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, 2001           Commission file number 000-30140

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

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

44 East Bridge Street, Oswego, New York                                    13126
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(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
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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.

                                      |_|

      The Issuer's revenues for its most recent fiscal year are $12,016,000.

      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 15, 2002,
was $8,095,143.

      As of March 15, 2002, there were 2,557,854 shares of common stock issued
and outstanding.
<PAGE>

                           OSWEGO COUNTY BANCORP, INC.

                       DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the 2002 Annual Meeting of Stockholders (Part III, Items
9-12)

                                FORM 10-KSB INDEX

<TABLE>
<CAPTION>
                                                                                           PAGE
PART I

<S>                                                                                        <C>
         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 MATTERS               25
         ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION              26
         ITEM 7.      FINANCIAL STATEMENTS                                                   38
         ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                      FINANCIAL DISCLOSURE                                                   38

PART III

         ITEM 9.      DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                      38
         ITEM 10.     EXECUTIVE COMPENSATION                                                 38
         ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         38
         ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         38
         ITEM 13.     EXHIBITS, LIST AND REPORTS                                             39
</TABLE>
<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 five
additional branch offices. The Bank plans on opening an additional branch in
Onondaga County in the second quarter of 2002. 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 a population growth rate of
0.5%, which is well below the national average, while Onondaga County's
population has declined 2.3%. The 2000 population census for Oswego and Onondaga
Counties were 122,000 and 458,000, respectively. 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 the Company. 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, 2001, the Company's total loans amounted to
$104.8 million. Net of the $0.9 million allowance for loan losses, loans were
$103.9 million at December 31, 2001 representing 63.8% of total assets. The
Company offers the following types of loans: one to four family residential,
home equity, commercial real estate, commercial business and consumer loans. At
December 31, 2001, $67.0 million or 63.9% of total loans consisted of
residential mortgage and home equity loans. Commercial mortgage loans totaled
$15.6 million on that date, representing 14.9% of total loans. Commercial loans
totaled $13.7 million or 13.1% of total loans and consumer loans totaled $8.5
million or 8.1% of total loans at December 31, 2001.

      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, 2001, the Bank's limit
on loans to one borrower was $2.1 million.

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

<TABLE>
<CAPTION>
                                                   At December 31,
                                                   ---------------
                                            2001                        2000
                                            ----                        ----
                                  Amount          %            Amount           %
                                  ------          -            ------           -
                                             (Dollars in Thousands)
<S>                             <C>            <C>            <C>            <C>
Residential mortgages and
   home equity loans            $ 67,004       63.91%         $ 63,979       73.47%
Commercial mortgages              15,626       14.90            10,762       12.36
Commercial loans                  13,690       13.06             7,651        8.79
Consumer loans                     8,529        8.13             4,689        5.38
                                --------      ------          --------      ------
Total loans                      104,849      100.00%           87,081      100.00%
                                              ======                        ======
Allowance for loan losses          (932)                       (1,121)
                                --------      ------          --------

Net loans                       $103,917                      $ 85,960
                                ========                      ========
</TABLE>

      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 credit reports, appraisals and other documentation involved
with a loan. Property valuations are performed by independent outside appraisers
licensed in New York State. The Company 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's Loan Committee usually must approve
any loan made over $500,000, except those which conform to standards permitting
their resale into the secondary market (which must be approved by one of four
designated officers).


                                      -2-
<PAGE>

      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, the Company began originating
long-term, fixed-rate residential mortgage loans with terms conforming to
secondary market standards. In 2000 the Company began acquiring newly originated
residential mortgage loans from a real estate firm operating in a nearby
community outside the Company's primary market area. Prior to purchase, these
loans are 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 one-to-four family residences and
home equity loans secured by second mortgages on one to four family residences.
At December 31, 2001, $67.0 million or 63.9% 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 one to four 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. During 2001 the majority of fixed rate loans
originated were sold by the Company in the secondary market with servicing
retained.

      Adjustable-rate, one to four family, residential mortgage loans generally
have up to 30-year terms and an interest rate which adjusts every year, three
years or five 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, three years or five 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, 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 $48.2 million or 72.0% of the permanent residential
mortgage loans in the loan portfolio at December 31, 2001 had adjustable
interest rates.

      The demand for adjustable-rate loans in the Company'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


                                      -3-
<PAGE>

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 in 2000, borro1wers have preferred adjustable rate loans
and originations of such loans continued to increase during 2000. During 2001
mortgage rates declined and as a result of the lower rate environment,
borrowers' preference shifted to fixed rate loans.

      Pursuant to underwriting guidelines adopted by the Board of Directors, the
Company will lend up to 100% of the appraised value of the property securing a
one to four 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 typically originated for up to 90% of the appraised
value, less the amount of any existing prior liens on the property. The Company
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, 2001, home equity loans
totaled $0.6 million or 0.6% of total loans. The Company 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, 2001, home equity lines of credit totaled $2.5
million or 2.4% of total loans.

      Commercial Mortgage Loans. At December 31, 2001, $15.6 million or 14.9% 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 one to four 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 $13.7 million at December 31, 2001. The Company 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 the
Company's related loan products. The


                                      -4-
<PAGE>

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 the
Company's market area. The Company has targeted commercial business loans for
expansion because yields are generally higher, terms are typically shorter and
the 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 one to four family residential mortgage loans. While commercial
business lending is relatively new to the Company, 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 may 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.

      Consumer Loans. The Company makes loans for a wide variety of personal or
consumer purposes. At December 31, 2001, $8.5 million or 8.1% of total loans
consisted of consumer loans. The Company 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 rates than one to four 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 $252,000 or 0.2% of total
loans at December 31, 2001. 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 Company 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
$3.4 million or 3.2% of total loans at December 31, 2001. Unsecured personal
lines of credit amounted to $1.7 million or 1.6% of total loans at December 31,
2001. Unsecured personal loans amounted to $2.7 million or 2.6% of total loans
at December 31, 2001. Secured personal loans amounted to $.4 million or 0.4% of
total loans at December 31, 2001.

      Consumer loans generally have shorter terms and higher interest rates than
residential mortgage loans but generally involve more credit risk than
residential 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
the Company's efforts to manage interest rate risk and to provide a full range
of services to its customers.


                                      -5-
<PAGE>

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 residential 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, the Company 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
the 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,
                                                        2001      2000
                                                        ----    ------
                                                    (Dollars in Thousands)
Non-accruing loans:
  Residential mortgages and home equity
      loans                                             $520    $  335
  Commercial mortgages and loans                         110       705
  Consumer                                               124        43
                                                        ----    ------
    Total                                                754     1,083
                                                        ----    ------
Restructured commercial mortgage loans                   220       220
                                                        ----    ------
Total non-performing loans                               974     1,303
                                                        ----    ------
Foreclosed assets:
  Residential real estate                                 --       165
                                                        ----    ------
    Total                                                 --       165
                                                        ----    ------
Total non-performing assets                             $974    $1,468
                                                        ====    ======
Non-performing assets to total assets                   0.60%     1.08%
                                                        ----    ------

      The Company had no accruing loans which were more than 90 days delinquent
at December 31, 2001 or 2000. If all non-accruing loans had been current in
accordance with their terms during the years ended December 31, 2001 and 2000,
additional interest income on such loans would have amounted to approximately
$80,000 and $82,000, 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, 2001 consisted
of $473,000 of assets classified as substandard, which represented 0.3% of total
assets. There were no assets classified as doubtful or loss at December 31,
2001.

      Allowance for Loan Losses. At December 31, 2001, the allowance for loan
losses amounted to $0.9 million or 0.9% 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 one to four
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 the Company 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,
                                              2001          2000
                                            ---------     --------
                                            (Dollars in Thousands)

Total loans outstanding at end of period    $ 104,849     $ 87,081
                                            =========     ========
Average loans outstanding                   $  96,406     $ 80,594
                                            =========     ========
Allowance for loan losses
 at beginning of period                     $   1,121     $  1,069
   Charge-offs                                   (388)        (162)
   Recoveries                                      55           45
                                            ---------     --------
   Net charge-offs                               (333)        (117)
Provision for loan losses                         144          169
                                            ---------     --------
Allowance for loan losses at end of period  $     932     $  1,121
                                            =========     ========
Allowance for loan losses as a percent of
 total loans outstanding                         0.89%        1.29%
                                            =========     ========
Ratio of net charge-offs to average loans
 outstanding                                     0.35%        0.15%
                                            =========     ========


                                      -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.

<TABLE>
<CAPTION>
                                                      At December 31,
                                                      ---------------
                                              2001                         2000
                                              ----                         ----

                                                     Loan                        Loan
                                                   Category                    Category
                                                   --------                    --------
                                     Amount         as a %         Amount       as a %
                                       of          of Total          of        of Total
                                    Allowance       Loans         Allowance     Loans
                                    ---------      --------       ---------    --------
                                                    (Dollars in Thousands)
<S>                                 <C>             <C>           <C>          <C>
Residential mortgages and
    home equity loans               $   304          63.91%       $ 290         73.47%
Commercial mortgages                    213          14.90          169         12.36
Commercial loans                        135          13.06          382          8.79
Consumer loans                          162           8.13           90          5.38
Unallocated                             118                         190
                                    -------         ------        ------       ------

Total                               $   932         100.00%       $1,121       100.00%
                                    =======         ======        ======       ======
</TABLE>


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.

      At December 31, 2001, the Company's securities portfolio had an amortized
cost of $41.0 million and a fair value of $41.2 million. All securities were
classified as available for sale at December 31, 2001. At December 31, 2001 the
Company's securities portfolio consisted of U.S. government sponsored agency
obligations, general obligations of corporations and municipalities,
mortgage-backed securities and equity securities.


                                      -9-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                   At December 31,
                                                           2001                          2000
                                                  ----------------------         --------------------
                                                   Carrying     Percent          Carrying     Percent
                                                    Value      of Total           Value      of Total
                                                  ----------------------         --------------------
                                                                                (dollars in thousands)
<S>                                               <C>             <C>             <C>         <C>
Securities available for sale (fair value)
Debt securities:
United States Government agency obigations        $   2,859         6.95%         18,967       95.51%
Corporate and municipal securities                   17,087        41.51              --          --
Mortgage-backed securities                           16,335        39.69              --          --
                                                  ----------------------          -------------------
    Total debt securities                            36,281        88.15          18,967       95.51
Equity securities                                     4,879        11.85             892        4.49
                                                  ----------------------          -------------------
  Total securities available for sale                41,160       100.00%         19,859      100.00%

Securities held to maturity (amortized cost)
United States Government agency obligations              --          --%           3,000       22.54
Corporate and municipal securities                       --           --           7,901       59.37
Mortgage-backed securities                               --           --           1,838       13.81
Small Business Administration                            --           --             569        4.28
                                                  ----------------------          -------------------
                                                         --          --%          13,308      100.00%
    Total securities                              $  41,160                       33,167
                                                  ======================          ===================
</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, 2001. Weighted average yields are
based on amortized cost.

<TABLE>
<CAPTION>

                                                                    At December 31, 2001
                          --------------------------------------------------------------------------------------------------------
                                              More Than One     More Than Five
                              One Year        Year to Five       Years to Ten        More Than
                              Or Less             Years              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>      <C>         <C>
Securities available
  for sale (fairvalue):
    U.S. Government
      Agency obligations   $ 1,510    4.05%     $ 1,349     5.47%    $    --       --      $    --       --     $ 2,859     4.72%
  Corporate and
    Municipal securities       254    5.99%       6,995     5.87%      2,506     4.99%       7,332     4.72%     17,087     5.25%
    Mortgage-backed
      securities                --      --          167     6.00%        479     6.01%      15,689     5.92%     16,335     5.92%
                           -------    ----      -------     ----     -------     ----      -------     ----     -------     ----
        Total              $ 1,764    4.33%     $ 8,511     5.81%    $ 2,985     5.17%     $22,861     5.52%    $36,281     5.50%
                           =======    ====      =======     ====     =======     ====      =======     ====     =======     ====
</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 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


                                      -11-
<PAGE>

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.

      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. The company has also
financed a portion of its asset growth with borrowings from the Federal Home
Loan Bank of New York (FHLB-NY).

      At December 31, 2001, the Company had total borrowings from the FHLB-NY of
$14.9 million. Also available to the Company are overnight and one-month
borrowing facilities with the FHLB-NY, of $6.8 million and $7.7 million
respectively, an overnight credit plus line of $7.0 million with the FHLB-NY and
a $5.0 million overnight line of credit with a commercial bank. Federal Home
Loan Bank advances are collateralized by FHLB stock owned by the Company and
mortgage-backed securities with a fair value of approximately $6.1 million at
December 31, 2001. In addition, the advances are collateralized by a blanket
lien on the Company's 1-4 family mortgage loans.

      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.


                                      -12-
<PAGE>

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

                                                December 31,
                                                ------------
                                      2001                         2000
                                      ----                         ----
                              Amount          %           Amount           %
                                              -           ------           -
                                            (Dollars in Thousands)
Time deposits:

          1.50% - 3.99%      $ 14,184      10.98%      $        7        0.01%
          4.00% - 5.99%        23,922      18.52           13,959       13.18
          6.00% - 7.99%         8,232       6.37           27,001       25.50
                             --------    -------       ----------    --------
       Total time deposits:    46,338      35.87           40,967       38.69
                             --------    -------       ----------    --------
Transaction accounts:
Savings deposits               42,788      33.12           44,544       42.07
Money market deposits          20,043      15.52            5,193        4.90
Demand deposits                20,014      15.49           15,183       14.34
                             --------    -------       ----------    --------
        Total transaction
            accounts           82,845      64.13           64,920       61.31
                             --------    -------       ----------    --------
        Total deposits       $129,183     100.00%      $  105,887      100.00%
                             ========    =======       ==========    ========

The following table sets forth the maturities of certificates of deposit with
principal amounts of $100,000 or more at December 31, 2001.

