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, 2000           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 April 25, 2000
   $2.50 par value                                       2,401,695

<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, 2000 and 1999                                    1

        Consolidated statements of financial condition as of March
        31, 2000 and December 31, 1999                                    2

        Consolidated statements of cash flows for the three months
        ending March 31, 2000 and 1999                                    3

        Notes to consolidated financial statements                        4 - 5

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 - None

<PAGE>

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

                                                                3 MONTHS ENDED
                                                                   MARCH 31,

                                                              2000     1999
INTEREST AND DIVIDEND INCOME
  Interest and fees on loans                                  $3,685   $2,598
  Interest on federal funds sold                                  86      126
  Interest on balances due from depository institutions           18        2
  Interest and dividends on securities available for sale      1,659    1,327
  Interest on investment securities                              193      245
  Dividends on FRB and FHLB stock                                 32       17

      Total interest and dividend income                       5,673    4,315

INTEREST EXPENSE
  Interest on deposits:
    Certificates and time deposits of $100,000 or more           780      480
    Regular savings, NOW and money market accounts               676      425
    Other time deposits                                        1,058      785
  Interest on securities sold under agreements to repurchase     134      165
  Interest on other borrowed money                               127       62

      Total interest expense                                   2,775    1,917

NET INTEREST INCOME                                            2,898    2,398
  Provision for loan losses                                       37       60

NET INTEREST INCOME AFTER PROVISION
  FOR LOAN LOSSES                                              2,861    2,338

OTHER INCOME
  Income from fiduciary activities                                39       39
  Service charges on deposit accounts                            109       89
  Other income                                                   197      152

      Total other income                                         345      280

OTHER EXPENSES
  Salaries and employee benefits                                 863      659
  Occupancy expense, net                                         125       94
  Furniture and equipment expense                                 98       84
  External data processing expense                               177      182
  Other expenses                                                 594      421

      Total other expenses                                     1,857    1,440

INCOME BEFORE INCOME TAXES                                     1,349    1,178
  Applicable income taxes                                        409      347

NET INCOME                                                    $  940   $  831

  Earnings per share
    Basic                                                     $ 0.39   $ 0.35
    Diluted                                                     0.39     0.35

Per share figures and shares outstanding have been adjusted to reflect the 3
for 2 stock split effected through the 50% stock dividend declared in July
1999.

     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)

                                                           3/31/00    12/31/99
ASSETS
Cash and cash equivalents:
  Non-interest bearing                                     $  8,099   $ 12,402
  Interest bearing                                           12,371      2,128
  Federal funds sold                                          4,400      5,300

    Total cash and cash equivalents                          24,870     19,830

Securities available for sale, at fair value                105,708     93,849

Investment securities (approximate fair value at March 31,
  2000 - $12,470; at December 31, 1999 - $13,611)            12,330     13,443

Investments required by law, stock in Federal Home Loan
  Bank of New York and Federal Reserve Bank of New York,
  at cost                                                     1,988      1,988

Loans                                                       192,153    183,785
  Unearned income                                           (11,993)   (11,372)
  Allowance for loan losses                                  (2,728)    (2,697)

    Net loans                                               177,432    169,716

Premises and equipment, net                                   3,496      3,550
Accrued interest receivable                                   2,159      1,745
Other assets                                                 10,371     10,787

    Total assets                                           $338,354   $314,908

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Demand (non interest bearing)                            $ 28,182   $ 25,671
  Regular savings, NOW and money market accounts            119,901    121,717
  Certificates and time deposits of $100,000 or more         56,050     35,339
  Other time deposits                                        81,402     82,353

    Total deposits                                          285,535    265,080

Securities sold under agreements to repurchase                9,157      9,581
Notes payable - Federal Home Loan Bank                       10,591      8,173
Other liabilities                                             1,248        789

    Total liabilities                                       306,531    283,623

STOCKHOLDERS' EQUITY
Common stock, $2.50 par value, 5,000,000
  shares authorized, 2,401,695 shares issued at
  March 31, 2000 and December 31, 1999                        6,004      6,004
Surplus                                                       4,415      4,415
Undivided profits                                            23,628     23,048
Accumulated other comprehensive loss                         (2,014)    (2,182)
Treasury stock, at cost; 7,276 shares at March 31, 2000        (210)         0

    Total stockholders' equity                               31,823     31,285

    Total liabilities and stockholders' equity             $338,354   $314,908

Share amounts have been adjusted to reflect the 3 for 2 stock split effected
through the 50% stock dividend declared in July 1999.

