<SUBMISSION>
<ACCESSION-NUMBER>0001169232-07-004140
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20070930
<FILING-DATE>20071107
<DATE-OF-FILING-DATE-CHANGE>20071107
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>COMMUNITY BANK SYSTEM INC
<CIK>0000723188
<ASSIGNED-SIC>6021
<IRS-NUMBER>161213679
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-13695
<FILM-NUMBER>071221236
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>5790 WIDEWATERS PKWY
<CITY>DEWITT
<STATE>NY
<ZIP>13214
<PHONE>8007242262
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>5790 WIDEWATERS PARKWAY
<CITY>DEWITT
<STATE>NY
<ZIP>13214
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d72933_10-q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
<html>
    <head>
        <title></title>
    </head>

    <body>
        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>&nbsp;</td>
            </tr>

            <tr>
                <td>
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>UNITED
                    STATES</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>SECURITIES AND EXCHANGE
                    COMMISSION</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;Washington, D.C.
                    20549</b></font></p>

                    <p align="center">
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>FORM
                    10-Q</u></b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" width="5%"><font face="Wingdings" size="2">x</font></td>

                <td><font face="Times New Roman, Times, Serif" size="2"><b>QUARTERLY REPORT
                PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934</b></font></td>
            </tr>

            <tr align="center">
                <td colspan="2"><font face="Times New Roman, Times, Serif" size="2">For the
                quarterly period ended <u>September 30, 2007</u></font></td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr>
                <td valign="top"><font face="Wingdings" size="2">o</font></td>

                <td><font face="Times New Roman, Times, Serif" size="2"><b>TRANSITION REPORT
                PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td align="center"><font face="Times New Roman, Times, Serif" size="2">For the
                transition period from&nbsp;_________________ to
                _____________________________.</font></td>
            </tr>

            <tr>
                <td align="center">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;</font> </td>
            </tr>

            <tr>
                <td align="center"><font face="Times New Roman, Times, Serif" size="2">Commission
                File Number <u>001-13695</u></font></td>
            </tr>

            <tr>
                <td align="center">&nbsp;</td>
            </tr>

            <tr>
                <td align="center">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td width="20%">&nbsp;</td>

                <td style="BORDER-TOP: black 5px solid; BORDER-LEFT: black 5px solid" width="3%">&nbsp;
                </td>

                <td style="BORDER-RIGHT: black 5px solid; BORDER-TOP: black 5px solid">
                <img height="27" src="image001.jpg" width="40"></td>

                <td width="25%">&nbsp;</td>
            </tr>

            <tr>
                <td align="center">&nbsp;</td>

                <td style="BORDER-LEFT: black 5px solid" align="center">&nbsp;</td>

                <td style="BORDER-RIGHT: black 5px solid" align="center">
                <font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK SYSTEM,
                INC.</b></font></td>

                <td align="center">&nbsp;</td>
            </tr>

            <tr>
                <td align="center">&nbsp;</td>

                <td style="BORDER-LEFT: black 5px solid; BORDER-BOTTOM: black 5px solid" align="center">&nbsp;
                </td>

                <td style="BORDER-RIGHT: black 5px solid; BORDER-BOTTOM: black 5px solid" valign="middle" align="center" height="35">
                <font face="Times New Roman, Times, Serif" size="2">(Exact name of registrant as
                specified in its charter)</font></td>

                <td align="center">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr align="center">
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr align="center">
                <td width="55%">&nbsp;</td>

                <td>&nbsp;</td>

                <td width="35%">&nbsp;</td>
            </tr>

            <tr align="center">
                <td><font face="Times New Roman, Times, serif" size="2">Delaware</font></td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, serif" size="2">16-1213679</font></td>
            </tr>

            <tr align="center">
                <td>
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td>
                    <hr noshade size="1">
                </td>
            </tr>

            <tr align="center">
                <td><font face="Times New Roman, Times, serif" size="2">(State or other
                jurisdiction of incorporation or organization)</font></td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, serif" size="2">(I.R.S. Employer
                Identification No.)</font></td>
            </tr>

            <tr align="center">
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr align="center">
                <td><font face="Times New Roman, Times, serif" size="2">5790 Widewaters Parkway,
                DeWitt, New York</font></td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, serif" size="2">13214-1883</font></td>
            </tr>

            <tr align="center">
                <td>
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td>
                    <hr noshade size="1">
                </td>
            </tr>

            <tr align="center">
                <td><font face="Times New Roman, Times, serif" size="2">(Address of principal
                executive offices)</font></td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;(Zip
                Code)</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="bottom" align="center" width="20%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" align="center" width="20%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">(315) 445-2282</font></td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                    <hr width="82" noshade size="1">
                </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">(Registrant&rsquo;s telephone
                number, including area code)</font></td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>&nbsp;</td>
            </tr>

