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 March 31, 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 Identification Number)
Incorporation or Organization)

                       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|

As of May 5, 2005,  there were issued and outstanding  11,178,092  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 March 31, 2005 and
             December 31, 2004
         D.  Comparison of Results of Operation for the Three-months Ended
             March 31, 2005 and 2004
         E.  Liquidity
         F.  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
------

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

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

ITEM 5:  Other Information
------

ITEM 6:  Exhibits
------   (a) Exhibits

Signature Page

Index to Exhibits


                                       1
<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, 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.


                                       2
<PAGE>

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

The Wilber Corporation
Consolidated Statements of Condition (Unaudited)

<TABLE>
<CAPTION>
                                                                    March 31,      December 31,
dollars in thousands except share and per share data                  2005             2004
-----------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>
Assets
Cash and Due from Banks                                             $   9,500       $  10,440
Time Deposits with Other Banks                                          9,799          10,099
                                                                    ---------       ---------
 Total Cash and Cash Equivalents                                       19,299          20,539

Securities
 Trading, at Fair Value                                                 1,421           1,504
 Available-for-Sale, at Fair Value                                    242,297         249,415
     Held-to-Maturity, Fair Value of $55,983 at March 31, 2005
     and $59,324 at December 31, 2004                                  57,144          59,463
Loans                                                                 401,436         391,043
 Allowance for Loan Losses                                             (6,378)         (6,250)
                                                                    ---------       ---------
 Loans, Net                                                           395,058         384,793
                                                                    ---------       ---------
Premises and Equipment, Net                                             6,224           5,860
Bank Owned Life Insurance                                              15,109          14,975
Goodwill                                                                4,451           2,682
Intangible Assets, Net                                                    833             377
Other Assets                                                           13,085          11,253
                                                                    ---------       ---------
 Total Assets                                                       $ 754,921       $ 750,861
                                                                    =========       =========

Liabilities and Stockholders' Equity
Deposits:
 Demand                                                             $  59,888       $  63,746
 Savings, NOW and Money Market Deposit Accounts                       259,475         241,151
 Certificates of Deposit (Over $100M)                                  75,917          76,346
 Certificates of Deposit (Under $100M)                                178,285         165,194
 Other Time Deposits                                                   26,339          25,492
                                                                    ---------       ---------
 Total Deposits                                                       599,904         571,929
                                                                    ---------       ---------
Short-Term Borrowings                                                  24,548          37,559
Long-Term Borrowings                                                   58,187          65,379
Other Liabilities                                                       5,946           8,389
                                                                    ---------       ---------
 Total Liabilities                                                    688,585         683,256
                                                                    ---------       ---------

Stockholders' Equity:
 Common Stock, $.01 Par Value, 16,000,000 Shares Authorized,
    and 13,961,664 Shares Issued at March 31, 2005,
    and December 31, 2004                                                 140             140
 Additional Paid in Capital                                             4,224           4,224
 Retained Earnings                                                     84,509          83,402
 Accumulated Other Comprehensive (Loss) / Income                       (1,775)            396
 Treasury Stock at Cost, 2,783,572 Shares at March 31, 2005
     and 2,767,072 Shares at December 31, 2004                        (20,762)        (20,557)
                                                                    ---------       ---------
 Total Stockholders' Equity                                            66,336          67,605
                                                                    ---------       ---------
 Total Liabilities and Stockholders' Equity                         $ 754,921       $ 750,861
                                                                    =========       =========
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>
The Wilber Corporation
Consolidated Statements of Income (Unaudited)                            Three-Months Ended
                                                                              March 31,
dollars in thousands except share and per share data                   2005               2004
--------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>
Interest and Dividend Income
Interest and Fees on Loans                                         $      6,593       $      5,939
Interest and Dividends on Securities:
 U.S. Government and Agency Obligations                                   2,341              2,204
 State and Municipal Obligations                                            700                649
 Other                                                                       44                160
Interest on Federal Funds Sold and Time Deposits                            142                144
                                                                   ------------       ------------
 Total Interest and Dividend Income                                       9,820              9,096
                                                                   ------------       ------------

Interest Expense
Interest on Deposits:
 Savings, NOW and Money Market Deposit Accounts                             589                511
 Certificates of Deposit (Over $100M)                                       581                531
 Other Time                                                               1,497              1,302
Interest on Short-Term Borrowings                                           152                 34
Interest on Long-Term Borrowings                                            690                731
                                                                   ------------       ------------
 Total Interest Expense                                                   3,509              3,109
                                                                   ------------       ------------
Net Interest Income                                                       6,311              5,987
Provisions for Loan Losses                                                  240                360
                                                                   ------------       ------------
Net Interest Income After Provision for Loan Losses                       6,071              5,627
                                                                   ------------       ------------

Non Interest Income
Trust Fees                                                                  328                321
Service Charges on Deposit Accounts                                         392                341
Commissions Income                                                          138                160
Investment Security Gains, Net                                              244                719
Increase in Cash Surrender Value of Bank Owned Life Insurance               134                161
Other Service Fees                                                          101                 54
Other Income                                                                 77                 56
                                                                   ------------       ------------
 Total Non Interest Income                                                1,414              1,812
                                                                   ------------       ------------