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

March 31, 2002                                                   $ 2,768
June 30, 2002                                                      3,468
September 30, 2002                                                 1,502
After September 30, 2002                                           2,948
      Total certificates of deposit with                       ---------
          balances of $100,000 or more                           $10,686
                                                               =========


                                      -13-
<PAGE>

                                   REGULATION

General

      The Bank is a New York-chartered stock savings bank, and its deposit
accounts are insured up to applicable limits 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.

      At a special shareholders meeting on December 28, 2001, shareholders of
the Company approved a plan of Charter Conversion by which the Company converted
its charter from a Delaware corporation regulated by the Department and the
FDIC, to a Federal corporation regulated by the Office of Thrift Supervision
(the "OTS"). The conversion was completed effective January 31, 2002.
Concurrent, with the Company's Charter Conversion, Oswego County MHC converted
its New York charter to a Federal mutual holding company charter. The Bank
retained its New York savings bank charter.

      The Company 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, the
Company 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 the Company, whether by a regulatory agency or
through legislation, could have a material adverse impact on the Bank and the
Company and their operations and stockholders. The following is a summary of
laws and regulations applicable to the Bank, the Company 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


                                      -14-
<PAGE>

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."

      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.


                                      -15-
<PAGE>

      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.

      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)


                                      -16-
<PAGE>

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 2002. However, deposit
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 $5,700 for each of the first two quarters of the year
2002.

      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.


                                      -17-
<PAGE>

      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 corrective action. The Bank
believes it was in compliance with all such safety and soundness guidelines as
of December 31, 2001.

      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, 2001, the Bank was classified as a "well
capitalized" institution.


                                      -18-
<PAGE>

      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.

      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 the Company
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 the Company 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,
2001, the regulatory capital of Oswego County MHC and the Company 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


                                      -19-
<PAGE>

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 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


                                      -20-
<PAGE>

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 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 the Company 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. On January 31, 2002, Oswego County MHC
completed a charter conversion from a New York charter to a Federal charter
regulated by the OTS. The OTS rules allow Mutual Holding Companies to waive
dividends paid to minority shareholders. Management believes Oswego County MHC
will waive future cash dividends paid by the Company.

      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


                                      -21-
<PAGE>

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.

      If Oswego County MHC decides that it is in its best interest to waive a
particular dividend to be paid by the Company, then the Company 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
the Company 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 the Company 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 the Company 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 the Company, 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.


                                      -22-
<PAGE>

Gramm-Leach-Bliley Act

      The Gramm-Leach-Bliley Act ("GLBA"), signed into law on November 12, 1999,
permits 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, or on March
11, 2000, other provisions became effective in May 2001. As a result, while
certain of the provisions of GLBA are summarized below, the overall impact of
GLBA on the Company 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 five other
banking offices in its primary market area. The Company plans on opening an
additional branch during the second quarter of 2002. The properties are owned or
leased by the Company and are listed below:


                                      -23-
<PAGE>

        Executive Office:

                 44 East Bridge Street
                 Oswego, New York 13126

        Branch Offices:

                 4879 North Jefferson Street
                 Pulaski, New York 13142

                 1930 State Route 3
                 Fulton, New York 13069

                 State Route 104 East
                 Oswego, New York 13126

                 30 West Utica Street
                 Oswego, New York 13126

                 700 North Main Street
                 N. Syracuse, New York 13212

                 7799 Oswego Road
                 Liverpool, New York 13090        (To open  second quarter 2002)

                            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 the Company's financial condition.

                        ITEM 4. SUBMISSION OF MATTERS TO
                            A VOTE OF SECURITYHOLDERS

      A Special Meeting of Stockholders was held on December 28, 2001. The
following item was voted on and the results of the stockholder voting is
summarized below:

      1.    The approval of the Plan of Charter conversion by which the Company
            will convert its charter from a Delaware corporation regulated by
            the New York Banking Department and the Board of Governors of the
            Federal Reserve System, to a Federal corporation regulated by the
            Office of Thrift Supervision.


                                      -24-
<PAGE>

                            Vote
                            ----

           For              Authority Withheld            Broker Non-Votes

           566,079

                                     PART II

                      ITEM 5. MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS

      The Common Stock, par value $.01 of the Company ("Common Stock") is traded
on the OTC Bulletin Board under the symbol OCSB. On February 21, 2002, the
Company's Board of Directors authorized a three-for-one stock split in the form
of a stock dividend for shareholders of record at the close of business on March
4, 2002. All share and per-share amounts have been restated to give effect to
the stock split.

      At the close of business on December 31, 2001, there were 2,557,854 shares
outstanding, held by approximately 339 shareholders of record. The high bid and
low bid prices noted below for the quarters of fiscal 2001 and 2000 are obtained
from the OTC Bulletin Board. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions, and may not represent actual
transactions. During 2001 the Company declared four quarterly dividends which
are reflected in the table that follows.

                                                                     Cash
                                         Price Per Share             Dividends
            2001                 High Bid             Low Bid        Declared

         First Quarter             3.67                  3.63         .0167
         Second Quarter            4.42                  3.62         .02

         Third Quarter             5.83                  4.42         .0267

         Fourth Quarter            7.00                  4.92         .04

            2000

         First Quarter             3.00                  2.00           -

         Second Quarter            3.29                  2.10         .01

         Third Quarter             3.46                  3.33         .01

         Fourth Quarter            3.42                  3.00         .01


                                      -25-
<PAGE>

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

      Oswego County Bancorp, Inc. (the "Company" or "OCB") is a mid-tier stock
holding company and the majority-owned subsidiary of Oswego County MHC.

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

      On February 21, 2002, the Company's Board of Directors authorized a
three-for-one stock split in the form of a stock dividend for shareholders of
record at the close of business on March 4, 2002. All share and per-share
amounts have been restated to give effect to the stock split.

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 of its
noninterest income; its noninterest 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. The Company'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 the Company's market areas and accounting
principles and guidelines. These risks and uncertainties should be considered in
evaluating forward-looking statements.


                                      -26-
<PAGE>

Comparison of Financial Condition at December 31, 2001 and December 31, 2000

      Total assets increased by $26.5 million or 19.4% to $163.0 million at
December 31, 2001 from $136.5 million at December 31, 2000. On May 10, 2001, the
Company acquired the Oswego branch of the BSB Bank & Trust Co. As a result of
this acquisition total assets increased approximately $4.1 million. The increase
in total assets was primarily due to a $18.0 million increase in loans and an
$8.0 million increase in securities. The increase in total assets was funded
with a $2.7 million increase in borrowings and a $23.3 million increase in total
deposits from $105.9 million at December 31, 2000 to $129.2 million at December
31, 2001.

      The $18.0 million increase in loans during 2001 was the result of a $3.0
million increase in residential mortgages and home equity loans, a $4.9 million
increase in commercial mortgages, a $6.0 million increase in commercial loans
and a $ 3.8 million increase in consumer loans. Residential loans were generated
by the Company's retail banking offices and originations through a real estate
firm operating in a community outside the Company's primary marketing area. As a
result of the Company's strategy to increase commercial lending, commercial
loans and commercial mortgages at December 31, 2001 increased to 28.0% of the
loan portfolio from 21.1% at December 31, 2000. Commercial loans typically carry
higher interest rates than certain other loan products, and many of the loans
have interest rates that vary with changes in the prime rate. At December 31,
2001, net loans amounted to $103.9 million or 63.8% of total assets, compared to
$86.0 million or 63.0% at December 31, 2000. Loan balances by category are
presented in the table that follows:


 Loans                             At December 31,
 -----                            ---------------
                                2001        2000
                         -------------------------------
                               (dollars in thousands)

Residential mortgages and
 home equity loans          $  67,004    $ 63,979
Commercial mortgages           15,626      10,762
Commercial loans               13,690       7,651
Consumer loans                  8,529       4,689
                            ---------    --------
             Total loans      104,849      87,081
Allowance for loan losses        (932)     (1,121)
                            ---------    --------
             Net Loans      $ 103,917    $ 85,960
                            ---------    --------

Total securities increased by $8.0 million, or 24.1% during the twelve month
period due primarily to increased investments in corporate bonds, municipal
securities, Freddie Mac and Fannie Mae preferred stock. At December 31, 2001
total securities amounted to $41.2 million or 25.3% of total assets as compared
to $33.2 million or 24.3% of total assets at December 31,


                                      -27-
<PAGE>

2000. A net gain of $51,000 was recorded from the sale of securities available
for sale in the twelve month period ended December 31, 2001. On January 1, 2001
the Company adopted SFAS No. 133. As a part of the adoption, all securities
classified as held to maturity were transferred to securities available for sale
and reported at fair value. The securities transferred had an amortized cost of
$13.3 million and a fair value of $13.2 million. The net unrealized holding loss
at the date of transfer was recognized as a separate component of shareholders'
equity. The composition of the Company's securities portfolios is summarized
below.

<TABLE>
<CAPTION>
                                                           At December 31,

                                                        2001              2000
                                                    --------------    -------------
                                                        (dollars in thousands)
<S>                                                 <C>                     <C>
     Securities available for sale (fair value)
Debt securities:
U.S. Government agency bonds                        $       2,859           18,967
Corporate and municipal securities                         17,087                -
Mortgage-backed securities                                 16,335                -
                                                    --------------    -------------
              Total debt securities                        36,281           18,967
Equity securities                                           4,879              892
                                                    --------------    -------------
    Total securities available for sale                    41,160           19,859

     Securities held to maturity (amortized cost)               -
U.S. Government agency bonds                                    -            3,000
Corporate and municipal securities                              -            7,901
Mortgage-backed securities                                      -            1,838
Small Business Administration                                   -              569
                                                    --------------    -------------
                                                                -           13,308
                          Total securities          $      41,160           33,167
                                                    ==============    =============
</TABLE>

      Non-performing assets decreased to $0.8 million at December 31, 2001 from
$1.2 million at December 31, 2000. Total non-performing assets as a percentage
of total assets decreased to 0.5% at December 31, 2001 from 0.9% at December 31,
2000. At December 31, 2001, the allowance for loan losses equaled $0.9 million
representing 0.9% of total loans outstanding and 123.6% of total non-performing
loans. At December 31, 2000 the allowance for loan losses was $1.1 million
representing 1.3% of total loans outstanding and 103.5% of total non-performing
loans.


                                      -28-
<PAGE>

A summary of the Company's non-performing assets and related ratios follows:

                 Non-performing assets         At December 31,
                                                  2001     2000
                                               -------    -----
                                            (dollars in thousands)

Nonaccrual loans                               $   754    1,083
Other real estate                                   --      165
                                               -------    -----
   Nonperforming assets                        $   754    1,248
                                               =======    =====
Nonperforming assets
   to total assets                                 0.5%     0.9%
Allowance for loan losses
   to nonperforming loans                        123.6%   103.5%

      Future developments with respect to non-performing assets will depend upon
regional and national economic conditions, underwriting judgments and business
and personal factors affecting the Company's customers. Although management
considers the Company's December 31, 2001 loan loss allowance to be adequate,
changes in the factors above and actual loss experience will impact the
allowance adequacy. In addition, banking regulators' judgments regarding the
adequacy of the allowance may differ from management's judgments and further
additions may be required.

      Total deposits increased during 2001 by $23.3 million or 22.0% to $129.2
million at December 31, 2001 from $105.9 million at December 31, 2000. Increases
were realized in all categories of deposits with time deposits increasing $5.4
million, demand deposits increasing $4.8 million and savings and money market
deposits increasing $13.1 million. The increase in deposits included
approximately $4.1 million of deposits related to the BSB Bank & Trust Co branch
acquisition. The Company believes stock market volatility has driven some
customers to seek less risky guaranteed interest returns offered by the
Company's various insured deposit programs.

      The Company's borrowings increased $2.7 million to $14.9 million during
2001. Borrowings increased to fund asset growth during the year. The increase in
borrowings resulted from a $4.7 million increase in long-term debt and a $2.0
million reduction in short-term borrowings. In June, the Company borrowed $2.0
million from the Federal Home Loan Bank of New York for a term of 10 years with
a fixed rate of 4.5% for the first two years and convertible at the option of
the Federal Home Loan Bank to current market rates thereafter. In October,
short-term borrowings were reduced by $3.0 due to the maturity of a Federal Home
Loan advance. In December 2001 the Company borrowed $3.0 million from the
Federal Home Loan Bank with various maturities ranging from December 2002 to
December 2006 and with fixed interest rates ranging from 2.5% to 4.5 %.
Additionally, at December 31, 2001, borrowing under an overnight line of credit
increased $0.7 million compared to 2000.


                                      -29-
<PAGE>

      Shareholders' equity increased $1.1 million or 7.4% for the year ended
December 31, 2001. The increase in shareholders' equity resulted from net income
for the period of $1.1 million, a $155,000 increase in accumulated other
comprehensive income from the net appreciation of securities, the issuance of
$21,000 of common stock that resulted from the exercise of options, the release
of ESOP shares and the amortization of restricted stock. The increases were
partially offset by dividend payments of $272,000.

      In April 2001, the Company announced a limited share buyback program
covering up to 5% of the Company's outstanding common stock, subject to market
conditions. No shares were purchased under this program during 2001. The Company
had a similar program during 2000 under which the Company purchased 133,500
shares of common stock.

Results of Operations for the Year Ended December 31, 2001 Versus the Year Ended
December 31, 2000

      Net income was $1.1 million for the year ended December 31, 2001, compared
to $615,000 in 2000. The total of net interest income and noninterest income
improved by $1.0 million as the Company increased earning assets and noninterest
income. The increases in net interest income and noninterest income were
partially offset by a $440,000 increase in noninterest expenses. Return on
average equity improved in 2001 to 7.33% from 4.29% in 2000. Return on average
assets also increased in 2001 to 0.75% from 0.47% in 2000.