     See accompanying notes to consolidated interim financial statements

                                     -2-

<PAGE>

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

                                                             3 MONTHS ENDED
                                                                MARCH 31,
                                                           2000       1999

Cash flows from operating activities:
    Net income                                             $    940   $   831
Adjustments to reconcile net income to cash and cash
  equivalents provided by operating activities:
    Increase in interest receivable                            (414)     (213)
    Decrease in other assets                                    271        95
    Increase in other liabilities                               459       278
    Deferred income tax (benefit) expense                       (15)       (6)
    Depreciation and amortization expense                       201        80
    Net increase in cash surrender value of bank-owned
      life insurance                                            (27)      (27)
    Amortization of premiums/discounts on securities, net        22        57
    Provision for loan losses                                    37        60

    Total adjustments                                           534       324

      Net cash provided by operating activities               1,474     1,155


  Cash flows from investing activities:
    Purchase of investment securities                          (379)        0
    Purchase of AFS securities                              (17,041)   (8,127)
    Purchase of FRB and FHLB stock                                0      (100)
    Proceeds from maturities, paydowns and calls of
      investment securities                                   1,487     2,738
    Proceeds from maturities, paydowns and calls of
      AFS securities                                          4,447     9,005
    Proceeds from sale of AFS securities                        993         0
    Net increase in loans                                    (7,783)   (2,111)
    Purchases of premises and equipment, net                    (37)      (65)

      Net cash (used) provided by investing activities      (18,313)    1,340


  Cash flows from financing activities:
    Net increase (decrease) in deposits                      20,455    (6,850)
    (Decrease) Increase in securities sold under
      agreement to repurchase                                  (424)       34
    Increase in notes payable - FHLB                          2,418     2,000
    Treasury stock purchased                                   (210)        0
    Cash dividends paid on common stock                        (360)     (352)

      Net cash provided (used) by financing activities       21,879    (5,168)


Net increase (decrease) in cash and cash equivalents          5,040    (2,673)
Cash and cash equivalents beginning of period                19,830    20,364


Cash and cash equivalents end of period                    $ 24,870   $17,691


Supplemental disclosures of cash flow information:
  Cash paid during the period:
    Interest                                               $  2,442   $ 1,818
    Income taxes                                                150       153
Supplemental schedule of noncash investing activities:
    Net reduction in loans resulting from the transfer
      to real estate owned                                        0       153


     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 industry. Amounts
   in the prior periods' 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, 2000
   and December 31, 1999 and the results of operations for the three months
   ended March 31, 2000 and 1999 and the changes in cash flows for the three
   months ended March 31, 2000 and 1999. 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 1999 Annual Report and
   Form 10-K.

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, 2000 and
   1999. Per share figures and shares outstanding have been adjusted to
   reflect the 3 for 2 stock split effected through the 50% stock dividend
   declared in July 1999.

<TABLE>
<CAPTION>
                                                          Income       Shares         Per Share
                                                          (Numerator)  (Denominator)  Amount

   <S>                                                    <C>          <C>            <C>
   For the Three Months Ended March 31, 2000:
   Basic EPS: Income Available to Common Shareholders     $940         2,401          $0.39

   Dilutive Effect of Stock Options                          0            30

   Diluted EPS: Income Available to Common Shareholders
        and Assumed Conversions                           $940         2,431          $0.39


   For the Three Months Ended March 31, 1999:
   Basic EPS: Income Available to Common Shareholders     $831         2,400          $0.35

   Dilutive Effect of Stock Options                          0            12

   Diluted EPS: Income Available to Common Shareholders
        and Assumed Conversions                           $831         2,412          $0.35

</TABLE>

3. COMPREHENSIVE INCOME

   The Company recorded total comprehensive income of $1,108,000 for the
   three months ended March 31, 2000 as compared to total comprehensive
   income of $489,000 for the three months ended March 31, 1999. 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. The following
   summarizes the components of other comprehensive income for the three
   month periods ending March 31 (in thousands):

<TABLE>
<CAPTION>
                                                                                2000     1999

<S>                                                                             <C>      <C>
   Unrealized gains (losses) on securities:

