2.3% of gross  loans at  September  30,  2004.
Non-performing loans increased  substantially  between periods. At September 30,
2004, non-performing loans totaled $1.387 million or 0.36% of loans outstanding.
This compares to $4.529  million or 1.14% of loans  outstanding at September 30,
2005. The level of delinquent loans increased significantly between the periods.
At September 30, 2005 delinquent  loans totaled $6.954 million or 1.75% of loans
outstanding.  By comparison at September 30, 2004 we had $1.827 million or 0.48%
of loans  outstanding  in this same  category,  a net increase of $5.127 million
between the periods.  A significant  portion of the increase in delinquent loans
was caused by a disruption in our billing and collection practices due to a core
computer  system  conversion  we  completed  in the  third  quarter.  Management
believes that upon  resumption of our normal billing and  collection  practices,
the level of delinquent loans will decrease during the fourth quarter.

Non-Interest   Income.   Non-interest  income  decreased  slightly  between  the
nine-month  period  ended  September  30, 2005 and the  nine-month  period ended
September 30, 2004. Specifically, non-interest income decreased $119 thousand or
2.7%, from $4.363 million for the nine-month  period ended September 30, 2004 to
$4.244  million for the  nine-month  period ended  September 30, 2005.  Although
several categories of non-interest income varied between comparable periods, the
factor which contributed most  significantly to the net decrease in non-interest
income was a $458 thousand decrease in net investment  securities gains.  During
the first three quarters of 2004, we recorded net investment securities gains of
$921 thousand. This compares to $463 thousand during the first three quarters of
2005. Due to the  historically  low interest rate  environment,  we sold $12.986
million of  available-for-sale  investment  securities  during  the first  three
quarters of 2004, as compared to $9.945 million of available-for-sale investment
securities during the first three quarters of 2005.

Other categories of non-interest  income that decreased  between periods include
commissions  income and income on bank-owned life insurance.  Commissions income
decreased $31 thousand or 7.2%, from $433 thousand during the nine-month  period
ended  September 30, 2004 to $402 thousand  during the  nine-month  period ended
September 30, 2005.  This decrease was primarily due to a significant  reduction
in sales commissions generated from a small specialized insurance agency held by
our  insurance  agency  subsidiary,  Mang -  Wilber  LLC.  The  bank-owned  life
insurance  income also decreased  slightly between  comparable  periods due to a
reduction in net crediting rates on our policies.

Trust fees,  service charges on deposit  accounts  (particularly  penalty fees),
other service fees and other income, increased between comparable periods. Trust
fees increased from $978 thousand  during the nine-month  period ended September
30, 2004 to $1.095  million  during the  nine-month  period ended  September 30,
2005, due to an increase in estate settlement fees and an increase in the market
value of trust  assets.  Service  charges  on  deposit  accounts  increased  $62
thousand or 5.5%  between  periods,  because we raised  select  service fees and
charges and increased the size of our customer base (primarily  through the HSBC
branch  acquisition).  Other income  increased $39 thousand or 13.9% between the
periods,  from $281  thousand  through the first three  quarters of 2004 to $320
thousand during the first three quarters of 2005. The increase was primarily due
to an increase in investment services income.  Other service fees increased $165
thousand or 86.8%  between  comparable  nine-month  periods.  The  increase  was
primarily  attributable  to  growth  in  our  residential  mortgage  origination
revenues. In late 2004 we trained and developed sales professionals to originate
residential mortgage products through an agency agreement with another financial
institution.  During the first three  quarters of 2004, we recorded $31 thousand
of mortgage origination  revenues, as compared to $167 thousand during the first
three quarters of 2005, a $136 thousand increase.

