UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, D.C. 20549

                                   FORM 10-Q

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

For the Quarter ended March 31, 1999           Commission File Number: 0-17501


                               CNB BANCORP, INC.
            (Exact Name of Registrant as Specified in its Charter)

            New York                                  14-1709485
(State or other jurisdiction of           (IRS Employer Identification Number)
 incorporation or organization)

      10-24 North Main Street, P.O. Box 873, Gloversville, New York,  12078
     (Address of principal executive offices)                    (Zip Code)

      Registrant's telephone number, including area code:   (518) 773-7911


Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that 
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes  X      No

Indicate the number of shares outstanding in each Issuer's classes of 
common stock, as of the latest practicable date:

                                              Number of Shares Outstanding
Class of Common Stock                             as of March 29, 1999
   $2.50 par value                                     1,600,000

<PAGE>

                        CNB BANCORP, INC. AND SUBSIDIARY

                                      INDEX

                                                                      Page No.

PART I  FINANCIAL INFORMATION

  Item 1 Consolidated interim financial statements (unaudited):

         Consolidated statements of income for the three months 
         ending March 31, 1999 and 1998                                   1 

         Consolidated statements of financial condition as of 
         March 31, 1999 and December 31, 1998                             2 

         Consolidated statements of cash flows for the three months 
         ending March 31, 1999 and 1998                                   3 

         Notes to consolidated financial statements                       4

  Item 2 Management's discussion and analysis

  Item 3 Quantitative and qualitative disclosures about market risk

PART II  OTHER INFORMATION

  Item 1 Legal proceedings - none

  Item 2 Changes in securities - none

  Item 3 Defaults upon senior securities - none

  Item 4 Submission of matters to a vote of security holders - none

  Item 5 Other information - none

  Item 6 (a) Exhibits - not applicable

         (b) Reports on Form 8-K - February 4, 1999 - Definitive 
             agreement to acquire Adirondack Financial Services 
             Bancorp, Inc.

<PAGE>

                                        CNB BANCORP, INC.
                               CONSOLIDATED STATEMENTS OF INCOME
                             (In thousands, except per share data)
                                          (UNAUDITED)

<TABLE>
<CAPTION>

                                                                3 MONTHS ENDED
                                                                   MARCH 31,
                                                          1999                1998

<S>                                                       <C>                 <C>
INTEREST AND DIVIDEND INCOME   
  Interest and fees on loans                              $2,598              $2,661
  Interest on federal funds sold                             126                  84
  Interest on balances due from depository institutions        2                   5
  Interest on securities available for sale                1,327                 826
  Interest on investment securities                          245                 492
  Dividends on FRB and FHLB stock                             17                  16
    Total interest and dividend income                     4,315               4,084

INTEREST EXPENSE 
  Interest on deposits:
    Certificates and time deposits of $100,000 or more       480                 477
    Regular savings, N.O.W. and money market accounts        425                 462
    Other time deposits                                      785                 809
  Interest on securities sold under agreements to 
     repurchase                                              165                  82
  Interest on other borrowed money                            62                   0
    Total interest expense                                 1,917               1,830
NET INTEREST INCOME                                        2,398               2,254
  Provision for loan losses                                   60                  60
NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES                                         2,338               2,194

OTHER INCOME
  Income from fiduciary activities                            39                  36
  Service charges on deposit accounts                         89                  74
  Other income                                               152                 109
    Total other income                                       280                 219

OTHER EXPENSES
  Salaries and employee benefits                             659                 658
  Occupancy expense, net                                      94                  82
  Furniture and equipment expense                             84                  82
  External data processing expense                           182                 139
  Other expenses                                             421                 336
    Total other expenses                                   1,440               1,297
INCOME BEFORE INCOME TAXES                                 1,178               1,116
  Applicable income taxes                                    347                 330
NET INCOME                                                $  831              $  786

  Earnings per share
    Basic                                                 $ 0.52              $ 0.49
    Diluted                                                 0.52                0.49

</TABLE>

  See accompanying notes to consolidated interim financial statements

                                                 -1-

<PAGE>

                                          CNB BANCORP, INC.