      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 $311,000 or 6.2%
from $5.0 million in 2000 to $5.3 million in 2001. The increase in net interest
income was generated from increased earnings on higher average loan balances.
The increase in interest income was partially offset by increased interest
expense which resulted from higher average deposits and borrowings. The
Company's interest rate spread decreased in 2001 by twenty-two basis points
primarily due to lower rates on interest earning assets partially offset by
lower rates on interest bearing liabilities. For the year ended December 31,
2001, net interest income increased $524,000 from increases in volume of
interest-earning assets and interest bearing liabilities and decreased $213,000
from lower rates.

      Average Balances, Net Interest Income, Yields Earned and Rates Paid. The
following table presents 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. Monthly average balances
utilized are not believed to differ significantly from averages based on daily
balances. No adjustment for taxable equivalent income on municipal securities
was made due to the insignificant impact on rates.


                                      -30-
<PAGE>

                     NET INTEREST INCOME, RATES AND BALANCES
                             Year Ended December 31,

<TABLE>
<CAPTION>
                                                       Interest                 Yields/ Rates            Average balances
                                               -----------------------      ---------------------     ----------------------
    (dollars in thousands)                       2001           2000          2001         2000         2001          2000
                                               --------       --------      --------     --------     --------      --------
                                                                           (dollars in thousands)
<S>                                            <C>               <C>            <C>          <C>      <C>             <C>
Interest earning assets:
Loans, gross (a)                               $  7,782          6,801          8.07%        8.44%    $ 96,406        80,594
Securities, at amortized cost (b)                 2,065          2,280          5.80%        6.19%      35,593        36,816
Federal funds sold & other                          164             69          5.33%        9.24%       3,075           747
                                               --------       --------      --------     --------     --------      --------
  Total interest earning assets                $ 10,011          9,150          7.41%        7.74%     135,074       118,157
                                                                            ========     ========     ========      ========
Noninterest earning assets                                                                              15,301        12,288
                                                                                                      --------      --------
  Total assets                                                                                        $150,375       130,445
                                                                                                      ========      ========
Interest bearing liabilities:
Savings, Now, money market (c)                 $  1,467          1,365          2.51%        2.73%    $ 58,341        49,934
Time deposits                                     2,432          2,172          5.39%        5.36%      45,120        40,497
Borrowings                                          801            613          6.28%        6.49%      12,747         9,447
                                               --------       --------      --------     --------     --------      --------
  Total interest bearing liabilities           $  4,700          4,150          4.04%        4.16%     116,208        99,878
                                                                            ========     ========     ========      ========
Noninterest bearing deposits                                                                            17,332        14,393
Other noninterest liabilities                                                                            1,493          1,823
                                                                                                      --------      --------
  Total liabilities                                                                                    135,033        116,094
Shareholders' equity                                                                                    15,342         14,351
                                                                                                      --------      --------
  Total liabilities & equity                                                                          $150,375        130,445
                                                                                                      ========      ========
Net interest income                            $  5,311          5,000
                                               ========       ========
Excess of earning assets
  over interest bearing liabilities                                                                   $ 18,866         18,279
                                                                                                      ========      ========
Interest rate spread                                                            3.37%        3.59%
Net interest margin (d)                                                         3.93%        4.23%
Average interest-earning assets to
  average interesting-bearing liabilities                                     116.23%      118.30%

</TABLE>

----------------------------------
(a)  Includes nonaccruing loans.
(b)   Average balance represents the amortized cost of securities excluding net
      unrealized gains or losses
(c)   Includes advance payments by borrowers for taxes and insurance (mortgage
      escrow deposits).
(d)   Equals net interest income divided by average interest-earning assets.

      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


                                      -31-
<PAGE>

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.

<TABLE>
<CAPTION>
                                              Year Ended December 31, 2001 compared to 2000
                                              ---------------------------------------------
                                                Increase(Decrease) Due to       Total
                                                ----------------------------------------
                                                    Volume        Rate        (Decrease)
                                                   -------       -------      ----------
                                                                         (dollars in thousands)
<S>                                                <C>           <C>           <C>
Interest-earning assets:
      Loans                                        $ 1,290          (309)          981
      Securities                                       (75)         (140)         (215)
      Short-term investments                           135           (40)           95
                                                   -------       -------       -------
           Total investments                         1,350          (489)          861
                                                   -------       -------       -------
Interest-bearing liabilities:
      Saving,Now and money
           market deposits                             218          (116)          102
      Time deposits                                    248            12           260
      Borrowings                                       208           (20)          188
                                                   -------       -------       -------
           Total interest-bearing liabilities          674          (124)          550
                                                   -------       -------       -------
Increase (decrease) in net interest income         $   676          (365)          311
                                                   =======       =======       =======
</TABLE>

      Interest Income. Total interest income increased by $861,000, or 9.4%, to
$10.0 million for 2001 compared to $9.2 million for 2000. The primary reason for
the increase in interest income was a $981,000 increase in interest earned on
outstanding loans. The average balance of loans increased $15.8 million from
$80.6 million in 2000 to $96.4 million in 2001. The average yield on the loan
portfolio decreased to 8.07% in 2001 from 8.44% in 2000. The decreases in the
average yield on the loan portfolio resulted from the decreasing rate
environment during 2001 that developed due to actions taken by the Federal
Reserve Board. Interest income from securities decreased $215,000 for the year
ended December 31, 2001 as compared to 2000. The decrease in interest income
from securities was due primarily to a $1.2 million decrease in average balance
of securities to $35.6 million for 2001 compared to $36.8 million in 2000 and a
reduction in average yield on the securities portfolio from 6.19% in 2000 to
5.80% in 2001.

         Other interest income, which consists of interest on federal funds sold
and other short-term investments, was $164,000 in 2001 as compared to $69,000 in
2000. The average amount


                                      -32-
<PAGE>

of federal funds and short-term investments increased to $3.1 million in 2001
compared to $0.7 million in 2000.

      Interest Expense. Interest expense, which consisted primarily of interest
paid on deposits and borrowings, was $4.7 million in 2001 compared to $4.2
million in 2000. The increase in interest expense for 2001 resulted from
increased interest expense on deposits of $362,000 and increased interest
expense on borrowings of $188,000. Deposit interest expense increased as a
result of volume increases from new deposits. The Company offers its deposit
customers tiered pricing schedules whereby higher balances earn higher rates of
interest. Interest expense on borrowings increased as a result of the Company's
decision to finance asset growth with borrowed funds.

      Provision for Loan Losses. The provision for loan losses was $144,000 in
2001 and $169,000 in 2000. 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 $333,000
in 2001 and $117,000 in 2000. At December 31, 2001, the allowance for loan
losses equaled $932,000, representing 0.9% of total loans outstanding and 123.6%
of total non-performing loans. Additional information regarding the allowance
for loan losses is provided in the table below:

                                                          For the Year Ended
                              Allowance for loan losses       December 31,
                                                             2001       2000
                                                           -------     ------
                                                         (dollars in thousands)

Balance, beginning of year                                 $ 1,121      1,069
   Provision for loan losses                                   144        169
   Charge-offs                                                (388)      (162)
   Recoveries                                                   55         45
                                                           -------     ------
Balance, end of year                                       $   932      1,121
                                                           -------     ------
Net charge-offs to average loans                              0.35%      0.15%
Allowance for loan losses to ending loans                     0.89%      1.30%

      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 the Company's allowance for loan losses and the
carrying value of non-performing assets based on their judgments 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 the Company attempts to increase
the amount of loan originations and diversify the types of loans offered,
increased future provisions for loan losses may be required.


                                      -33-
<PAGE>

      Noninterest Income. Noninterest income increased $667,000 to $2.0 million
in 2001 compared to $1.3 million in 2000. The increase in noninterest income is
due, in part, to the Company's continued efforts to increase revenues from
noninterest sources through revising fee structures and enhancing services.
Additionally, the Company's noninterest income included net earnings on life
insurance policies acquired on the lives of Directors, net gains on sale of
loans and net gains from security transactions. For 2001 compared to 2000,
service charges and other income increased $426,000, net gains on the sale of
loans increased $105,000, net gains on security transactions increased $65,000
and life insurance policy income increased $71,000.

      Noninterest Expenses. Noninterest expense increased during 2001 by
$440,000 compared to 2000. Increased expense that resulted from the branch
acquisition is the primary reason for the increase in expenses. During 2001,
payroll expenses increased $333,000, data processing costs increased $189,000,
office supplies, printing and postage increased $81,000, marketing and
advertising expense increased $60,000, and contribution expense increased
$36,000. The expense increases were partially offset by a $256,000 decrease in
professional fees. The reduction of professional fees in 2001 is the result of a
reduction from professional fees incurred in 2000 associated with a
profitability study.

      Income Taxes. Income tax expense for the year ended December 31, 2001, was
$297,000 as compared to income tax expense of $244,000 in 2000. The increase in
tax expense was primarily caused by the $563,000 increase in income before taxes
for the year ended December 31, 2001, as compared to the prior year. The
increase in tax expense for 2001 is below statutory income tax rates due
primarily to favorable tax benefits from tax-exempt income on securities and
income from bank-owned life insurance.

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


                                      -34-
<PAGE>

      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 51.7% of the Company's
one to four 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 71.2% of
residential mortgages at December 31, 2001. 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.
During 2001 as residential mortgage interest rates declined a significant
portion of loans originated were 15 and 30 year fixed rate loans. To reduce the
long term interest rate exposure of these loans the Company sold the majority of
all fixed rate 15 and 30 year loans originated during 2001 in the secondary
market. However, there were no loans held for sale at December 31, 2001. Future
originations may be designated and sold in the secondary markets.

      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, 2001, $9.7 million or
21.0% of the Company'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 change. The
Company'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 $62.8 million or 48.6% of total deposits at December 31,
2001.

      How Interest Rate Risk Is Measured. 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 the Company'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, 2001 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


                                      -35-
<PAGE>

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.

The following table presents internal calculations of net interest income for a
twelve-month period and market value of portfolio equity at December 31, 2001,
under varying interest rate scenarios.

<TABLE>
<CAPTION>
                                          Net Interest Income               Market Value of Portfolio Equity
                                        For Twelve-Month Period            Based on December 31, 2001 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>
+200                                $ 6,061         $ (26)        (0.4)%       $ 15,759     $ (2,530)         (13.8)%
+100                                  6,091             4          0.1           16,840       (1,449)          (7.9)
Base                                  6,087                                      18,289
-100                                  6,093             6          0.1           20,071        1,782            9.7
-200                                  6,109            22          0.4           21,334        3,045           16.6
</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 the Company'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


                                      -36-
<PAGE>

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. The Company also utilizes 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, the
Company maintains a strategy of investing in various lending products. Such
products frequently have short terms (five years or less) or 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, 2001, the Company had outstanding commitments to originate loans of
approximately $17.7 million and unused letters of credit of approximately $1.4
million. At December 31, 2001, the Company also had certificates of deposit
scheduled to mature in one year or less totaling $36.6 million. Based on
historical experience, management believes that a significant portion of
maturing deposits will remain with the Company. It is anticipated that the
Company will continue to have sufficient deposit funds and available borrowings
to meet its current commitments.

      During 2001, the Company entered into two new borrowing arrangements to
provide funds for asset growth. Both arrangements were with the Federal Home
Loan Bank of New York (FHLB-NY). In June, the Company borrowed $2.0 million from
the Federal Home Loan Bank of New York for a term of 10 years with a fixed rate
of 4.5% for the first two years and convertible at the option of the Federal
Home Loan Bank to current market rates thereafter. In December, the Company
borrowed $3.0 million from the Federal Home Loan Bank with various maturities
ranging from December 2002 to December 2006 and with fixed interest rates
ranging from 2.5% to 4.5 %. At December 31, 2001, the Company had total
borrowings from the FHLB-NY of $14.9 million. Also available to the Company are
overnight and one-month borrowing facilities with the FHLB-NY, of $6.8 million
and $7.7 million respectively, an overnight credit plus line of $7.0 million
with the FHLB-NY 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, 2001, 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 accounting principles generally accepted in the
United States of America, which generally require the measurement of financial
position and operating results in terms of


                                      -37-
<PAGE>

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.

                          ITEM 7. FINANCIAL STATEMENTS

         See Financial Statements filed as a part of this report.

                    ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         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 17, 2001, which
information is hereby incorporated by reference into this Annual Report.


                                      -38-
<PAGE>

                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
                     DOCUMENTS FILED AS PART OF THIS REPORT

A.    EXHIBITS

            (3)   Articles of incorporation and by-laws

                  (i)   Stock Holding Company Charter of Oswego County Bancorp,
                        Inc.-- incorporated herein by reference to Exhibit A in
                        definitive Proxy Statement, dated December 7, 2001.

                  (ii)  By-laws of Oswego County Bancorp, Inc.-- incorporated
                        herein by reference to Exhibit B in definitive Proxy
                        Statement, dated December 7, 2001.

                  (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.

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

                  (i)   Form of Stock Certificate of Oswego County Bancorp, Inc.

                  (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.

            (10)  Material contracts -incorporated herein by reference to same
                  numbered Exhibits on Form 10-KSB for the year ended December
                  31, 1999, filed March 30, 2000:

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


                                      -39-
<PAGE>

                  (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.

            (21)  Subsidiaries of the registrant.

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

            (23)  Consent of KPMG, LLP.

B.    REPORTS ON FORM 8-K

            No reports on Form 8-K were filed by the Registrant during the
            quarter ended December 31, 2001.

            Subsequent to December 31, 2001, on February 25, 2002 the Company
            filed an 8-K Report regarding the Board of Directors authorization
            of a three-for-one stock split for shareholders of record on March
            4, 2002.