Non Interest Expense
Salaries and Employee Benefits                                            2,798              2,671
Net Occupancy Expense of Bank Premises                                      433                393
Furniture and Equipment Expense                                             172                174
Computer Service Fees                                                       131                 80
Advertising and Marketing                                                   102                 85
Professional Fees                                                           196                225
Other Miscellaneous Expenses                                                721                685
                                                                   ------------       ------------
 Total Non Interest Expense                                               4,553              4,313
                                                                   ------------       ------------
Income Before Taxes                                                       2,932              3,126
Income Taxes                                                               (762)              (842)
                                                                   ------------       ------------
Net Income                                                         $      2,170       $      2,284
                                                                   ============       ============

Weighted Average Shares Outstanding                                  11,186,275         11,209,392
Basic Earnings Per Share                                           $       0.19       $       0.20
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       4
<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 data    Stock       Capital      Earnings   Income (Loss)      Stock         Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>           <C>           <C>           <C>
Balance December 31, 2003                              $    140     $  4,224     $ 79,043      $  1,272      $(20,375)     $ 64,304
 Comprehensive Income:
    Net Income                                               --           --        2,284            --            --         2,284
    Change in Net Unrealized Gain (Loss)
      on Securities, Net of Taxes                            --           --           --         1,198            --         1,198
                                                                                                                           --------
 Total Comprehensive Income                                                                                                   3,482
                                                                                                                           --------
 Cash Dividends ($.095 per share)                            --           --       (1,065)           --            --        (1,065)
                                                       --------     --------     --------      --------      --------      --------
Balance March 31, 2004                                 $    140     $  4,224     $ 80,262      $  2,470      $(20,375)     $ 66,721
                                                       --------     --------     --------      --------      --------      --------

Balance December 31, 2004                              $    140     $  4,224     $ 83,402      $    396      $(20,557)     $ 67,605
 Comprehensive Income:
    Net Income                                               --           --        2,170            --            --         2,170
    Change in Net Unrealized Gain (Loss)
      on Securities, Net of Taxes                            --           --           --        (2,171)           --        (2,171)
                                                                                                                           --------
 Total Comprehensive Loss                                                                                                        (1)
                                                                                                                           --------
 Cash Dividends ($.095 per share)                            --           --       (1,063)           --            --        (1,063)
 Purchase of Treasury Stock (16,500 shares)                                                                      (205)         (205)
                                                       --------     --------     --------      --------      --------      --------
Balance March 31, 2005                                 $    140     $  4,224     $ 84,509      $ (1,775)     $(20,762)     $ 66,336
                                                       --------     --------     --------      --------      --------      --------
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       5
<PAGE>

The Wilber Corporation
Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Three-Months Ended
                                                                                      March 31,
dollars in thousands                                                             2005          2004
-----------------------------------------------------------------------------------------------------
<S>                                                                            <C>           <C>
Cash Flows from Operating Activities:
 Net Income                                                                    $  2,170      $  2,284
 Adjustments to Reconcile Net Income to Net Cash
 Used in Operating Activities:
    Provision for Loan Losses                                                       240           360
    Depreciation and Amortization                                                   263           102
    Net Amortization of Premiums and Accretion of Discounts on Investments          270           543
    Available-for-Sale Investment Security Gains, net                              (247)         (678)
    Other Real Estate Losses                                                         --            24
    Increase in Cash Surrender Value of Bank Owned Life Insurance                  (134)         (161)
    Net Decrease (Increase) in Trading Securities                                    80          (295)
    Net Losses (Gains) on Trading Securities                                          3           (41)
    (Increase) Decrease in Other Assets                                            (321)          104
    Decrease in Other Liabilities                                                (2,501)       (2,361)
                                                                               --------      --------
    Net Cash Used in Operating Activities                                          (177)         (119)
                                                                               --------      --------

Cash Flows from Investing Activities:
 Net Cash Acquired from Acquisition of a Branch                                  22,521            --
 Proceeds from Maturities of Held-to-Maturity Investment Securities               2,294         4,015
 Purchases of Held-to-Maturity Investment Securities                                (15)       (9,490)
 Proceeds from Maturities of Available-for-Sale Investment Securities            19,205        40,326
 Proceeds from Sales of Available-for-Sale Investment Securities                  5,351         7,394
 Purchases of Available-for-Sale Investment Securities                          (20,977)      (38,737)
 Net Increase in Loans                                                           (2,870)       (6,106)
 Proceeds from Sale of Loans                                                         --           294
 Purchase of Premises and Equipment, Net of Disposals                              (109)         (373)
 Proceeds from Sale of Other Real Estate                                             --            35
                                                                               --------      --------
    Net Cash Provided by (Used in) Investing Activities                          25,400        (2,642)
                                                                               --------      --------

Cash Flows from Financing Activities:
 Net Decrease in Demand Deposits, Savings, NOW,
    Money Market and Other Time Deposits                                         (5,493)       (6,346)
 Net Increase in Certificates of Deposit                                            501         9,159
 Net Decrease in Short-Term Borrowings                                          (13,011)       (5,283)
 Increase in Long-Term Borrowings                                                16,900        15,000
 Repayment of Long-Term Borrowings                                              (24,092)       (1,141)
 Purchase of Treasury Stock                                                        (205)           --
 Cash Dividends Paid                                                             (1,063)       (1,065)
                                                                               --------      --------
    Net Cash (Used in) Provided by Financing Activities                         (26,463)       10,324
                                                                               --------      --------
       Net (Decrease) Increase in Cash and Cash Equivalents                      (1,240)        7,563

Cash and Cash Equivalents at Beginning of Year                                   20,539        19,890
                                                                               --------      --------
Cash and Cash Equivalents at End of Period                                     $ 19,299      $ 27,453
                                                                               ========      ========
</TABLE>

See accompanying notes to unaudited consolidated interim financial statements.