                           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                (In thousands, except per share data)
                                              (UNAUDITED)

<TABLE>
<CAPTION>

                                                          3/31/99              12/31/98
<S>                                                       <C>                  <C>
ASSETS 
Cash and cash equivalents:
  Non-interest bearing                                    $  6,593             $  6,422
  Interest bearing                                              98                   42
  Federal funds sold                                        11,000               13,900
    Total cash and cash equivalents                         17,691               20,364

Securities available for sale, at fair value                87,656               89,157

Investment securities (approximate fair value at 
  March 31, 1999 - $15,327; at December 31, 
  1998 - $18,125)                                           14,656               17,397

Investments required by law, stock in Federal Home 
   Loan Bank of New York and Federal Reserve Bank of 
   New York, at cost                                         1,075                  975

Loans                                                      133,794              132,027
   Unearned income                                         (10,047)             (10,190)
   Allowance for loan losses                                (1,592)              (1,580)
           Net loans                                       122,155              120,257

Premises and equipment                                       2,560                2,575
Accrued interest receivable                                  1,673                1,460
Other assets                                                 3,701                3,383
       Total assets                                       $251,167             $255,568

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
   Demand (non interest bearing)                          $ 20,964             $ 23,268
   Regular savings, N.O.W. and money market accounts        77,037               90,934
   Certificates and time deposits of $100,000 or more       40,980               30,439
   Other time deposits                                      60,555               61,745
     Total deposits                                        199,536              206,386

Securities sold under agreements to repurchase              12,878               12,844
Notes payable - Federal Home Loan Bank                       6,000                4,000
Other liabilities                                            1,105                  827
       Total liabilities                                   219,519              224,057

STOCKHOLDERS' EQUITY
Common stock, $2.50 par value, 5,000,000 shares 
   authorized, 1,600,000 shares issued and outstanding 
   in 1999 and 1998                                          4,000                4,000
Surplus                                                      4,000                4,000
Undivided profits                                           23,644               23,165
Accumulated other comprehensive income                           4                  346
       Total stockholders' equity                           31,648               31,511
       Total liabilities and stockholders' equity         $251,167             $255,568

</TABLE>

  See accompanying notes to consolidated interim financial statements

                                          -2-
<PAGE>

                                        CNB BANCORP, INC.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (In thousands)
                                           (UNAUDITED)

<TABLE>
<CAPTION>

                                                                    3 MONTHS ENDED
                                                                        MARCH 31,
                                                            1999                     1998

<S>                                                         <C>                      <C>
Cash flows from operating activities:
     Net income                                             $   831                  $   786
Adjustments to reconcile net income to cash and cash 
   equivalents provided by operating activities:
     Increase in interest receivable                           (213)                    (146)
     (Increase) decrease in other assets                         41                     (209)
     Increase in other liabilities                              278                      286
     Deferred income tax benefit                                 (6)                     (29)
     Depreciation and amortization expense                       80                       69
     Net increase in cash surrender value of bank-owned 
        life insurance                                           27                       27
     Amortization of premiums/discounts on securities, net       57                       39
     Provision for loan losses                                   60                       60
     Total adjustments                                          324                       97
       Net cash provided by operating activities              1,155                      883

  Cash flows from investing activities:
     Purchase of securities available for sale               (8,127)                  (6,704)
     Purchase of FRB and FHLB stock                            (100)                     (23)
     Proceeds from matured investment securities              2,738                    5,481
     Proceeds from matured securities available for sale      9,005                    5,950
     Net increase in loans                                   (2,111)                  (3,113)
     Purchases of premises and equipment, net                   (65)                     (92)
       Net cash provided by investing activities              1,340                    1,499

  Cash flows from financing activities:
     Net increase (decrease) in deposits                     (6,850)                     904
     Increase in securities sold under agreement 
        to repurchase                                            34                    3,735
     Increase in notes payable - FHLB                         2,000                        0
     Payment of dividends                                      (352)                    (336)
       Net cash provided (used) by financing activities      (5,168)                   4,303

  Net increase (decrease) in cash and cash equivalents       (2,673)                   6,685
  Cash and cash equivalents beginning of period              20,364                    9,407

  Cash and cash equivalents end of period                   $17,691                  $16,092

  Supplemental disclosures of cash flow information: 
     Cash paid during the period:
       Interest                                             $ 1,818                  $ 1,687
       Income taxes                                             153                      145

  Supplemental schedule of noncash investing activities:
    Net reduction in loans resulting from the transfer 
       to real estate owned                                     153                        0

</TABLE>

  See accompanying notes to consolidated interim financial statements

                                           -3-

<PAGE>

                                      CNB BANCORP, INC.