            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2">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. &nbsp;&nbsp;Yes&nbsp;<font face="Wingdings">x</font>&nbsp; &nbsp;
                    No&nbsp;<font face="Wingdings">o</font>.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Indicate by check mark
                    whether the registrant is a large accelerated filer, an accelerated filer, or a
                    non-accelerated filer. See definition of &ldquo;accelerated filer and large
                    accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act. (Check
                    one):</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="bottom" width="33%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td valign="bottom" width="33%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="2">Large
                accelerated filer&nbsp;&nbsp;<font face="Wingdings">o</font></font> </td>

                <td valign="bottom"><font face="Times New Roman, Times, serif" size="2">Accelerated
                filer&nbsp;&nbsp;<font face="Wingdings">x</font></font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="2">Non-accelerated
                filer&nbsp;&nbsp;<font face="Wingdings">o</font></font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">Indicate by check mark
                    whether the registrant is a shell company (as defined in Rule 12b-2 of the
                    Exchange Act). &nbsp;Yes&nbsp;<font face="Wingdings">o</font>&nbsp;&nbsp;
                    No&nbsp;<font face="Wingdings">x</font>&nbsp;</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Indicate the number of
                    shares outstanding of each of the issuer&rsquo;s classes of common stock, as of
                    the latest practicable date.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td align="center">
                <font face="Times New Roman, Times, Serif" size="2"><u>29,673,827 shares of Common
                Stock, $1.00 par value, were outstanding on October 31, 2007.</u></font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center"></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>TABLE
                    OF CONTENTS</b></font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" width="576">&nbsp;</td>

                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th colspan="2">&nbsp;</th>

                <th>&nbsp;</th>

                <th><font face="Times New Roman, Times, Serif" size="1"><b>Page</b></font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th>
                    <hr noshade size="1">
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="9%">
                <b><font face="Times New Roman, Times, serif" size="2">Part I.</font></b></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="left" colspan="2">
                <b><font face="Times New Roman, Times, serif" size="2">Financial
                Information</font></b></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right" width="5%">
                </td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                1.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">Financial Statements
                (Unaudited)</font></td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" width="3%">&nbsp;</td>

                <td align="left">
                <a href="#a1"><font face="Times New Roman, Times, serif" size="2">Consolidated
                Statements of Condition<br>
                September 30, 2007 and December 31, 2006</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">3</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>

                <td align="left">
                <a href="#a2"><font face="Times New Roman, Times, serif" size="2">Consolidated
                Statements of Income<br>
                Three and nine months ended September 30, 2007 and 2006</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">4</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>

                <td align="left">
                <a href="#a3"><font face="Times New Roman, Times, serif" size="2">Consolidated
                Statement of Changes in Shareholders&rsquo; Equity<br>
                Nine months ended September 30, 2007</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">5</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>

                <td align="left">
                <a href="#a4"><font face="Times New Roman, Times, serif" size="2">Consolidated
                Statements of Comprehensive Income<br>
                Three and nine months ended September 30, 2007 and 2006</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">6</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>

                <td align="left">
                <a href="#a5"><font face="Times New Roman, Times, serif" size="2">Consolidated
                Statements of Cash Flows<br>
                Nine months ended September 30, 2007 and 2006</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">7</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>

                <td align="left">
                <a href="#a6"><font face="Times New Roman, Times, serif" size="2">Notes to the
                Consolidated Financial Statements<br>
                September 30, 2007</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">8</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                2.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a7"><font face="Times New Roman, Times, serif" size="2">Management&rsquo;s
                Discussion and Analysis of Financial Condition and Results of
                Operations</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">13</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                3.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a8"><font face="Times New Roman, Times, serif" size="2">Quantitative and
                Qualitative Disclosure about Market Risk</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">28</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                4.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a9"><font face="Times New Roman, Times, serif" size="2">Controls and
                Procedures</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td colspan="2"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><b><font face="Times New Roman, Times, serif" size="2">Part
                II.</font></b></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td colspan="2"><b><font face="Times New Roman, Times, serif" size="2">Other
                Information</font></b></td>

