SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the fiscal year December 31, 1999           Commission file number 000-30140

                           OSWEGO COUNTY BANCORP, INC.
           (Name of Small Business Issuer as specified in its Charter)

          New York                                       16-1567491
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

44 East Bridge Street, Oswego, New York                      13126
(Address of Principal Executive Office)                   (Zip Code)

Issuer's telephone number, including Area Code         (315) 343-4100

-----------------------------------------------------------------------
Securities registered under Section 12(b) of the Exchange Act:

                                      None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 par value

                                (Title of Class)


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

              Yes  [X]                                       No [_]

         Indicate by check mark if disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of the issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB,

                                        [X]

         The Issuer's revenues for its most recent fiscal year are $8,338,000.

         The aggregate market value of the Common Stock held by non-affiliates,
computed by reference to the average bid and asked price, as of March 16, 2000,
was $3,313,000.

         As of March 16, 2000, there were 887,230 shares of common stock issued
and outstanding.
<PAGE>

                           OSWEGO COUNTY BANCORP, INC.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.       Sections of Annual Report to Stockholders for the fiscal year ended
         December 31, 1999 (Part II, Item 7)

2.       Proxy Statement for the 2000 Annual Meeting of Stockholders (Part III,
         Items 9-12)



                                FORM 10-KSB INDEX

                                                                            PAGE

PART I

         ITEM 1.     DESCRIPTION OF BUSINESS                                   1
         ITEM 2.     DESCRIPTION OF PROPERTY                                  23
         ITEM 3.     LEGAL PROCEEDINGS                                        24
         ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      24

PART II

         ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER         24
                     MATTERS
         ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF          25
                     OPERATION
         ITEM 7.     FINANCIAL STATEMENTS                                     35
         ITEM 8.     CHANGES IN AND DISAGREEMENTS  WITH ACCOUNTANTS ON        35
                     ACCOUNTING AND FINANCIAL DISCLOSURE

PART III

         ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL     35
                     PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
                     EXCHANGE ACT
         ITEM 10.    EXECUTIVE COMPENSATION                                   35
         ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND      35
                     MANAGEMENT
         ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS           35
         ITEM 13.    EXHIBITS, LIST AND REPORTS                               35
<PAGE>

                         ITEM 1. DESCRIPTION OF BUSINESS

Market Area

         Oswego County Bancorp, Inc. (the "Company" or "OCB") conducts
operations mainly through its wholly owned subsidiary, Oswego County Savings
Bank (the "Bank"), from the Bank's headquarters office in Oswego, New York and
four additional branch offices. The majority of loans and deposits held by the
Bank are generated within Oswego and northern Onondaga counties, a region
consisting of a mixture of suburban and rural areas.

         Since 1990, Oswego County has experienced population growth rates
slightly above the average for the State of New York and well below the national
average, while Onondaga County's population has declined. The 1999 population
estimates for Oswego and Onondaga Counties were 124,000 and 456,000,
respectively. Syracuse, New York is located within Onondaga County. Some
significant job losses in Oswego County in the early 1990s contributed to a
declining real estate market and a relatively high unemployment rate. While the
local economy has been stable in recent years, it has not enjoyed the robust
economic conditions experienced in other parts of the nation.

         Local banking competition is substantial with several other savings
institutions headquartered in the counties served by OCB. Additionally, branches
of money center banks, large regional banks, and certain other community banks
operate within Oswego and Onondaga Counties.

Lending Activities

         General. At December 31, 1999, the Company's total loans amounted to
$73.1 million. Net of the $1.1 million allowance for loan losses, loans were
$72.0 million at December 31, 1999 representing 58.6% of total assets. OCB
offers the following types of loans: single-family residential, home equity,
commercial real estate, commercial business and consumer loans. At December 31,
1999, $55.6 million or 76.1% of total loans consisted of residential mortgage
and home equity loans. Commercial mortgage loans totaled $7.9 million on that
date, representing 10.8% of total loans. Commercial loans totaled $5.9 million
and consumer loans totaled $3.7 million at December 31, 1999.

         The types of loans that the Company may originate are subject to
federal and state laws and regulations. Interest rates charged on loans are
affected principally by loan demand and the supply of money available for
lending purposes and the rates offered by its competitors. These factors are, in
turn, affected by general economic conditions, the monetary policy of the
federal government, including the Federal Reserve Board, legislative and tax
policies, and governmental budgetary matters.


<PAGE>

         A New York-chartered savings bank generally may not make loans to one
borrower and related entities in an amount which exceeds 15% of its unimpaired
capital and surplus, although loans in an amount equal to an additional 10% of
unimpaired capital and surplus may be made to a borrower if the loans are fully
secured by readily marketable securities. At December 31, 1999, the Bank's limit
on loans to one borrower was $2.0 million.

         Loan Portfolio. The following table sets forth the composition of OCB's
loan portfolio by type of loan at the dates indicated.


<TABLE>
<CAPTION>
                                                              At December 31,
                                                      1999                        1998
                                                      ----                        ----
                                            Amount         %              Amount         %
                                          ---------     ------         ----------     ------
                                                       (Dollars in Thousands)
<S>                                       <C>            <C>            <C>            <C>
           Residential mortgages and
              home equity loans           $ 55,594       76.05%         $ 60,829       84.39%
           Commercial mortgages              7,857       10.75             8,950       12.42
           Commercial loans                  5,903        8.08               265        0.37
           Consumer loans                    3,744        5.12             2,037        2.82
                                          --------      ------          --------      ------
           Total loans                      73,098      100.00%           72,081      100.00%
                                                        ======                        ======
           Allowance for loan losses       (1,069)                       (1,068)
                                           -------                       -------

           Net loans                      $ 72,029                      $ 71,013
                                          ========                      ========
</TABLE>

         Loans Due or Adjusting After One Year. The following table sets forth
the dollar amount of all loans, before net items, due or adjusting after one
year from December 31, 1999. The table lists the total loans in each category as
well as those with fixed interest rates and those with floating or adjustable
interest rates.

                                                   Floating or
                                                   Adjustable-
                                 Fixed-Rate           Rate               Total
                                 ----------         --------             -----
                                                 (In Thousands)
Residential mortgages and
   home equity loans               $ 11,871         $ 10,140          $ 22,011
Commercial mortgages                    798            1,032             1,830
Commercial loans                      1,151              672             1,823
Consumer loans                        1,661               21             1,682
                                   --------         --------          --------

  Total                            $ 15,481         $ 11,865          $ 27,346
                                   ========         ========          ========


         Origination, Purchase and Sale of Loans. The lending activities of the
Company are subject to the written, non-discriminatory, underwriting standards
and loan origination procedures established by the Board of Directors,
management, secondary market investors such as Freddie Mac and private mortgage
insurance companies. The Company obtains loan originations from a variety of
sources, including referrals from real estate brokers, developers, builders,
existing customers, newspaper, radio and walk-in customers. Loan applications
are taken by lending personnel, and the loan origination department supervises
the procurement of


                                      -2-
<PAGE>

credit reports, appraisals and other documentation involved with a loan.
Property valuations are performed by independent outside appraisers licensed in
New York State. OCB requires borrowers to obtain hazard insurance on any
property securing a loan, and title insurance is normally required on all newly
originated mortgage loans.

         The loan approval process is intended to assess the borrower's ability
to repay the loan, the viability of the loan and the adequacy of the value of
the property that will secure the loan. A loan application file is first
reviewed by a loan originator or branch manager and then underwritten to
established standards and policies. The Board has granted underwriting authority
to branch managers, loan underwriters, senior consumer and commercial loan
officers, and the president in varying levels. The Board Loan Committee usually
must approve any loan made over $100,000, except those which conform to
standards permitting their resale into the secondary market (which must be
approved by one of four designated officers).

         Historically, the Company has originated substantially all of the loans
in the portfolio and held them until maturity. However, in early 1998, because
of customer preference for fixed-rate mortgage loans, OCB began originating
long-term, fixed-rate residential mortgage loans with terms conforming to
secondary market standards. While the Company has rarely purchased loans in the
past, in 2000 it expects to begin acquiring newly originated residential
mortgage loans from certain third party entities. Prior to purchase, such loans
will be evaluated under the Company's normal underwriting criteria.

         Residential Mortgages and Home Equity Loans. Historically, the Company
has concentrated its lending activities on the origination of loans secured
primarily by first mortgage liens on existing single-family (one-to-four unit)
residences and home equity loans secured by second mortgages on single-family
residences. At December 31, 1999, $55.6 million or 76.1% of total loans
consisted of such loans.

         From the early 1980s until early 1998, the Company originated primarily
adjustable-rate residential mortgage loans in order to manage its interest-rate
risk. However, in February 1998, the Company commenced the origination of
long-term, fixed-rate single-family residential mortgage loans in order to
provide a full range of products to its customers, but only under terms,
conditions and documentation which conform to standards which permit their
resale in the secondary market.

         Adjustable-rate, single-family, residential mortgage loans generally
have up to 30-year terms and an interest rate which adjusts every year or three
years in accordance with a designated index (currently the weekly average yield
on U.S. Treasury securities adjusted to a constant comparable maturity of one
year or three years, respectively, as made available by the Federal Reserve
Board). The Company generally does not offer deeply discounted interest rates.
Loans generally have a cap on the amount of any increase or decrease in the
interest rate during the applicable adjustment period, and various caps,
depending on when the loan was originated, on the amount which the interest rate
can increase or decrease over the life of the loan. Adjustable-rate loans
currently being originated are not assumable without the Company's consent, and
do not contain prepayment penalties. The company has not engaged in the practice
of establishing a cap on the payments that could allow the loan balance to
increase rather than decrease,


                                      -3-
<PAGE>

resulting in negative amortization. Adjustable-rate loans decrease the risks
associated with changes in interest rates but involve other risks, primarily
because as interest rates rise, the payment by the borrower rises to the extent
permitted by the terms of the loan, thereby increasing the potential for
default. At the same time, the marketability of the underlying property may be
adversely affected by higher interest rates. Management believes that these
risks, which have not had a material adverse effect on the Company to date,
generally are less than the risks associated with holding fixed-rate loans in an
increasing interest rate environment. Approximately $41.8 million or 78.1% of
the permanent residential mortgage loans in the loan portfolio at December 31,
1999 had adjustable interest rates.

         The demand for adjustable-rate loans in OCB's primary market area has
been a function of several factors, including the level of interest rates, the
expectations for changes in the level of interest rates and the difference
between the interest rates and loan fees offered for fixed-rate loans and
adjustable-rate loans. The relative amount of fixed-rate and adjustable-rate
residential loans that can be originated at any time is largely determined by
the demand for each in a competitive environment. Through mid 1999, interest
rate levels were conducive to originations of the Company's fixed rate
residential mortgages. As interest rates continued to rise in the latter part of
1999 and into early 2000, borrowers have preferred adjustable rate loans and
originations of such loans have increased.

         Pursuant to underwriting guidelines adopted by the Board of Directors,
the Company will lend up to 95% of the appraised value of the property securing
a single-family residential loan, and generally requires borrowers to obtain
private mortgage insurance on the portion of the principal amount of the loan
that exceeds 80% of the appraised value of the security property. The Company
generally requires title insurance insuring the priority and validity of its
mortgage lien, as well as fire and extended coverage casualty insurance in order
to protect the properties securing its residential and other mortgage loans.
Borrowers may be required to advance funds, with each monthly payment of
principal and interest, to a loan escrow account from which the Company makes
disbursements for items such as real estate taxes, hazard insurance premiums and
mortgage insurance premiums as they become due. The properties securing mortgage
loans are appraised by independent appraisers licensed in New York State.