                       NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                         (UNAUDITED)

1. FINANCIAL STATEMENT PRESENTATION

     The accounting and reporting policies of CNB Bancorp, Inc. (the Company)
and City National Bank and Trust Company (subsidiary Bank) conform to
generally accepted accounting principles in a consistent manner and are in
accordance with the general practices within the banking field. Amounts in
the prior period's consolidated financial statements are reclassified,
whenever necessary, to conform to the presentation in the current period's
consolidated financial statements.

     In the opinion of CNB Bancorp, Inc., the accompanying unaudited
consolidated financial statements contain all adjustments necessary to
present fairly the consolidated financial position as of March 31, 1999 and
December 31, 1998 and the results of operations for the three months ended
March 31, 1999 and 1998 and the changes in cash flows for the three months
ended March 31, 1999 and 1998. All accounting adjustments made for these
periods were of a normal recurring nature. The accompanying interim
consolidated financial statements should be read in conjunction with CNB
Bancorp, Inc.'s consolidated year-end financial statements including notes
thereto, which are included in CNB Bancorp, Inc.'s 1998 Annual Report and
Form 10-K.

     The Company recorded comprehensive income of $489,000 and $765,000 for
the three month periods ending March 31, 1999 and 1998, respectively. At the
Company, comprehensive income represents net income plus other comprehensive
income, which consists of the net change in unrealized gains and losses on
securities available for sale for the period.

2. EARNINGS PER COMMON SHARE (In Thousands, Except Per Share Amounts)

     The following table presents a reconciliation of the numerator and
denominator used in the calculation of basic and diluted earnings per common
share (EPS) for the three month periods ended March 31, 1999 and 1998.

<TABLE>
<CAPTION>

                                                     Income              Shares            Per Share
                                                     (Numerator)         (Denominator)     Amount

<S>                                                  <C>                 <C>               <C>
   For the Three Months Ended March 31, 1999:
   Basic EPS: Income Available to Common 
     Shareholders                                    $831                1,600             $0.52
   Dilutive Effect of Stock Options                     0                    8
   Diluted EPS: Income Available to Common 
     Shareholders and Assumed Conversions            $831                1,608             $0.52

   For the Three Months Ended March 31, 1998:
   Basic EPS: Income Available to Common 
     Shareholders                                    $786                1,600             $0.49
   Dilutive Effect of Stock Options                     0                    0
   Diluted EPS: Income Available to Common 
     Shareholders and Assumed Conversions            $786                1,600             $0.49

</TABLE>

3. PENDING ACQUISITION

     On January 25, 1999, CNB Bancorp, Inc. announced that it had entered
into a definitive agreement of merger to acquire Adirondack Financial Service
Bancorp, Inc., Gloversville, New York, parent company of Gloversville Federal
Savings and Loan Association. Completion of the transaction is subject to
approval by Adirondack's shareholders and regulatory authorities. The terms
of the acquisition call for CNB Bancorp, Inc. to pay $15 million in cash in
the aggregate for all of the outstanding shares of Adirondack (subject to
possible adjustment under certain circumstances). The transaction will be
accounted for as a purchase and is expected to close, upon shareholder and
regulatory approval, in the second quarter of 1999.

4. NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. This
Statement is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. Management is currently evaluating the impact of this
Statement on the Company's consolidated financial statements.

<PAGE>

                                    SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant, has duly caused this report to be signed on its behalf by the
undersigned duly authorized.

                                          CNB BANCORP, INC.

April 26, 1999                            By /s/ William N. Smith
--------------                            ------------------------
Date                                      William N. Smith
                                          Chairman of the Board, President
                                          And Chief Executive Officer

April 26, 1999                            By /s/ George A. Morgan
--------------                            ------------------------
Date                                      George A. Morgan
                                          Vice President and Secretary
                                          (Principal Financial Officer)

<PAGE>

                                      CNB BANCORP, INC.

                          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL:

     CNB Bancorp, Inc., a New York corporation, organized in 1988, is a
registered bank holding company headquartered in Gloversville, New York. Its
wholly-owned subsidiary, City National Bank and Trust Company, was organized
in 1887 and is also headquartered in Gloversville, New York, with four
branches located in the county of Fulton. The subsidiary Bank is a full
service commercial Bank that offers a broad range of demand and time
deposits; consumer, mortgage, and commercial loans; and trust and investment
services. The subsidiary Bank is a member of the Federal Deposit Insurance
Corporation and the Federal Reserve System and is subject to regulation and
supervision of the Federal Reserve and the Comptroller of the Currency.