                                      -40-
<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 15, 2002


By: /s/ Gregory J. Kreis                    By: /s/ Eugene R. Sunderhaft
   ---------------------------------------     ---------------------------------
   Gregory J. Kreis                            Eugene R. Sunderhaft
   President and Chief Executive Officer       Senior Vice President and Chief
   (Principal Executive Officer)               Financial Officer
                                               (Principal Financial and
                                               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 15, 2002                              March 15, 2002


By: /s/ Paul J. Heins                      By: /s/ Paul W. Schneible
   ----------------------------------         ---------------------------
   Paul J. Heins, Director                    Paul W. Schneible, Director
   March 15, 2002                             March 15, 2002


By: /s/ Deborah F. Stanley                 By: /s/ Gregory J. Kreis
   -----------------------------------         ---------------------------
   Deborah F. Stanley, Director                Gregory J. Kreis, Director
   March 15, 2002                              March 15, 2002


By: /s/ Carl K. Walrath
   ----------------------------------
   Carl K. Walrath, Director
   March 15, 2002


                                      -41-
<PAGE>
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                        Consolidated Financial Statements

                     Years ended December 31, 2001 and 2000

                   (With Independent Auditors' Report Thereon)
<PAGE>

                                                    Independent Auditors' Report

The Board of Directors
Oswego County Bancorp, Inc.:

We have audited the accompanying consolidated statements of financial condition
of Oswego County Bancorp, Inc. and subsidiary (the "Company") as of December 31,
2001 and 2000, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Oswego County
Bancorp, Inc. and subsidiary as of December 31, 2001 and 2000, and the results
of their operations and their cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

                                                     KPMG  LLP

Syracuse, New York
January 15, 2002 (except with
respect to note 1(t), as to which the
date is February 21, 2002)


                                       1
<PAGE>


                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                 Consolidated Statements of Financial Condition

                           December 31, 2001 and 2000
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                     Assets                                     2001        2000
                                                                             ---------    --------
<S>                                                                          <C>             <C>
Cash and due from banks                                                      $   6,478       7,119
Securities available for sale, at fair value                                    41,160      19,859
Securities held to maturity, fair value of $13,219 in 2000                          --      13,308
Loans                                                                          104,849      87,081
    Less: allowance for loan losses                                                932       1,121
                                                                             ---------    --------
               Loans, net                                                      103,917      85,960
                                                                             ---------    --------
Real estate owned                                                                   --         165
Premises and equipment, net                                                      3,712       3,053
Accrued interest receivable                                                        872         991
Bank owned life insurance                                                        4,727       4,419
Other assets                                                                     2,119       1,586
                                                                             ---------    --------
               Total assets                                                  $ 162,985     136,460
                                                                             =========    ========
                       Liabilities and Shareholders' Equity
Liabilities:
    Deposits:
       Demand                                                                   20,014      15,183
       Savings and money market                                                 62,831      49,737
       Time                                                                     46,338      40,967
                                                                             ---------    --------
                                                                               129,183     105,887
    Escrow deposits                                                              1,341       1,492
    Short-term borrowings                                                        1,174       3,200
    Long-term debt                                                              13,700       9,000
    Other liabilities                                                            1,770       2,149
                                                                             ---------    --------
               Total liabilities                                               147,168     121,728
                                                                             ---------    --------
Commitments and contingencies (note 16)
Shareholders' equity:
    Preferred stock, $0.01 par value, 500,000 shares authorized, at
       December 31, 2001 and 2000, no shares issued                                 --          --
    Common stock, $0.01 par value, 3,000,000  shares authorized and
       2,691,354 and 2,681,472 shares issued at December 31, 2001 and 2000           9           9
    Additional paid-in capital                                                   3,285       3,241
    Unvested restricted stock awards, 15,282 and 16,812 shares at
       December 31, 2001 and 2000                                                  (48)        (50)
    Treasury stock, at cost,  133,500 shares at December 31, 2001 and 2000        (473)       (473)
    Unallocated common stock held by Employee Stock Ownership
       Plan (ESOP), 70,593 and 80,181 shares at December 31, 2001 and 2000        (228)       (259)
    Retained earnings                                                           13,156      12,303
    Accumulated other comprehensive income (loss)                                  116         (39)
                                                                             ---------    --------
               Total shareholders' equity                                       15,817      14,732
                                                                             ---------    --------
               Total liabilities and shareholders' equity                    $ 162,985     136,460
                                                                             =========    ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        2
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                        Consolidated Statements of Income

                     Years ended December 31, 2001 and 2000
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                    2001      2000
                                                                   -------   ------
<S>                                                                <C>        <C>
Interest income:
    Loans                                                          $ 7,782    6,801
    Securities                                                       2,065    2,280
    Federal funds sold and other short-term investments                164       69
                                                                   -------   ------
             Total interest income                                  10,011    9,150
                                                                   -------   ------
Interest expense:
    Deposits and escrow accounts                                     3,899    3,537
    Borrowings                                                         801      613
                                                                   -------   ------
             Total interest expense                                  4,700    4,150
                                                                   -------   ------
             Net interest income                                     5,311    5,000
Provision for loan losses                                              144      169
                                                                   -------   ------
             Net interest income after provision for loan losses     5,167    4,831
                                                                   -------   ------
Noninterest income:
    Service charges                                                  1,591    1,055
    Net gains (losses) on securities transactions                       51      (14)
    Net gains on sale of loans                                         110        5
    Other                                                              253      292
                                                                   -------   ------
             Total noninterest income                                2,005    1,338
                                                                   -------   ------
Noninterest expenses:
    Salaries and employee benefits                                   2,787    2,454
    Occupancy and equipment                                            877      835
    Data processing                                                    626      437
    Office supplies, printing and postage                              280      199
    Professional fees                                                  295      551
    Real estate owned, net                                              26      (14)
    Director fees                                                      109      125
    Marketing and advertising                                          205      145
    Contributions                                                       76       40
    Other                                                              469      538
                                                                   -------   ------
             Total noninterest expenses                              5,750    5,310
                                                                   -------   ------
Income before income tax expense                                     1,422      859
Income tax expense                                                     297      244
                                                                   -------   ------
             Net income                                            $ 1,125      615
                                                                   =======   ======
Basic  income per share                                            $  0.46     0.24
                                                                   =======   ======
Diluted  income per share                                          $  0.45     0.24
                                                                   =======   ======
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        3
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

           Consolidated Statements of Changes in Shareholders' Equity

                     Years ended December 31, 2001 and 2000
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                             Unvested
                                                                                               Additional   restricted
                                                                                    Common      paid-in       stock       Treasury
                                                                                     stock      capital       awards        stock
                                                                                   ----------  ------------------------  -----------
<S>                                                                                  <C>          <C>          <C>          <C>
Balance at December 31, 1999                                                         $    9       3,182         --            --
Purchase of treasury stock (133,500 shares)                                              --          --         --          (473)
Cash dividends ($0.03 per share)                                                         --          --         --            --
Issue restricted stock (19,782 shares)                                                   --          59        (59)           --
Amortization of restricted stock                                                         --          --          9            --
Acquisition of common stock by ESOP (16,500 shares)                                      --          --         --            --
Allocation of ESOP stock (9,171 shares)                                                  --          --         --            --
Comprehensive income:
    Net income                                                                           --          --         --            --
    Net change in the unrealized gain (loss) on securities available for sale,
         net of taxes                                                                    --          --         --            --
           Total comprehensive loss
                                                                                     ------       -----        ---          ----
Balance at December 31, 2000                                                              9       3,241        (50)         (473)
Net proceeds from the exercise of stock options (7,182 shares)                           --          21         --            --
Cash dividends ($0.10 per share)                                                         --          --         --            --
Issue restricted stock (2,700 shares)                                                    --          11        (11)           --
Amortization of restricted stock                                                         --          --         13            --
Allocation of ESOP stock (9,588 shares)                                                  --          12         --            --
Comprehensive income:
    Net income                                                                           --          --         --            --
    Net change in the unrealized gain (loss) on securities available for sale,
        net of taxes                                                                     --          --         --            --
           Total comprehensive income
                                                                                     ------       -----        ---          ----
Balance at December 31, 2001                                                         $    9       3,285        (48)         (473)
                                                                                     ======       =====        ===          ====
</TABLE>

<TABLE>
<CAPTION>
                                                                                                         Accumulated
                                                                                  Unallocated               other
                                                                                    common                 compre-
                                                                                    stock                  hensive
                                                                                   held by     Retained     income
                                                                                     ESOP      earnings     (loss)       Total
                                                                                  -----------  ----------  ---------  ------------
<S>                                                                                  <C>        <C>         <C>        <C>
Balance at December 31, 1999                                                         (238)      11,764      (498)      14,219
Purchase of treasury stock (133,500 shares)                                            --           --        --         (473)
Cash dividends ($0.03 per share)                                                       --          (76)       --          (76)
Issue restricted stock (19,782 shares)                                                 --           --        --           --
Amortization of restricted stock                                                       --           --        --            9
Acquisition of common stock by ESOP (16,500 shares)                                   (51)          --        --          (51)
Allocation of ESOP stock (9,171 shares)                                                30           --        --           30
Comprehensive income:
    Net income                                                                         --          615        --          615
    Net change in the unrealized gain (loss) on securities available for sale,
         net of taxes                                                                  --           --       459          459
                                                                                                                      -------
           Total comprehensive loss                                                                                     1,074
                                                                                     ----      -------      ----      -------
Balance at December 31, 2000                                                         (259)      12,303       (39)      14,732
Net proceeds from the exercise of stock options (7,182 shares)                         --           --        --           21
Cash dividends ($0.10 per share)                                                       --         (272)       --         (272)
Issue restricted stock (2,700 shares)                                                  --           --        --           --
Amortization of restricted stock                                                       --           --        --           13
Allocation of ESOP stock (9,588 shares)                                                31           --        --           43
Comprehensive income:
    Net income                                                                         --        1,125        --        1,125
    Net change in the unrealized gain (loss) on securities available for sale,
        net of taxes                                                                   --           --       155          155
                                                                                                                      -------
           Total comprehensive income                                                                                   1,280
                                                                                     ----      -------      ----      -------
Balance at December 31, 2001                                                         (228)      13,156       116       15,817
                                                                                     ====      =======      ====      =======
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows

                     Years ended December 31, 2001 and 2000
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                          2001      2000
                                                                                        --------   -------
<S>                                                                                     <C>            <C>
Cash flows from operating activities:
    Net income                                                                          $  1,125       615
    Adjustments to reconcile net income to net cash provided by
       operating activities:
          Depreciation                                                                       393       363
          Provision for loan losses                                                          144       169
          Writedown on real estate owned                                                      38        19
          Gain on sale of real estate owned                                                   (4)      (31)
          Net loss (gain) on securities transactions                                         (51)       14
          Net (gain) on sale of loans                                                       (110)       (5)
          Net increase in cash surrender value of life insurance                            (208)     (137)
          Net amortization of securities premiums                                             66        17
          Proceeds from sale of loans held for sale                                       13,629       730
          Loans originated for sale                                                      (13,519)     (725)
          Deferred income tax expense (benefit)                                              126       (67)
          ESOP stock released for allocation and amortization of  restricted stock            56        39
          Change in:
             Accrued interest receivable                                                     125       (53)
             Other assets                                                                   (413)    1,155
             Other liabilities                                                              (379)      823
                                                                                        --------   -------
                     Net cash provided by operating activities                             1,018     2,926
                                                                                        --------   -------
Cash flows from investing activities:
    Proceeds from maturity of and principal collected on securities held to maturity          --     2,983
    Proceeds from sale of securities available for sale                                    7,935     2,985
    Proceeds from maturity of and principal collected on securities available for sale    18,573        --
    Purchases of securities available for sale                                           (34,257)   (1,260)
    Purchase of loans                                                                     (5,100)       --
    Disbursements for loan originations net of principal collections                     (11,974)  (14,394)
    Proceeds from sale of real estate owned                                                  243       396
    Purchase of bank owned life insurance                                                   (100)   (4,282)
    Purchases of premises and equipment, net of disposals                                   (911)     (360)
    Net cash provided by acquisition of branch                                             2,439        --
                                                                                        --------   -------
                     Net cash used in  investing activities                              (23,152)  (13,932)
                                                                                        --------   -------
Cash flows from financing activities:
    Net increase in demand, savings and money market deposits                             14,544     2,591
    Net increase (decrease) in time deposits                                               4,677     3,178
    Net increase (decrease) in escrow deposits                                              (151)      206
    Net increase in short-term borrowings                                                 (2,026)    2,300
    Proceeds of long-term debt                                                             4,700     4,000
    Net proceeds from the exercise of stock options                                           21        --
    Purchase of common stock by ESOP                                                          --       (51)
    Dividends on common stock                                                               (272)      (76)
    Purchase of treasury stock                                                                --      (473)
                                                                                        --------   -------
                     Net cash provided by financing activities                            21,493    11,675
                                                                                        --------   -------
Net increase (decrease) in cash and cash equivalents                                        (641)      669
Cash and cash equivalents at beginning of year                                             7,119     6,450
                                                                                        --------   -------
Cash and cash equivalents at end of year                                                $  6,478     7,119
                                                                                        ========   =======
Supplemental disclosure of cash flow information:
    Cash paid during the year for:
       Interest                                                                         $  4,738     3,453
       Income taxes                                                                          279       251
                                                                                        ========   =======
    Non-cash investing and financing activities:
       Transfer of loans to real estate owned                                           $    110       294
       Transfer of securities held to maturity to  available for sale upon adoption of
          SFAS No. 133                                                                    13,308        --
       Adjustment of securities available for sale to fair value, net of taxes          $    155       459
                                                                                        ========   =======
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>


                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(1)   Summary of Significant Accounting Policies

      Oswego County Bancorp, Inc. (the "Parent Company") is the parent company
      of Oswego County Savings Bank (the "Bank") referred to together as the
      "Company" (the Company). On July 13, 1999, the Bank reorganized into the
      mutual holding company form of organization as a wholly owned subsidiary
      of the Parent Company, a mid-tier stock holding company that became the
      majority-owned subsidiary of Oswego County MHC (the "MHC").