         Home equity loans are originated for up to 80% of the appraised value,
less the amount of any existing prior liens on the property. OCB secures home
equity loans with a mortgage on the property (generally a second mortgage) and
will originate the loan even if another institution holds the first mortgage.
There is a maximum term of ten years on fixed-rate and 15 years on
adjustable-rate home equity loans. At December 31, 1999, home equity loans
totaled $1.3 million or 1.8% of total loans. OCB also offers home equity lines
of credit in amounts of up to 80% of the appraised value, or 90% if the Company
already has a first lien on the property, less the amount of existing prior
liens. At December 31, 1999, home equity lines of credit totaled $840,000 or
1.1% of total loans.

         Consumer Loans. The Company makes loans for a wide variety of personal
or consumer purposes. At December 31, 1999, $3.7 million or 5.1% of total loans
consisted of consumer loans. OCB originates consumer loans in order to provide a
full range of financial services to customers and because such loans generally
have shorter terms and higher interest


                                      -4-
<PAGE>

rates than single-family residential mortgage loans. The consumer loans offered
include loans secured by deposit accounts, automobile loans, recreational
vehicle loans, boat loans and other miscellaneous secured and unsecured personal
consumer loans.

         Loans secured by deposit accounts amounted to $226,000 or 0.3% of total
loans at December 31, 1999. Such loans are originated for up to 100% of the
account balance, with a hold placed on the account restricting the withdrawal of
the account balance. The interest rate on the loan is typically equal to the
interest rate paid on the deposit account plus 3%. OCB offers automobile loans
on both new and used vehicles, with most of the loans secured by used vehicles.
Automobile loans have terms of up to five years and have fixed interest rates.
Such loans amounted to $1.0 million or 1.4% of total loans at December 31, 1999.
Unsecured personal lines of credit amounted to $1.7 million or 2.4% of total
loans at December 31, 1999. Unsecured personal loans amounted to $684,000 or
0.9% of total loans at December 31, 1999.

         Consumer loans generally have shorter terms and higher interest rates
than mortgage loans but generally involve more credit risk than mortgage loans
because of the type and nature of the collateral and, in certain cases, the
absence of collateral. In addition, consumer lending collections are dependent
on the borrower's continuing financial stability, and thus are more likely to be
adversely affected by job loss, divorce, illness and personal bankruptcy. In
most cases, any repossessed collateral for a defaulted consumer loan will not
provide an adequate source of repayment of the outstanding loan balance because
of improper repair and maintenance of the underlying security. The remaining
deficiency often does not warrant further substantial collection efforts against
the borrower. The Company believes that generally higher yields earned on
consumer loans compensate for the increased credit risk associated with such
loans. Furthermore, consumer loans facilitate OCB's efforts to manage interest
rate risk and to provide a full range of services to its customers.

         Commercial Mortgage Loans. At December 31, 1999, $7.9 million or 10.8%
of total loans consisted of commercial mortgage loans. The majority of
commercial mortgage loans are secured by mixed-use properties (partly commercial
and partly residential) and apartment buildings located in the Company's primary
market area. Commercial mortgage lending is generally considered to involve a
higher degree of risk than single-family residential lending. Such lending
typically involves large loan balances concentrated in a single borrower or
groups of related borrowers. In addition, the payment experience on loans
secured by income-producing properties is typically dependent on the successful
operation of the related real estate project and thus may be subject to a
greater extent to adverse conditions in the real estate market or in the economy
generally.

         Commercial Business Loans. The Company's portfolio of commercial
business loans amounted to $5.9 million at December 31, 1999. OCB had not been
an active originator of such loans until 1998 when an experienced commercial
lending manager joined the Company and began developing and promoting OCB's
related loan products. The Company concentrates its efforts on making commercial
business loans in amounts of $50,000 to $1.0 million to small and medium-sized
entities located in OCB's market area. OCB has targeted commercial business
loans for expansion because yields are generally higher, terms are typically
shorter and the


                                      -5-
<PAGE>

prevalence of adjustable or floating rates of interest is greater than in
certain other types of lending.

         Commercial business loans are generally deemed to involve a greater
degree of risk than single-family residential mortgage loans. While commercial
business lending is relatively new to OCB, the Company has implemented
underwriting, monitoring and collection policies and procedures that management
believes to be prudent.

         Loan Origination Fees. In addition to interest earned on loans, the
Company receives loan origination fees or "points" on the origination of
commercial mortgage loans. Loan points are a percentage of the principal amount
of the mortgage loan which is charged to the borrower at the time the loan is
originated.

Asset Quality

         General. When a borrower fails to make a required payment on a loan,
the Company attempts to cure the deficiency by contacting the borrower and
seeking payment. Late charges are generally imposed following the tenth day
after a payment is due on consumer and commercial loans and the fifteenth day
after a payment is due on mortgage loans. In most cases, deficiencies are cured
promptly. If a delinquency extends beyond 30 days, the loan and payment history
is reviewed and efforts are made to collect the loan. While the Company
generally prefers to work with borrowers to resolve such problems, when the
account becomes 60 to 90 days delinquent, OCB institutes foreclosure or other
proceedings, as necessary, to minimize any potential loss.

         A loan is placed on non-accrual status when it is 90 days or more past
due. In addition, the Company places any loan on non-accrual status if any part
of it is classified as doubtful or loss (or if any part has been charged off.)
When a loan is placed on non-accrual status, total interest accrued and unpaid
to date is reversed and charged to interest income. Subsequent payments are
either applied to the outstanding principal balance or recorded as interest
income, depending on the assessment of the ultimate collectibility of the loan.

         Real estate acquired by the Company as a result of foreclosure or by
deed-in-lieu of foreclosure is classified, under generally accepted accounting
principles, as real estate owned until sold. Real estate owned properties are
carried at the lower of fair value minus estimated costs to sell the property,
or cost (generally the balance of the loan on the property at the date of
acquisition). Writedowns to estimated fair value at the time of foreclosure are
charged to the allowance for loan losses. After the date of acquisition, all
costs incurred in maintaining the property are expensed and costs incurred for
the improvement or development of such property are capitalized. Adjustments to
carrying value of such properties that result from subsequent declines in fair
value are charged to operations in the period in which the decline occurs.


                                      -6-
<PAGE>

         Non-Performing Assets. The following table sets forth the amounts and
categories of the company's non-performing assets at the dates indicated.

                                                             At December 31,
                                                            1999          1998
                                                           ------        ------
                                                          (Dollars in Thousands)
Non-accruing loans:
 Residential mortgages and home equity
    loans                                                  $  888        $1,017
  Commercial mortgages                                        139           671
  Consumer                                                     37
                                                           ------        ------
    Total                                                   1,064         1,688
                                                           ------        ------

Restructured commercial mortgage loans                        250
                                                                         ------
Total non-performing loans                                  1,314         1,688
                                                           ------        ------

Foreclosed assets:
  Residential real estate                                     255           128
  Commercial real estate                                                     67
                                                           ------        ------
     Total                                                    255           195
                                                           ------        ------

Total non-performing assets                                $1,569        $1,883
                                                           ======        ======

Non-performing assets to total assets                        1.28%         1.70%
                                                           ======        ======

         The Company had no accruing loans which were more than 90 days
delinquent at December 31, 1999 or 1998. If all non-accruing loans had been
current in accordance with their terms during the years ended December 31, 1999
and 1998, additional interest income on such loans would have amounted to
$56,000 and $81,000, respectively.

         Classified Assets. Federal regulations require that each insured
savings bank classify its assets on a regular basis. In addition, in connection
with examinations of insured institutions, federal examiners have authority to
identify problem assets and, if appropriate, classify them. There are three
classifications for problem assets: "substandard," "doubtful" and "loss."
Substandard assets have one or more defined weaknesses and are characterized by
the distinct possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a high possibility of loss. An
asset classified loss is considered uncollectible and of such little value that
continuance as an asset of the institution is not warranted. Another category
designated "special mention" also must be established and maintained for assets
which do not currently expose an insured institution to a sufficient degree of
risk to warrant classification as substandard, doubtful or loss. Assets
classified as substandard or doubtful require the institution to establish
general allowances for potential losses. If an asset or portion thereof is
classified loss, the insured institution must either establish specific
allowances for loan losses in the amount of 100% of the portion of the asset
classified loss, or charge off such amount. General loss allowances established
to cover possible losses related to assets classified substandard or doubtful
may be included in determining an institution's regulatory capital, while
specific valuation allowances for loan losses do not qualify as regulatory
capital. Federal examiners may disagree with an insured institution's
classifications and amounts reserved.


                                      -7-
<PAGE>

         Exclusive of any assets classified as loss which have been fully
reserved or charged-off, the Company's classified assets at December 31, 1999
consisted of $617,000 of assets classified as substandard, which represented
0.5% of total assets. There were no assets classified as doubtful or loss at
such date.

         Allowance for Loan Losses. At December 31, 1999, the allowance for loan
losses amounted to $1.1 million or 1.46% of the total loan portfolio. The
Company's loan portfolio consists primarily of residential mortgage, home equity
and commercial mortgage loans and, to a lesser extent, consumer loans and
commercial loans. Management regularly reviews the loan portfolio and makes
provisions for loan losses in order to maintain the adequacy of the allowance.
The allowance for loan losses consists of amounts specifically allocated to
non-performing loans and potential problem loans (if any) as well as allowances
determined for each major loan category. Loan categories such as single-family
residential mortgages and consumer loans are generally evaluated on an aggregate
or "pool" basis by applying loss factors to the current balances of the various
loan categories. The loss factors are determined by management based on an
evaluation of historical loss experience, delinquency trends, volume and type of
lending conducted, and the impact of current economic conditions in the
Company's market area. While OCB uses the best information available to make
evaluations, future adjustments to the allowance may be necessary if conditions
differ substantially from the assumptions used in making the evaluation. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the allowance for loan losses. Such agencies may
require the Company to recognize additions to the allowance based on their
judgments about information available to them at the time of their examinations.

         The following table sets forth an analysis of the Company's allowance
for loan losses during the periods indicated.

                                                       Year Ended December 31,
                                                         1999            1998
                                                       -------         -------
                                                       (Dollars in Thousands)

Total loans outstanding at end of period               $ 73,098       $ 72,081
                                                       ========       ========

Average loans outstanding                              $ 72,061       $ 75,648
                                                       ========       ========

Allowance for loan losses
 at beginning of period                                $  1,068       $  1,409
   Charge-offs                                             (157)          (526)
   Recoveries                                                38             65
                                                       --------       --------
   Net charge-offs                                         (119)          (461)

Provision for loan losses                                   120            120
                                                       --------       --------
Allowance for loan losses at end of period             $  1,069       $  1,068
                                                       ========       ========
Allowance for loan losses as a percent of
 total loans outstanding                                   1.46%          1.48%
                                                       ========       ========
Ratio of net charge-offs to average loans
 outstanding                                               0.17%          0.61%
                                                       ========       ========


                                      -8-
<PAGE>

         The following table presents the allocation of the Company's allowance
for loan losses by type of loan at each of the dates indicated.