     Net unrealized holding gains (losses) arising during the period,
     net of taxes of ($108) in 2000 and $228 in 1999                            $168     ($342)

     Reclassification adjustment for net realized gains included in income,
     net of taxes of $0 in 2000 and $0 in 1999                                     0         0

     Other comprehensive income (loss), net of taxes of ($108) in 2000 and
     $228 in 1999                                                               $168     ($342)

</TABLE>

4. NEW ACCOUNTING PRONOUNCEMENTS

   In June 1998, the Financial Accounting Standards Board (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. During the second quarter of 1999,
   the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
   Hedging Activities - Deferral of the Effective Date of FASB Statement No.
   133"

                                     -4-

<PAGE>

   which deferred the effective date of SFAS No. 133 by one year from fiscal
   quarters of fiscal years beginning after June 15, 1999 to fiscal quarters
   of fiscal years beginning after June 15, 2000. Management is currently
   evaluating the impact of this Statement on the Company's consolidated
   financial statements.

                                     -5-

<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 25, 2000                                By /s/ William N. Smith

     Date                                     William N. Smith
                                              Chairman of the Board, President
                                              and Chief Executive Officer

April 25, 2000                                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 five
branches located in the county of Fulton and one branch located in the county
of Saratoga. 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 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:

Acquisition:

     On June 1, 1999, the Company acquired Adirondack Financial Services
Bancorp, Inc. (Adirondack) and its wholly owned subsidiary, Gloversville
Federal Savings and Loan Association. At the date of the merger, Adirondack
had approximately $68.5 million in assets, $56.4 million in deposits and $9.5
million in shareholders' equity. Pursuant to the merger agreement, Adirondack
was merged into CNB Bancorp, Inc. and Gloversville Federal Savings and Loan
Association was merged into City National Bank and Trust Company. The
combined bank now operates as one institution under the name of City National
Bank and Trust Company.

Financial Condition:

     Comparison of Financial Condition at March 31, 2000 and December 31,
1999. Total assets at March 31, 2000 were $338.4 million an increase of $23.5
million, or 7.5%, over the December 31, 1999 amount of $314.9 million. The
largest increases were related to loan growth of $7.8 million and investments
available for sale of $11.9 million. Asset growth was financed by deposit
growth of $20.5 million and increased Federal Home Loan Bank borrowings of
$2.4 million.

     Non-interest bearing cash balances decreased to $8.1 million at March
31, 2000 from $12.4 million at December 31, 1999 due primarily to the
reduction in vault cash that had been accumulated for any Year 2000 related
needs. Interest bearing cash balances increased

                                     -1-

<PAGE>

to $12.4 million at March 31, 2000 from $2.1 million at December 31, 1999 due
primarily to temporary deposits of one large commercial customer at March 31,
2000.

     Securities available for sale increased by $11.9 million, from $93.8
million at December 31, 1999, to $105.7 million at March 31, 2000 primarily
as a result of deposit growth exceeding the borrowing needs of our customers
and the reinvestment of maturing investment securities in securities
available for sale.

     Loans receivable, net of unearned income, increased $7.8 million, or
4.5%, from $172.4 million at December 31, 1999, to $180.2 million at March
31, 2000, due primarily to the increase of $6.9 million in the commercial
loan portfolio.

     Deposits at March 31, 2000 were $285.5 million an increase of $20.4
million, or 7.7%, over the balance of $265.1 million at December 31, 1999.
The main reason for the increase was the growth in municipal certificates of
deposit of $100,000 and over and the temporary funds of one commercial
depositor in money market accounts.

     Stockholders' equity increased to $31.8 million at March 31, 2000 from
$31.3 million at December 31, 1999, an increase of 1.6% primarily due to the
retention of earnings during the first quarter of 2000. Stockholders' equity
was partially reduced by the purchase of seven thousand shares of stock which
were placed into treasury.

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 2000. Funds from repayment of loans, maturing investment
securities and securities available for sale are available to satisfy any
normal needs that may arise.

Capital Resources:

   Stockholder's equity to total assets decreased during the first three
months of 2000 from 9.9% at December 31, 1999 to 9.4% at March 31, 2000. This
decrease was primarily due to the growth in assets of $23.5 million or 7.4%
during the first quarter while stockholders' equity increased $0.5 million or
1.6%.

   The table below shows the Companys' current ratios, December 31, 1999
ratios and the current regulatory guideline ratios for classification as well
capitalized as established by the Federal Reserve Board.