Non-Interest Expense.  Every category of non-interest expense,  except furniture
and fixture expense which remained flat at $552 thousand,  increased between the
nine-month  period  ended  September  30, 2004 and the


                                       20
<PAGE>

nine-month period ended September 30, 2005.  Specifically,  non-interest expense
increased $1.455 million or 11.4% between the periods,  from $12.755 million for
the first three  quarters of 2004, as compared to $14.210  million for the first
three quarters of 2005. In general terms,  the increase was due to our expansion
and acquisition activities,  the core computer system conversion and our efforts
to comply with various regulations,  in particular Section 404 of the Sarbanes -
Oxley Act.

Approximately  75% of the total increase in  non-interest  expense was due to an
increase in salaries  and employee  benefits  expense  related to the  foregoing
activities.  Salaries and employee  benefits  increased  $1.089 million or 13.8%
between the periods, from $7.916 million during the first nine months of 2004 to
$9.005  million  during the first nine months of 2005.  Salaries  and  overtime,
which is comprised of employee base  salaries,  employee  commissions,  employee
incentives,  and deferred compensation expense, increased $906 thousand or 14.8%
between the periods,  from $6.126 million in the first three quarters of 2004 to
$7.032 million in the first three quarters of 2005. Our HSBC branch  acquisition
and other expansion activities,  deferred compensation costs, employee incentive
plans and  overtime  related to our core  computer  system  conversion  were the
primary contributing  factors to this increase.  Benefits expense increased $239
thousand or 13.8%  between the periods  from $1.734  million for the  nine-month
period ended  September  30, 2004 to $1.973  million for the  nine-month  period
ended  September  30,  2005.  The  increase  in  employee  benefits  expense was
primarily driven by a $105 thousand  increase in group health insurance costs, a
$73 thousand increase in FICA expense and a $73 thousand increase in the cost of
our defined benefit pension plan.

Professional  fees increased $149 thousand or 41.2%,  from $362 thousand  during
the first  three  quarters  of 2004 to $511  thousand  during  the  first  three
quarters of 2005.  During the first  quarter of 2004,  we  incurred  significant
non-recurring  professional  fees  related to the  Company's  SEC  common  stock
registration  and American Stock Exchange  listing.  Although these fees did not
recur  during the first three  quarters  of 2005,  professional  fees  increased
significantly  due to our  efforts  to comply  with  various  provisions  of the
Sarbanes - Oxley Act, particularly section 404.

Occupancy expenses, furniture and fixture expenses and advertising and marketing
expenses combined increased $59 thousand or 2.9% between  comparable  nine-month
periods.  During the nine-month  period ended September 30, 2005, these expenses
totaled  $2.073  million.  This compares to $2.014 million during the nine-month
period ended September 30, 2004. These increases were primarily  attributable to
our expansion activities, in particular,  (i) the opening of a branch in Johnson
City  (Broome  County),  New York in March of 2004,  (ii) the  opening of a loan
production office (representative  office) in Kingston (Ulster County), New York
in April 2004,  (iii) the acquisition and continued  operation of an HSBC branch
in Walton (Delaware County), New York in February 2005, and (iv) the acquisition
and  assimilation of the assets of an HSBC branch  acquired in Sidney  (Delaware
County), New York in February 2005.

Computer service fees increased $10 thousand or 2.2% between comparable periods,
from $464 thousand for the  nine-month  period ended  September 30, 2004 to $474
thousand for the nine-month  period ended  September 30, 2005.  Although the net
increase in computer service fees was insignificant,  it should be noted that we
incurred a $135 thousand  non-recurring charge during the third quarter of 2004,
due to the termination of a core computer system contract.

Other miscellaneous  expenses increased $148 thousand or 7.4% between comparable
periods,  from $1.999 million during the nine-month  period ended  September 30,
2004 to $2.147 million during the  nine-month  period ended  September 30, 2005.
Although  there were various  increases and  decreases in several  components of
other  miscellaneous  expense,  much of the increase  between the periods can be
attributed to expenses  associated  with the HSBC branch  acquisition  and other
expansion  activities  and the core  computer  system  conversion,  namely a $61
thousand  increase  in  amortization  expense,  $45  thousand  increase in check
printing costs, a $41 thousand increase in postage and shipping,  a $24 thousand
increase  in travel and  entertainment  and a $20  thousand  increase  in office
supplies between the periods.