                                       6
<PAGE>

The Wilber Corporation
Consolidated Statements of Cash Flows (Unaudited), continued

                                                            Three-Months Ended
                                                                 March 31,
dollars in thousands                                         2005         2004
--------------------------------------------------------------------------------
Supplemental Disclosures of Cash Flow Information:
 Cash Paid during Period for:
    Interest                                               $  3,537     $  3,137
    Income Taxes                                           $  3,070     $  2,859
 Non Cash Investing Activities:
    Change in Unrealized Gain on Securities                $ (3,556)    $  1,958
    Transfer of Loans to Other Real Estate                 $     --     $     59
 Fair Value of Assets Acquired                             $  8,185     $     --
 Fair Value of Liabilities Assumed                         $ 32,967     $     --

See accompanying notes to unaudited consolidated interim financial statements.


                                       7
<PAGE>

The Wilber Corporation
Notes to Unaudited Consolidated Financial Statements

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 March
31,  2005;  and  the  statements  of  income,   the  statements  of  changes  in
stockholders'   equity  and   comprehensive   income  and  cash  flows  for  the
three-months  ended March 31, 2005 and 2004 should be read in  conjunction  with
the 2004 consolidated financial statements, including the notes thereto.

Amounts in prior period's  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

The   Company   does   not   issue   any    guarantees    that   would   require
liability-recognition or disclosure,  other than its stand-by letters of credit.
Stand-by and other letters of credit are conditional  commitments  issued by the
Company 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.  Typically,  these  instruments  have
terms of 12 months or less and expire  unused.  Therefore,  the total amounts do
not necessarily represent future cash requirements.

The  estimated  fair value of the Company's  stand-by  letters of credit was $29
thousand and $22 thousand at March 31, 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.


                                       8
<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 also 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
measurement date, are:

                                                            Three-Months Ended
                                                                 March 31,
dollars in thousands                                        2005           2004
--------------------------------------------------------   --------------------
      Service Cost                                         $ 170          $ 162
      Interest Cost                                          231            210
      Expected Return on Plan Assets                        (311)          (286)
      Net Amortization                                        53             50
                                                           -----          -----
                                                           $ 143          $ 136
                                                           =====          =====

Note 5. Other Comprehensive Income

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

<TABLE>
<CAPTION>
                                                                          Three-Months Ended
                                                                               March 31,
dollars in thousands                                                        2005        2004
----------------------------------------------------------------------    -------------------
<S>                                                                       <C>         <C>
Unrealized Holding (Losses) Gains Arising During the Period, Net of Tax
    (Pre-tax Amount of ($3,309) and $2,636)                               $(2,021)    $ 1,601
Reclassification Adjustment for (Gains) Realized in Net Income
    During the Period, Net of Tax (Pre-tax Amount of ($247) and ($678)       (150)       (403)
                                                                          -------     -------

Other Comprehensive (Loss) Income, Net of Tax of $1,385 and $760          $(2,171)    $ 1,198
                                                                          =======     =======
</TABLE>


                                       9
<PAGE>

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 Company recorded related goodwill
of $1.769 million and a core deposit  intangible of $492  thousand.  See PART I,
ITEM 2B.

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

dollars in thousands
--------------------------------------------------------------------------------
Deposits Assumed                                                         $32,967
  Less Assets Acquired:
       Loans                                                               7,635
       Property Plant and Equipment                                          440
       Other Assets                                                          110
  Less Goodwill                                                            1,769
  Less Core Deposit Intangible                                               492
                                                                         -------
                        Net Cash Acquired from Acquisition               $22,521
                                                                         =======

The core  deposit  intangible  recorded  as a result of the  branch  acquisition
totaling  $492  thousand  will be  amortized  on a  straight-line  basis  over a
five-year period.


                                       10
<PAGE>

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

A. General

The primary objective of this quarterly report is to provide: (i) an overview of
the material changes in our financial condition, including liquidity and capital
resources,  at March 31,  2005,  as compared to December  31,  2004;  and (ii) a
comparison of our results of operations for the  three-month  period ended March
31, 2005, as compared to the three-month period ended March 31, 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, occupancy and equipment expense, advertising and
marketing expense,  computer service fees, professional fees and other 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  March 31,
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 historical  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 has a
significant  impact on the overall analysis of the adequacy of the allowance for
loan  losses.  While we have  concluded  that the March 31, 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 first quarter of 2005, our total assets  increased by $4.060 million,
from  $750.861  million at December  31,  2004 to $754.921  million at March 31,
2005. The slight net increase in total assets was impacted by the acquisition of
two branch offices during the 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
$2.261  million of intangible  assets,  consisting of $1.769 million of goodwill
and $492  thousand of core  deposit  intangibles.  We also  acquired  the Walton
office  building  for $425  thousand.  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  quarter.  Between  December  31,  2004 and March 31,  2005  total  deposits
increased by $27.975 million from $571.929  million to $599.904  million,  while
total borrowings (both short-term and long-term borrowings) decreased by $20.203
million from  $102.938 at December 31, 2004 million to $82.735  million at March
31, 2005.

Between  December 31, 2004 and March 31, 2005, the overall credit quality of the
loan portfolio deteriorated modestly.  Specifically, total non-performing loans,
potential  problem loans and delinquent loans that were 30 or more days past due
(excluding loans placed on non-accrual status) all increased during the quarter.
The allowance for loan losses  changed only  slightly  during the quarter,  from
$6.250 million or 1.60% of total loans at December 31, 2004 to $6.378 million at
March 31, 2005 or 1.59% of total loans.