                <th>
                </th>

                <th>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                1.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a10"><font face="Times New Roman, Times, serif" size="2">Legal
                Proceedings</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                1A.</font> </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a11"><font face="Times New Roman, Times, serif" size="2">Risk
                Factors</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                2.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a12"><font face="Times New Roman, Times, serif" size="2">Unregistered
                Sales of Equity Securities and Use of Proceeds</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                3.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a13"><font face="Times New Roman, Times, serif" size="2">Defaults Upon
                Senior Securities</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                4.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a14"><font face="Times New Roman, Times, serif" size="2">Submission of
                Matters to a Vote of Securities Holders</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                5.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a15"><font face="Times New Roman, Times, serif" size="2">Other
                Information</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">29</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Item
                6.</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left" colspan="2">
                <a href="#a16"><font face="Times New Roman, Times, serif" size="2">Exhibits</font></a></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">30</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">2</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>Part I. &nbsp;
                    Financial Information</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>Item 1. Financial
                    Statements</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a1"></a>CONSOLIDATED
                    STATEMENTS OF CONDITION<br>
                    </b><b>(In Thousands, Except Share Data)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2"><font face="Times New Roman" size="1">(Unaudited)<br>
                September 30,<br>
                2007</font> </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">December 31,<br>
                2006</font> </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Cash and cash
                equivalents</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, serif" size="2">205,224</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, serif" size="2">232,032</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Available-for-sale
                investment securities, at fair value</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,297,124</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,083,412</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Held-to-maturity
                investment securities (fair value of $134,377<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and $142,694,
                respectively)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">136,806</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">145,859</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                investment securities</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,433,930</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,229,271</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Loans</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,791,910</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,701,558</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Allowance for
                loan losses</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(36,447</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(36,313</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
                loans</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,755,463</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,665,245</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Core deposit
                intangibles, net</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">21,819</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">24,665</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Goodwill</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">233,279</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">220,290</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Other
                intangibles, net</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,668</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">1,181</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible
                assets, net</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">256,766</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">246,136</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Premises and
                equipment, net</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">69,931</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">66,199</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Accrued
                interest receivable</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">26,799</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">26,797</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Other
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">44,754</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">32,117</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>
                Total assets</strong></font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,792,867</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,497,797</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="2">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">Liabilities:</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Noninterest-bearing
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">607,756</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">578,951</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Interest-bearing
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,696,848</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">2,589,348</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">3,304,604</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">3,168,299</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">821,343</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">647,481</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Subordinated debt
                held by unconsolidated subsidiary trusts</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">127,123</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">158,014</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Accrued interest
                and other liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">71,455</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">62,475</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,324,525</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,036,269</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Commitment and
                contingencies (See Note I)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">Shareholders&rsquo;
                equity:</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Preferred stock
                $1.00 par value, 500,000 shares authorized, 0 shares issued</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">&mdash;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">&mdash;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Common stock, $1.00
                par value, 50,000,000 shares authorized;<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,951,707 and 32,773,320 shares issued in 2007 and
                2006, respectively</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">32,952</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">32,773</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Additional paid-in
                capital</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">207,100</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">203,197</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Retained
                earnings</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">304,673</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">291,871</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Accumulated other
                comprehensive income</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(4,444</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(4,697</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Treasury stock, at
                cost (3,279,811 and 2,753,161 shares, respectively)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(71,939</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">(61,616</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                shareholders&rsquo; equity</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">468,342</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">461,528</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>
                Total liabilities and shareholders&rsquo; equity</strong></font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,792,867</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, serif" size="2">4,497,797</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="2">
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The accompanying notes
                    are an integral part of the consolidated financial statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">3</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a2"></a>CONSOLIDATED
                    STATEMENTS OF INCOME (Unaudited)</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>(In Thousands, Except
                    Per-Share Data)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th colspan="5"><font face="Times New Roman, Times, serif" size="1">Three Months
                Ended<br>
                September 30,</font> </th>

                <th>
                </th>

                <th colspan="5"><font face="Times New Roman, Times, serif" size="1">Nine months
                Ended<br>
                September 30,</font> </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2"><font face="Times New Roman" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><strong>Interest
                income:</strong></font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest and
                fees on loans</font></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">47,821</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">43,482</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">138,846</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">121,570</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest and
                dividends on taxable investments</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">12,546</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">10,033</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">35,488</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">31,407</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest and
                dividends on nontaxable investments</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,239</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,646</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">16,086</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">17,324</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest
                income</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">65,606</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">59,161</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">190,420</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">170,301</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2"><strong>Interest
                expense:</strong></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest on
                deposits</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">20,291</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">16,357</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">58,503</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">43,998</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest on
                borrowings</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">8,568</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,075</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">23,461</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">19,593</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Interest on
                subordinated debt held by&nbsp;<br>
                 &nbsp;&nbsp;unconsolidated subsidiary trusts</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,467</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,937</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,471</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,624</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest
                expense</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">31,326</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">25,369</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">89,435</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">69,215</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Net interest
                income</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">34,280</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">33,792</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">100,985</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">101,086</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Less: provision for loan
                losses</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">510</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,300</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,124</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,175</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Net interest income after
                provision for loan losses</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">33,770</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">32,492</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">99,861</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">95,911</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2"><strong>Noninterest
                income:</strong></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Deposit service
                fees</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">8,382</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,329</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">23,184</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">21,001</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Other banking
                services</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,512</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,329</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,607</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,166</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Benefit plan
                administration, consulting and actuarial fees</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,509</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,271</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">14,248</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">9,807</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Trust,
                investment and asset management fees</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,185</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,815</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,054</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,631</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Loss on sales of
                investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(16</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&mdash;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(24</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&mdash;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Total noninterest
                income</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">17,572</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">13,744</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">46,069</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">38,605</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><strong>Operating
                expenses:</strong></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Salaries and
                employee benefits</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">19,099</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">16,741</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">55,771</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">49,948</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Occupancy and
                equipment</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,884</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,350</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">14,109</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">13,557</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Data processing
                and communications</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,240</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,264</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">11,613</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">9,747</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Amortization of
                intangible assets</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,629</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,520</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,725</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,502</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Legal and
                professional fees</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,365</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,119</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,606</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,510</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Office supplies
                and postage</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,168</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,004</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,222</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,063</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Business
                development and marketing</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,800</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,190</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,288</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,085</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;Other</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,580</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,652</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,482</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,071</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating
                expenses</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">36,765</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">31,840</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">104,816</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">94,483</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Income before income
                taxes</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">14,577</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">14,396</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">41,114</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">40,033</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Income taxes</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,548</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,517</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">10,070</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">9,808</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><strong>Net
                income</strong></font></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">11,029</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">10,879</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="2">
                </td>