Income  Taxes.  The  change in income  tax  expense  was  insignificant  between
comparable periods.  Income tax expense increased from $2.203 million during the
nine-month  period  ended  September  30,  2004 to  $2.210  million  during  the
nine-month period ended September 30, 2005, a $7 thousand increase.

F. Liquidity

Liquidity  describes  our ability to meet  financial  obligations  in the normal
course of  business.  Liquidity is primarily  needed to meet the  borrowing  and
deposit withdrawal requirements of our customers and to fund current and planned
expenditures.  We are  committed to  maintaining  a strong  liquidity  position.
Accordingly,  we monitor our  liquidity  position  on a daily basis  through our
daily funds management process. This includes:


                                       21
<PAGE>

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

o     balancing our mandated  deposit or "reserve"  requirements  at the Federal
      Reserve Bank of New York,

o     maintaining adequate cash balances at our correspondent banks, and

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

In addition to the daily  funds  management  process,  we also  monitor  certain
liquidity  ratios and complete a liquidity  assessment every 90 days to estimate
current and future  sources and uses of liquidity.  The 90-day  sources and uses
assessment is reviewed by our Asset and Liability Committee ("ALCO").  The ALCO,
based on this  assessment  and other  data,  determines  our  future  funding or
investment  needs and  strategies.  The following list represents the sources of
funds available to meet our liquidity requirements. Our primary sources of funds
are denoted by an asterisk (*).

                  Source of Funding

                  o Currency*

                  o Federal Reserve and Correspondent Bank Balances*

                  o Federal Funds Sold*

                  o Loan and Investment Principal and Interest Payments*

                  o Investment Security Maturities and Calls*

                  o Demand Deposits & NOW Accounts*

                  o Savings & Money Market Deposits*

                  o Certificates of Deposit and Other Time Deposits*

                  o Repurchase Agreements*

                  o FHLBNY Advances / Lines of Credit*

                  o Sale of Available-for-Sale Investment Securities

                  o Brokered Deposits

                  o Correspondent Lines of Credit

                  o Fed. Reserve Discount Window Borrowings

                  o Sale of Loans

                  o Proceeds from Issuance of Equity Securities

                  o Branch Acquisition

                  o Cash Surrender Value of Bank Owned Life Insurance

The following table summarizes several of our key liquidity measures for the
periods stated:

Table of Liquidity Measures:

      --------------------------------------------------------------------------
                  Liquidity Measure                  September 30,  December 31,
      Dollars in Thousands                                2005         2004
      --------------------------------------------------------------------------
      Cash and Cash Equivalents                         $26,851      $20,539
      --------------------------------------------------------------------------
      Available-for-Sale Investment Securities at
      Estimated Fair Value less Securities pledged      $63,677      $63,472
      for State and Municipal Deposits and
      Borrowings
      --------------------------------------------------------------------------
      Total Loan to Total Asset Ratio                     52.64%       52.08%
      --------------------------------------------------------------------------
      FHLBNY Remaining Borrowing Capacity               $18,778      $19,180
      --------------------------------------------------------------------------
      Correspondent Bank Lines of Credit                $10,000      $ 7,600
      --------------------------------------------------------------------------

Our liquidity  position did not materially  change between December 31, 2004 and
September 30, 2005. Cash and cash  equivalents  and our available  correspondent
bank line of credit  increased  between  the  periods  due to the change  from a
$2.400 million Federal Funds borrowed  position at December 31, 2004 to a $5.100
million  Federal  Funds  sold at  September  30,  2005.  The  fair  value of our
unencumbered  available-for-sale  investment securities and our FHLBNY remaining
borrowing capacity did not change significantly between the periods.