Net income for the first  quarter of 2005 was slightly  less than net income for
the first quarter of 2004.  Specifically,  net income decreased by $114 thousand
or 5.0%,  from  $2.284  million in the first  quarter of


                                       11
<PAGE>

2004 to $2.170  million  during the first  quarter of 2005.  The decrease in net
income  reduced  earnings  per share from $0.20 in the first  quarter of 2004 to
$0.19 in the first quarter of 2005. Several factors  contributed to the decrease
in net income between the periods. Specifically, a $324 thousand increase in net
interest income,  a $120 thousand  decrease in the provision for loan losses and
an $80  thousand  reduction  in income  taxes were  negatively  offset by a $398
thousand  decrease in  non-interest  income and a $240 thousand  increase in non
interest  expense.  The decrease in other income was primarily  driven by a $475
thousand reduction in investment  securities gains.  During the first quarter of
2004 we realized  $719 thousand of  investment  securities  gains as compared to
only $244 thousand in the first quarter of 2005.

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.


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                        For the Three-Months Ended March 31,
                                                   ----------------------------------------------------------------------------
                                                                     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                               $  4,356       $     25      2.33%      $  7,252       $     18      1.00%
   Interest bearing deposits                           9,810            117      4.84%         7,520            126      6.74%
   Securities (1)                                    309,013          3,085      4.05%       305,416          3,013      3.97%
   Loans, Net (2)                                    389,866          6,593      6.86%       358,519          5,939      6.66%
                                                    -----------------------                 -----------------------
                Total earning assets                 713,045          9,820      5.59%       678,707          9,096      5.39%

   Non-earning assets                                 47,046                                  45,253
                                                    --------                                --------
                    Total assets                    $760,091                                $723,960
                                                    ========                                ========

Liabilities:
   Savings accounts                                 $ 98,553       $    152      0.63%      $ 93,113       $    173      0.75%
   Money market accounts                              32,793            156      1.93%        31,018             64      0.83%
   NOW accounts                                      121,302            281      0.94%       124,772            274      0.88%
   Time accounts                                     275,247          2,078      3.06%       269,136          1,833      2.74%
   Borrowings                                         94,870            842      3.60%        74,948            765      4.11%
                                                    -----------------------                 -----------------------
         Total interest bearing liabilities          622,765          3,509      2.29%       592,987          3,109      2.11%

   Non-interest bearing deposits                      61,705                                  57,620
   Other non-interest bearing liabilities              7,611                                   7,728
                                                    --------                                --------
   Total liabilities                                 692,081                                 658,335
   Stockholders' equity                               68,010                                  65,625
                                                    --------                                --------
      Total liabilities and shareholder equity      $760,091                                $723,960
                                                    ========                                ========

    Net interest income                                            $  6,311                                $  5,987
                                                                   ========                                ========

   Net interest rate spread (3)                                                  3.30%                                   3.28%
                                                                                 ====                                    ====

    Net earning assets                              $ 90,280                                $ 85,720
                                                    ========                                ========

   Net interest margin (4)                                                       3.59%                                   3.55%
                                                                                 ====                                    ====

   Ratio of earning assets to interest bearing
   liabilities                                        114.50%                                 114.46%
                                                    ========                                ========
</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.


                                       13
<PAGE>

Table of Non-performing Assets:

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

                                                  ------------------------------
                                                  At March 31,   At December 31,
                    Dollars in Thousands              2005            2004
                                                  ------------------------------
            Loans in Non-Accrual Status:
               Residential real estate (1)           $   82          $  141
               Commercial real estate                 2,577           2,168
               Commercial (2)                           535             243
               Consumer                                   5               9
                                                     ----------------------
                   Total non-accruing loans           3,199           2,561

            Loans Contractually Past Due 90 Days
            or More and Still Accruing Interest         272             190
            Troubled Debt Restructured Loans             --              --
                                                     ----------------------
                  Total non-performing loans          3,471           2,751
            Other real estate owned                      78              78
                                                     ----------------------
            Total non-performing assets              $3,549          $2,829
                                                     ======================
            Total non-performing assets as a
            percentage of total assets                 0.47%           0.38%
                                                     ======================
            Total non-performing loans as a
            percentage of total loans                  0.86%           0.70%
                                                     ======================

            (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


                                       14
<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
                                                                          March 31,
                                                                    ----------------------
                                                                       2005        2004
                                                                    ----------------------
                                                                    (Dollars in thousands)
<S>                                                                   <C>         <C>
            Balance at beginning of period                            $6,250      $5,757

            Charge offs:
            Residential real estate (1)                                   18         112
            Commercial real estate                                        --          43
            Commercial (2)                                                --          48
            Consumer                                                     162         120
                                                                      ------------------
                   Total charge offs                                     180         323
                                                                      ------------------

            Recoveries:
            Residential real estate (1)                                   20          13
            Commercial real estate                                        --          --
            Commercial (2)                                                10          20
            Consumer                                                      38          66
                                                                      ------------------
                    Total recoveries                                      68          99
                                                                      ------------------

            Net charge-offs                                              112         224
            Provision for loan losses                                    240         360
                                                                      ------------------
            Balance at end of period                                  $6,378      $5,893
                                                                      ==================

            Ratio of net charge-offs during the period to average
            loans outstanding during the period (annualized)            0.11%       0.25%
                                                                      ==================

            Allowance for loan losses to total loans                    1.59%       1.61%
                                                                      ==================

            Allowance for loan losses to non-performing loans            183%        170%
                                                                      ==================
</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


                                       15
<PAGE>

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

Overview.  During the first  quarter of 2005 our total assets  increased by less
than 1% in spite of  acquiring  two  branch  offices  previously  owned by HSBC.
Specifically,  total  assets  only  increased  by 0.5% or $4.060  million,  from
$750.861  million at December  31,  2004 to  $754.921  million at March 31, 2005
because the net proceeds obtained in the HSBC acquisition were primarily used to
reduce  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 we repaid the $15.000 million short-term  borrowing
and, in effect, substituted short-term borrowings with deposit liabilities.