<TABLE>
<CAPTION>
                                                                                 Regulatory
                                                           03/31/00   12/31/99   Guidelines

<S>                                                        <C>        <C>        <C>
   Tier 1 risk based capital to net risk weighted assets   16.3%      17.4%      4.0%
   Total risk based capital to net risk weighted assets    17.5       18.7       8.0

   Leverage ratio (Tier 1/adjusted total assets)            9.2        9.3       3.0

</TABLE>

   These strong ratios are well in excess of regulatory minimums.

Results of Operations:

Most Recent Quarter and Same Quarter in Preceding Year:

     Total interest and dividend income for the first quarter of 2000
increased $1,358,000 or 31.5% from the corresponding period in 1999, while
total interest expense increased $858,000 or 44.8% from the corresponding
period in 1999. Net interest income increased $500,000 or 20.9% from the
prior year period resulting primarily from volume increases in interest
earning assets and interest bearing liabilities related to the acquisition of
Adirondack on June 1, 1999 and other growth in interest earning assets and
interest bearing liabilities as compared to the first quarter of 1999.

     The increase in interest on securities available for sale of $332,000 is
largely due to the increase of $18.2 million in average outstanding volume of
available for sale securities compared to the first quarter of 1999. The
increase is largely attributed to securities acquired from Adirondack
totaling $12 million as well as the Company's strategy of deploying excess
cash in to the securities available for sale portfolio.

                                     -2-

<PAGE>

     The decrease in interest income on federal funds sold is primarily
attributed to the decrease in the average outstanding volume of $4.6 million
from the first quarter of 1999 to the first quarter of 2000.

     The increase in interest expense is primarily related to the increased
volume of interest bearing liabilities associated with the acquisition of
Adirondack on June 1, 1999. Additional interest expense was due to the
increase in the average volume of certificates of deposit over $100,000 of
$16.4 million as compared to the first quarter of 1999.

     The provision for loan losses decreased $23,000 from the corresponding
period in 1999 to $37,000. Net charge-offs decreased $42,000 to $6,000 from
the prior year period, a decrease of 87.5%. Non-performing loans decreased
from $1,615,000 at December 31, 1999 to $1,540,000 at March 31, 2000, a
decrease of $75,000. The provision was deemed to be adequate based on the
overall evaluation of the allowance for loan losses as of March 31, 2000. The
allowance for loan losses as a percent of net loans outstanding was 1.51% at
March 31, 2000 as compared to 1.56% at December 31, 1999.

     Non-interest income increased $65,000 or 23.2% from the corresponding
period of 1999. This increase was primarily due to the increase in deposit
account service charges and increases in service fees collected on merchant
credit card sales.

     Non-interest expense increased $417,000 or 30.0% from the corresponding
period of 1999 due primarily to higher salaries and employee benefits, higher
occupancy expense, higher furniture and equipment expense and higher other
expenses. The higher salaries and employee benefits were primarily attributed
to the adding of two new offices as of June 1, 1999 with the acquisition of
Gloversville Federal Savings and Loan Association and normal salary
adjustments. The higher occupancy expense relates primarily to the two
additional offices as a result of the acquisition of Gloversville Federal.
The higher furniture and equipment expense was also a result of acquiring
Gloversville Federal consisting of additional depreciation expense and
maintenance contracts. Higher other expenses is primarily due to the
amortization of goodwill associated with the purchase of Adirondack, which is
primarily non deductible for income tax purposes. Other increases were in
stationary and supplies, advertising, and telephone expenses primarily
associated with the two additional offices. Credit card processing expenses
also increased in relation to the increase in other income discussed above.

     Net income increased $109,000 or 13.1% as compared to the same period of
1999. This increase was due to the increase in net interest income and other
income more than offsetting the increase in other expenses.

                                     -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, 2000 assuming an
increase or decrease of 200 basis points in interest rates.

           Change in         Estimated Net          Change in
           Interest Rate     Interest Margin        Net Interest
           (basis points)    ($000 omitted)         Margin
           +200              11,933                  2.4%
           +100              11,781                  1.1
              0              11,655                  0.0
           -100              11,448                 (1.8)
           -200              11,393                 (2.2)

     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,
2000 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, 2000 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, 2000 was 8.30% of total assets.

                                     -1-