Our  commitments  to extend credit and stand-by  letters of credit  increased by
$10.819  million or 16.1%  between  December 31, 2004 to September  30, 2005. At
September 30, 2005,  commitments to extend credit and stand-by letters of credit
were $77.822 million,  as compared to $67.003 million at December 31, 2004. This
increase  was due to both an increase in home equity line of credit  commitments
assumed  during the HSBC  branch  acquisition  and  additional  commercial  loan
commitments.  Our experience  indicates that draws on the  commitments to extend


                                       22
<PAGE>

credit  and  stand-by  letters  of credit do not  fluctuate  significantly  from
quarter to quarter,  and  therefore,  are not expected to materially  impact our
liquidity prospectively.

We recognize that deposit flows and loan and investment  prepayment activity are
affected by the level of interest rates, the interest rates and products offered
by competitors,  and other factors.  Based on our deposit retention  experience,
anticipated levels of regional economic activity,  particularly  moderate levels
of loan demand within our primary market area, and current  pricing  strategies,
we  anticipate  that we will have  sufficient  levels of  liquidity  to meet our
current funding commitments for several quarters prospectively.

G. Capital Resources and Dividends

The maintenance of appropriate capital levels is a management priority.  Overall
capital adequacy is monitored on an ongoing basis by our management and reviewed
regularly by the Board of Directors.  Our principal  capital planning goal is to
provide an adequate return to shareholders  while retaining a sufficient capital
base to provide for future expansion and comply with all regulatory standards.

At September 30, 2005, stockholders' equity was $68.259 million, a $654 thousand
or 1.0% increase over December 31, 2004 stockholders' equity of $67.605 million.
The  increase  in  stockholders'  equity was  primarily  due to an  increase  in
retained earnings offset by a decrease in accumulated other comprehensive (loss)
income and an  increase in treasury  stock.  During the first three  quarters of
2005,  we earned  $6.151  million  of net income and  declared  and paid  $3.186
million of dividends,  netting a $2.965 million  increase in retained  earnings.
The increase in retained  earnings was offset by a $1.973  million change in the
unrealized loss on our  available-for-sale  investment  securities portfolio and
$388 thousand of treasury stock purchases.

The  Company and the Bank are both  subject to  regulatory  capital  guidelines.
Under  these  guidelines,  as  established  by federal  bank  regulators,  to be
adequately capitalized,  the Company and the Bank must both maintain the minimum
ratio of "Tier 1" capital to risk-weighted  assets at 4.0% and the minimum ratio
of total capital to risk-weighted assets of 8.0%. Tier 1 capital is comprised of
stockholders' equity, less intangible assets and accumulated other comprehensive
income.  Total capital,  for this risk-based  capital standard,  includes Tier 1
capital plus the Company's allowance for loan losses. Similarly, for the Bank to
be  considered  "well  capitalized,"  it  must  maintain  a  Tier 1  capital  to
risk-weighted  assets ratio of 6.0% and a total capital to risk-weighted  assets
ratio of 10.0%.  The Company and the Bank exceeded all capital adequacy and well
capitalized  guidelines  at  September  30,  2005 and  December  31,  2004.  The
Company's  Tier 1 capital to  risk-weighted  assets  ratio and total  capital to
risk-weighted  assets  ratio at  September  30,  2005 were  13.13%  and  14.38%,
respectively.

The principal  source of funds for the payment of  shareholder  dividends by the
Company has been  dividends  declared and paid to the Company by its  subsidiary
bank.  There are various  legal and  regulatory  limitations  applicable  to the
payment of dividends to the Company by its  subsidiaries  as well as the payment
of dividends by the Company to its shareholders. As of September 30, 2005, under
this statutory  limitation,  the maximum amount that could have been paid by the
Bank subsidiary to the Company,  without special regulatory approval, was $9.490
million.  The ability of the Company and the Bank to pay dividends in the future
is and will continue to be influenced by regulatory policies, capital guidelines
and applicable laws.