                <td>&nbsp;</td>

                <td colspan="5">
                    <hr noshade size="2">
                </td>

                <td>
                </td>
            </tr>

            <tr>
                <td>
                </td>

                <td colspan="3">
                </td>

                <td colspan="3">
                </td>

                <td colspan="3">
                </td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><strong><font face="Times New Roman" size="2">Basic earnings per
                share</font></strong></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.37</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">1.04</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">1.01</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><strong><font face="Times New Roman" size="2">Diluted earnings per
                share</font></strong></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.37</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">1.02</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">1.00</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><strong><font face="Times New Roman" size="2">Dividends declared
                per share</font></strong></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.21</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.20</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.61</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0.58</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The accompanying notes
                    are an integral part of the consolidated financial statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">4</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a3"></a>CONSOLIDATED
                    STATEMENT OF CHANGES IN SHAREHOLDERS&rsquo; EQUITY (Unaudited)</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>Nine months Ended
                    September 30, 2007</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>(In Thousands, Except
                    Share Data)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600">
            <tr align="center">
                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="5">
                    <strong><font face="Times New Roman, Times, serif" size="1">Common
                    Stock</font></strong>
                    <hr noshade size="1">
                </td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Additional</font></strong></td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="2">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Accumulated
                Other</font></strong></td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="2">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" colspan="2">&nbsp;</td>

                <td valign="bottom" width="1%">&nbsp;</td>
            </tr>

            <tr align="center">
                <td valign="bottom">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Shares
                Outstanding</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Amount
                Issued</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Paid-In
                Capital</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Retained
                Earnings</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Comprehensive
                Income</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="top" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Treasury
                Stock</font></strong></td>

                <td valign="top">&nbsp;</td>

                <td valign="bottom" colspan="2">
                <strong><font face="Times New Roman, Times, serif" size="1">Total</font></strong></td>

                <td valign="bottom">&nbsp;</td>
            </tr>

            <tr align="center">
                <td valign="bottom">&nbsp;</td>

                <td valign="top" colspan="20">
                    <hr noshade size="1">
                </td>

                <td valign="bottom">&nbsp;</td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Balance at
                December 31, 2006</font> </td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right" width="8%">
                <font face="Times New Roman, Times, serif" size="1">30,020,159</font> </td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right" width="6%">
                <font face="Times New Roman, Times, serif" size="1">32,773</font> </td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right" width="7%">
                <font face="Times New Roman, Times, serif" size="1">203,197</font> </td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right" width="7%">
                <font face="Times New Roman, Times, serif" size="1">291,871</font> </td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right" width="8%">
                <font face="Times New Roman, Times, serif" size="1">($4,697</font></td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right" width="7%">
                <font face="Times New Roman, Times, serif" size="1">($61,616</font></td>

                <td valign="bottom" width="3%">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom" width="1%">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right" width="7%">
                <font face="Times New Roman, Times, serif" size="1">461,528</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Net
                income</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">31,044</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">31,044</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Other
                comprehensive gain, net<br>
                &nbsp;&nbsp;&nbsp;&nbsp;of tax</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">253</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">253</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Dividends
                declared:</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Common,
                $0.61 per share</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">(18,242</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">(18,242</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Common
                stock issued under</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Stock plan,
                including<br>
                tax benefits of $309</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">178,387</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">179</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">2,243</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">2,422</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Stock
                options earned</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">1,660</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">1,660</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Treasury
                stock purchased</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">(526,650</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">(10,323</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">(10,323</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>
            </tr>

            <tr>
                <td valign="bottom" colspan="21">
                    <hr noshade size="1">
                </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="right">&nbsp;</td>

                <td valign="bottom">&nbsp;</td>
            </tr>

            <tr>
                <td valign="bottom"><font face="Times New Roman, Times, serif" size="1">Balance at
                September 30, 2007</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">29,671,896</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">32,952</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">207,100</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">304,673</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">($4,444</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">($71,939</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">)</font></td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">$</font></td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">468,342</font> </td>

                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" colspan="21">
                    <hr noshade size="2">
                </td>