      The Company provides traditional community banking services for
      individuals and small-to-medium sized businesses through the Bank's five
      branches in Oswego and Onondaga counties of New York State. The Bank is
      subject to regulation by the New York State Banking Department and the
      Federal Deposit Insurance Corporation (FDIC).

      The accounting and reporting policies of the Company conform to generally
      accepted accounting principles and reporting practices followed by the
      banking industry. The more significant policies are described below.

      (a)   Basis of Presentation

            The consolidated financial statements include the accounts of Oswego
            County Bancorp, Inc. and its subsidiary, Oswego County Savings Bank.
            All inter-company accounts and transactions have been eliminated in
            consolidation. The Company utilizes the accrual method of accounting
            for financial reporting purposes. Amounts in the prior year's
            consolidated financial statements have been reclassified whenever
            necessary to conform to the current year's presentation.

      (b)   Use of Estimates

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions that affect the reported amounts of assets and
            liabilities and disclosure of contingent assets and liabilities at
            the date of the financial statements and the reported amounts of
            income and expenses during the reporting period. Actual results
            could differ from those estimates.


                                       6
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      (c)   Securities

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

            Held to maturity securities are recorded at cost, adjusted for the
            amortization or accretion of premiums or discounts. Available for
            sale securities are recorded at fair value. Unrealized holding gains
            and losses, net of the related tax effect, on available for sale
            securities are excluded from earnings and are reported as
            accumulated other comprehensive income or loss until realized.
            Non-marketable equity securities (principally Federal Home Loan Bank
            Stock) are included in securities available for sale at cost since
            there is no readily available market value.

            A decline in the fair value of any available for sale or held to
            maturity security below cost, that is deemed other than temporary,
            is charged to earnings resulting in the establishment of a new cost
            basis for the security.

            Premiums and discounts are amortized or accreted over the life of
            the related security as an adjustment to yield using the effective
            interest method. Realized gains and losses on securities are
            recognized on the trade date and are determined using the specific
            identification method for determining the cost of securities sold.

      (d)   Loans

            Loans (other than those held for sale) are reported at the principal
            amount outstanding. Fees and certain direct origination costs
            related to lending activities are recognized in income as incurred,
            as the amounts are immaterial.

            Mortgage loans originated and intended for sale in the secondary
            market are carried at the lower of aggregate cost or estimated
            market value. Net unrealized losses are recognized through a
            valuation allowance by charges to income.

            The Company recognizes as separate assets the rights to service
            mortgage loans for others, regardless of how those servicing rights
            were acquired. Mortgage servicing rights are amortized in proportion
            to, and over the period of, estimated net servicing income.
            Additionally, capitalized mortgage servicing rights are assessed for
            impairment based on the fair value of those rights, and any
            impairment is recognized through a valuation allowance by a charge
            to income.


                                       7
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

            Generally, the Company places all loans that are 90 days or more
            past due on non-accrual status. 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 by a charge 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. Loans are removed from
            non-accrual status when they become current as to principal and
            interest, or when, in the opinion of management, the loans are
            expected to be fully collectible as to principal and interest.

      (e)   Allowance for Loan Losses

            The Company's provision for loan losses charged to operations is
            based upon management's evaluation of the loan portfolio. The
            allowance for loan losses is maintained at an amount management
            deems adequate to provide for probable loan losses considering the
            character of the loan portfolio, economic conditions, analysis of
            specific loans and historical loss experience. While management uses
            available information to recognize losses on loans, future additions
            to the allowance may be necessary based on changes in economic
            conditions. In addition, various regulatory agencies, as an integral
            part of their examination process, periodically review the Company's
            allowance for loan losses. Such agencies may require the Company to
            recognize additions to the allowance based on their judgments about
            information available to them at the time of their examinations.

            The Company considers a loan impaired when, based on current
            information and events, it is probable that it will be unable to
            collect all amounts of principal and interest under the original
            terms of the agreement. Large groups of smaller balance, homogeneous
            loans such as the Company's residential mortgages, home equity loans
            and consumer loans are collectively evaluated for impairment.
            Accordingly, the Company measures impaired commercial mortgages and
            commercial loans based on the present value of future cash flows
            discounted at the loan's effective interest rate, or at the fair
            value of the collateral if the loan is collateral dependent.
            Impairment losses are recognized as a component of the allowance for
            loan losses.


                                       8
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      (f)   Real Estate Owned

            Real estate owned includes property acquired through, or in lieu of,
            formal foreclosure. Write-downs to estimated fair value which are
            required at the time of foreclosure are charged to the allowance for
            loan losses. After transfer, the property is carried at the lower of
            cost or fair value, less estimated selling expenses. Adjustments to
            the carrying value of such properties that result from subsequent
            declines in fair value are charged to operations in the period in
            which the declines occur.

      (g)   Premises and Equipment

            Land is carried at cost, and buildings, furniture and equipment are
            stated at cost less accumulated depreciation. Depreciation is
            computed primarily on the straight-line method over the estimated
            service lives of the assets.

      (h)   Bank Owned Life Insurance

            The Bank Owned Life Insurance ("BOLI") was purchased as a financing
            tool for director benefits. The value of life insurance financing is
            the tax preferred status of increases in life insurance cash value
            and death benefits and the cash flow generated at the death of the
            insured. The purchase of the life insurance policy results in an
            interest sensitive asset on the Company's consolidated statements of
            financial condition that provides tax-free income to the Company.
            The largest risk to the BOLI program is credit risk of the insurance
            carriers. To mitigate this risk, annual financial condition reviews
            are completed on all carriers. BOLI is stated on the Company's
            consolidated statements of financial condition at its current cash
            surrender value. Increases in BOLI's cash surrender value are
            reported as other operating income in the Company's consolidated
            statements of income.

      (i)   Goodwill

            Goodwill represents the excess purchase price over the fair value of
            the tangible net assets acquired in a branch acquisition. Goodwill
            is being amortized over fifteen years on a straight-line basis. The
            amortization period is monitored to determine if events or
            circumstances require that such period be reduced. The Company also
            reviews its goodwill for events that may indicate that the carrying
            amount has become impaired. Goodwill is included in other assets.


                                       9
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      (j)   Income Taxes

            Deferred tax assets and liabilities are recognized for the estimated
            future tax consequences attributable to temporary differences
            between the financial statement carrying amounts of existing assets
            and liabilities and their respective tax bases. Deferred tax assets
            are also recognized for tax carryforwards such as charitable
            contributions. Deferred tax assets and liabilities are measured
            using enacted tax rates in effect for the year in which those
            temporary differences are expected to be recovered or settled. If it
            is more likely than not that all or a portion of the Company's
            deferred tax assets will not be realized, a valuation allowance is
            established by a charge to income tax expense. The effect on
            deferred tax assets and liabilities of a change in tax rates is
            recognized in income tax expense in the period which includes the
            enactment date.

      (k)   Pension and Other Postretirement Benefits

            The Company has a defined benefit pension plan covering
            substantially all of its employees. Benefits are based on credited
            years of service and the employee's average compensation prior to
            retirement. The Company's funding policy is to contribute annually
            at least the minimum required by law.

            The Company sponsors an unfunded defined benefit plan that covers
            all of its full time employees and provides postretirement medical
            and life insurance benefits for employees who retired prior to
            December 31, 2000. Employees are eligible for these benefits if they
            retire under the Company's defined benefit pension plan and have
            attained age 55 with at least 5 years of service. Employees are
            required to contribute a portion of the medical insurance premium.
            The Company accrues the cost of these benefits to employees and the
            employees' beneficiaries during the years that the employees render
            the necessary service. The postretirement medical and life insurance
            plan was amended as of December 31, 2000 to exclude all active
            employees from receiving benefits under the plan.

      (l)   Stock Based Compensation

            Compensation expense is recognized for the Company's Employee Stock
            Ownership Plan (ESOP) equal to the average fair value of shares
            committed to be released for allocation to participant accounts. Any
            difference between the average fair value of the shares committed to
            be released for allocation and the ESOP's original acquisition cost
            is charged or credited to shareholders' equity (additional paid-in
            capital). The cost of unallocated ESOP shares (shares not yet
            released for allocation) is reflected as a reduction of
            shareholders' equity.


                                       10
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

            The Company accounts for stock options granted under its stock
            option plan in accordance with the provisions of Accounting
            Principles board ("APB") Opinion No. 25, Accounting for Stock Issued
            to Employees, and related Interpretations. Accordingly, compensation
            expense is recognized only if the exercise price of the options is
            less than the fair value of the underlying stock at the grant date.
            Statement of Financial Accounting Standards ("SFAS") No. 123,
            Accounting for Stock-Based Compensation encourages entities to
            recognize the fair value of all stock-based awards on the date of
            the grant as compensation expense over the vesting period.
            Alternatively, SFAS No. 123 allows entities to continue to apply the
            provisions of ABP Opinion No. 25 and provide pro forma disclosure of
            net income and earnings per share as if the fair-value-based method
            defined in SFAS No. 123 had been applied.

            Restricted stock awards are also accounted for in accordance with
            APB Opinion No. 25. The fair value of the shares awarded, measured
            as of the grant date, is recognized as unearned compensation (a
            component of shareholders' equity) and amortized to compensation
            expense over their respective vesting period.

      (m)   Earnings per Share

            Basic earnings per share is calculated by dividing net income by the
            weighted-average number of common shares outstanding during the
            period. Diluted earnings per share is computed in a manner similar
            to that of basic earnings per share except that the weighted-average
            number of common shares outstanding is increased to include the
            number of additional common shares that would have been outstanding
            if all potentially dilutive common shares (such as stock options and
            unvested restricted stock) were issued during the reporting period
            using the treasury stock method. Unallocated common shares held by
            the ESOP are not included in the weighted-average number of common
            shares outstanding for either the basic or diluted earnings per
            share calculations.

      (n)   Cash and Cash Equivalents

            For purposes of reporting cash flows, cash and cash equivalents
            include cash on hand, amounts due from banks and Federal funds sold
            and other short-term investments with original maturities of less
            than 90 days.


                                       11
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      (o)   Financial Instruments With Off-Balance Sheet Risk

            The Company's primary off-balance sheet financial instruments are
            commercial and residential mortgage commitments. These off-balance
            sheet items are shown in the Company's statement of financial
            condition upon funding.

            The Company adopted the provisions of SFAS No. 133, "Accounting for
            Derivative Instruments and Hedging Activities," effective January 1,
            2001. Statement No.133 establishes accounting and reporting
            standards for derivative instruments, including certain derivative
            instruments embedded in other contracts, and for hedging activities.
            It requires that an entity recognize all derivatives as either
            assets or liabilities in the statement of financial condition and
            measure those instruments at fair value. Changes in the fair value
            of the derivative financial instruments are reported in either
            earnings or comprehensive income, depending on the use of the
            derivative and whether or not it qualifies for hedge accounting.

            Special hedge accounting treatment is permitted only if specific
            criteria are met, including a requirement that the hedging
            relationship be highly effective both at inception and on an ongoing
            basis. Accounting for hedges varies based on the type of hedge -
            fair value or cash flow. Results of effective hedges are recognized
            in current earnings for fair value hedges and in other comprehensive
            income for cash flow hedges. Ineffective portions of hedges are
            recognized immediately in earnings and are not deferred.

            The derivative instruments held by the Company as of and for the
            year ended December 31, 2001 consisted solely of instruments used to
            hedge interest rate risk related to the Company's mortgage banking
            activities. The adoption of Statement No.133, as of January 1, 2001,
            did not have a material effect on the Company's financial position
            or results of operations. As a part of the adoption, all securities
            classified as held to maturity were transferred to securities
            available for sale and reported at fair value. The securities
            transferred had an amortized cost of $13,308,000 and a fair value of
            $13,219,000.

      (p)   Comprehensive Income

            Comprehensive income, presented in the consolidated statements of
            changes in shareholders' equity, consists of net income and the net
            change for the period in after-tax unrealized gains or losses on
            securities available for sale. Accumulated other comprehensive
            income in the accompanying statements of financial condition
            represents the net unrealized gains or losses on securities
            available for sale as of the reporting dates.


                                       12
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      (q)   Segment Information

            Public companies are required to report financial and other
            information about key revenue producing segments of the entity for
            which such information is available and is utilized by the chief
            operating decision maker. As a community-oriented financial
            institution, substantially all of the Company's operations involve
            the delivery of loan and deposit products to customers. Management
            makes operating decisions and assesses performance based on an
            ongoing review of these community banking operations, which
            constitute the Company's only operating segment for financial
            reporting purposes.

      (r)   Other Accounting Standards

            In July 2001, the Financial Accounting Standards Board ("FASB")
            issued Statement No. 141, "Business Combinations," and Statement No.
            142, "Goodwill and Other Intangible Assets." Statement No.141
            supercedes Accounting Principles Board ("APB") No. 16, "Business
            Combinations," and requires all business combinations to be
            accounted for under the purchase method of accounting, thus
            eliminating the pooling of interests method of accounting. The
            Statement is effective for business combinations initiated after
            June 30, 2001.

            Statement No.142 requires acquired intangible assets (other than
            goodwill) to be amortized over their useful economic life, while
            goodwill and any acquired intangible asset with an indefinite useful
            economic life would not be amortized, but would be reviewed for
            impairment on an annual basis based upon guidelines specified by the
            Statement. Statement No.142 also requires additional disclosures
            pertaining to goodwill and intangible assets. The provisions of
            Statement No.142 are required to be adopted starting with fiscal
            years beginning after December 15, 2001. For any goodwill and other
            intangibles acquired after June 30, 2001, the non-amortization and
            amortization provisions of this Statement are effective immediately.