                                                   At December 31,
                                            1999                   1998
                                            ----                   ----

                                                 Loan                   Loan
                                               Category               Category
                                     Amount     as a %     Amount      as a %
                                       of      of Total      of       of Total
                                    Allowance   Loans     Allowance    Loans
                                   ---------    -----     ---------    -----
                                            (Dollars in Thousands)
Residential mortgages and
    home equity loans               $  377      76.05%     $  527      84.39%
Commercial mortgages                   336      10.75         408      12.42
Commercial loans                       134       8.08           9       0.37
Consumer loans                          87       5.12          42       2.82
Unallocated                            135                     82
                                    ------     ------      ------     ------

Total                               $1,069     100.00%     $1,068     100.00%
                                    ======     ======      ======     ======


Securities

         The Company has authority to invest in various types of liquid assets,
including United States Treasury obligations, securities of various federal
agencies and of state and municipal governments, certain corporate securities,
certificates of deposit at federally insured banks and savings institutions and
federal funds. Each purchase of a security is ratified by the Board of Directors
and the Asset Liability Management Committee.

         The largest component of the Company's securities portfolio are
securities issued by U.S. government-sponsored agencies which had a carrying
value of $25.2 million or 67.8% of the portfolio as of December 31, 1999. As of
that same date, the portfolio also included $8.2 million of general obligations
of corporations and municipalities and $3.1 million of mortgage-backed
securities.

         At December 31, 1999, the Company's securities portfolio had an
amortized cost of $38.0 million. The amortized cost of securities classified as
held to maturity at December 31, 1999 was $16.3 million with a fair value of
$15.8 million. The amortized cost of securities available for sale at December
31, 1999 was $21.7 million with a fair value of $20.8 million.


                                      -9-
<PAGE>

         The following table presents the composition of the Company's
securities portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                             At December 31,
                                                       1999                     1998
                                                       ----                     ----
                                               Carrying    Percent      Carrying   Percent
                                                 Value     of Total      Value     of Total
                                                -------   ----------    -------   ----------

                                                             (Dollars in Thousands)
<S>                                             <C>                     <C>             <C>
Securities available for sale (fair value):

 Debt securities:
       United States Treasury                   $  --             -%    $ 1,020         6.90%
       United States Government
         Agency obligations                      20,202        96.97     13,762        93.09
 Equity securities:
       Corporate stocks                             632         3.03          2         0.01
                                                -------                 -------   ----------

Total securities available for sale             $20,834       100.00%   $14,784       100.00%
                                                -------   ----------    -------   ----------

Securities held to maturity (amortized cost):

   Debt securities:
      Corporate and municipal
        Securities:                             $ 8,171        50.11%   $ 4,125        30.04%
      Mortgage-backed securities:
       GNMA                                       1,369         8.39      2,164        15.76
       FNMA                                       1,014         6.22        426         3.10
       FHLMC                                         47         0.29         22         0.16
       Small Business
         Administration                             711         4.36        502         3.66
       United States Government
         Agency obligations                       4,995        30.63      6,491        47.28
                                                -------   ----------    -------   ----------


Total securities held to maturity               $16,307       100.00%   $13,730       100.00%
                                                -------   ----------    -------   ----------

Total securities                                $37,141                 $28,514
                                                =======                 =======
</TABLE>


                                      -10-
<PAGE>

         The following table presents information regarding the carrying value,
weighted average yields and contractual maturities of the Company's debt
securities available for sale and debt securities held to maturity, including
mortgage-backed securities, as of December 31, 1999. Weighted average yields are
based on amortized cost.

<TABLE>
<CAPTION>
                                                                   At December 31, 1999
                             ------------------------------------------------------------------------------------------------
                                     One Year      More Than One      More Than Five            More Than
                                      Or Less   Year to Five Years    Years to Ten Years        Ten Years             Total
                             ------------------------------------------------------------------------------------------------
                                     Weighted            Weighted             Weighted          Weighted             Weighted
                            Carrying  Average   Carrying  Average   Carrying   Average Carrying  Average    Carrying  Average
                              Value    Yield      Value    Yield      Value     Yield    Value    Yield       Value    Yield
                             ------- --------   -------- --------   --------  -------- -------- --------    -------- --------
                                                                     (Dollars in Thousands)
<S>                          <C>                 <C>        <C>      <C>        <C>      <C>                 <C>        <C>
  Securities available
     for sale (fair value):
U.S. Government
  Agency obligations         $  --      --       $ 6,565    5.94%    $13,637    6.70%    $  --      --       $20,202    6.45%
                             =======             =======             =======             =======             =======

Securities held to maturity
   (amortized cost):
U.S. Government
  Agency obligations         $ 1,002    6.35%    $ 3,993    5.90%    $  --      --       $  --      --       $ 4,995    5.99%


Corporate and
 Municipal securities            250    8.36%      3,469    6.46%      3,401    6.33%      1,051    6.22%      8,171    6.43%

Mortgage-backed
 securities                     --                          --         1,539    6.28%      1,602    5.93%      3,141    6.10%
                             -------             -------             -------             -------             -------
    Total due                $ 1,252    6.75%    $ 7,462    6.16%    $ 4,940    6.31%    $ 2,653    6.04%    $16,307    6.23%
                             =======             =======             =======             =======             =======
</TABLE>


         Mortgage-Backed Securities. Mortgage-backed securities represent a
participation interest in a pool of single-family mortgages, the principal and
interest payments on which are passed from the mortgage originators, through
intermediaries (generally U.S. Government agencies and government-sponsored
enterprises) that pool and repackage the participation interests in the form of
securities, to investors such as the Company. U.S. Government agencies and
government-sponsored enterprises, which guarantee the payment of principal and
interest to investors, primarily include Freddie Mac, Fannie Mae and Ginnie Mae.

         Freddie Mac, which is a corporation chartered by the U.S. Government,
issues participation certificates backed principally by conventional mortgage
loans. Freddie Mac guarantees the timely payment of interest and the ultimate
return of principal on participation certificates. Fannie Mae is a private
corporation chartered by the U.S. Congress with a mandate to establish a
secondary market for mortgage loans. Fannie Mae guarantees the timely payment of
principal and interest on Fannie Mae securities. Ginnie Mae is a government
agency within the Department of Housing and Urban Development which is intended
to help finance government-assisted housing programs. The timely payment of
principal and interest on GNMA securities is guaranteed by the GNMA and backed
by the full faith and credit of the U.S. Government. Because these government
sponsored agencies were established to provide support for low- and
middle-income housing, there are limits to the maximum size of loans that
qualify for these programs. To accommodate larger-sized loans and loans that,
for other reasons, do not


                                      -11-
<PAGE>

conform to the agency programs, a number of private institutions have
established their own home-loan origination and securitization programs.

         Mortgage-backed securities typically are issued with stated principal
amounts, and the securities are backed by pools of mortgages of varying
maturities with interest rates that are within a range. The underlying pool of
mortgages may be fixed-rate or adjustable-rate, and prepayment risk is passed on
to the certificate holder. The life of a mortgage-backed pass-through security
approximates the life of the underlying mortgages.

         At December 31, 1999, the amortized cost of the Company's
mortgage-backed securities amounted to $3.1 million, which represented 2.6% of
total assets at that date. All of the Company's mortgage-backed securities at
December 31, 1999 were insured or guaranteed by Ginnie Mae, Freddie Mac, the
Small Business Administration or Fannie Mae, and were classified as held to
maturity. Approximately 65% of OCB's mortgage-backed securities had adjustable
rates of interest at December 31, 1999.

         Mortgage-backed securities generally yield less than the loans which
underlie such securities because of payment guarantees or credit enhancements
and fees paid to servicers. Furthermore, mortgage-backed securities are
generally more liquid than individual mortgage loans and may be used to
collateralize borrowings or other obligations of the Company.

Sources of Funds

         General. Deposits are the primary source of the Company's funds for
lending and other investment purposes. In addition to deposits, funds are
derived from borrowings and principal and interest payments on loans and
mortgage-backed securities. Loan repayments are a relatively stable source of
funds, while deposit inflows and outflows are significantly influenced by
general interest rates and money market conditions. Prior to late 1999, the
company had generally not used borrowings as a source of funds. However,
borrowings may be used on a short-term basis to compensate for reductions in the
availability of funds from other sources, or on a longer-term basis for general
business purposes.

         In December 1999, OCB entered into a five-year, $5.0 million
convertible borrowing agreement with the Federal Home Loan Bank of New York
(FHLB-NY) to support growth in investments and loans. Interest is fixed at 6.0%
until December 2001 when the FHLB-NY may convert the borrowing into a new
arrangement at a then current interest rate. OCB securities with an amortized
cost of $6.2 million in December 1999 are pledged in support of the borrowing.

         The Company also has available lines of credit under the FHLB-NY's
overnight and one-month repricing advance programs, amounting to $5.8 million in
each case. Interest rates under the one-month program would be subject to daily
adjustment. Also available to OCB are up to $5.0 million in collateralized
borrowings under an overnight line of credit with a commercial bank.


                                      -12-
<PAGE>

         Deposits. The Company's deposit products include a broad selection of
deposit instruments, including demand deposits, money market deposits, savings
deposits and time deposits. Deposit account terms vary, with the principal
differences being the minimum balance required, the time periods the funds must
remain on deposit and the interest rate.

         The Company's deposits are obtained primarily from residents of Oswego
County and Onondaga County in New York State. It is estimated that less than 1%
of current deposits are obtained from customers residing outside New York State.
brokers are not retained to solicit funds for deposit with the Company or to
actively solicit negotiable-rate certificates of deposit with balances of
$100,000 or more.

         The Company sets interest rates, maturity terms, service fees and
withdrawal penalties on a periodic basis. Determination of rates and terms are
predicated on funds acquisition and liquidity requirements, rates paid by
competitors, growth goals and federal and state regulations.

         The following table sets forth the dollar amount of deposits in the
various types of programs offered by the Company at the dates indicated.

<TABLE>
<CAPTION>

                                                             December 31,
                                                    1999                         1998
                                                    ----                         ----
                                            Amount           %           Amount           %
                                          ----------    --------      ---------     ---------
                                                          (Dollars in Thousands)
<S>                                           <C>          <C>           <C>            <C>
         Time deposits:
                  2.00% - 3.99%           $       42        0.04%     $      34          0.03%
                  4.00% - 5.99%               33,557       33.52         33,724         34.92
                  6.00% - 7.99%                4,190        4.18         4, 489          4.66
                                          ----------    --------      ---------     ---------
                Total time deposits:          37,789       37.74         38,247         39.61
                                          ----------    --------      ---------     ---------
         Transaction accounts:
         Savings deposits                     48,864       48.81         46,365         48.02
         Money market deposits                   136        0.14            322          0.33
         Demand deposits                      13,329       13.31         11,630         12.04
                                          ----------    --------      ---------     ---------
                 Total transaction
                     accounts                 62,329       62.26         58,317         60.39
                                          ----------    --------      ---------     ---------
                 Total deposits             $100,118      100.00%       $96,564        100.00%
                                          ==========    ========      =========     =========
</TABLE>


The following table sets forth the maturities of certificates of deposit with
principal amounts of $100,000 or more at December 31, 1999.