                <td valign="bottom">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The accompanying notes
                    are an integral part of the consolidated financial statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">5</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a4"></a>CONSOLIDATED
                    STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>(In
                    Thousands)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, serif" size="1">Three Months
                Ended<br>
                September 30,</font> </th>

                <th>
                </th>

                <th colspan="5"><font face="Times New Roman, Times, serif" size="1">Nine months
                Ended<br>
                September 30,</font> </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Other comprehensive loss,
                before tax:</font></td>

                <td align="left" width="2%">&nbsp;</td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Change in pension
                liability</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">($ 50</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">($ 117</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Change in unrealized loss on
                derivative instruments<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; used in cash flow hedging
                relationship</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(1,882</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(890</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Unrealized gain (loss) on
                securities:</font></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
                holding gain (loss) arising during period</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">13,237</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">12,063</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,173</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(7,432</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification
                adjustment for losses included in net income</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">24</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Other comprehensive income
                (loss), before tax:</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">11,371</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">12,063</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">257</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(7,549</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Income tax (expense) benefit
                related to other<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; comprehensive gain (loss)</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4,206</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4,627</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,927</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Other comprehensive gain
                (loss), net of tax:</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,165</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">7,436</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">253</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4,622</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Net income</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">11,029</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">10,879</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Comprehensive
                income</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">18,194</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">18,315</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">31,297</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">25,603</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                    <hr noshade size="2">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="left">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The accompanying notes
                    are an integral part of the consolidated financial statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">6</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a5"></a>CONSOLIDATED
                    STATEMENTS OF CASH FLOWS (Unaudited)</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>(In
                    Thousands)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th colspan="5"><font face="Times New Roman, Times, serif" size="1">Nine months
                Ended<br>
                September 30,</font> </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2"><font face="Times New Roman" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman" size="1">2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><b>Operating
                activities:</b></font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="9%">
                </td>

                <td align="left" width="3%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>

                <td align="right" width="9%">
                </td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Net
                income</font></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Adjustments to
                reconcile net income to net cash provided by operating activities:</font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,995</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,456</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of
                intangible assets</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,725</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,502</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (accretion)
                amortization of premiums and discounts on securities and loans</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4,661</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">971</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of
                unearned compensation and discount on subordinated debt</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">284</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">95</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for
                loan losses</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,124</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,175</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on
                investment securities and debt extinguishments</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">24</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of
                loans and other assets</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(175</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(97</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from
                the sale of loans held for sale</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">9,261</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">14,388</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Origination of
                loans held for sale</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(9,198</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(14,347</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Excess tax
                benefits from share-based payment arrangements</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(133</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(245</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in other
                operating assets and liabilities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(3,564</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,644</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Net cash provided by
                operating activities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">35,726</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">52,767</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><strong><font face="Times New Roman" size="2">Investing
                activities:</font></strong></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Proceeds from
                sales of available-for-sale investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,775</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">33,719</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Proceeds from
                maturities of held-to-maturity investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">12,202</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,802</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Proceeds from
                maturities of available-for-sale investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">420,420</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">88,118</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Purchases of
                held-to-maturity investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(3,258</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(6,627</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Purchases of
                available-for-sale investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(609,082</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(70,909</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Net increase in
                loans outstanding</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(36,529</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(56,110</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Cash paid for
                acquisition (net of cash acquired of $9,172 and $1,097)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(11,821</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(38,971</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Capital
                expenditures</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(7,581</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(4,142</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Net cash used in investing
                activities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(228,874</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(51,120</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2"><b>Financing
                activities:</b></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Net change in
                demand deposits, NOW accounts and savings accounts</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">33,165</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(36,124</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Net change in
                time deposits</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">19,138</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">53,091</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Net change in
                short-term borrowings</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">170,701</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(96,400</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Change in
                long-term borrowings (net of payments of $1,078 and $252)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(1,078</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">102,648</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Payment on
                subordinated debt held by unconsolidated subsidiary trusts</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(30,929</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">0</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Issuance of
                common stock</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,527</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">2,309</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Purchase of
                treasury stock</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(10,323</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(5,542</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Cash dividends
                paid</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(17,994</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(17,049</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Tax benefits
                from share-based payment arrangements</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">133</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">245</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">Net cash provided by
                financing activities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">166,340</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">3,178</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">Change in cash and cash
                equivalents</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(26,808</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">4,825</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Cash and cash
                equivalents at beginning of period</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">232,032</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">114,605</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><b>Cash and cash equivalents
                at end of period</b></font></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">205,224</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">119,430</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td colspan="6">
                    <hr noshade size="2">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2"><b>Supplemental disclosures
                of cash flow information:</b></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Cash paid for
                interest</font></td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">87,905</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">$</font></td>

                <td align="right"><font face="Times New Roman" size="2">66,919</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Cash paid for
                income taxes</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,105</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,621</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2"><b>Supplemental disclosures
                of noncash financing and investing activities:</b></font></td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Dividends
                declared and unpaid</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">6,238</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">5,972</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;Gross change in
                unrealized loss on available-for-sale investment securities</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">1,197</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman" size="2">(7,432</font></td>