ITEM 3: Quantitative and Qualitative Disclosures about Market Risk
------

Our business  activities  generate  market risk.  Market risk is the possibility
that changes in future market  conditions,  including interest rates and prices,
will  reduce  earnings  and make the Company  less  valuable.  We are  primarily
exposed to market risk through  changes in interest  rates.  This risk is called
interest rate risk and is an inherent  component of risk for all banks. The risk
occurs  because we pay interest on deposits and borrowed  funds at varying rates
and  terms,  while  receiving  interest  income  on loans and  investments  with
different  rates and terms.  As a result,  our  earnings and the market value of
assets and  liabilities are subject to potentially  significant  fluctuations as
interest  rates rise and fall.  Our objective is to minimize the  fluctuation in
net  interest   margin  and  net  interest  income  caused  by  anticipated  and
unanticipated changes in interest rates.

Ultimately,  the Company's  Board of Directors is responsible for monitoring and
managing market and interest rate risk. The Board accomplishes this objective by
annually reviewing and approving an Asset and Liability Management Policy, which
establishes  broad risk limits and delegates  responsibility  to carry out asset
and  liability  oversight  and  control to the  Directors'  Loan and  Investment
Committee and management's Asset and Liability Committee ("ALCO").


                                       23
<PAGE>

We manage several  different  forms of interest rate risk. The first is mismatch
risk,  which  involves  the  mismatch  of  maturities  of fixed rate  assets and
liabilities.  The second is basis risk.  Basis risk is the risk  associated with
non-correlated  changes in different interest rates. For example,  we price many
of our  adjustable  rate  commercial  loans (an asset) using the Prime Rate as a
basis,  while some of our deposit  accounts (a  liability)  are tied to Treasury
security yields. In a given timeframe,  the Prime rate might decrease 2% while a
particular  Treasury security might only decrease 1%. If this were to occur, our
yield on Prime based  commercial  loans would  decrease by 2%, while the cost of
deposits might only decrease by 1% negatively  affecting net interest income and
net  interest  margin.  The third risk is option  risk.  Option  risk  generally
appears  in  the  form  of  prepayment  volatility  on  residential   mortgages,
commercial and commercial  real estate loans,  consumer  loans,  mortgage-backed
securities,  and callable agency or municipal investment securities.  The Bank's
customers generally have alternative financing sources (or options) to refinance
their existing debt obligations with other financial institutions. When interest
rates decrease,  many of these  customers  exercise this option and refinance at
other institutions and prepay their loans with us, which requires us to reinvest
the prepaid  funds in lower  yielding  investments  and loans.  The same type of
refinancing  activity also  accelerates  principal  payments on  mortgage-backed
securities  held  by  the  Bank.  Municipal  investment  securities  and  agency
securities  are  issued  with  specified  call  dates  and call  prices  and are
typically  exercised by the issuer when interest  rates on  comparable  maturity
securities are lower than the current coupon rate on the security.

Measuring and managing  interest rate risk is a dynamic  process that the Bank's
management must continually  perform to meet the objective of maintaining stable
net interest  income and net interest  margin.  This means that prior to setting
the term or interest rate on loans or deposits,  or before purchasing investment
securities  or  borrowing  funds,  management  must  understand  the impact that
alternative  interest rates will have on the Bank's  interest rate risk profile.
This is accomplished  through simulation  modeling.  Simulation  modeling is the
process of "shocking" the current Balance Sheet under a variety of interest rate
scenarios  and then  measuring  the  impact of  interest  rate  changes  on both
projected  earnings and the market  value of the Bank's  equity.  The  estimates
underlying the sensitivity analysis are based on numerous assumptions including,
but not limited to: the nature and timing of interest rate changes,  prepayments
on loans and  securities,  deposit decay rates,  pricing  decisions on loans and
deposits,  and  reinvestment  / replacement  rates on asset and  liability  cash
flows.  While  assumptions  are  developed  based on available  information  and
current  economic  and  local  market  conditions,  management  cannot  make any
assurances  as  to  the  ultimate  accuracy  of  these   assumptions   including
competitive influences and customer behavior.  Accordingly,  actual results will
differ from those predicted by simulation modeling.