         Certificates of deposit
         maturing in quarter ending:                             Amount
         ---------------------------                             ------
                                                               (Thousands)

         March 31, 2000                                          $   675
         June 30, 2000                                             2,754
         September 30, 2000                                          426
         After September 30, 2000                                  2,686
                                                                --------
         Total certificates of deposit with
           balances of $100,000 or more                          $ 6,541
                                                                ========



                                      -13-
<PAGE>

                                   REGULATION

General

         The Bank is a New York-chartered stock savings bank, and its deposit
accounts are fully insured by the FDIC. The Bank is subject to extensive
regulation by both the New York State Banking Department (the "Department") and
the FDIC.

         The Bank must file reports with the Department and the FDIC concerning
its activities and financial condition. The Bank must obtain regulatory approval
prior to entering into certain transactions, such as mergers with, or
acquisitions of, other depository institutions and opening or acquiring branch
offices. The Department and the FDIC periodically examine the Bank's compliance
with various regulatory requirements to ensure that the Bank is being operated
in a safe and sound manner. This regulation and supervision is intended
primarily for the protection of the deposit insurance funds and depositors. The
regulatory authorities have extensive discretion in exercising their supervisory
and enforcement activities, including the setting of policies regarding asset
classification and loan loss reserves.

         OCB and Oswego County MHC, as bank holding companies, are required to
file certain reports with, and otherwise comply with, the rules and regulations
of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") and the Department. As a publicly held company, OCB is also subject to
rules and regulations of the Securities and Exchange Commission ("SEC") under
the federal securities laws. Any change in the regulations governing the Bank or
OCB, whether by a regulatory agency or through legislation, could have a
material adverse impact on the Bank and OCB and their operations and
stockholders. The following is a summary of laws and regulations applicable to
the Bank, OCB and Oswego County MHC.

New York Regulation of the Bank

         Powers. The Bank derives its lending, investment and other powers
primarily from provisions of the New York Banking Law and regulations. Under
these laws and regulations, savings banks may invest in real estate mortgages,
consumer and commercial loans, certain types of debt securities, including
certain corporate debt securities and obligations of federal, state and local
governments and agencies, certain types of corporate equity securities and
certain other assets. A savings bank may also exercise trust powers upon
approval of the New York Banking Board. The exercise of these lending,
investment and other powers, however, may be limited by federal law and
regulations.

         Community Reinvestment Act. The New York Banking Law, like the federal
Community Reinvestment Act discussed below, requires New York banking
institutions to serve the credit needs of its local community. Under the
regulations, the Department makes biennial community reinvestment evaluations of
each banking institution and assesses each institution's compliance with the New
York regulations for community reinvestment. The Bank's latest rating from the
Department was "satisfactory."


                                      -14-
<PAGE>

         Limitations on Dividends. Under the New York Banking Law, the Bank will
not be able to declare, or pay any dividends if capital is impaired or would be
impaired as a result of the dividend. In addition, the New York Banking Law
provides that the Bank cannot declare or pay dividends in any calendar year in
excess of its "net profits" for that year combined with its "retained net
profits" of the two preceding years, less any required transfer to surplus or a
fund for the retirement of preferred stock, without prior regulatory approval.

         Enforcement. Under the New York Banking Law, the New York
Superintendent may issue an order to a banking institution to appear and explain
an apparent violation of law, to discontinue unauthorized or unsafe practices
and to keep prescribed books and accounts. The New York Superintendent also has
authority to take possession of a New York banking organization under certain
circumstances, including when it appears that the banking organization is
conducting its business in an unauthorized or unsafe manner, is in an unsound or
unsafe condition to transact its business or has an impairment of its capital.

Federal Regulation of the Bank

         Capital Requirements. The FDIC has adopted risk-based minimum capital
regulations for insured state nonmember banks, such as the Bank. The regulations
establish a systematic framework that makes regulatory capital requirements more
sensitive to differences in risk profiles among insured depository institutions.
Risk-based capital ratios are determined by allocating assets and specified
off-balance sheet commitments to four risk-weighted categories ranging from 0%
to 100%, with higher levels of capital required for the categories perceived as
representing greater risk. State nonmember banks must maintain a minimum ratio
of qualifying total capital to risk-weighted assets of 8.0%, and a minimum ratio
of Tier 1 capital to risk-weighted assets of 4.0%. Tier 1 capital includes
common equity, certain noncumulative perpetual preferred stock and minority
interests in equity accounts of consolidated subsidiaries, less goodwill and
certain other intangible assets except mortgage servicing rights and purchased
credit card relationships. Total capital consists of Tier 1 capital plus
supplementary (Tier 2) capital which includes, among other items, cumulative
perpetual and long-term, limited-life, preferred stock, mandatory convertible
securities, certain hybrid capital instruments, term-subordinated debt and the
allowance for loan and lease losses, subject to certain limitations, less
required deductions. In addition, insured state nonmember banks must maintain a
ratio of Tier 1 capital to average total assets (leverage ratio) of at least 3%
to 5%, depending on the bank's CAMELS rating.

         Capital requirements higher than these minimum requirements may be
established for a particular bank if the FDIC determines that a bank's capital
is, or may become, inadequate in view of its particular circumstances.
Individual minimum capital requirements may be appropriate if a bank is
receiving special supervisory attention, has a high degree of exposure to
interest rate risk or poses other safety and soundness concerns. The Bank
currently is not subject to any individually imposed minimum capital
requirements.


                                      -15-
<PAGE>

         Failure to meet capital guidelines could subject the Bank to a variety
of enforcement actions, including issuance of a capital directive, the
termination of deposit insurance, a prohibition on the taking of brokered
deposits, and certain other restrictions on its business. As described below,
additional restrictions can be imposed upon banks that fail to meet applicable
capital requirements under the FDIC's prompt corrective action regulations.

         The FDIC assesses the Bank's exposure to declines in the economic value
of the Bank's capital due to changes in interest rates when assessing the bank's
capital adequacy. FDIC examiners will evaluate the Bank's capital for interest
rate risk on a case-by-case basis, with consideration of both quantitative and
qualitative factors. Applicable considerations include the quality of the bank's
interest rate risk management process, the overall financial condition of the
bank and the level of other risks at the bank for which capital is needed.
Institutions with significant interest rate risk may be required to hold
additional capital.

         Activity Restrictions on State-Chartered Banks. Section 24 of the
Federal Deposit Insurance Act generally limits the activities and investments
that state-chartered insured banks and their subsidiaries may engage in as
principals to those permissible for national banks and their subsidiaries,
except for certain exemptions. Any bank that held, at the time of passage of
Section 24, an impermissible investment or engaged in an impermissible activity
and that did not receive FDIC approval to retain the investment or to continue
the activity was required to submit to the FDIC a plan for divesting of the
investment or activity as quickly and prudently as possible.

         Enforcement. The FDIC has extensive enforcement authority over the
Bank. This enforcement authority includes, among other things, the ability to
assess civil money penalties, to issue cease and desist orders and to remove
directors and officers. In general, these enforcement actions may be initiated
in response to violations of laws and regulations and to unsafe or unsound
practices.

         The FDIC is required, with certain exceptions, to appoint a receiver or
conservator for an insured state bank if that bank is "critically
undercapitalized." For this purpose, "critically undercapitalized" means having
a ratio of tangible equity to total assets that is equal to or less than 2%. See
"-- Prompt Corrective Action." The FDIC may also appoint a conservator or
receiver for a state bank on the basis of the institution's financial condition
or upon the occurrence of certain events, including: (1) insolvency; (2)
substantial dissipation of assets or earnings through violations of law or
unsafe or unsound practices; (3) existence of an unsafe or unsound condition to
transact business; (4) likelihood that a bank will be unable to meet the demands
of its depositors or to pay its obligations in the normal course of business;
and (5) insufficient capital. In the event of any such appointment, it is likely
that stockholders of the institution would not receive anything for their
interests in the institution.

         Deposit Insurance. The Bank's deposits are insured through the FDIC's
Bank Insurance Fund. Under the FDIC's risk-based insurance assessment system,
annual insurance premiums paid by banks may vary between $0.00 and $0.27 per
$100 of insured deposits, depending on the risk classification assigned to each
institution. Based on its risk classification, the Bank expects to incur no FDIC
deposit insurance premiums for the first half of 2000. However, deposit


                                      -16-
<PAGE>

insurance assessments imposed by the FDIC are subject to change. A second
assessment by the FDIC is based on the amount of insured deposits held by an
institution irrespective of assigned risk classification. The amount of the
Bank's second assessment, which is subject to change by the FDIC on a quarterly
basis, was approximately $5200 for each of the first two quarters of the year
2000.

         FDIC insurance on deposits may be terminated by the FDIC, after notice
and hearing, upon a finding by the FDIC that the insured bank has engaged or is
engaging in unsafe or unsound practices, or is in an unsafe or unsound condition
to continue operations as an insured bank, or has violated any applicable law,
regulation, rule or order of, or condition imposed by or written agreement
entered into with the FDIC.

         Community Reinvestment Act. Under the Community Reinvestment Act, as
implemented by FDIC regulations, a savings bank has an obligation consistent
with its safe and sound operation to help meet the credit needs of its entire
community, including low- and moderate-income neighborhoods. The Community
Reinvestment Act requires the FDIC, in connection with its examination of a
savings institution, to assess the institution's record of meeting the credit
needs of its community and to take such record into account in its evaluation of
certain applications by the institution.

         The FDIC rates an institution based on its actual performance in
meeting community needs. The evaluation system focuses on a lending test, an
investment test, and a service test.

         In its most recent examination for community reinvestment performance,
the Bank received a "satisfactory" rating from the FDIC.

         Safety and Soundness Standards. The Bank is subject to certain FDIC
standards designed to maintain the safety and soundness of individual banks and
the banking system. The FDIC has prescribed safety and soundness guidelines
relating to (1) internal controls, information systems and internal audit
systems; (2) loan documentation; (3) credit underwriting; (4) interest rate
exposure; (5) asset growth and quality; (6) earnings; and (7) compensation and
benefit standards for officers, directors, employees and principal stockholders.
The guidelines are intended to set out standards that the FDIC will use to
identify and address problems at institutions before capital becomes impaired.
Institutions are required to, among other things, establish and maintain a
system to identify problem assets and prevent deterioration of those assets in a
manner commensurate with their size and the nature and scope of their
operations. Furthermore, institutions must establish and maintain a system to
evaluate and monitor earnings to ensure that earnings are sufficient to maintain
adequate capital and reserves.

         A bank not meeting one or more of the safety and soundness guidelines
may be required to file a compliance plan with the FDIC. In the event that an
institution were to fail to submit an acceptable compliance plan or fail in any
material respect to implement an accepted compliance plan within the time
allowed by the FDIC, the institution would be required to correct the deficiency
and the FDIC would also be authorized to: (1) restrict asset growth; (2) require
the institution to increase its ratio of tangible equity to assets; (3) restrict
the rates of interest that the institution may pay; or (4) take any other action
that would better carry out the purpose of the


                                      -17-
<PAGE>

corrective action. The Bank believes it was in compliance with all such safety
and soundness guidelines as of December 31, 1999.