            At December 31, 2001, the Company had goodwill of $336,000; however,
            this relates to the acquisition of a banking branch office;
            therefore, the Company's goodwill will continue to be amortized over
            the estimated life. As goodwill acquired in connection with branch
            acquisitions is specifically excluded from the new non-amortization
            provisions of Statement No. 142, the adoption of the Statement is
            not anticipated to have a material effect on the Company's results
            of operations. The FASB is currently evaluating the exclusion of
            branch goodwill and may amend the accounting rules in the near
            future.


                                       13
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

            In October 2001, the FASB issued No. 144, Accounting for Impairment
            or Disposal of Long -Lived Assets, that replaces SFAS No. 121,
            Accounting for the Impairment of Long-Lived Assets and for
            Long-Lived Assets to Be Disposed Of. The provisions of SFAS No. 144
            are effective for financial statements issued for fiscal years
            beginning after December 15, 2001 and, generally, are to be applied
            prospectively. The Company does not believe that there will be a
            material impact on the Company's financial condition or results of
            operations upon adoption of SFAS No. 144.

      (s)   Acquisitions

            On May 10, 2001, the Company acquired the BSB Bank & Trust Co.
            branch located in the P&C Food Market store on Route 104 East in
            Oswego. On the acquisition date the Company acquired $1.2 million of
            loans, $380,000 of other assets and assumed deposit liabilities of
            $4.1 million. As a part of the transaction the Company received a
            cash payment from BSB Bank & Trust Co of $2.2 million for the
            liabilities assumed and the assets purchased. The transaction was
            treated as a purchase, and the Company recorded goodwill of
            approximately $352,000, which is being amortized on a straight-line
            basis over a 15-year period.

      (t)   Stock split (subsequent event)

            On February 21, 2002, the Company's Board of Directors authorized a
            three-for-one stock split in the form of a stock dividend for
            shareholders of record at the close of business on March 4, 2002.
            All share and per-share amounts have been restated to give effect to
            the stock split.


                                       14
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(2)   Securities

      The amortized cost and fair value of securities are as follows:

<TABLE>
<CAPTION>
                                                                      December 31, 2001
                                                       ---------------------------------------------
                                                                      Gross       Gross
                                                       Amortized   unrealized   unrealized    Fair
                                                         cost         gains       losses      value
                                                       ---------   -----------  -----------   ------
                                                                       (in thousands)
<S>                                                     <C>            <C>         <C>        <C>
Securities available for sale
Debt securities:
   United States Government
       agency obligations                               $ 2,800         59          --         2,859
   Corporate and municipal securities                    17,095        238         246        17,087
   Mortgage-backed securities                            16,200        141           6        16,335
                                                        -------        ---         ---        ------
                                                                                              16,335
       Total debt securities                             36,095        438         252        36,281

Equity securities:
   Marketable equity securities                           4,003         28          20         4,011
   FHLB stock                                               858         --          --           858
   Non-marketable equity securities                          10         --          --            10
                                                        -------        ---         ---        ------
       Total equity securities                            4,871         28          20         4,879

              Total securities available
                  for sale                              $40,966        466         272        41,160
                                                        =======        ===         ===        ======
</TABLE>


                                       15
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                            December 31, 2000
                                                   ---------------------------------------------------------------
                                                                       Gross            Gross
                                                       Amortized    unrealized        unrealized         Fair
                                                         cost          gains            losses           value
                                                       ---------    ----------        ----------         ----
                                                                          (in thousands)
<S>                                                      <C>              <C>              <C>           <C>
Securities available for sale
Debt securities:
   United States Government
       agency obligations                                $19,032          77               142           18,967
Equity securities:
   FHLB stock                                                890          --                --              890
   Non-marketable equity securities                            2          --                --                2
                                                         -------       -----             -----           ------
           Total securities available
              for sale                                   $19,924          77               142           19,859
                                                         =======       =====             =====           ======
Securities held to maturity
Debt securities:
   United States Government
       agency obligations                                $ 3,000          --                 9            2,991
   Corporate and municipal securities                      7,901          55               181            7,775
   Mortgage-backed securities                              1,838          62                --            1,900
   Small Business Administration                             569          --                16              553
                                                         -------       -----             -----           ------
           Total securities held
              to maturity                                $13,308         117               206           13,219
                                                         =======       =====             =====           ======
</TABLE>

      Proceeds from the sale of securities available for sale during 2001 were
      approximately $7,935,000 with gross gains of $70,100 and gross losses of
      $19,500 realized on those sales. Proceeds from the sale of securities
      available for sale during 2000 were approximately $2,985,000 with gross
      gains of $2,400 and gross losses of $16,400 realized on those sales.


                                       16
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      Securities available for sale with a fair value of approximately $6.1
      million at December 31, 2001 were pledged to secure borrowings from the
      Federal Home Loan Bank.

      The following is a tabulation of debt securities, excluding
      mortgage-backed securities, by contractual maturity as of December 31,
      2001. Expected maturities will differ from contractual maturities because
      issuers may have the right to call or prepay obligations with or without
      call or prepayment penalties.

                                        Amortized  Fair
                                          cost     value
                                        --------  ------
                                           (in thousands)

Due in one year or less                 $ 1,751   1,764
Due after one year through five years     8,140   8,344
Due after five years through ten years    2,511   2,506
Due after ten years                       7,493   7,332
                                        -------  ------
       Total                            $19,895  19,946
                                        =======  ======

(3)   Other comprehensive income

      The following summarizes the components of other comprehensive income for
      the years ended December 31, 2001 and 2000:

                                                     2001  2000
                                                    -----   ---
                                                   (in thousands)

Net unrealized holding gain on securities           $ 310   751
Reclassification adjustments for (gains) losses
        included in net income                        (51)   14
                                                    -----   ---
Other comprehensive income, before tax                259   765
Income tax expense related to items of
        other comprehensive income                    104   306
                                                    -----   ---
Balance at end of year                              $ 155   459
                                                    =====   ===


                                       17
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(4)   Loans

      The following is a summary of loans outstanding:

                                     December 31,
                                 -------------------
                                   2001      2000
                                 ---------   -------
                                    (in thousands)
Residential mortgages and
    home equity loans            $  67,004    63,979
Commercial mortgages                15,626    10,762
Commercial loans                    13,690     7,651
Consumer loans                       8,529     4,689
                                 ---------   -------
        Total loans                104,849    87,081
Allowance for loan losses             (932)   (1,121)
                                 ---------   -------
        Net loans                $ 103,917    85,960
                                 =========   =======

      There were no mortgage loans held for sale at December 31, 2001 and 2000.

      The Company's primary market area is generally Oswego County and Onondaga
      County in Central New York State. The company also acquires newly
      originated residential loans from a real estate firm operating in a
      community outside the Company's primary market area. Substantially all of
      the Company's portfolio is located in these marketing areas and,
      accordingly, the ultimate collectibility of the Company's loan portfolio
      is susceptible to changes in market conditions in these areas. The
      Company's concentration of credit risk by loan type is shown in the above
      schedule of loans outstanding. Other than general economic risks, there
      are no material concentrations of credit risk to any industry or
      individual borrower.

(5)   Allowance for Loan Losses

      The following is a summary of changes in the allowance for loan losses:

                                     Years ended December 31,
                                     ------------------------
                                         2001     2000
                                        -------   ------
                                          (in thousands)

Balance at beginning of year            $ 1,121    1,069
Provision for loan losses                   144      169
Loan charge-offs                           (388)    (162)
Recoveries                                   55       45
                                        -------   ------
Balance at end of year                  $   932    1,121
                                        =======   ======


                                       18
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      The principal balance of all loans not accruing interest amounted to
      approximately $754,000 and $1,083,000 at December 31, 2001 and 2000,
      respectively. The forgone interest income on non-accruing loans was
      approximately $80,000 and $82,000 for the years ended December 31, 2001
      and 2000, respectively.

      At December 31, 2001 and 2000, the Company had recorded investments in
      impaired loans of approximately $330,000 and $855,000, respectively. The
      impairment allowance associated with these loans was approximately $20,000
      and $291,000 at December 31, 2001 and 2000, respectively. The average
      recorded investment in impaired loans during the year was approximately
      $458,000 and $702,000 for 2001 and 2000, respectively. The amount of
      interest income recognized on impaired loans (while such loans were
      considered impaired) was not significant for the years ended December 31,
      2001 and 2000.

(6)   Premises and Equipment

      Premises and equipment at December 31 consist of the following:

                                             2001     2000
                                           -------   ------
                                            (in thousands)

Land                                       $   810      810
Buildings and improvements                   3,856    3,050
Furniture, fixtures and equipment            2,772    2,526
                                           -------   ------
                                             7,438    6,386
Accumulated depreciation                    (3,726)  (3,333)
                                           -------   ------
        Premises and equipment, net        $ 3,712    3,053
                                           =======   ======

      Depreciation expense was approximately $393,000 and $363,000 for the years
ended December 31, 2001 and 2000, respectively.


                                       19
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(7)   Time Deposits

      Time deposit contractual maturities are summarized as follows:

                                                        December 31,
                                                     ---------------
                                                       2001    2000
                                                     -------  ------
                                                     (in thousands)

Within one year                                      $36,608  32,276
After one year and within two years                    6,924   4,391
After two years and within three years                 1,234   3,239
After three years and within four years                  590     714
After four years and within five years                   982     347
                                                     -------  ------
                                                     $46,338  40,967
                                                     =======  ======

      Certificates of deposit of $100,000 and over were approximately
      $10,686,000 and $7,459,000 at December 31, 2001 and 2000, respectively.

(8)   Short-term borrowings

      Short-term borrowings consist of borrowings from the Federal Home Loan
      Bank (FHLB), with original maturities of one year or less. At December 31,
      2001, the Company had $300,000 outstanding under a fixed rate advance and
      $874,000 outstanding under an overnight line of credit agreement. The
      fixed rate advance matures on December 23, 2002, has an interest rate of
      2.50% and is collateralized by a lien on the Company's 1-4 family
      mortgages. At December 31, 2000, the Company had $3,000,000 outstanding
      under a repurchase agreement and $200,000 outstanding under an overnight
      line of credit agreement. The repurchase agreement matured on October 2,
      2001, had an interest rate of 6.51% and was collateralized by
      mortgage-backed securities with a fair value of approximately $3.0 million
      at December 31, 2000.

      The Company has two unused lines of credit available from the FHLB under
      an overnight and one-month borrowing facility of approximately $6.8
      million and $7.7 million at December 31, 2001. Also, available to the
      Company at December 31, 2001 was an overnight credit plus line of $7.0
      million from the FHLB and a $5.0 million line of credit with a commercial
      bank.


                                       20
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(9)   Long-Term Debt

      Long-term debt is principally fixed rate callable advances from the FHLB.
      Information on the borrowings at December 31, 2001 and 2000 is summarized
      as follows:

<TABLE>
<CAPTION>
                                                                      2001
                                    -------------------------------------------------------------------------------
      Maturity date                    Amount                         Rate                      Call Date
      -------------                    ------                         ----                      ---------
                                    (in thousands)
<S>                                 <C>                               <C>                     <C>
      December 22, 2003             $       450                       3.63%                   Non-callable
      December 13, 2004                   5,000                       6.00%                   Quarterly, beginning
                                                                                              December 13, 2001
      December 21, 2004                     750                       4.42%                   Non-callable
      December 21, 2005                     750                       4.97%                   Non-callable
      April 12, 2005                      4,000                       7.15%                   Quarterly
      December 21, 2006                     750                       5.31%                   Non-callable
      June 6, 2011                        2,000                       4.50%                   Quarterly, beginning
                                                                                              June 5, 2003
                                    -----------                   -----------
              Total                 $    13,700                       5.86%
                                    ===========

                                                                      2000
                                    -------------------------------------------------------------------------------
      Maturity date                    Amount                         Rate                      Call Date
      -------------                    ------                         ----                      ---------
                                    (in thousands)

      December 13, 2004             $     5,000                       6.00%                   Quarterly, beginning
                                                                                              December 13, 2001
      April 12, 2005                      4,000                       7.15%                   April 12, 2001
                                    --------------                -----------
               Total                $     9,000                       6.51%
                                    ==============
</TABLE>

      Federal Home Loan Bank advances are collateralized by FHLB stock owned by
      the Company and mortgage-backed securities with a fair value of
      approximately $6.1 million at December 31, 2001. In addition, the advances
      are collateralized by a blanket lien on the Company's 1-4 family mortgage
      loans.