The following  table shows the projected  changes in net interest  income from a
parallel  shift in all market  interest  rates.  The shift in interest  rates is
assumed to occur in monthly  increments  of 0.50% per month until the full shift
is  complete.  In other words,  the model  assumes it will take six months for a
3.00% shift to take place. This is also known as a "ramped" interest rate shock.
The  projected  changes in net interest  income are totals for the  twelve-month
period  beginning  October 1, 2005 and ending  September  30, 2006 under  ramped
shock scenarios.

Interest Rate Sensitivity Table:

<TABLE>
<CAPTION>
          ------------------------------------------------------------------------------------------------
                Interest Rates                           Dollars in Thousands
          ------------------------------------------------------------------------------------------------
                                                                                          Projected
                                                                                          Change in Net
                                                       Projected       Projected          Interest Income
                                       Projected       Dollar          Percentage         as a Percent of
           Interest                    Annualized      Change in       Change in          Total
           Rate Shock      Prime       Net Interest    Net Interest    Net Interest       Stockholders'
           (1)             Rate        Income          Income          Income             Equity
          ------------------------------------------------------------------------------------------------
<S>                        <C>         <C>                 <C>            <C>                  <C>
                3.00%      9.75%       $26,687             $256           0.97%                0.38%
          ------------------------------------------------------------------------------------------------
                2.00%      8.75%       $26,232            ($199)         -0.75%               -0.29%
          ------------------------------------------------------------------------------------------------
                1.00%      7.75%       $26,320            ($111)         -0.42%               -0.16%
          ------------------------------------------------------------------------------------------------
           No change       6.75%       $26,431               --             --                    -
          ------------------------------------------------------------------------------------------------
               -1.00%      5.75%       $26,099            ($332)         -1.26%               -0.49%
          ------------------------------------------------------------------------------------------------
               -2.00%      4.75%       $25,171          ($1,260)         -4.77%               -1.85%
          ------------------------------------------------------------------------------------------------
               -3.00%      3.75%       $24,481          ($1,950)         -7.38%               -2.86%
          ------------------------------------------------------------------------------------------------
</TABLE>

          (1) Under a ramped interest rate shock, interest rates are modeled to
          change at a rate of 0.50% per month.

Many  assumptions  are  embedded  within our  interest  rate risk  model.  These
assumptions  were  approved  by  the  Bank's  ALCO  and  were  based  upon  both
management's  experience  and  projections  provided  by  investment


                                       24
<PAGE>

securities companies. Assuming our prepayment and other assumptions are accurate
and assuming we take  reasonable  actions to preserve net  interest  income,  we
project that net interest  income would  decrease by $199  thousand or -0.29% of
total stockholders' equity in a +2.00% ramped interest rate shock. Similarly, we
project that net interest  income would  decrease by $1.260 million or -1.85% of
total  stockholders'  equity in a -2.00% ramped  interest rate shock.  These are
well within our Asset and Liability Policy  guideline,  which limits the maximum
projected  decrease in net interest income in a +2.00% or -2.00% ramped interest
rate shock to -5.00% of the Company's total equity capital.

Our  strategy  for  managing  interest  rate risk is impacted by general  market
conditions and customer demand. But,  generally,  we try to limit the volume and
term of fixed-rate assets and fixed-rate liabilities,  so that we can adjust the
mix and  pricing of assets and  liabilities  to  mitigate  net  interest  income
volatility.  We also  purchase  investments  for the  securities  portfolio  and
structure borrowings from the FHLBNY to counter-balance interest rate risk taken
in the loan portfolio.  We also offer  adjustable rate loan and deposit products
that change as interest rates change. Approximately 22% of our total assets were
invested in adjustable rate loans and investments at September 30, 2005.