         Prompt Corrective Action. Under the FDIC's prompt corrective action
regulations, insured institutions will be considered:

         (1)      "well capitalized" if the institution has a total risk-based
                  capital ratio of 10% or greater, a Tier 1 risk-based capital
                  ratio of 6% or greater, and a leverage ratio of 5% or greater
                  provided that the institution is not subject to an order,
                  written agreement, capital directive or prompt corrective
                  action directive to meet and maintain a specified capital
                  level for any capital measure;

         (2)      "adequately capitalized" if the institution has a total
                  risk-based capital ratio of 8% or greater, a Tier 1 risk based
                  capital ratio of 4% or greater and a leverage ratio of 4% or
                  greater (3% or greater if the institution is rated composite
                  CAMELS 1 in its most recent report of examination and is not
                  experiencing or anticipating significant growth);

         (3)      "undercapitalized" if the institution has a total risk-based
                  capital ratio that is less than 8%, or a Tier 1 risk-based
                  ratio of less than 4% and a leverage ratio that is less than
                  4% (3% if the institution is rated composite CAMELS 1 in its
                  most recent report of examination and is not experiencing or
                  anticipating significant growth);

         (4)      "significantly undercapitalized" if the institution has a
                  total risk-based capital ratio that is less than 6%, Tier 1
                  risk-based capital ratio of less than 3% or a leverage ratio
                  that is less than 3%; and

         (5)      "critically undercapitalized" if the institution has a ratio
                  of tangible equity to total assets that is equal to or less
                  than 2%.

         Under certain circumstances, the FDIC can reclassify a well capitalized
institution as adequately capitalized and may require an adequately capitalized
institution or an undercapitalized institution to comply with supervisory
actions as if it were in the next lower category (except that the FDIC may not
reclassify a significantly undercapitalized institution as critically
undercapitalized). At December 31, 1999, the Bank was classified as a "well
capitalized" institution.

         An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to the FDIC. An undercapitalized institution
also is generally prohibited from increasing its average total assets, making
acquisitions, establishing any branches, or engaging in any new line of
business, except in accordance with an accepted capital restoration plan or with
the approval of the FDIC. In addition, the FDIC may take any other action that
it determines will better carry out the purpose of prompt corrective action
initiatives.


                                      -18-
<PAGE>

         Dividend Restrictions. The Bank is not permitted to pay dividends if,
as the result of the payment, it would become undercapitalized, as defined in
the prompt corrective action regulations of the FDIC. In addition, if the Bank
becomes "undercapitalized" under the "prompt corrective action" initiatives of
the FDIC, payment of dividends would be prohibited without the prior approval of
the FDIC. The Bank also could be subject to these dividend restrictions if the
FDIC determines that the Bank is in an unsafe or unsound condition or engaging
in an unsafe or unsound practice.

         Required Reserves. Under Federal Reserve Board regulations, the Bank is
required to maintain non-interest-earning reserves against its transaction
accounts (primarily NOW and regular checking accounts). The Federal Reserve
Board regulations generally require that reserves of 3% be maintained against
aggregate transaction accounts of $46.5 million or less (subject to adjustment)
and an initial reserve of $1,395,000 plus 10% (subject to adjustment between 8%
and 14%) against that portion of total transaction accounts in excess of $46.5
million. The first $4.9 million of otherwise reservable balances (subject to
adjustments) are exempted from the reserve requirements. Because required
reserves must be maintained in the form of either vault cash, a
non-interest-bearing account at a Federal Reserve Bank or a pass-through account
as defined by the Federal Reserve Board, the effect of this reserve requirement
is to reduce the Bank's interest-earning assets.

Holding Company Regulation

         Federal Bank Holding Company Regulation. Oswego County MHC and OCB are
bank holding companies, subject to comprehensive regulation and regular
examinations by the Federal Reserve Board. The Federal Reserve Board also has
extensive enforcement authority over bank holding companies, including, among
other things, the ability to assess civil money penalties, to issue cease and
desist or removal orders and to require that a holding company divest
subsidiaries (including its bank subsidiaries). In general, enforcement actions
may be initiated for violations of law and regulations and unsafe or unsound
practices.

         Oswego County MHC and OCB are subject to capital adequacy guidelines
for bank holding companies (on a consolidated basis) which are substantially
similar to those of the FDIC for the Bank. As of December 31, 1999, the
regulatory capital of Oswego County MHC and OCB exceeded these requirements.

         Under Federal Reserve Board policy, a bank holding company must serve
as a source of strength for its subsidiary bank. Under this policy the Federal
Reserve Board may require, and has required in the past, a holding company to
contribute additional capital to an undercapitalized subsidiary bank.

         Under the Bank Holding Company Act, a bank holding company must obtain
Federal Reserve Board approval before: (1) acquiring, directly or indirectly,
ownership or control of any voting shares of another bank or bank holding
company if, after such acquisition, it would own or control more than 5% of such
shares (unless it already owns or controls the majority of such


                                      -19-
<PAGE>

shares); (2) acquiring all or substantially all of the assets of another bank or
bank holding company; or (3) merging or consolidating with another bank holding
company.

         The Bank Holding Company Act also prohibits a bank holding company,
with certain exceptions, from acquiring direct or indirect ownership or control
of more than 5% of the voting shares of any company which is not a bank or bank
holding company, or from engaging directly or indirectly in activities other
than those of banking, managing or controlling banks, or providing services for
its subsidiaries. The principal exceptions to these prohibitions involve certain
non-bank activities which, have been identified by the Federal Reserve Board as
activities closely related to the business of banking or managing or controlling
banks.

         Interstate Banking and Branching. Federal law allows the Federal
Reserve Board to approve an application of an adequately capitalized and
adequately managed bank holding company to acquire control of, or acquire all or
substantially all of the assets of, a bank located in a state other than the
holding company's home state, without regard to whether the transaction is
prohibited by the laws of any state. The Federal Reserve Board may not approve
the acquisition of a bank that has not been in existence for the minimum time
period (not exceeding five years) specified by the statutory law of the host
state. The Federal Reserve Board is prohibited from approving an application if
the applicant (and its depository institution affiliates) controls or would
control more than 10% of the insured deposits in the United States or 30% or
more of the deposits in the target bank's home state or in any state in which
the target bank maintains a branch. Individual states continue to have authority
to limit the percentage of total insured deposits in the state which may be held
or controlled by a bank or bank holding company to the extent such limitation
does not discriminate against out-of-state banks or bank holding companies.
Individual states may also waive the 30% statewide concentration limit referred
to above.

         Additionally, beginning on June 1, 1997, the federal banking agencies
were authorized to approve interstate merger transactions without regard to
whether the transaction is prohibited by the law of any state, unless the home
state of one of the banks "opted out" by adopting a law which applies equally to
all out-of-state banks and expressly prohibits merger transactions involving
out-of-state banks. Interstate acquisitions of branches are permitted only if
the law of the state in which the branch is located permits such acquisitions.
In response to the federal law, the State of New York enacted laws allowing
interstate mergers and branching on a reciprocal basis.

         Federal law authorizes the FDIC to approve interstate branching de novo
by national and state banks, respectively, only in states which specifically
allow for such branching. The appropriate federal banking agencies are required
to prescribe regulations which prohibit any out-of-state bank from using the
interstate branching authority primarily for the purpose of deposit production.
The FDIC and Federal Reserve Board have adopted such regulations. These
regulations include guidelines to ensure that interstate branches operated by an
out-of-state bank in a host state are reasonably helping to meet the credit
needs of the communities which they serve. Should the FDIC determine that a bank
interstate branch is not reasonably helping to meet the credit needs of the
communities serviced by an interstate branch, the FDIC is authorized to


                                      -20-
<PAGE>

close the interstate branch or not permit the bank to open a new branch in the
state in which the bank previously opened an interstate branch.

         New York State Bank Holding Company Regulation. In addition to the
federal bank holding company regulations, a bank holding company organized or
doing business in New York State also may be subject to regulation under the New
York State Banking Law. The term "bank holding company," for the purposes of the
New York State Banking Law, is defined generally to include any person, company
or trust that directly or indirectly either controls the election of a majority
of the directors or owns, controls or holds with power to vote more than 10% of
the voting stock of a bank holding company or, if the bank holding company is a
banking institution, another banking institution, or 10% or more of the voting
stock of each of two or more banking institutions. In general, a bank holding
company controlling, directly or indirectly, only one banking institution will
not be deemed to be a bank holding company for the purposes of the New York
State Banking Law. Neither Oswego County MHC nor OCB is a bank holding company
for purposes of New York State law.

         Mutual Holding Company Regulation. Under New York law, Oswego County
MHC may exercise all powers and privileges of a New York-chartered mutual
savings bank, except for the power of accepting deposits. Oswego County MHC is
also permitted to exercise all powers and engage in all activities permitted to
a bank holding company under the Bank Holding Company Act.

         Dividend Waivers by Oswego County MHC. It has been the policy of many
mutual holding companies to waive the receipt of dividends declared by any
savings institution subsidiary or mid-tier stock holding company. In connection
with its approval of the reorganization of the Bank into holding company form,
however, the Federal Reserve Board imposed certain conditions on the waiver by
Oswego County MHC of the receipt of dividends declared on the common stock. In
particular, Oswego County MHC is expected to be required to obtain prior Federal
Reserve Board approval before it may waive any dividends. To date, the Federal
Reserve Board has not approved the waiver of dividends by mutual holding
companies under its supervision.

         The terms of the Federal Reserve Board approval of the reorganization
require that the amount of any waived dividends will not be available for
payment to minority stockholders and be excluded from capital for purposes of
calculating dividends payable to minority stockholders. Moreover, the cumulative
amount of any waived dividends must be maintained in a restricted capital
account which would be added to any liquidation account of the Bank, and would
not be available for distribution to minority stockholders. The restricted
capital account and liquidation account amounts would not be reflected in the
Bank's financial statements or the notes thereto, but would be considered as a
notational or memorandum account of the Bank, and would be maintained in
accordance with the rules, regulations and policies adopted or administered by
the Federal Reserve Board.

         Management does not believe that Oswego County MHC will initially waive
dividends declared by OCB. If Oswego County MHC decides that it is in its best
interest to waive a particular dividend to be paid by OCB, and the Federal
Reserve Board approves the waiver, then


                                      -21-
<PAGE>

OCB would pay dividends only to minority stockholders, and the amount of the
dividend waived by Oswego County MHC would be treated in the manner described
above. Oswego County MHC's decision to waive a particular dividend will depend
on a number of factors, including Oswego County MHC's capital needs, the
investment alternatives available to Oswego County MHC as compared to those
available to OCB, and regulatory approvals.

         Conversion of Oswego County MHC to Stock Form. New York law,
regulations of the Department and the plan of reorganization permit Oswego
County MHC to convert from the mutual to the capital stock form of organization
(a "conversion transaction"). There can be no assurance when, if ever, a
conversion transaction will occur, and the board of trustees of Oswego County
MHC has no current intention or plan to undertake a conversion transaction. In a
conversion transaction, Oswego County MHC and OCB would merge with and into the
Bank with the Bank as the resulting entity, and certain depositors of the Bank
would receive the right to subscribe for additional shares of the resulting
entity. A conversion transaction may be structured in other ways to comply with
applicable regulatory requirements. In a conversion transaction, each share of
common stock outstanding immediately prior to the completion of the conversion
transaction held by persons other than Oswego County MHC would be automatically
converted into and become the right to receive a number of shares of common
stock of the resulting entity determined pursuant to an exchange ratio that
ensures that after the conversion transaction, the percentage of the
to-be-outstanding shares of the resulting entity issued to minority stockholders
in exchange for their common stock would be equal to the percentage of the
outstanding shares of common stock held by minority stockholders immediately
prior to the conversion transaction. An appraiser will assess the value of any
assets other than OCB stock held by Oswego County MHC. The value of those assets
will cause a reduction in the number of shares issued to minority shareholders
in a conversion transaction. The total number of shares held by minority
stockholders after the conversion transaction also would be affected by any
purchases by those persons in the offering that would be conducted as part of
the conversion transaction.