                                       21
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(10)  Income Taxes

      Income tax expense (benefit) attributable to income before income taxes
      consisted of the following:

<TABLE>
<CAPTION>
                                          Current            Deferred                 Total
                                    -------------------  -------------------    ------------------
                                                           (in thousands)
<S>                                         <C>                  <C>                   <C>
Year ended December 31, 2001:
       Federal                              $149                 75                    224
       State                                  22                 51                     73
                                            ----               ----                    ---
           Total                            $171                126                    297
                                            ====               ====                    ===
Year ended December 31, 2000:
       Federal                              $250                (56)                   194
       State                                  61                (11)                    50
                                            ----               ----                    ---
           Total                            $311                (67)                   244
                                            ====               ====                    ===
</TABLE>

      Actual income tax expense attributable to income before income taxes
      differed from the amounts computed by applying the Federal statutory
      income tax rate to pre-tax income as follows:

                                                     Years ended December 31,
                                                     ------------------------
                                                           2001   2000
                                                          -----   ----
                                                         (in thousands)
Federal income tax expense
    at statutory rate                                     $ 483    292
Increase (decrease) resulting from:
    Tax-exempt income on securities                        (123)   (46)
    State taxes, net of Federal income
       tax effect                                            48     33
    Income from bank-owned life insurance                   (71)   (47)
    Other, net                                              (40)    12
                                                          -----   ----

           Actual income tax expense                      $ 297    244
                                                           =====   ====


                                       22
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

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

                                                                    2001 2000
                                                                    ----  ---
                                                                  (in thousands)
Deferred tax assets:
    Allowance for loan losses                                       $364  438
    Postretirement benefits                                          231  221
    Deferred compensation                                            281  203
    Charitable contribution carryover                                 63   61
    Net unrealized loss on securities available for sale              --   26
    Other                                                             15   12
                                                                    ----  ---
           Total gross deferred tax assets                           954  961
                                                                    ----  ---
Deferred tax liabilities:
    Excess tax bad debt reserve over base year                       153  146
    Depreciation                                                     117   83
    Prepaid pension expenses                                         137  105
    Mortgage servicing rights                                         57   --
    Net unrealized gain on securities available for sale              78   --
    Other                                                             22    7
                                                                    ----  ---
           Total gross deferred tax liabilities                      564  341
                                                                    ----  ---
Net deferred tax asset, included in
    other assets                                                    $390  620
                                                                    ====  ===

      In accordance with SFAS No. 109, the Company has not recognized deferred
      tax liabilities with respect to the Bank's Federal and state base-year
      reserves of approximately $1,107,000 at December 31, 2001, since the
      Company does not expect that these amounts will become taxable in the
      foreseeable future. Under current tax law, events that would result in
      taxation of these reserves include redemptions of the Bank's stock or
      certain excess distributions to the Parent Company. The unrecognized
      deferred tax liability at December 31, 2001 with respect to the base-year
      reserves was approximately $450,000.

      Realization of deferred tax assets is dependent upon the generation of
      future taxable income or the existence of sufficient taxable income within
      the loss carryback period. A valuation allowance is provided when it is
      more likely than not that some portion or all of the deferred tax assets
      will not be realized. In assessing the need for a valuation allowance,
      management considers the scheduled reversal of the deferred tax
      liabilities, the level of historical taxable income and projected future
      taxable income over the periods in which the temporary differences
      comprising the deferred tax assets will be deductible. Based on its
      assessment, management determined that no valuation allowance was
      necessary at December 31, 2001 and 2000.


                                       23
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(11)  Earnings Per Share

      The following table sets forth certain information regarding the
      calculation of basic and diluted earnings per share for the years ended
      December 31, 2001 and 2000. Unallocated ESOP shares are not considered
      outstanding for earnings per share computations. The ESOP shares become
      outstanding for earnings per share computations when they are released for
      allocation.

<TABLE>
<CAPTION>
                                                        2001                                   2000
                                         ------------------------------------    ----------------------------------
                                                      Weighted                                Weighted
                                            Net        Average      Per Share      Net        Average
       Per Share                           Income       Shares       Amount      Income       Shares        Amount
                                         ---------    --------      ---------    ------      --------      -------
                                                            (in thousands, except share data)
<S>                                     <C>          <C>              <C>         <C>       <C>              <C>
       Basic earnings per share         $   1,125    2,460,783        $ 0.46      $ 615     2,549,754     $    0.24
         Dilutive effect of potential
         common shares:
             Stock options                              30,483                                  9,066
             Restricted stock awards                     3,303                                  1,497
                                        ---------    ---------        ------      -----     ---------     ---------
       Dilutive earnings per share      $   1,125    2,494,569        $ 0.45      $ 615     2,560,317     $    0.24
                                        =========    =========        ======      =====     =========     =========
</TABLE>

      Dilutive shares for stock options and restricted stock awards represent
      the number of incremental shares computed using the treasury stock method.


                                       24
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(12)  Benefit Plans

      Pension and Other Postretirement Benefit Plans

      The following table sets forth the defined benefit pension plan's and the
      other postretirement benefit plan's change in benefit obligation, change
      in fair value of plan assets, and the funded status for the years ended
      December 31, 2001 and 2000, using the most recent actuarial data measured
      at October 1, 2001 and 2000 for the defined benefit pension plan and at
      December 31, 2001 and 2000 for the other postretirement benefit plan:

<TABLE>
<CAPTION>
                                                                     Pension benefits     Postretirement benefits
                                                                    ------------------        --------------
                                                                      2001       2000         2001     2000
                                                                    -------     ------        ----     ----
                                                                                   (in thousands)
<S>                                                                 <C>          <C>           <C>      <C>
       Change in benefit obligation:
          Benefit obligation at beginning of year                   $ 3,016      2,921         594      852
          Service cost                                                  105         98          --       23
          Interest cost                                                 237        223          42       52
          Amendments                                                     --         --          --     (163)
          Actuarial loss (gain)                                         230        (62)         44     (152)
          Benefits paid                                                (180)      (164)        (23)     (18)
                                                                    -------     ------        ----     ----
                 Benefit obligation at end of year                    3,408      3,016         657      594
                                                                    -------     ------        ----     ----

       Change in plan assets:
          Fair value of plan assets at beginning of year              4,268      3,785          --       --
          Actual return on plan assets                                 (602)       647          --       --
          Employer contributions                                         --         --          23       18
          Benefits paid                                                (180)      (164)        (23)     (18)
                                                                    -------     ------        ----     ----
                 Fair value of plan assets at end of year             3,486      4,268          --       --
                                                                    -------     ------        ----     ----

       Funded status (deficit)                                           78      1,252        (657)    (594)
       Unamortized net (asset) obligation at transition                  --         (8)        136      146
       Unamortized net loss (gain) subsequent to transition             274       (977)        (73)    (120)
       Unamortized prior service cost                                    --          1          --       --
                                                                         --         --          --       --
                                                                    -------     ------        ----     ----
              Prepaid (accrued) benefit cost                        $   352        268        (594)    (568)
                                                                    =======     ======        ====     ====
</TABLE>

      The postretirement plan was amended as of December 31, 2000 to exclude all
      active employees from receiving future benefits under the plan.


                                       25
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      Net periodic pension cost (income) consists of the following components
      for the years ended December 31, 2001 and 2000:

                                                        2001    2000
                                                       -----    ----
                                                   (dollars in thousands)

Service cost                                           $ 105      98
Interest cost on projected benefit obligation            237     223
Expected return on plan assets                          (377)   (296)
Amortization of net transition asset                      (8)    (21)
Amortization of unrecognized gain                        (42)    (14)
Amortization of prior service cost                         1       1
                                                       -----    ----
Net periodic pension cost (income)                     $ (84)     (9)
                                                       =====    ====
Weighted average discount rate                          7.25%   8.00%
                                                       =====    ====
Expected long-term rate of return                       9.00%   9.00%
                                                       =====    ====

      The projected benefit obligation assumed a long-term rate of increase in
      future compensation levels of 4.5% for 2001 and 5.5% for 2000.

      Net periodic postretirement benefit cost for the years ended December 31,
      2001 and 2000 included the following components:

                                               2001  2000
                                               ----   ---
                                             (in thousands)

Service cost                                   $ --    23
Interest cost on accumulated benefit
    obligation                                   42    52
Amortization of transition obligation            10    27
Amortization of unrecognized gain                (3)   (5)
                                               ----   ---
Net periodic postretirement benefit cost       $ 49    97
                                               ====   ===


                                       26
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      For measurement purposes, a 8.0% annual rate of increase in the per capita
      cost of average health care benefits for retirees was assumed for 2001 and
      7.5% for 2000. The rate was assumed to decrease gradually to 4.0% by 2010
      and remain at that level thereafter. The health care cost trend rate
      assumption has a significant effect on the amounts reported. To
      illustrate, increasing the assumed health care cost trend rates by 1% in
      each year would increase the accumulated postretirement benefit obligation
      at December 31, 2001 by approximately $36,000, and the net periodic
      postretirement benefit cost by approximately $3,000 for the year then
      ended. The weighted average discount rate used in determining the
      accumulated postretirement benefit obligation was 7.0% for 2001 and 2000.

      Other Benefit Plans

      In 1997, the Company instituted a nonqualified deferred compensation plan
      for directors, under which participants may elect to defer all or part of
      their annual director fees. The plan provides that deferred fees are to be
      invested in mutual funds, as selected by the individual directors. At
      December 31, 2001 and 2000, deferred director fees included in other
      liabilities aggregated approximately $405,000 and $433,000, respectively.

      In 2000, the Company established a supplemental retirement plan for
      directors, providing for extended compensation after retirement. The plan
      was funded with life insurance policies on the participants, with the
      Company as owner and beneficiary of the policies. Cash surrender value of
      these policies approximated $4,727,000 at December 31, 2001 and $4,419,000
      at December 31, 2000. At December 31, 2001 and 2000, other liabilities
      include approximately $161,000 and $60,000, respectively accrued under the
      retirement plan.

      The Company sponsors a defined contribution profit sharing 401(k) plan
      covering substantially all employees. The Company matches certain
      percentages of each eligible employee's contribution to the plan. Expense
      for the plan amounted to approximately $37,000 and $31,000 in 2001 and
      2000, respectively.


                                       27
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(13)  Employee Stock Ownership Plan (ESOP)

      The Company established an ESOP in conjunction with its initial public
      offering to provide substantially all employees of the Company the
      opportunity to also become shareholders. The ESOP borrowed approximately
      $259,000 from the Company and used the funds to purchase 79,380 shares of
      the common stock of the Company in July 1999. An additional 16,500 shares
      were purchased using loan proceeds in 2000. The loans will be repaid from
      the Company's discretionary contributions to the ESOP over a period of
      approximately ten years. At December 31, 2001, the loans had an
      outstanding balance of approximately $244,000 and an interest rate of
      8.5%. Shares purchased with the loan proceeds are held in a suspense
      account for allocation among participants as the loan is repaid. Shares
      released from the suspense account are allocated among participants at the
      end of the plan year on the basis of relative compensation in the year of
      allocation.

      Unallocated ESOP shares are pledged as collateral on the loan and are
      reported as a reduction of shareholders' equity. The Company reports
      compensation expense equal to the average market price of the shares to be
      released from collateral at the end of the plan year. The Company recorded
      approximately $43,000 and $30,000 of compensation expense related to the
      ESOP for the years ended December 31, 2001 and 2000, respectively.

The ESOP shares as of December 31, 2001 were as follows:
                 Allocated shares                          25,287
                 Unallocated shares                        70,593
                                                          -------
                          Total ESOP shares                95,880
                                                          =======
                 Market value of unallocated shares at
                      December 31, 2001 (in thousands)    $   403
                                                          =======
The ESOP shares as of December 31, 2000 were as follows:
                 Allocated shares                          15,699
                 Unallocated shares                        80,181
                                                          -------
                          Total ESOP shares                95,880
                                                          =======
                 Market value of unallocated shares at
                      December 31, 2000 (in thousands)    $   291
                                                          =======


                                       28
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(14)  Stock Option and Restricted Stock Plans

      In April 2000, the Company established a stock option plan and a
      restricted stock plan. At December 31, 2001, there were 119,850 shares of
      the Company's common stock reserved for issuance under the stock option
      plan and 35,955 shares reserved for the restricted stock plan. Under the
      terms of the stock option plan, options are granted to directors and key
      employees to purchase shares of the Company's common stock at a price
      equal to the fair market value of the common stock on the date of the
      grant. Options granted vest over five years and expire ten years from the
      date of the grant. At December 31, 2001, there were 17,937 shares
      available for grant under the option plan.

      The Company applies APB Opinion No. 25 and accordingly, no compensation
      cost has been recognized for its stock options in the financial
      statements. The fair value of each option grant is estimated on the dates
      of grant using the Black-Scholes option-pricing model with the following
      weighted-average assumptions used for grants made on April 20, 2000 and
      December 4, 2000: dividend yield 1.85%; expected volatility of 15%; risk
      free interest of 6.5%; expected lives of seven years. The estimated
      weighted average fair value of the options granted during 2000 was $0.91
      per option. Had the Company determined compensation cost based on the fair
      value at the grant date for its stock options under SFAS No. 123 and
      recognized the cost over the vesting period, the Company's net income and
      earnings per share would have been reduced to the pro forma amounts
      indicated below:

                                2001     2000
                             ---------  -------
Net income (in thousands):
        As reported          $  1,125       615
        Pro forma               1,103       607

Basic earnings per share:
        As reported               0.4      0.24
        Pro forma                 0.4      0.24

Diluted earnings per share:
        As reported               0.4      0.24
        Pro forma                 0.4      0.24


                                       29
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      Because the Company's stock options have characteristics significantly
      different from those of traded options for which the Black-Scholes model
      was developed, and because changes in the subjective input assumptions can
      materially affect the fair value estimate, the existing models, in
      management's opinion, do not necessarily provide a reliable single measure
      of fair value of its stock options. In addition, the effect on reported
      net income and earnings per share may not be representative of the effects
      on reported net income or earnings per share for future years.

      The following is a summary of changes in stock options outstanding:

                                                           Weighted Average
                                                Options      Option Price
                                              Outstanding      Per share
                                              -----------  ----------------

      Outstanding at December 31, 1999               --         $   --
        Granted                                 109,413           3.00
        Forfeited                                (7,500)          2.96
                                              ----------        ------
      Outstanding at December 31, 2000          101,913         $ 3.00
        Exercised                                (7,182)          2.96
                                              ----------        ------
      Outstanding at December 31, 2001           94,731         $ 3.01
                                              ==========        =======

      At December 31, 2001, 13,200 shares were exercisable.

      Under the terms of the restricted stock plan, shares awarded to directors
      and key employees vest at a rate of 20% per year from the date of grant.
      During 2001 and 2000, the Company granted 2,700 and 19,782 shares,
      respectively, of restricted stock. At December 31, 2001 there were 13,473
      additional shares available under the plan. The Company recognized
      compensation expense for the restricted stock plan of $13,000 and $9,000
      in 2001 and 2000, respectively.