                <td align="left"><font face="Times New Roman" size="2">)</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The accompanying notes
                    are an integral part of the consolidated financial statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">7</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>COMMUNITY BANK
                    SYSTEM, INC.</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a6"></a>NOTES
                    TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)</b></font><br>
                    <font face="Times New Roman, Times, Serif" size="2"><b>September 30,
                    2007</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE A:&nbsp; BASIS
                    OF PRESENTATION</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The interim financial
                    data as of September 30, 2007 and for the three and nine months ended September
                    30, 2007 and 2006 is unaudited; however, in the opinion of the Company, the
                    interim data includes all adjustments, consisting only of normal recurring
                    adjustments, necessary for a fair statement of the results for the interim
                    periods. The results of operations for the interim periods are not necessarily
                    indicative of the results that may be expected for the full year or any other
                    interim period.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE B:&nbsp;
                    ACQUISITION AND OTHER MATTERS</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><i>Hand Benefits &amp;
                    Trust, Inc.</i></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On May 18, 2007, Benefit
                    Plans Administrative Services, Inc. (BPAS), a wholly owned subsidiary of the
                    Company, completed its acquisition of Hand Benefits &amp; Trust, Inc. (HBT) in
                    an all cash transaction. HBT is a Houston, Texas based provider of employee
                    benefit plan administration and trust services. The results of HBT&rsquo;s
                    operations have been included in the consolidated financial statements since
                    that date.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><i>TLNB Financial
                    Corporation</i></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On June 1, 2007, the
                    Company completed its acquisition of TLNB Financial Corporation, parent company
                    of Tupper Lake National Bank (TLNB), in an all-cash transaction valued at
                    approximately $17.8 million. Based in Tupper Lake, NY, TLNB operated five
                    branches in the northeastern New York State cities of Tupper Lake, Plattsburgh
                    and Saranac Lake, as well as an insurance subsidiary, TLNB Insurance Agency,
                    Inc. The results of TLNB&rsquo;s operations have been included in the
                    consolidated financial statements since that date.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The estimated purchase
                    price allocation of the assets acquired and liabilities assumed in the purchase
                    of HBT and TLNB, collectively, including capitalized acquisition costs, is as
                    follows:&nbsp;</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font> </th>

                <th>
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Cash and due
                from banks</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="13%">
                <font face="Times New Roman, Times, Serif" size="2">9,172</font></td>

                <td align="left" width="1%" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" width="28%" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">Available-for-sale investment
                securities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">25,966</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Loans net of
                allowance for loan losses of $747</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">54,805</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Premises and
                equipment, net</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,034</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Other
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,989</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">Goodwill</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">12,837</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Core deposit
                &amp; customer list intangibles</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,366</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="1">
                </th>

                <th bgcolor="#ffffff">&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total assets
                acquired</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">112,169</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="1">
                </th>

                <th bgcolor="#ffffff">&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">Deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">84,002</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">Borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,288</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Other
                liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,886</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="1">
                </th>

                <th bgcolor="#ffffff">&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total liabilities
                assumed</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">91,176</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="1">
                </th>

                <th bgcolor="#ffffff">&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
                assets acquired</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">20,993</font></td>

                <td align="left" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="3">
                    <hr noshade size="2">
                </th>