         In addition, if Oswego County MHC is permitted by state and federal
regulators to waive dividends it would otherwise be entitled to receive as a
stockholder of OCB, the number of shares issued to minority stockholders in a
mutual-to-stock conversion would be reduced to reflect the aggregate amount of
dividends waived by Oswego County MHC. To date, the Federal Reserve Board has
not approved the waiver of dividends by mutual holding companies under its
supervision.

Gramm-Leach-Bliley Act

         The Gramm-Leach-Bliley Act ("GLBA"), signed into law on November 12,
1999, will permit bank holding companies to offer their customers virtually any
type of financial service that is financial in nature or incidental thereto,
including banking, securities underwriting, and insurance (both underwriting and
agency). While certain provisions of GLBA became effective upon enactment, many
major provisions do not become effective until March 11, 2000 or May 2001 and
most of the regulations implementing the law have not yet been issued. As a
result,


                                      -22-
<PAGE>

while certain of the provisions of GLBA are summarized below, the overall impact
of GLBA on OCB and the Bank cannot be predicted at this time.

         In order to engage in new financial activities, a bank holding company
must qualify and register with the Federal Reserve Board as a "financial holding
company" by demonstrating that each of its bank subsidiaries is "well
capitalized," "well managed," and has at least a "satisfactory" rating under the
Community Reinvestment Act.

         These new financial activities authorized by GLBA may also be engaged
in by a "financial subsidiary" of a national or state bank, except for insurance
or annuity underwriting, insurance company portfolio investments, real estate
investment and development, and merchant banking, which must be conducted in a
financial holding company. In order for the new financial activities to be
engaged in by a financial subsidiary of a national or state bank, GLBA requires
each of the parent bank (and its sister-bank affiliates) to be well capitalized
and well managed; the aggregate consolidated assets of all of that bank's
financial subsidiaries may not exceed 45% of its consolidated total assets; and
the bank must have at least a satisfactory CRA rating.

         GLBA establishes a system of functional regulation, under which the
federal banking agencies will regulate the banking activities of financial
holding companies and banks' financial subsidiaries, the SEC will regulate their
securities activities and state insurance regulators will regulate their
insurance activities.

         GLBA also provides new protections against the transfer and use by
financial institutions of consumers' nonpublic, personal information.

                         ITEM 2. DESCRIPTION OF PROPERTY

Properties

         The Company conducts business through its executive office and four
other banking offices in its primary market area. The properties are owned by
the Company and are listed below:

                  Executive Office:

                           44 East Bridge Street
                           Oswego, New York 13126



                                      -23-
<PAGE>

                  Branch Offices:

                           4879 North Jefferson Street
                           Pulaski, New York 13142

                           1930 State Route 3
                           Fulton, New York 13069

                           30 West Utica Street
                           Oswego, New York 13126

                           700 North Main Street
                           N. Syracuse, New York 13212



                            ITEM 3. LEGAL PROCEEDINGS

         The Company is involved in routine legal proceedings occurring in the
ordinary course of business which, in the aggregate, are expected to be resolved
for amounts that would not be material to OCB's financial condition.

                        ITEM 4. SUBMISSION OF MATTERS TO

                            A VOTE OF SECURITYHOLDERS

         None.



                                     PART II

                      ITEM 5. MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS

         The Common Stock, par value $.01 of OCB ("Common Stock") is traded on
the OTC Bulletin Board under the symbol OCSB. At the close of business on
December 31, 1999, there were 887,230 shares outstanding, held by approximately
378 shareholders of record. The high bid and low bid prices noted below for the
quarters of fiscal 1999 are obtained from the OTC


                                      -24-
<PAGE>

Bulletin Board. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions, and may not represent actual transactions.

                                                           Price Per Share
                                                   High Bid              Low Bid

                  Third Quarter
                  (commencing July 13, 1999)        10.375                10.00

                  Fourth Quarter                    10.25                  9.00

         The Company has not declared any dividends since its commencement of
operations on July 13, 1999.

                 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         On July 13, 1999, the Bank reorganized under a mutual holding company
structure as a wholly owned subsidiary of OCB, a mid-tier stock holding company
that became the majority-owned subsidiary of Oswego County MHC.
Contemporaneously with the reorganization, the Company sold in a public offering
399,500 shares of its common stock, par value $.01 ("Company Common Stock") at
$10.00 per share, raising net proceeds of $3.0 million. As an integral part of
the reorganization and public offering and in furtherance of the Company's
commitment to the communities it serves, the Bank and the Company have
established a charitable foundation known as the Oswego County Charitable
Foundation (the "Foundation") and have contributed 15,980 shares to the
Foundation. The Foundation will provide funding to support charitable causes and
community development activities, which will complement the Bank's existing
community activities. In addition, the Company established an Employee Stock
Ownership Plan (ESOP) for employees of the Company and the Bank, which became
effective with completion of the reorganization. The ESOP plan acquired 31,960
shares of OCB stock through January 2000 and has no immediate plans to purchase
additional shares.

         The consolidated financial condition and operating results of the
Company are primarily dependent on its wholly owned subsidiary, the Bank, and
all references to the Company prior to July 13, 1999, except where otherwise
indicated are to the Bank.

General

         The Company's results of operations depend primarily on net interest
income, which is the difference between income on interest-earning assets and
expense on interest-bearing deposits and borrowings. Interest-earning assets
principally consist of loans and securities. The Company's results of operations
also are affected by the provision for losses on loans; the level


                                      -25-
<PAGE>

of its noninterest income; its general, administrative and other expenses,
including compensation and benefits, occupancy and equipment expense, real
estate owned expense and other expenses; and its income tax expense. Results of
operations are also significantly affected by general economic and competitive
conditions, particularly changes in market interest rates, government policies
and actions of regulatory authorities.

Forward-Looking Statements

         This document contains forward-looking statements which are based on
assumptions and describe future plans, strategies and expectations of the
Company. These forward-looking statements are generally identified by use of the
words "believe," "expect," "intend," "anticipate," "estimate," "project," or
similar words. OCB's ability to predict results and the actual effect of future
plans or strategies is uncertain. Factors which could have a material adverse
effect on operations include, but are not limited to, changes in interest rates,
general economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and
Federal Reserve Board, the quality or composition of the loan or investment
portfolios, demand for loan products, deposit flows, competition, demand for
financial services in OCB's market areas and accounting principles and
guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements.

Comparison of Financial Condition at December 31, 1999 and December 31, 1998

         Total assets increased by $12.0 million or 10.8% to $122.8 million at
December 31, 1999 from $110.9 million at December 31, 1998. The increase was
primarily due to a $2.6 million or 18.8% increase in securities held to maturity
and a $6.1 million or 40.9% increase in securities available for sale. Loans
outstanding increased $1.0 million from $72.1 million at December 31, 1998 to
$73.1 million at December 31, 1999. These asset increases were funded with net
stock offering proceeds of $3.0 million, $5.0 million in long-term borrowings
and a $3.6 million increase in total deposits from $96.6 million at December 31,
1998 to $100.1 million at December 31, 1999.

         While total loans increased $1.0 million during 1999, the mix of
outstanding loans changed due to continued mortgage refinancings and successful
efforts in commercial lending. Total residential and home equity loans decreased
$5.2 million from $60.8 million at December 31, 1998 to $55.6 million at
December 31, 1999. The decrease in mortgage and home equity loans reflects
consumer preference in lower interest rate environments for fixed-rate
residential mortgage loans and the continued high levels of mortgage loan
refinancings in 1999. As interest rates have risen in the latter part of 1999
and in early 2000, refinancing has slowed and consumer interest in
adjustable-rate mortgages has increased. Commercial loans increased from
$265,000 at December 31, 1998 to $5.9 million at December 31, 1999. This
increase reflects the Company's continued efforts to diversify the loan
portfolio and to expand product offerings to include commercial term loans and
lines of credit. At December 31, 1999, net loans


                                      -26-
<PAGE>

amounted to $72.0 million or 58.6% of total assets, compared to $71.0 million or
64.1% at December 31, 1998.

         Total securities available for sale increased $6.1 million from $14.8
million at December 31, 1998 to $20.8 million at December 31, 1999. Securities
held to maturity increased $2.6 million from $13.7 million at December 31, 1998
to $16.3 million at December 31, 1999. The increase in securities available for
sale was funded by increased deposit balances and long term borrowings. The
increases in securities held to maturity were primarily in municipal issues
which offer the Company favorable income tax benefits. Securities represented
30.2% of total assets at December 31, 1999 and 25.7% of total assets at December
31, 1998.

         Real estate owned at December 31, 1999 was $255,000 compared to
$195,000 at December 31, 1998. During 1999, the Company continued to reduce the
level of non-performing loan amounts. Total non-performing loans decreased from
$1.7 million at December 31, 1998 to $1.3 million at December 31, 1999. Loan
charge-offs have also decreased from $526,000 in 1998 to $157,000 in 1999. At
December 31, 1999, the allowance for loan losses equaled $1.1 million
representing 1.46% of total loans outstanding and 81.35% of total non-performing
loans.

         Total deposits increased during 1999 by $3.6 million to $100.1 million
at December 31, 1999 from $96.6 million at December 31, 1998. The increase was
centered in demand and savings deposits which increased $1.7 million and $2.3
million, respectively. Time deposit levels were consistent with the prior year.

         Total shareholders' equity was $14.2 million at December 31, 1999, an
increase of $2.5 million from December 31, 1998. The increase was due primarily
to the offering proceeds offset by the increase in accumulated other
comprehensive loss and the unallocated ESOP shares, which are presented as a
reduction of shareholders' equity.

Results of Operations for the Year Ended December 31, 1999 Versus the Year Ended
December 31, 1998

         Net income was $169,000 for the year ended December 31, 1999, compared
to $309,000 in 1998, reflecting the Company's 1999 contribution of common stock
valued at $160,000 to a charitable foundation, and costs associated with opening
a fifth banking office. Fiscal 1999 was a year of transition to public company
status and to an expanded base of operations.

         Net Interest Income. Net interest income is determined by the average
interest rate spread (i.e., the difference between the average yields earned on
interest-earning assets and the average rates paid on interest-bearing
liabilities) and the relative amounts of interest-earning assets and
interest-bearing liabilities. Net interest income increased from $4.5 million in
1998 to $4.6 million in 1999 during a year in which market levels for short-term
interest rates increased by approximately 1.50%. The Company views favorably its
ability in 1999 to maintain a consistent level of net interest income in a
rising rate environment. OCB can offer no assurance, however, that it would be
able to achieve similar results during future periods. For the year


                                      -27-
<PAGE>

ended December 31, 1999, taxable equivalent net interest income increased by
$57,000 due to volume and $49,000 as the result of interest rate variances.

         Average Balances, Net Interest Income, Yields Earned and Rates Paid
(taxable equivalent basis). The following table presents for the periods
indicated the total dollar amount of interest income from the Company's average
interest-earning assets and the resultant yields, as well as the interest
expense on average interest-bearing liabilities, expressed both in dollars and
rates, and the net interest margin. Taxable equivalent adjustments relating to
municipal securities totaled $41,000 in 1999 and $13,000 in 1998. Monthly
average balances utilized are not believed to differ significantly from averages
based on daily balances.