During  the  quarter  an  increase  in total  loans  was  generally  offset by a
reduction  in  investment  securities.  Specifically,  total loans  increased by
$10.393 million or 2.7%, while total investment  securities  (including trading,
available-for-sale  and  held-to-maturity)  decreased by $9.520 million or 3.1%.
Approximately,  $7.6  million of the increase in total loans was due to the HSBC
branch  acquisition,  while $3.556  million of the decrease in total  investment
securities  was  due to a  decrease  in  the  value  of  the  available-for-sale
investment securities due to rising interest rates during the quarter.

Asset Quality.  We use several  measures to determine the overall credit quality
of our loan portfolio.  These include the level of delinquent loans (those 30 or
more days delinquent,  excluding loans placed on non-accrual  status), 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
March 31, 2005 the credit quality of our loan portfolio declined  modestly.  The
levels of delinquent  loans,  non-performing  loans, and potential problem loans
increased between the periods. Net loan charge-offs for the quarter totaled $112
thousand, as compared to $224 thousand during the same quarter in 2004.

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  $720 thousand or 26.2%,  from $2.751  million at December 31, 2004 to
$3.471  million at March 31,  2005.  The  increase in  non-performing  loans was
primarily  due to three loans (to one borrower)  totaling  $666  thousand  being
placed into non-accrual status during the quarter.

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.
During  the first  quarter  of 2005,  potential  problem  loans  increased  $827
thousand from $8.662 million at December 31, 2004 to $9.489 million at March 31,
2005. The increase in potential problem loans from the period ended December 31,
2004 to the period  ended March 31, 2005 was  primarily  due to a decline of the
credit-worthiness  of two large borrowers during the quarter with combined total
loan  balances of $1.649  million  offset by the  transfer of three  substandard
loans (to one borrower) totaling $666 thousand to non-accrual status.

At March 31, 2005,  loans that were 30 or more days delinquent  (excluding loans
placed  on  non-accrual  status)  totaled  $4.021  million  or  1.00%  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 $1.754 million
between the periods.  The increase in delinquent loans was primarily due to four
commercial real estate loans and one residential  real estate loan that exceeded
30 days delinquent prior to March 31, 2005.

The allowance for loan losses increased from $6.250 million at December 31, 2004
to  $6.378  million  at March  31,  2005.  The  allowance  for loan  losses as a
percentage  of  total  loans  outstanding  was  very  stable  at  1.60% of loans
outstanding  at December 31 2004,  as compared to 1.59% at March 31,  2005.  Our
management  and Board of  Directors  deemed  the  allowance  for loan  losses as
adequate at March 31, 2005.

The   credit   quality   of   the   investment   securities   portfolios,   both
available-for-sale and held-to-maturity,  remained strong during the quarter. At
March 31, 2005,  99.8% of the  securities  held in the Company's  bond portfolio
were rated "A" or better by Moody's credit rating service; 95.1% were rated AAA.
By  comparison,  at December 31, 2004,  99.8% were rated "A" or better and 94.1%
were rated AAA.


                                       16
<PAGE>

D. Comparison of Results of Operations for the Three-Months Ended March 31, 2005
and 2004

Overview.  During the first  quarter of 2005,  our net income and  earnings  per
share were $2.170  million and $0.19  respectively.  This was a $114 thousand or
5.0%  decrease  in net  income and a $0.01  decrease  in  earnings  per share as
compared  to the first  quarter  of 2004.  During  the first  quarter of 2004 we
earned  $2.284  million in net income and earnings  per share of $0.20.  The two
most  significant  factors which  contributed to the decrease in net income on a
comparable quarter basis were a $475 thousand decrease in investment  securities
gains,  offset by a $324 thousand  increase in net interest income. In the first
quarter of 2005, we recorded $244 thousand in investment  securities  gains,  as
compared to $719 thousand of investment securities gains in the first quarter of
2004.

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
first quarter of 2005 our return on average  assets and return on average equity
were 1.16% and 12.94%, respectively,  as compared to 1.27% and 14.00% during the
first quarter of 2004.

Net Interest  Income.  Net  interest  income is our most  significant  source of
revenue.  During  the first  quarter  of 2005 and  first  quarter  of 2004,  net
interest  income  comprised 82% and 77% of our net revenue (net interest  income
plus non-interest income),  respectively.  In the three-month period ended March
31, 2005, our net interest  income was $6.311  million.  By comparison,  for the
three-month  period  ended  March 31,  2004 our net  interest  income was $5.987
million.  The $324  thousand  improvement  in net  interest  income  between the
periods was the result of several factors, which are explained below.