                <th bgcolor="#ffffff">&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2"><i>Acquisitions in
                    2006</i></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company completed
                    two acquisitions in 2006: (1) in August, the Company acquired ES&amp;L
                    Bancorp&nbsp;(Elmira), the parent company of Elmira Savings and Loan, FA, a
                    federally chartered thrift based in Elmira, NY with two branches and
                    approximately $210 million in assets; and (2) in December, the Company acquired
                    ONB Corporation (ONB), the parent company of Ontario National Bank, a federally
                    chartered national bank based in Clifton Springs, NY with four branches and
                    approximately $95 million in assets.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><i>Stock Repurchase
                    Program</i></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On April 20, 2005, the
                    Company announced a twenty-month authorization to repurchase up to 1,500,000 of
                    its outstanding shares. On December 20, 2006, the Company extended the program
                    through December 31, 2008 and announced an additional two-year authorization to
                    repurchase up to 900,000 of its shares in open market or privately negotiated
                    transactions. Through September 30, 2007, the Company has repurchased pursuant
                    to the program 1,379,811 shares at an aggregate cost of $29.8 million and an
                    average price per share of $21.61. The repurchased shares will be used for
                    general corporate purposes, including those related to stock plan
                    activities.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">8</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE C:&nbsp;
                    ACCOUNTING POLICIES</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>Critical Accounting
                    Policies</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><i>Allowance for Loan
                    Losses</i></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Management continually
                    evaluates the credit quality of the Company&rsquo;s loan portfolio and performs
                    a formal review of the adequacy of the allowance for loan losses on a quarterly
                    basis. The allowance reflects management&rsquo;s best estimate of probable
                    losses inherent in the loan portfolio. Determination of the allowance is
                    subjective in nature and requires significant estimates. The Company&rsquo;s
                    allowance methodology consists of two broad components, general and specific
                    loan loss allocations.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The general loan loss
                    allocation is composed of two calculations that are computed on four main loan
                    categories: commercial, consumer direct, consumer indirect and residential real
                    estate. The first calculation determines an allowance level based on the latest
                    three years of historical net charge-off data for each loan category
                    (commercial loans exclude balances with specific loan loss allocations). The
                    second calculation is qualitative and takes into consideration five major
                    factors affecting the level of loan loss risk: portfolio risk migration
                    patterns (internal credit quality trends); the growth of the categories of the
                    loan portfolio; economic and business environment trends in the Company&rsquo;s
                    markets (includes review of bankruptcy, unemployment, population, consumer
                    spending and regulatory trends); industry, geographical and product
                    concentrations in the portfolio; and the perceived effectiveness of managerial
                    resources and lending practices and policies. These two calculations are added
                    together to determine the general loan loss allocation. The specific loan loss
                    allocation relates to individual commercial loans that are both greater than
                    $0.5 million and in a nonaccruing status with respect to interest. Specific
                    losses are based on discounted estimated cash flows, including any cash flows
                    resulting from the conversion of collateral.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Loan losses are charged
                    off against the allowance, while recoveries of amounts previously charged off
                    are credited to the allowance. A provision for loan loss is charged to
                    operations based on management&rsquo;s periodic evaluation of the factors
                    previously mentioned.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><i>Income
                    Taxes</i></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Provisions for income
                    taxes are based on taxes currently payable or refundable, and deferred taxes
                    which are based on temporary differences between the tax basis of assets and
                    liabilities and their reported amounts in the financial statements. Deferred
                    tax assets and liabilities are reported in the financial statements at
                    currently enacted income tax rates applicable to the period in which the
                    deferred tax assets and liabilities are expected to be realized or
                    settled.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><i>Intangible
                    Assets</i></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Intangible assets
                    include core deposit intangibles, customer relationship intangibles and
                    goodwill arising from acquisitions. Core deposit intangibles and customer
                    relationship intangibles are amortized on either an accelerated or
                    straight-line basis over periods ranging from 7 to 20 years. Goodwill is
                    evaluated at least annually for impairment. The carrying value of goodwill and
                    other intangible assets is based upon discounted cash flow modeling techniques
                    that require management to make estimates regarding the amount and timing of
                    expected future cash flows. It also requires use of a discount rate that
                    reflects the current return requirements of the market in relation to present
                    risk-free interest rates, required equity market premiums, and company-specific
                    risk indicators.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><i>Retirement
                    Benefits</i></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company provides
                    defined benefit pension benefits and post-retirement health and life insurance
                    benefits to eligible employees. The Company also provides deferred compensation
                    and supplemental executive retirement plans for selected current and former
                    employees and officers. Expense under these plans is charged to current
                    operations and consists of several components of net periodic benefit cost
                    based on various actuarial assumptions regarding future experience under the
                    plans, including discount rate, rate of future compensation increases and
                    expected return on plan assets.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>New Accounting
                    Pronouncements</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">In February 2007, the
                    Financial Accounting Standards Board (FASB) issued SFAS No. 159, <i>The Fair
                    Value Option for Financial Assets and Financial Liabilities</i> (SFAS No. 159).
                    SFAS No. 159 permits entities to choose to measure many financial assets and
                    financial liabilities at fair value. Unrealized gains and losses on items for
                    which the fair value option has been elected are reported in earnings. SFAS No.
                    159 is effective for fiscal years beginning after November 15, 2007. The
                    Company is currently assessing the impact of SFAS No. 159 on its consolidated
                    statements of condition and income.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">In September 2006, the
                    FASB issued SFAS No. 157, <i>Fair Value Measurements</i> (SFAS 157). SFAS 157
                    does not address &ldquo;what&rdquo; to measure at fair value; instead, it
                    addresses &ldquo;how&rdquo; to measure fair value. SFAS 157 applies (with
                    limited exceptions) to existing standards that require assets or liabilities to
                    be measured at fair value. SFAS 157 establishes a fair value hierarchy, giving
                    the highest priority to quoted prices in active markets and the lowest priority
                    to unobservable data and requires new disclosures for assets and liabilities
                    measured at fair value based on their level in the hierarchy. SFAS 157 is
                    effective for financial statements issued for fiscal years beginning after
                    November 15, 2007. The Company is currently evaluating the impact of adopting
                    SFAS 157.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">9</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE D:&nbsp;
                    EARNINGS PER SHARE</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Basic earnings per share
                    are computed based on the weighted-average common shares outstanding for the
                    period. Diluted earnings per share are based on the weighted-average shares
                    outstanding adjusted for the dilutive effect of the assumed exercise of stock
                    options during the year. The dilutive effect of options is calculated using the
                    treasury stock method of accounting. The treasury stock method determines the
                    number of common shares that would be outstanding if all the dilutive options
                    (those where the average market price is greater than the exercise price) were
                    exercised and the proceeds were used to repurchase common shares in the open
                    market at the average market price for the applicable time period. There were
                    approximately 1.7 million anti-dilutive stock options outstanding at September
                    30, 2007 compared to approximately 1.4 million weighted-average anti-dilutive
                    stock options outstanding at September 30, 2006. The following is a
                    reconciliation of basic to diluted earnings per share for the three and nine
                    months ended September 30, 2007 and 2006.</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted, except per share data)</font> </th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Income</font>
                </th>