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                              1999                                         1998

                                                 Average                         Yield/        Average                        Yield/
                                                 Balance         Interest         Rate         Balance        Interest         Rate
                                                 --------       ---------         ----         -------        --------         ----
                                                                (Dollars in Thousands)
<S>                                              <C>             <C>               <C>         <C>            <C>              <C>
Interest-earning assets:
   Loans, gross (1)                              $ 72,061        $  5,770          8.01%       $ 75,648       $  6,253         8.27%
   Securities (2)                                  31,059           1,868          6.01          24,706          1,494         6.05
   Federal funds sold and
     other short term investments                   2,930             156          5.32           3,232            181         5.60
                                                 --------        --------                      --------       --------
     Total interest-earning                       106,050           7,794          7.35         103,586          7,928         7.65
     assets                                                      --------                                     --------

Noninterest-earning assets                          8,346                                         6,094
                                                 --------                                      --------
     Total assets                                $114,396                                      $109,680
                                                 ========                                      ========

Interest-bearing  liabilities:
   Savings, NOW and money
       market deposits (3)                       $ 49,445           1,222          2.47        $ 48,441          1,317         2.72
   Time deposits                                   37,780           1,909          5.05          38,257          2,071         5.41
   Borrowings                                         282              17          6.03            --             --           --
                                                 --------        --------                      --------       --------       ------
     Total interest-bearing
     liabilities                                   87,507           3,148          3.60          86,698          3,388         3.91

Noninterest-bearing deposits                       12,065                                        10,474
Other noninterest-bearing                           1,482                                         1,125
   liabilities                                   --------                                      --------

     Total liabilities                            101,054                                        98,297
Shareholders' equity                               13,342                                        11,383
                                                 --------                                      --------
     Total liabilities and equity                $114,396                                      $109,680
                                                 ========                                      ========
Net interest income                                              $  4,646                                     $  4,540

Interest rate spread                                                               3.75%                                       3.74%
Net interest margin (4)                                                            4.38%                                       4.38%
Average interest-earning assets
to average interest-bearing liabilities                                          121.19%                                     119.48%

</TABLE>

(1)      Includes non-accruing loans. Interest is recognized on non-accruing
         loans only as and when received.

(2)      Average balance represents the amortized cost of securities with net
         unrealized gains or losses on securities available for sale as a
         component of noninterest-earning assets.

(3)      Includes advance payments by borrowers for taxes and insurance
         (mortgage escrow deposits).

(4)      Equals net interest income divided by average interest-earning assets.


                                      -28-
<PAGE>

         Rate/Volume Analysis. The following table presents the extent to which
changes in interest rates and changes in volume of interest-related assets and
liabilities have affected the Company's interest income and expense during the
periods indicated. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable to
(i) changes in volume (change in volume multiplied by prior year rate), and (ii)
changes in rate (change in rate multiplied by prior year volume). The combined
effect of changes in both rate and volume has been allocated proportionately to
the change due to rate and the change due to volume.

                                                      Year Ended December 31,
                                                          1999 vs. 1998
                                                          -------------
                                                  Increase(Decrease)    Total
                                                        Due to         Increase
                                                  Volume      Rate    (Decrease)
                                                  ------      ----    ----------
                                                      (In Thousands)

Interest-earning assets:
   Loans                                          $(291)     $(192)     $(483)
   Securities                                       382         (8)       374
   Short-term investments                           (16)        (9)       (25)
                                                  -----      -----      -----

     Total interest-earning assets                   75       (209)      (134)
                                                  -----      -----      -----

Interest-bearing liabilities:
   Savings, NOW and money market deposits            27       (122)       (95)
   Time deposits                                    (26)      (136)      (162)
   Borrowings                                        17       --           17
                                                  -----      -----      -----
     Total interest-bearing liabilities              18       (258)      (240)


Increase in net interest income                   $  57      $  49      $ 106
                                                  =====      =====      =====


         Interest Income. Total interest income decreased by $134,000, or 2.1%,
to $7.8 million for 1999 compared to $7.9 million for 1998. The primary reason
for the decrease in interest income was a $483,000 decrease in interest earned
on outstanding loans reflecting mainly the pay down of higher yielding
adjustable rate residential mortgage loans. The average balance of loans
decreased $3.5 million from $75.6 million in 1998 to $72.1 million in 1999. The
average yield on the loan portfolio also decreased from 8.27% in 1998 to 8.01%
in 1999.

         Income from securities increased by $374,000 during 1999 to $1.9
million, compared to $1.5 million in 1998. The increase in interest income from
securities during 1999 was due primarily to a $6.4 million increase in the
average balance of securities to $31.1 million for 1999 compared to $24.7
million in 1998. The average yield on the securities portfolio decreased
slightly to 6.01% in 1999 compared to 6.05% in 1998.

         Other interest income, which consists of interest on federal funds sold
and other short-term investments, was $156,000 in 1999 as compared to $181,000
in 1998. The average amount of federal funds and short-term investments
decreased from $3.2 million in 1998 to $2.9 million in 1999. The average yields
on these investments decreased from 5.60% in 1998 to 5.32% in 1999.


                                      -29-
<PAGE>

         Interest Expense. Interest expense, which consisted primarily of
interest paid on deposits, was $3.1 million in 1999 compared to $3.4 million in
1998. The primary reason for the $240,000 decrease in interest expense was a 31
basis point reduction in the average rate paid on these deposits in 1999
compared to 1998. This reflects the Company's increase in lower costing savings
and demand deposits, and reduced average rates paid on savings, demand and time
deposits. OCB offers its deposit customers tiered pricing schedules whereby
higher balances earn higher rates of interest.

         Provision for Loan Losses. The provision for loan losses was $120,000
in both 1999 and 1998. Provisions for loan losses are recorded to maintain the
allowance for loan losses at an amount management considers adequate to cover
losses which are deemed probable and can be estimated. These provisions were
based upon a number of factors, including asset classifications, management's
assessment of the credit risk inherent in the portfolio, historical loan loss
experience, economic trends, industry experience and trends, estimated
collateral values and underwriting policies. Net loan charge-offs were $119,000
in 1999 and $461,000 in 1998, reflecting the Company's efforts during the past
three years to address problem loan situations in a timely manner. As a result
of improvement in loan portfolio quality, charge-offs and non-performing loans
declined during 1999. Total non-performing loans decreased from $1.7 million at
December 31, 1998 to $1.3 million at December 31, 1999. At December 31, 1999,
the allowance for loan losses equaled $1.1 million, representing 1.46% of total
loans outstanding and 81.35% of total non-performing loans.

         Although the Company believes that the allowance for loan losses is
adequate, there can be no assurances that additions to such allowance will not
be necessary in future periods, adversely affecting results of operations. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review OCB's allowance for loan losses and the carrying
value of non-performing assets based on their judgements about information
available to them at the time of their examinations. No assurance can be given
as to whether any such agencies might require additional provisions for loan
losses in the future. Furthermore, as OCB attempts to increase the amount of
loan originations and diversify the types of loans offered, increased future
provisions for loan losses may be required.

         Noninterest Income. Noninterest income increased by $116,000 during
1999 as compared to 1998. The increase reflects the Company's efforts to expand
commercial loan and deposit products, which result in greater service fee
levels. In addition, the Company extended efforts to reduce fee and service
charge waivers during 1999.

         Noninterest Expenses. Noninterest expenses increased during 1999 by
$459,000, or 10.4%, to $4.9 million compared to $4.4 million in 1998. The
primary reasons for the increase were a 10.3% increase in salaries and benefits,
a 15.6% increase in occupancy and equipment expenses, a $170,000 increase in
professional fees, a $98,000 increase in data processing costs and a $160,000
increase in charitable contributions. Partially offsetting these increases were
the absence in 1999 of $171,000 in terminated merger expenses, and a reduction
of $217,000 in ORE expenses. Higher salary and benefit costs reflect the branch
opening, wage increases and inflationary increases in benefit expenses. The
increase in occupancy and equipment expense


                                      -30-
<PAGE>

was caused by higher depreciation expense on capital expenditures, primarily for
the new branch and computer equipment. The increase in data processing costs in
1999 reflects efforts to continue to improve data processing capabilities,
inflationary increases in a data processing servicing contract, expenses
associated with ATMs installed in mid 1998, and costs to bring a new branch on
line. Professional fees include the costs of a profitability study, Y2K
consulting costs, and increased costs from operating as a publicly held company.
Increased charitable contributions reflect the $160,000 contribution of common
stock to Oswego County Charitable Foundation.

         Income Taxes. Income tax expense decreased by $125,000 in 1999 to
$37,000 as compared to $162,000 in 1998, reflecting reduced pretax income and a
greater volume of tax exempt securities in 1999. The effective income tax rate
declined to 18.0% in 1999 from 34.4% in 1998.

Market Risk Analysis

         Efforts to Address Interest Rate Risk. To reduce the potential for
materially adverse effects of changes in interest rates on results of
operations, the Company has implemented asset and liability management policies
designed to better match the maturities and repricing terms of interest-earning
assets and interest-bearing liabilities. The Company's policies have consisted
primarily of the following:

        o       originating adjustable or variable rate long-term loans for
                portfolio;

        o       purchasing adjustable-rate mortgage-backed securities and short
                or intermediate-term investment securities;

        o       since February 1998, originating fixed-rate one-to-four family
                residential loans with terms of 15 to 30 years under terms and
                conditions which will permit their sale in the secondary market;
                and

        o       managing interest expense by maintaining a strong retail deposit
                base and emphasizing core deposits.

         From the early 1980s until early 1998, the Company originated primarily
adjustable-rate mortgage loans and did not originate fixed-rate residential
mortgage loans with terms over 15 years. Approximately 65% of OCB's
single-family residential mortgage loans have interest rates that adjust
annually or every three years. The Company's total portfolio of adjustable-rate
one-to-four family residential mortgage loans amounted to approximately 78% of
residential mortgages at December 31, 1999. As long term interest rates
decreased during the 1990s, many customers indicated a preference for fixed-rate
residential mortgage loans. In February 1998, the Company began the origination
of long-term, fixed-rate one-to-four family residential mortgage loans in order
to provide a full range of products to customers, but only under terms,
conditions and documentation which allow their sale in the secondary market. In
late 1999 and early 2000, rising interest rates have enhanced the attractiveness
to customers of adjustable rate mortgages.


                                      -31-
<PAGE>

         In order to better match the maturity or repricing of interest-bearing
liabilities and interest-earning assets, the Company offers certificates of
deposit with terms in excess of one year. At December 31, 1999, $10.7 million or
28.3% of OCB's certificates of deposit mature in more than one year. In the
company's efforts to address interest-rate risk, higher rates are paid on longer
term and higher balance certificates of deposit.

         The Company considers its savings deposit and money market accounts to
be core deposits that are less likely to be withdrawn if interest rates rise.
OCB's savings and money market accounts have variable interest rates, and
management believes that the interest rates on the accounts can be adjusted to
retain a substantial portion of these deposits. Savings and money market
accounts amounted to $49.0 million or 48.9% of total deposits at December 31,
1999.

         How OCB Measures Interest Rate Risk. Prolonged increases in market
rates of interest could adversely affect the interest rate spread and net
interest margin. Moreover, prolonged increases in interest rates could adversely
affect the demand for residential mortgage loans within OCB's primary market
area. The asset and liability management committee regularly reviews interest
rate risk. The Company forecasts the impact of alternative interest rate
environments on net interest income and market value of portfolio equity, which
is defined as the net present value of existing assets, liabilities and
off-balance sheet instruments. Such impacts are evaluated against the maximum
potential changes in net interest income and market value of portfolio equity
that are authorized by the board of directors.