During the last two quarters of 2004 and the first quarter of 2005,  the Federal
Open Market  Committee,  raised the target federal funds 175 basis points (seven
increases of 25 basis points).  These actions  prompted seven  corresponding  25
basis point  increases in the national  prime  lending rate, an index to which a
significant  portion  of our  variable  rate loan  portfolio  were  tied.  These
interest  rate  increases,  along  with a $31.846  million or 8.7%  increase  in
average loans outstanding,  increased the interest and fees on loans from $5.939
million in the three-month  period ended March 31, 2004 to $6.593 million in the
three-month  period ended March 31,  2005.  This  represents a $654  thousand or
11.0% increase between the periods.

The interest and dividends  earned on investment  securities also increased on a
comparable  quarter basis. The total interest and dividends earned on investment
securities,   including   trading,   available-for-sale   and   held-to-maturity
securities,  increased $72 thousand from $3.013 million during the first quarter
of 2004 to $3.085 million during the first quarter of 2005. The increase was due
to both an increase  in the average  volume of  investment  securities  totaling
$3.597  million  and an 8 basis  point  improvement  in the yield on  investment
securities.

The  increase  in both the yield on  earning  assets  and the  volume of earning
assets that drove the  improvement  in interest  income of $724  thousand,  were
partially offset by higher funding costs. As short-term interest rates increased
during the last two  quarters of 2004 and the first  quarter of 2005,  we raised
the  rates  of  interest  paid  on  our  interest-sensitive   deposit  accounts,
particularly money market, NOW and time accounts. These increases,  coupled with
modest increases in the average volume of all interest-bearing deposit accounts,
offset by a slight decrease in the rate paid on savings accounts,  resulted in a
$323 thousand  increase in the interest expense on deposit  liabilities  between
comparable  quarters.  Interest  expense on  borrowings  also  increased  by $77
thousand  between  the  periods  due to an  increase  in the  average  volume of
borrowings  in the first  quarter of 2005,  offset by a decrease  in the average
interest rate paid on borrowings.

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.


                                       17
<PAGE>

                                                      For the Three-months
                                                         Ended March 31,
                                                   ---------------------------
                                                          2005 vs. 2004
                                                   ---------------------------
                                                    Rate      Volume     Total
                                                   ---------------------------
                                                         (In thousands)
            Earning assets:
            Federal Funds Sold                     $  16      $  (9)     $   7
            Interest Bearing Deposits                (41)        32         (9)
            Securities                                37         35         72
            Loans                                    127        527        654
                                                   ---------------------------
                   Total earning assets              139        585        724
                                                   ---------------------------

            Interest bearing liabilities:
            Savings accounts                         (30)         9        (21)
            Money market accounts                     88          4         92
            NOW accounts                              15         (8)         7
            Time accounts                            202         43        245
            Borrowings                              (108)       185         77
                                                   ---------------------------
            Total interest bearing liabilities       167        233        400
                                                   ---------------------------

            Change in net interest income          $ (28)     $ 352      $ 324
                                                   ---------------------------

Net interest income was $324 thousand  greater in the  three-month  period ended
March 31, 2005 than in the  three-month  period ended March 31,  2004.  Interest
income  increased  $724  thousand  due to both an  increase  in the  rate and an
increase in the volume of earning assets.  More  specifically,  $585 thousand of
the increase in interest income was due to the increase in the volume of earning
assets,  while $139  thousand 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 $654 thousand or 90.3% of the net increase in interest income
period over period.

The $724  thousand  increase  in interest  income was offset by a $400  thousand
increase in the cost of interest bearing  liabilities;  $167 thousand due to the
increase in rate and $233 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 increased $245 thousand and $92 thousand respectively over the comparable
periods.  Interest  expense on borrowings  also  increased $77 thousand  between
periods,  primarily due to an increase in the volume of borrowings,  offset by a
lower cost of borrowings.  The cost of NOW accounts and savings accounts changed
only modestly on a comparable quarter basis.

Provision  for Loan  Losses.  We  recorded a  provision  for loan losses of $240
thousand for the  three-month  period ended March 31, 2005,  as compared to $360
thousand  for the  three-month  period  ended March 31,  2004,  a $120  thousand
decrease.  During the  three-month  period ended March 31, 2005, we recorded net
loan  charge-offs  of $112 thousand.  This compares to $224 thousand  during the
three-month  period  ended March 31,  2004 and $208  thousand  for the  previous
quarter  ended  December 31, 2004.  The favorable  reduction in net  charge-offs
during the quarter was countered by a modest deterioration in the overall credit
quality  of the loan  portfolio.  Non-performing  loans,  loans 30 or more  days
delinquent  (excluding  non  performing  loans) and potential  problem loans all
increased during the quarter.

Non-Interest  Income.  Non-interest  income decreased from $1.812 million in the
three-month  period  ended March 31, 2004 to $1.414  million in the  three-month
period ended March 31, 2005, a $398  thousand or 22.0%  decrease.  This decrease
was  primarily  driven by a $475  thousand  reduction in  investment  securities
gains. Specifically,  during the first quarter of 2004 we recorded $719 thousand
of investment  securities  gains,  as compared to $244 thousand during the first
quarter of 2005.  During the first  quarter  of 2004 we sold  $7.394  million of
available-for-sale  investment  securities  to fund loan  growth.


                                       18
<PAGE>

These sales, along with matured securities and trading securities gains totaling
$41 thousand,  resulted in net investment  securities gains of $719 thousand for
the  quarter.  By  comparison,  during the first  quarter of 2005,  we only sold
$5.351 million of available-for-sale  investment securities.  These sales, along
with matured securities and trading  securities losses of $3 thousand,  resulted
in net  investment  securities  gains of $244  thousand for the first quarter of
2005.