ITEM 4: Controls and Procedures
------

Our  management,  including  the Chief  Executive  Officer  and Chief  Financial
Officer,  evaluated the design and  operational  effectiveness  of the Company's
disclosure  controls  and  procedures  (as  defined  in  Rules  13(a)-15(e)  and
15(d)-15(e)  under  the  Securities  Exchange  Act of 1934,  as  amended)  as of
September 30, 2005. Based upon that evaluation,  the Chief Executive Officer and
Chief Financial  Officer  concluded that the Company's  disclosure  controls and
procedures were effective in ensuring that information  required to be disclosed
by the Company in reports that it files or submits under the Securities Exchange
Act of 1934 are recorded,  processed,  summarized  and reported  within the time
periods specified in the SEC's rules and forms.

                           PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings
------

The Company is not the subject of any material pending legal proceedings,  other
than ordinary routine litigation occurring in the normal course of its business.

On an ongoing basis,  the Bank also becomes subject to various legal claims from
time to time, which arise in the normal course of business.  The various pending
legal claims against the Bank will not, in the opinion of management  based upon
consultation with counsel,  result in any material  liability to the Company and
will not materially affect our financial position, results of operations or cash
flow.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds
------

A. Changes in the Rights of Holders of Our Registered Securities

During the three-month period ended September 30, 2005, the rights of holders of
our registered securities were not modified.

B. Issuances or Modifications of Other Classes of Securities

During the  three-month  period ended  September  30, 2005, we did not issue any
other class of security.

C. Sale of Unregistered Securities

During the  three-month  period ended  September  30, 2005,  we did not sell any
unregistered securities.


                                       25
<PAGE>

D. Stock Repurchases

On August 27, 2004 we  announced  that our Board of  Directors  approved a stock
repurchase  program,  which  authorizes  the  purchase,  at  the  discretion  of
management,  of up to $1.5 million of the  Company's  common  stock.  All shares
repurchased  under the  repurchase  program  will be made in the open  market or
through  private  transactions  and will be limited to one transaction per week,
and  shall  be  conducted   exclusively  through  Merrill  Lynch,  a  registered
broker-dealer.  All such purchases shall be effected in compliance with the laws
of the State of New York, Rule 10b-18 of the Securities Exchange Act of 1934 and
the rules  and  regulations  thereunder,  and the  rules of the  American  Stock
Exchange.

On July 22, 2005, the Board of Directors  revised the Company's stock repurchase
plan.  Under the revised  plan,  management's  share  repurchase  authority  was
renewed, in effect increasing  management's authority from $932 thousand back to
$1.5  million.  In addition,  under the revised plan,  private  purchases may be
transacted  directly with the seller and need not be transacted  through Merrill
Lynch. Each private  transaction is individually  subject to the approval of the
Board of Directors of the Company.

No shares  were  repurchased  by us under  this  repurchase  program  during the
three-month period ended September 30, 2005.

ITEM 3: Defaults Upon Senior Securities
------

The  Company  did not default on any senior  securities  during the  three-month
period ended September 30, 2005.

ITEM 4: Submission of Matters to a Vote of Security Holders
------

None.

ITEM 5: Other Information
------

None.

ITEM 6:  Exhibits
------

(a) See Exhibit Index to this Form 10-Q


                                       26
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

THE WILBER CORPORATION


By: /s/ Alfred S. Whittet                   Dated: November 8, 2005
   -----------------------------                   ----------------
Alfred S. Whittet
Vice Chairman, President and Chief Executive Officer


By: /s/ Joseph E. Sutaris                   Dated: November 8, 2005
   -----------------------------                   ----------------
Joseph E. Sutaris
Treasurer and Chief Financial Officer


                                       27
<PAGE>

                                  EXHIBIT INDEX

No.         Document

31.1        Certification of Chief Executive Officer Pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

31.2        Certification of Chief Financial Officer Pursuant to Section 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


                                       28