     Except for historical information contained herein, the matters contained
in this review are "forward-looking statements" that involve risk and
uncertainties, including statements concerning future events or performance
and assumptions and other statements which are other than statements of
historical facts. The Company wishes to caution readers that the following
important factors, among others, could in the future affect the Company's
actual results and could cause the Company's actual results for subsequent
periods to differ materially from those expressed in any forward-looking
statement made by or on behalf of the Company herein:

     * the effect of changes in laws and regulations, including federal and
       state banking laws and regulations, with which the Company and its 
       banking subsidiary must comply, the cost of such compliance and the 
       potentially material adverse effects if the Company or its banking 
       subsidiary were not in substantial compliance either currently or in 
       the future as applicable; 
     * the effect of changes in accounting policies and practices, as may be 
       adopted by the regulatory agencies as well as by the Financial 
       Accounting Standards Board, or changes in the Company's organization, 
       compensation and benefit plans; 
     * the effect on the Company's competitive position within its market
       area of increasing consolidation within the banking industry and 
       increasing competition from larger "super regional" and other 
       banking organizations as well as non-bank providers of various 
       financial services;
     * the effect of certain customers and vendors of critical systems or
       services failing to adequately address issues relating to becoming 
       year 2000 compliant;
     * the effect of unforeseen changes in interest rates;
     * the effects of changes in the business cycle and downturns in the
       local, regional or national economies.

     The Company wishes to caution readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and to
advise readers that various factors, including those described above, could
cause the Company's actual results or circumstances for future periods to
differ materially from those anticipated or projected.

     The Company does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

FINANCIAL REVIEW:

Liquidity:

     There have been no trends or demands that have affected the Company's or
the subsidiary Bank's liquidity position in any material way during the first
three months of 1999. Funds from repayment of loans, maturing investment
securities and securities available for sale are available to satisfy any
normal needs that may arise.

     The Company expects to close on the purchase of Adirondack Financial
Services Bancorp, Inc. during the second quarter of 1999. The anticipated
purchase price of $15 million will come from Federal Funds Sold, maturing
available for sale and investment securities and borrowings on our line of
credit with the Federal Home Loan Bank of New York, if needed.

Capital Resources:

     Stockholder's equity to total assets increased slightly during the first
three months of 1999 from 12.3% at December 31, 1998 to

                                           -1-

<PAGE>

12.6% at March 31, 1999. The subsidiary Bank has experienced loan growth of
approximately $2.1 million during the first three months of 1999. This growth
in loans was funded primarily by maturing available for sale securities and
investment securities. The remaining funds available from maturing securities
and the reduction in Federal Funds Sold plus new FHLB borrowings were used to
fund the seasonal outflow of deposits.

     As of December 31, 1990, banks were required to report new risk-based
capital ratios that require bank holding companies to meet a ratio of
qualifying total capital to risk-weighted assets. The table below shows the
Companys' current ratios, December 31, 1998 ratios and the current regulatory
guideline ratios as established by the Federal Reserve Board.

<TABLE>
<CAPTION>

                                                                                                     Regulatory
                                                              03/31/99            12/31/98           Guidelines
<S>                                                           <C>                 <C>                <C>
Tier 1 risk based capital to net risk weighted assets         23.3%               23.4%              4.0%
Total risk based capital to net risk weighted assets          24.5                24.6               8.0

Leverage ratio (Tier 1/adjusted total assets)                 12.6                12.5               3.0

</TABLE>

   These strong ratios are well in excess of regulatory minimums, and well
above the average for peer banks and the industry as a whole.

Results of Operations:

Most Recent Quarter and Same Quarter in Preceding Year:

     Total interest and dividend income for the first quarter of 1999
increased $231,000 or 5.7% from the corresponding period of 1998, while total
interest expense increased $87,000 or 4.8% from the corresponding period of
1998. Net interest income increased $144,000 or 6.4% from the prior year
period reflecting the average increase in interest earning assets over
interest bearing liabilities of $3.7 million as compared to the corresponding
period of 1998. This was partially offset by a decline in the net interest
margin from 4.60% in 1998 to 4.32% in 1999.