         The following table sets forth at December 31, 1999 the estimated
percentage and dollar change in the Company's net interest income over a
four-quarter period and the market value of portfolio equity based on the
indicated changes in interest rates. Certain assumptions have been made in
preparing the table below. Although management believes these assumptions to be
reasonable, the interest rate sensitivity of assets and liabilities and the
estimated effects of changes in interest rates on net interest income and the
market value of portfolio equity indicated in the following table could vary
substantially if different assumptions were used or if actual experience differs
from such assumptions.


                                      -32-
<PAGE>

The following table presents internal calculations of net interest income for a
twelve-month period and market value of portfolio equity at December 31, 1999,
under varying interest rate scenarios.

<TABLE>
<CAPTION>
                                          Net Interest Income                   Market Value of Portfolio Equity
                                        For Twelve-Month Period                Based on December 31, 1999 Balances
                              -------------------------------------------- --------------------------------------------
                                                  Dollar       Percentage                     Dollar        Percentage
Change in Interest                Estimated        Change         Change       Estimated       Change          Change
Rates in Basis Points(1)            Amount       from Base      from Base        Amount      from Base       from Base
---------------------               ------       ---------      ---------        ------      ---------       ---------
                                                               (Dollars in Thousands)
<S>                                 <C>            <C>           <C>            <C>          <C>               <C>
+400                                $ 4,478        $ (544)       (10.8)%        $ 16,120     $ (1,782)         (10.0)%
+200                                  4,880          (142)        (2.8)           16,885       (1,017)         (5.7)
Base                                  5,022                                       17,902
-200                                  4,846          (176)        (3.5)           17,962            60           .3
-400                                  4,720          (302)        (6.0)           16,498       (1,404)         (7.8)
</TABLE>

--------------------
(1)   Assumes an instantaneous uniform change in interest rates.  Basis point
equals 0.01%.

         Certain shortcomings are inherent in the methodology used in the above
interest rate risk measurement. Modeling changes in net interest income and
market value of portfolio equity requires the utilization of assumptions that
may or may not reflect the manner in which actual yields and costs respond to
changes in market interest rates. In this regard, the above table's presentation
assumes that the composition of interest sensitive assets and liabilities
existing at the beginning of a period remains constant over the period being
measured and also assumes that a particular change in interest rates is
reflected uniformly across the yield curve, regardless of the duration to
maturity or repricing of specific assets and liabilities. Accordingly, although
the above table provides an indication of OCB's interest-rate risk exposure at a
particular point in time, these measurements are not intended to and do not
provide a precise forecast of the effect of changes in market interest rates on
the Company's net interest income and will differ from actual results.

Liquidity and Capital Resources

         The Company's liquidity, represented by cash, cash equivalents,
securities available for sale and potential borrowings, is a product of its
operating, investing and financing activities. The primary sources of funds are
deposits and borrowings; the amortization, prepayment and maturity of
outstanding loans, securities and other short-term investments; and funds
provided from operations. While scheduled payments from the amortization of
loans, maturing securities and short-term investments are relatively predictable
sources of funds, deposit flows and loan prepayments are greatly influenced by
general interest rates, economic conditions and competition. In addition, the
Company invests excess funds in federal funds sold and other short-term
interest-earning assets that provide liquidity to meet lending requirements. In
1999, the Company also utilized borrowings to fund a portion of its asset
growth.

         Excess liquidity is generally invested in short-term investments such
as federal funds sold or U.S. Treasury securities. On a longer term basis, OCB
maintains a strategy of investing in various lending products. Such products
frequently have short terms (five years or less) or


                                      -33-
<PAGE>

interest rates that adjust at least every three years. funds are utilized to
meet ongoing commitments to pay maturing certificates of deposit and savings
withdrawals, fund loan commitments and maintain a portfolio of investment
securities. At December 31, 1999, the Company had outstanding commitments to
originate loans of $5.9 million and unused letters of credit of $233,000. At
December 31, 1999, OCB also had certificates of deposit scheduled to mature in
one year or less totaling $27.1 million. Based on historical experience,
management believes that a significant portion of maturing deposits will remain
with the Company. It is anticipated that OCB will continue to have sufficient
deposit funds and available borrowings to meet its current commitments.

         In 1999, OCB entered into a five-year, convertible $5.0 million
borrowing arrangement with the Federal Home Loan Bank of New York (FHLB-NY).
Interest is fixed under the related agreement until December 2001 when the
FHLB-NY may replace the borrowing with a new arrangement at a then current
interest rate. Also available to the Company are overnight and one-month
borrowing facilities with the FHLB-NY, both amounting to $5.8 million, and a
$5.0 million overnight line of credit with a commercial bank.

         The Company and the Bank are subject to various regulatory capital
requirements administered by the Federal and New York State banking regulators.
Failure to meet minimum capital requirements could result in certain mandatory
and discretionary responses by regulators that could have a material effect on
the company's financial condition and results of operations. In addition, the
ability of the Company and the Bank to pay dividends is subject to regulations
administered by the banking agencies. At December 31, 1999, the Company and the
Bank exceeded minimum capital requirements of the agencies and also exceeded
levels established for banking organizations considered well capitalized by the
regulators. Additional information regarding regulatory capital status is
provided in notes to the Company's financial statements.

Impact of Inflation and Changing Prices

         The financial statements and related financial data presented herein
have been prepared in conformity with generally accepted accounting principles,
which generally require the measurement of financial position and operating
results in terms of historical dollars, without considering changes in relative
purchasing power over time due to inflation. Unlike most industrial companies,
virtually all of the Company's assets and liabilities are monetary in nature. As
a result, interest rates generally have a more significant impact on the
Company's performance than does the direct effect of inflation.

Potential Year 2000 Exposure

         The company's Y2K efforts were effective and OCB entered the year 2000
without significant date-related problems. However, the Company will continue to
monitor its operations for any Y2K issues arising during the year.


                                      -34-
<PAGE>

         Any computer problems experienced by OCB's commercial borrowers could
have an adverse effect on their business operations and their ability to repay
loans when due. At this time, the Company is not aware of any commercial
borrowers' year 2000 computer problems that would have a significant effect on
OCB's operating results.

                          ITEM 7. FINANCIAL STATEMENTS

         For information concerning this Item, see the Company's balance sheet
and related financial statements at Item 13.

                    ITEM 8. CHANGES IN AND DISAGREEMENTS WITH

               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

         None.



                                    PART III

         The information required by Items 9, 10, 11 and 12 of this part is
presented in the Proxy Statement issued by the Board of Directors in connection
with the Annual Meeting of Stockholders to be held on April 20, 2000, which
information is hereby incorporated by reference into this Annual Report.

                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

                     DOCUMENTS FILED AS PART OF THIS REPORT

A.       INDEX TO FINANCIAL STATEMENTS

         Independent Auditors' Report

         Consolidated Statements of Financial Condition as of December 31, 1999
         and 1998

         Consolidated Statements of Income for the Years Ended December 31, 1999
         and 1998


                                      -35-
<PAGE>

         Consolidated Statements of Changes in Shareholders' Equity for the
         Years Ended December 31, 1999 and 1998

         Consolidated Statements of Cash Flows for the Years Ended December 31,
         1999 and 1998

         Notes to Consolidated Financial Statements

         Financial Statements are incorporated by reference to the Annual Report
         to Stockholders, filed herewith as Exhibit 13.

B.       EXHIBITS

         (3)      Articles of incorporation and by-laws

                  (i)      Certificate of Incorporation of Oswego County
                           Bancorp, Inc.-- incorporated herein by reference to
                           Exhibit 3.1 on Form SB-2/A, dated May 4, 1999.

                  (ii)     By-laws of Oswego County Bancorp, Inc.-- incorporated
                           herein by reference to Exhibit 3.2 on Form SB-2/A,
                           dated May 4, 1999.

                  (iii)    Restated New York Organization Certificate of Oswego
                           County Savings Bank -- incorporated herein by
                           reference to Exhibit 3.3 on Form SB-2, dated December
                           30, 1998.

                  (iv)     By-laws of Oswego County Savings Bank -- incorporated
                           herein by reference to Exhibit 3.4 on Form SB-2/A,
                           dated May 4, 1999.

                  (v)      Restated Organization Certificate of Oswego County
                           MHC -- incorporated herein by reference to Exhibit
                           3.5 on Form SB-2, dated December 30, 1998.

                  (vi)     By-laws of Oswego County MHC -- incorporated herein
                           by reference to Exhibit 3.6 on Form SB-2/A, dated May
                           4, 1999.

         (4)      Instruments defining rights of security holders, including
                  indentures

                  (i)      Form of Stock Certificate of Oswego County Bancorp,
                           Inc.-- incorporated herein by reference to Exhibit
                           4.1 on Form SB-2, dated December 30, 1998.

                  (ii)     Form of Stock Certificate of Oswego County Savings
                           Bank -- incorporated herein by reference to Exhibit
                           4.2 on Form SB-2/A, dated May 4, 1999.


                                      -36-
<PAGE>

         (10)     Material contracts

                  (i)      Directors Supplemental Retirement Benefit Plan, dated
                           March 15, 2000.

                  (ii)     Executive Supplemental Retirement Income Agreement,
                           dated March 15, 2000, between Oswego County Savings
                           Bank and Gregory J. Kreis.

                  (iii)    Trust Agreement dated as of February 1, 2000 between
                           Oswego County Savings Bank and Security Federal
                           Savings Bank.

         (13)     Annual Report to Stockholders for the year ended December 31,
                  1999.

         (21)     Subsidiaries of the registrant.

                  (i)      Oswego County Savings Bank, organized under New York
                           law.

         (27)     Financial data schedule

                  (i)      Financial data schedule, filed herewith.



                                      -37-
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                           OSWEGO COUNTY BANCORP, INC.

                                   Registrant

DATE:  March 16, 2000


By:   /s/ Gregory J. Kreis                 By: /s/ Stephen B. Albright
     -------------------------------------    ---------------------------------
     Gregory J. Kreis                         Stephen B. Albright
     President and Chief Executive Officer    Senior Vice President & Treasurer
     (Principal Executive Officer)            (Principal Financial Officer)


By:   /s/ Elaine L. Miller
     -------------------------------------
     Elaine L. Miller
     Controller
     (Principal Accounting Officer)


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

By:    /s/ Michael R. Brower                  By:     /s/ Bruce P. Frassinelli
     --------------------------------         --------------------------
     Michael R. Brower, Director              Bruce P. Frassinelli, Director
     March 16, 2000                           March 16, 2000


By:    /s/ Paul J. Heins                      By:     /s/ Paul W. Schneible
     --------------------------------         --------------------------
     Paul J. Heins, Director                  Paul W. Schneible, Director
     March 16, 2000                           March 16, 2000


By:    /s/ Bernard Shapiro                    By:     /s/ Deborah F. Stanley
     --------------------------------         --------------------------
     Bernard Shapiro, Director                Deborah F. Stanley, Director
     March 16, 2000                           March 16, 2000


By:    /s/ Carl K. Walrath                    By:     /s/ Gregory J. Kreis
     --------------------------------         --------------------------
     Carl K. Walrath, Director                Gregory J. Kreis, Director
     March 16, 2000                           March 16, 2000