The decrease in investment  security gains coupled with a $22 thousand  decrease
in commissions  income and a $27 thousand  decrease in bank owned life insurance
income between the periods were partially  offset by a $51 thousand  increase in
service charges on deposit  accounts,  a $47 thousand  increase in other service
fees and a $21 thousand increase in other income.

Non-Interest Expense. Non-interest expense increased from $4.313 million for the
quarter  ended March 31, 2004 to $4.553  million for the quarter ended March 31,
2005,  a $240  thousand or 5.6%  increase.  Increases  in salaries  and benefits
expense,  occupancy expenses,  computer service fees,  advertising and marketing
expense  and  other  expenses,  were  partially  offset by small  reductions  in
furniture and fixture expense and professional fees.

Salaries and employee  benefits  increased  $127  thousand or 4.8%,  from $2.671
million  during  the first  quarter of 2004 to $2.798  million  during the first
quarter of 2005.  Salaries and overtime expense,  which is comprised of employee
base  salaries,   employee  commissions,   employee  incentives,   and  deferred
compensation  expense,  increased by $107  thousand or 5.1% between the periods,
from $2.114  million in the first quarter of 2004 to $2.221 million in the first
quarter of 2005.  The  remaining  $20  thousand of net  increase in salaries and
benefits  expense  was due to an  increase  in  F.I.C.A.  expense,  group  life,
retirement plan costs,  unemployment  insurance and other benefits  totaling $46
thousand,  offset  by  decreases  in group  health,  group  disability,  workers
compensation and employee education costs totaling $26 thousand.

Computer  service fee  expenses  increased  from $80  thousand  during the first
quarter  of 2004 to $131  thousand  during  the  first  quarter  of 2005,  a $51
thousand or 63.8%  increase.  Throughout the last three quarters of 2004 and the
first quarter of 2005 we executed  several new computer system contracts due to:
(i) a core computer operating system conversion scheduled for the second quarter
of 2005, (ii) increased system recovery and information  security demands on our
information  technology  systems,  and (iii) the  implementation of new customer
delivery systems.

Professional fees decreased $29 thousand or 12.9%, from $225 thousand during the
first quarter of 2004 to $196 thousand during the first quarter of 2005.  During
the first quarter of 2004, we incurred significant  professional fees related to
the Company's SEC common stock registration and American Stock Exchange listing.
These  fees did not recur  during the first  quarter  of 2005.  In spite of this
decrease in  professional  fees during the first quarter of 2005, we expect that
professional  fees will  increase in the last three  quarters of 2005 due to our
efforts to comply with various aspects of the Sarbanes - Oxley Act of 2002.

Occupancy  expenses  and  furniture  and fixture  expenses  increased  from $567
thousand  during  the first  quarter of 2004 to $605  thousand  during the first
quarter of 2005,  a $38 thousand or 6.7%  increase.  Much of the increase can be
attributed to our recent expansion activities, in particular, the opening of our
Johnson City (Broome  County),  New York office in March of 2004 and the opening
of our Kingston (Ulster County), New York office in April of 2004.

Other  expenses and  advertising  and  marketing  expenses  increased  from $770
thousand on a combined  basis in the first quarter of 2004 to $823 thousand on a
combined  basis in the first  quarter of 2005, a $53 thousand or 6.9%  increase.
Although  there were various  increases and  decreases in several  components of
other  expense and  advertising  and  marketing  expense,  much of the  increase
between  the  periods  can  be  attributed  to  expenses   associated  with  the
acquisition of two branch offices from HSBC,  namely a $40 thousand  increase in
check  printing  costs,  $12 thousand  increase in postage and  shipping,  a $15
thousand  increase in travel and  entertainment  and a $8  thousand  increase in
amortization expense.

Income  Taxes.  Income  tax  expense  decreased  from $842  thousand  during the
three-month  period ended March 31, 2004 to $762 thousand during the three-month
period  ended March 31, 2005.  The decrease in income tax expense was  primarily
due to a decreased  amount of pre-tax  income.  Our effective tax rate decreased
between  periods,  from 26.9% in the three-month  period ended March 31, 2004 to
26.0% in the  three-month  period  ended  March 31,  2005.  The  decrease in the
effective tax rate during the first quarter of 2005 was due to a greater portion
of our pre-tax income being generated from our tax-advantaged


                                       19
<PAGE>

subsidiary Wilber REIT, Inc. and a slight increase in non-taxable income.

E. 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 our 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:

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

Table of Liquidity Measures:

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

<TABLE>
<CAPTION>
            ------------------------------------------------------------------------
                           Liquidity Measure                March 31,   December 31,
            Dollars in Thousands                               2005         2004
            ------------------------------------------------------------------------
<S>                                                          <C>          <C>
            Cash and Cash Equivalents                        $19,299      $20,539
            ------------------------------------------------------------------------
            Available for Sale Investment Securities at
            Estimated Fair Value less Securities pledged
            for State and Municipal Deposits and
            Borrowings                                       $68,390      $63,472
            ------------------------------------------------------------------------
            Total Loan to Total Asset Ratio                    53.18%       52.08%
            ------------------------------------------------------------------------
            FHLBNY Remaining Borrowing Capacity              $21,104      $19,180
            ------------------------------------------------------------------------
            Correspondent Bank Lines of Credit               $ 3,800      $ 7,600
            ------------------------------------------------------------------------
</TABLE>


                                       20
<PAGE>

In addition to the above liquidity measures,  at March 31, 2005 and December 31,
2004 we had $15.109 million and $14.975 million, respectively, of cash surrender
value in our  bank-owned  life  insurance  portfolio.  These  policies  could be
terminated and surrendered for cash upon our demand.