                                       30
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(15)  Shareholders' Equity and Regulatory Matters

      The Parent Company's ability to pay dividends is primarily dependent upon
      the ability of the Bank to pay dividends. The payment of dividends by the
      Bank is subject to continued compliance with minimum regulatory capital
      requirements. In addition, regulatory approval is generally required prior
      to the Bank declaring dividends in an amount in excess of net income for
      that year plus net income retained in the preceding two years.

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

      Quantitative measures established by regulation to ensure capital adequacy
      require the Bank and the Company (consolidated) to maintain minimum
      amounts and ratios of total and Tier I capital to risk-weighted assets ,
      and Tier I capital to average assets (each as defined in the regulations).
      Management believes that, as of December 31, 2001 and 2000, the Bank and
      the Company met all capital adequacy requirements to which they were
      subject.

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


                                       31
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      The Bank and consolidated Company's regulatory capital amounts and ratios
      are presented in the following table:

<TABLE>
<CAPTION>
                                                                                    Required Ratios
                                                     Actual                 --------------------------------
                                                Regulatory Capital            Minimum        Classification
                                          ------------------------------      Capital           as Well
                                              Amount           Ratio          Adequacy        Capitalized
                                          ---------------   -------------   -------------    ---------------
                                              (dollars in thousands)
<S>                                         <C>                 <C>             <C>               <C>
As of December 31, 2001:
Bank
    Total Capital
        (to risk weighted assets)           $15,384             14.8%           8.0%              10.0%
    Tier I Capital
        (to risk weighted assets)            14,452             13.9            4.0                6.0
    Tier I Capital
        (to average assets)                  14,452              9.1            4.0                5.0
Consolidated
    Total Capital
        (to risk weighted assets)            16,297             15.7            8.0               10.0
    Tier I Capital
        (to risk weighted assets)            15,365             14.8            4.0                6.0
    Tier I Capital
        (to average assets)                  15,365             10.2            4.0                5.0

As of December 31, 2000:
Bank
    Total Capital
        (to risk weighted assets)            15,038             15.2%           8.0%              10.0%
    Tier I Capital
        (to risk weighted assets)            13,917             14.1            4.0                6.0
    Tier I Capital
        (to average assets)                  13,917             11.5            4.0                5.0
Consolidated
    Total Capital
        (to risk weighted assets)            15,892             16.1            8.0               10.0
    Tier I Capital
        (to risk weighted assets)            14,771             15.0            4.0                6.0
    Tier I Capital
        (to average assets)                  14,771             11.3            4.0                5.0
</TABLE>


                                       32
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

      In order to grant a priority to eligible depositors, the Bank established
      a liquidation account at the time of conversion in an amount equal to its
      total net worth at June 30, 1999. In the event of a future liquidation of
      the converted bank (and only in such event), eligible account holders who
      continue to maintain accounts shall be entitled to receive a distribution
      from the liquidation account. The total amount of the liquidation account
      will be decreased (as balances of eligible accounts are reduced) on annual
      determination dates. No cash dividends may be paid to the shareholders and
      no shares may be repurchased by the Company if such actions would reduce
      the Bank's shareholders' equity below the amount required for the
      liquidation account. At December 31, 2001, the amount remaining in the
      liquidation account was approximately $4.1 million.

(16)  Commitments and Contingencies

      The Company is a party to certain financial instruments with
      off-balance-sheet risk in the normal course of business to meet the
      financing needs of its customers. These financial instruments include
      commitments to extend credit, unused line of credit and standby letters of
      credit. These instruments involve, to varying degrees, elements of credit
      risk in excess of the amount recognized in the consolidated financial
      statements.

      The Company's exposure to credit loss in the event of nonperformance by
      the other party to the commitments to extend credit and standby letters of
      credit is represented by the contractual notional amount of those
      instruments. The Company uses the same credit policies in making
      commitments as it does for on-balance-sheet instruments.

      Commitments to extend credit are agreements to lend to a customer as long
      as there is no violation of any condition established in the contract.
      Commitments generally have fixed expiration dates or other termination
      clauses and may require payment of a fee. Since not all of the commitments
      are expected to be funded, the total commitment amounts do not necessarily
      represent future cash requirements. The Company evaluates each customer's
      creditworthiness on a case-by-case basis. The amount of collateral, if
      any, required by the Company upon the extension of credit is based on
      management's credit evaluation of the customer. Mortgage and other loan
      commitments outstanding at December 31, 2001 and 2000 with fixed interest
      rates amounted to approximately $3.7 million and $7.3 million,
      respectively. Fixed interest rates on mortgage and other loan commitments
      outstanding can change prior to closing only if interest rates decrease.
      Mortgage and other loan commitments outstanding at December 31, 2001 and
      2000 with variable interest rates amounted to approximately $8.9 million
      and $6.0 million, respectively. Variable rate loans float prior to
      closing.


                                       33
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000


      Standby letters of credit are conditional commitments issued by the
      Company to guarantee payment on behalf of a customer and guarantee the
      performance of a customer to a third party. The credit risk involved in
      issuing these instruments is essentially the same as that involved in
      extending loans to customers. Since a portion of these instruments will
      expire unused, the total amounts do not necessarily represent future cash
      requirements. Each customer is evaluated individually for creditworthiness
      under the same underwriting standards used for commitments to extend
      credit and on-balance-sheet instruments. Company policies governing loan
      collateral apply to standby letters of credit at the time of credit
      extension. Outstanding commitments on standby letters of credit at
      December 31, 2001 and 2000 amounted to approximately $1.4 million and $1.5
      million, respectively.

      The Company generally enters in to rate lock agreements at the time that
      residential mortgage loan applications are taken. These rate lock
      agreements fix the interest rate at which the loan, if ultimately made,
      will be originated. Such agreements may exist with borrowers with whom
      commitments to extend loans have been made, as well as with individuals
      who have not yet received a commitment. The Company makes it determination
      of whether or not to identify a loan as held for sale at the time rate
      lock agreements are entered into. Accordingly, the Company is exposed to
      interest rate risk to the extent that a rate lock agreement is associated
      with a loan application or a loan commitment which is intended to be held
      for sale, as well as with respect to loans held for sale.

      In order to reduce the interest rate risk associated with the portfolio of
      conventional mortgage loans held for sale, as well as outstanding loan
      commitments and uncommitted loans applications with rate lock agreements
      which are intended to be held for sale, the Company enters into mandatory
      forward sales commitments to sell loans in the secondary market to
      unrelated investors. At December 31, 2001, the Company had mandatory
      commitments to sell conventional fixed rate mortgage loans at set prices
      amounting to approximately $9.3 million. The Company estimates that it
      will incur a loss of $130,000 in meeting these commitments and has
      recorded that loss in net gains on sale of loans for the year ended
      December 31, 2001.

      The Company is required to maintain certain reserves of vault cash and/or
      deposits with the Federal Reserve Bank. The amount of this reserve
      requirement, included in cash and due from banks, was approximately $1.7
      million at December 31, 2001 and 2000.

(17)  Fair Value of Financial Instruments

      SFAS No. 107 requires disclosures about the fair value of financial
      instruments for which it is practicable to estimate fair value. The
      definition of a financial instrument includes many of the assets and
      liabilities recognized in the Company's consolidated statements of
      financial condition, as well as certain off-balance sheet items. Fair
      value is defined in SFAS No. 107 as the amount at which a financial
      instrument could be exchanged in a current transaction between willing
      parties, other than in a forced or liquidation sale.


                                       34
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

The following methods and assumptions were used by the Company in estimating the
fair values of its financial instruments:

(a)   Short-Term Financial Instruments

      For short-term instruments that are available on demand or that generally
      mature in ninety days or less, the carrying value approximates fair value.
      Such instruments include cash and cash equivalents, accrued interest
      receivable and accrued interest payable, and short-term borrowings.

      (b)   Securities

      Fair values for securities are based on quoted market prices, where
      available. Where quoted market prices are not available, fair values are
      based on quoted market prices of comparable instruments.

      (c)   Loans

      For variable rate loans that reprice frequently and have no significant
      credit risk, fair values are based on carrying amounts. The fair values of
      fixed rate loans are estimated through discounted cash flow analyses using
      interest rates currently being offered for loans with similar terms and
      credit quality.

      Delinquent loans are valued using the discounted cash flow methods
      described above. While credit risk is a component of the discount rate
      used to value loans, delinquent loans are presumed to possess additional
      risk. Therefore, the calculated fair values of loans are reduced by the
      allowance for loan losses.

      (d)   Deposits

      The fair values disclosed for demand, savings and money market deposits
      are, by definition, equal to the carrying amounts payable on demand at the
      reporting date. The fair value of fixed maturity time deposits is
      estimated using a discounted cash flow approach. This approach applies
      interest rates currently being offered on these accounts to a schedule of
      weighted average contractual monthly maturities on time deposits.


                                       35
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(e)   Long-Term Debt

      The fair value of long-term debt has been estimated using discount cash
      flow analyses that apply interest rates currently being offered for notes
      with similar terms.


      The estimated fair values of the Company's financial instruments as of
      December 31, 2001 and 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                   2000                               2000
                                     -------------------------------    -------------------------------
                                        Carrying           Fair            Carrying           Fair
                                         amount            value            amount            value
                                     -------------     -------------    -------------     -------------
                                                                (in thousands)
<S>                                  <C>                   <C>               <C>               <C>
  Financial assets:
    Cash and cash equivalents        $     6,478             6,478            7,119             7,119
    Accrued interest receivable              872               872              991               991
    Securities                            41,160            41,160           33,167            33,078
    Net loans                            103,917           102,263           85,960            86,516
  Financial liabilities:
    Demand, savings and money
      market deposits                     82,845            82,845           64,920            64,920
    Time deposits                         46,338            46,690           40,967            41,184
    Escrow deposits                        1,341             1,341            1,492             1,492
    Short-term borrowings                  1,174             1,174            3,200             3,200
    Long-term debt                        13,700            14,281            9,000             9,517
    Accrued interest payable                  51                51               89                89
</TABLE>

      The fair value of commitments to extend credit are equal to the deferred
      fees outstanding, as the contractual rates and fees approximate those
      currently charged to originate similar commitments.

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


                                       36
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(18)  Condensed Financial Information of the Parent Company

      The Parent Company began operations in conjunction with the Bank's
      mutual-to-stock conversion and the Parent Company's initial public
      offering of its common stock. The following represents the Parent
      Company's statements of financial condition as of December 31, 2001, and
      2000 and its statements of income and statements of cash flows for the
      years ended December 31, 2001 and 2000.

                        Statements of Financial Condition
                                 (in thousands)

                                                     2001     2000
                                                   -------  -------
Assets
Cash and cash equivalents                          $   785  $   732
Loan receivable from ESOP                              244      267
Investment in subsidiary                            14,905   13,878
Other assets                                             5       --
                                                   -------  -------
       Total assets                                $15,939  $14,877
                                                   =======  =======
Liabilities and Shareholders' Equity
Liabilities:
Payable to subsidiary                              $   122  $   145
Total shareholders' equity                          15,817   14,732
                                                   -------  -------
       Total liabilities and shareholders' equity  $15,939  $14,877
                                                   =======  =======

                                                                     (continued)


                                       37
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(18)  Condensed Financial Information of the Parent Company (continued)

                              Statements of Income
                                 (in thousands)

                                       For the Years Ended December 31,

                                                2001    2000
                                              -------   -----
Interest and dividend income:
    Interest income                           $    41   $ 50
    Dividend income                               272     76
                                              -------   -----
         Total interest and dividend income       313    126
                                              -------   -----
Non-interest expenses:
    Other non-interest expenses                    73     43
                                              -------   -----
         Total non-interest expenses               73     43
                                              -------   -----
Income before income tax expense (benefit)
  and equity in income  of subsidiary             240     83
Income tax (benefit) expense                      (13)     2
                                              -------   -----
Income before equity in income
             of subsidiary                        253     81
Undistributed equity in income of subsidiary      872    534
                                              -------   -----
Net income                                    $ 1,125   $615
                                              =======   =====

                                                                     (continued)


                                       38
<PAGE>

                   OSWEGO COUNTY BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                           December 31, 2001 and 2000

(18)  Condensed Financial Information of Parent Company (continued)

                            Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>
                                                       For the Years ended December 31,
                                                              2001      2000
                                                            -------   -------
<S>                                                         <C>       <C>
Cash flows from operating activities:
    Net income                                              $ 1,125   $   615
    Adjustments to reconcile net income to net
       cash  provided by operating activities:
          Undistributed equity in net income loss
              of subsidiary                                    (872)     (534)
          ESOP stock release for allocation and
              amortization of restricted stock awards            56         9
          Net (increase) decrease in other assets                (5)       41
          Net decrease in intercompany
              payable to subsidiary                             (23)     (110)
                                                            -------   -------
                  Net cash provided by
                     operating activities                       281        21
Cash flows from investing activities:
     Loan made to ESOP                                           --       (50)
     Principal payment on loan receivable from ESOP              23        42
                                                            -------   -------
                  Net cash provided by (used in)
                        investing activities                     23        (8)
                                                            -------   -------
Cash flows from financing activities:
     Net proceeds from the exercise of stock options             21        --
     Dividends on common stock                                 (272)      (76)
     Purchase of treasury stock                                  --      (473)
                                                            -------   -------
                  Net cash used in
                        financing activities                   (251)     (549)
                  Net (decrease) increase in cash and cash       53      (536)
                     equivalents
Cash and cash equivalents at beginning of year                  732     1,268
                                                            -------   -------
Cash and cash equivalents at end of year                    $   785   $   732
                                                            =======   =======
</TABLE>


                                       39