     The increase in interest on securities available for sale of $501,000 is
due to the increase of $33.8 million in average outstanding volume of
available for sale securities compared to the first quarter of 1998. Maturing
held to maturity securities are primarily being reinvested in available for
sale securities and new growth in securities is being invested primarily in
available for sale securities.

     The provision for loan losses of $60,000 was unchanged from the prior
year period. Net charge-offs increased $25,000 to $48,000 from the prior year
period, an increase of 108.7%. The allowance for loan losses as a percent of
loans outstanding was 1.29% at March 31, 1999 as compared to 1.30% at
December 31, 1998. Non-performing loans decreased from $529,000 at December
31, 1998 to $428,000 at March 31, 1999, a decline of $101,000.

     Non-interest income increased $61,000 or 27.9% from the corresponding
period of 1998. This increase was primarily due to increases in fiduciary
income, deposit account service charges and increases in service fees
collected on merchant credit card sales. Non-interest expense increased
$143,000 or 11.0% from the corresponding period of 1998 due primarily to
higher external data processing expenses related to preparation and testing
of all data hardware and software in preparation for the Year 2000 and the
outsourcing of our proof and transit department. Additional expenses were
also incurred in the collection of merchant sales tickets and other real
estate expenses.

     Net income increased $45,000 or 5.7% as compared to the same period of
1998. This increase was due to the increase in net interest income and other
income more than offsetting the increase in other expenses.

PENDING ACQUISITION:

     On January 25, 1999, CNB Bancorp, Inc. announced that it had entered
into a definitive agreement of merger to acquire Adirondack Financial Service
Bancorp, Inc., Gloversville, New York, parent company of Gloversville Federal
Savings and Loan Association. Completion of the transaction is subject to
approval by Adirondack's shareholders and regulatory authorities. The terms
of the acquisition call for CNB Bancorp, Inc. to pay $15 million in cash in
the aggregate for all of the outstanding shares of Adirondack

                                          -2-

<PAGE>

(subject to possible adjustment under certain circumstances). The transaction
will be accounted for as a purchase and is expected to close, upon
shareholder and regulatory approval, in the second quarter of 1999.

STATUS OF YEAR 2000 PROJECT:

     Entering the Year 2000 presents a complicated problem to industries
worldwide, including the banking industry. The Year 2000 problem originates
in the method used to code dates in computer software and hardware. Most
computer systems and programs had used six digit date fields (YYMMDD)
allowing only two digits for the year. As we enter the Year 2000, if not
fixed, the two digit field would have read 00. Most computer systems would
have interpreted 00 as the year 1900, not as 2000.

     A Year 2000 Committee, led by senior management and composed of officers
representing all areas of operation, has been formed to evaluate and solve
the Year 2000 problem for the subsidiary Bank. With the help of federal
regulators, the Committee has focused on identifying risks posed by the Year
2000 and taking the appropriate action to ensure continuity of operation.
This process has been underway since July 1997 and will continue until the
effort is complete.

     The federal government has designated five phases of the Year 2000
project: awareness, assessment, renovation, validation and implementation.
The subsidiary Bank has completed all five phases. This means that the Year
2000 problem as it pertains to the subsidiary Bank has been defined,
executive level support has been acquired, the magnitude of the project has
been assessed, all mission critical systems have been tested and the
subsidiary Bank is using compliant versions of mission critical systems in
production.

     The subsidiary Bank has also evaluated the Year 2000 readiness of its
funds providers and funds takers. They concluded that their primary funds
providers fall into two categories: (1) municipal depositors and (2) the same
entities as their primary commercial borrowers. The municipal deposit base
was evaluated and was assigned a minimal overall risk based on the fact that
favorable responses have been received from inquiries regarding their Year
2000 readiness. The commercial portfolio was evaluated and assigned a minimal
overall risk based on the following criteria: loan balances and types,
collateral, the subsidiary Bank's knowledge of the businesses and the
businesses' self assessment. Correspondent banks are the subidiary Bank's
primary non-commercial funds takers. A low level of risk has been associated
with this group as these are major institutions which are on schedule to meet
their goal of being fully Year 2000 compliant no later than June 30, 1999.
All organizations will continue to be evaluated to assure readiness for the
Year 2000.