Between  December 31, 2004 and March 31, 2005, our liquidity  position  improved
slightly  due to the  acquisition  of the  HSBC  branch  offices.  The net  cash
acquired from the  acquisition of the HSBC branches  during the first quarter of
2005 totaling $22.521 million were primarily used to repay borrowings.  This, in
turn,  increased the amount of our  unencumbered  available-for-sale  investment
securities  between the periods.  The substantial  majority of our  unencumbered
available-for-sale  investment  securities  are highly  liquid and could be sold
immediately  or  pledged  for  borrowing  purposes  to meet our  anticipated  or
unanticipated loan and other funding requirements.  In addition, the anticipated
principal repayments on existing loans and investment securities, as well as the
anticipated  deposit  retention  levels  continue to provide us with an adequate
amount of liquidity.

Our  commitments  to extend credit and stand-by  letters of credit  increased by
$9.583  million or 14.3%  between  December 31, 2004 to March 31, 2005. At March
31,  2005  commitments  to extend  credit and  stand-by  letters of credit  were
$76.586  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
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.

F. 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 March 31, 2005  stockholders'  equity was $66.336 million,  $1.269 million or
1.9% below  December  31,  2004  stockholders'  equity of $67.605  million.  The
decrease in stockholders'  equity was primarily due to a decrease in accumulated
other comprehensive  income.  During the quarter accumulated other comprehensive
income  decreased by $2.171 million,  from accumulated  comprehensive  income of
$396  thousand at  December  31, 2004 to an  accumulated  comprehensive  loss of
$1.775  million at March 31,  2005 due to a decline  in the market  value of our
available-for-sale investment securities.

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 March 31, 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 March 31, 2005 were 12.58% and 13.83%, 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 March 31, 2005,  under
this statutory  limitation,  the maximum amount that could have been paid by the
Bank subsidiary to the Company,


                                       21
<PAGE>

without special  regulatory  approval,  was $7.996  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 ALCO.

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" our 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 6 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


                                       22
<PAGE>

income are totals for the  12-month  period  beginning  April 1, 2005 and ending
March 31, 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%        8.75%        $24,704          ($975)         -3.80%            -1.47%
            -------------------------------------------------------------------------------------------
                2.00%        6.75%        $24,153        ($1,526)         -5.94%            -2.30%
            -------------------------------------------------------------------------------------------
                1.00%        6.75%        $24,800          ($879)         -3.42%            -1.33%
            -------------------------------------------------------------------------------------------
            No change        5.75%        $25,679             --              --                --
            -------------------------------------------------------------------------------------------
               -1.00%        4.75%        $25,517          ($162)         -0.63%            -0.24%
            -------------------------------------------------------------------------------------------
               -2.00%        3.75%        $24,844          ($835)         -3.25%            -1.26%
            -------------------------------------------------------------------------------------------
               -3.00%        2.75%        $24,606        ($1,073)         -4.18%            -1.62%
            -------------------------------------------------------------------------------------------
</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  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 $1.526  million or -2.30% of total
stockholders'  equity in a +2.00%  ramped  interest  rate shock.  Similarly,  we
project that net interest  income would  decrease by $835  thousand or -1.26% of
total  stockholders'  equity in a -2.00%  ramped  interest  rate shock.  This is
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 March 31, 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  Rule  13(a)-15(e)  and
15(d)-15(e)  under the Securities  Exchange Act of 1934, as amended) as of March
31, 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.


                                       23
<PAGE>

                           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 operation or cash
flow.

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

During the three-month period ended March 31, 2005, the rights of holders of our
registered  securities  were not  modified;  nor was any other class of security
issued that could materially limit or qualify our registered securities.

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  $1,500,000  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 and regulations of the
American Stock Exchange.  The following table summarizes the shares  repurchased
by us under this repurchase  program during the  three-month  period ended March
31, 2005:

Share Repurchases:

<TABLE>
<CAPTION>
                                                                                                    Remaining
                                              Total Number   Average Price                            Share
                                               of Shares        Paid per         Total Cost        Repurchase
      Period                                   Purchased          Share              (1)            Authority
      -------------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>               <C>               <C>
      January 1 - January 31, 2005                    0        $       --        $       --        $1,318,995
      February 1 - February 28, 2005             16,500             12.38           204,300         1,114,695
      March 1 - March 31, 2005                        0                --                --         1,114,695

                                                 ------------------------------------------------------------
      Total                                      16,500        $    12.38        $  204,300
</TABLE>

      (1) Excludes brokerage commissions paid by the Company.

All shares  purchased by the Company in the  three-month  period ended March 31,
2005 were purchased under the publicly announced program.

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

The  Company  did not default on any senior  securities  during the  three-month
period ended March 31, 2005.

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

None.


                                       24
<PAGE>

ITEM 5: Other Information
------

None.

ITEM 6: Exhibits
------

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


                                       25
<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: 05/05/2005
   -------------------------          -----------

Alfred S. Whittet
Vice Chairman, President and Chief Executive Officer


By: /s/ Joseph E. Sutaris       Dated: 05/05/2005
   -------------------------          -----------

Joseph E. Sutaris
Treasurer and Chief Financial Officer


                                       26
<PAGE>

                                  EXHIBIT INDEX

No.   Document

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

31.2  Certification   of  Chief  Financial   Officer  Pursuant  to  302  of  the
      Sarbanes-Oxley Act of 2002

32.1  Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350

32.2  Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350


                                       27