     The Committee is now focusing on taking the planning process to the
final step: contingency planning. Although assurances have been made of all
mission critical systems' Year 2000 compliance, the Committee has drafted a
business resumption contingency plan which will ensure the subsidiary Bank's
ability to temporarily do business without the services of any mission
critical vendor.

     The subsidiary Bank, like all other companies, has incurred costs as a
result of preparing for the Year 2000. The portion of the project which has
required the most resources has been the data processing system. To date, the
subsidiary Bank has spent approximately $200,000 on the conversion to
HORIZON, a data processing program distributed by ALLTEL Information
Services, Inc. The subsidiary Bank has spent a negligible amount in other
areas. The expected additional cost to finish this project is $100,000.

     The Committee will continue its diligent efforts to ensure the
preparedness for the Year 2000. The goal is to achieve full Year 2000
readiness by June 30, 1999 and the subsidiary Bank is on schedule to meet
this goal. The Company is confident that the subsidiary Bank will be ready to
enter the Year 2000 without significant problems. The Company does not
foresee the Year 2000 having a negative impact on its financial condition,
operation or cash flows.

                                          -3-

<PAGE>

                                  CNB BANCORP, INC.
             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK:

     Market risk is the risk of loss from adverse changes in market prices
and interest rates. The subsidiary Bank's market risk arises primarily from
interest rate risk inherent in its lending and deposit taking activities.
Although the subsidiary Bank manages other risks, as in credit and liquidity
risk, in the normal course of its business, management considers interest
rate risk to be its most significant market risk and could potentially have
the largest material effect on the subsidiary Bank's financial condition and
results of operation. The subsidiary Bank does not currently have a trading
portfolio or use derivatives to manage market and interest rate risk.

     The subsidiary Bank's interest rate risk management is the
responsibility of the Asset/Liability Management Committee (ALCO), which
reports to the Board of Directors. The Committee, comprised of senior
management, has developed policies to measure, manage and monitor interest
rate risk. Interest rate risk arises from a variety of factors, including
differences in the timing between the contractual maturity or repricing of
the subsidiary Bank's assets and liabilities. For example, the subsidiary
Bank's net interest income is affected by changes in the level of market
interest rates as the repricing characteristics of its loans and other assets
do not necessarily match those of its deposits, other borrowings and capital.

     In managing exposure, the subsidiary Bank uses interest rate sensitivity
models that measure both net gap exposure and earnings at risk. The ALCO
monitors the volatility of its net interest income by managing the
relationship of interest rate sensitive assets to interest rate sensitive
liabilities. The committee utilizes a simulation model to analyze net income
sensitivity to movements in interest rates. The simulation model projects net
interest income based on both an immediate rise or fall in interest rates of
200 basis point shock over a twelve month period. The model is based on the
actual maturity and repricing characteristics of interest rate assets and
liabilities. The model incorporates assumptions regarding the impact of
changing interest rates on the prepayment rate of certain assets and
liabilities.

     The following table shows the approximate effect on the subsidiary
Bank's annualized net interest margin as of March 31, 1999, assuming an
increase or decrease of 200 basis points in interest rates.

          Change in             Estimated Net       Change in
          Interest Rate         Interest Marg       Net Interest
          (basis points)        ($000 omitted)      Margin

          +200                  9,903                2.1%
          +100                  9.785                0.9
             0                  9,695                0.0
          -100                  9,563               (1.4)
          -200                  9,340               (3.7)

     Another tool used to measure interest rate sensitivity is the cumulative
gap analysis. The cumulative gap represents the net position of assets
and liabilities subject to repricing in specified time periods. Deposit
accounts without specified maturity dates, are modeled based on historical
run-off characteristics of these products in periods of rising rates. At
March 31, 1999 the Company had a negative one year cumulative gap position.

     The cumulative gap analysis is merely a snapshot at a particular date
and does not fully reflect that certain assets and liabilities may have
similar repricing periods but may in fact reprice at different times within
that period and at differing rate levels. Management, therefore, uses the 
interest rate sensitivity gap only as a general indicator of the potential 
effects of interest rate changes on net interest income. Management believes 
that the gap analysis is a useful tool only when used in conjunction with its 
simulation model and other tools for analyzing and managing interest rate risk.

     As of March 31, 1999 the subsidiary Bank was in a liability sensitive
position which means that more liabilities are scheduled to mature or reprice
within the next year than assets. The cumulative interest rate sensitivity
gap as of March 31, 1999 was 4.08% of total assets.

                                          -1-