                <th>&nbsp;</th>

                <th><font face="Times New Roman, Times, Serif" size="1">Shares</font> </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Per Share<br>
                Amount</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr>
                <td colspan="8">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><em><font face="Times New Roman, Times, Serif" size="2">Three
                Months Ended September 30, 2007</font></em></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="9%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="9%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="left" width="16%" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Basic
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">11,029</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">29,792</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Stock options
                and restricted stock</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">286</font></td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">11,029</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,078</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td>
                </td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><em><font face="Times New Roman, Times, Serif" size="2">Three
                Months Ended September 30, 2006</font></em></td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Basic
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,879</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">29,932</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Stock options
                and restricted stock</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">402</font></td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,879</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,334</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td>
                </td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><em><font face="Times New Roman, Times, Serif" size="2">Nine
                Months Ended September 30, 2007</font></em></td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Basic
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">29,988</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.04</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Stock options
                and restricted stock</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">320</font></td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,308</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.02</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td>
                </td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><em><font face="Times New Roman, Times, Serif" size="2">Nine
                Months Ended September 30, 2006</font></em></td>

                <td colspan="3">
                </td>

                <td align="right" colspan="2">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Basic
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">29,967</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.01</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Stock options
                and restricted stock</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">406</font></td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
                EPS</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,373</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.00</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td colspan="5">
                    <hr noshade size="2">
                </td>

                <td align="right">
                </td>

                <td align="right" colspan="2">&nbsp;</td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p align="left"><font face="Times New Roman, Times, Serif" size="2"><b>NOTE
                    E:&nbsp; INTANGIBLE ASSETS</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">The gross
                carrying amount and accumulated amortization for each type of intangible asset are
                as follows:</font></td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">As of September
                30, 2007</font> </th>

                <th>&nbsp;</th>

                <th colspan="7"><font face="Times New Roman, Times, Serif" size="1">As of December
                31, 2006</font> </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="7">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th align="left">&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Gross<br>
                Carrying<br>
                Amount</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Accumulated<br>
                Amortization</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Net<br>
                Carrying<br>
                Amount</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Gross<br>
                Carrying<br>
                Amount</font></th>

                <th>&nbsp;</th>

                <th nowrap><font face="Times New Roman, Times, Serif" size="1">Accumulated<br>
                Amortization</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Net<br>
                Carrying<br>
                Amount</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="7">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><em><font face="Times New Roman, Times, Serif" size="2">Amortizing
                intangible assets:</font></em></td>

                <td align="left" width="3%">&nbsp;</td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Core deposit
                intangibles</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">66,973</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">($45,154</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">21,819</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">65,351</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">($40,686</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">24,665</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Other
                intangibles</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,383</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(1,715</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,668</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,750</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(1,569</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,181</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="7">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                amortizing intangibles</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">70,356</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(46,869</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">23,487</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">68,101</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(42,255</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">25,846</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <em><font face="Times New Roman, Times, Serif" size="2">Non-amortizing intangible
                assets:</font></em></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Goodwill</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">233,279</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">233,279</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">220,290</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">220,290</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="7">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                intangible assets, net</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">303,635</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">($46,869</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">256,766</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">288,391</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">($42,255</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">246,136</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="2">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="7">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">No goodwill
                impairment adjustments were recognized in 2007 or 2006.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">10</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">The estimated
                aggregate amortization expense for each of the succeeding fiscal years ended
                December 31 is as follows:</font></td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="center"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Amount</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="center" colspan="4">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="right"><font face="Times New Roman, Times, Serif" size="2">Sep-Dec
                2007</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">1,623</font></td>

                <td align="left" width="65%" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2008</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">6,117</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2009</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,517</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2010</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,590</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2011</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,484</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">Thereafter</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,156</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">Total</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">23,487</font></td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE
                    F:&nbsp;&nbsp;MANDATORILY REDEEMABLE PREFERRED SECURITIES</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company sponsors
                    three business trusts, Community Capital Trust II, Community Statutory Trust
                    III and Community Capital Trust IV (Trust IV), of which 100% of the common
                    stock is owned by the Company. The trusts were formed for the purpose of
                    issuing company-obligated mandatorily redeemable preferred securities to
                    third-party investors and investing the proceeds from the sale of such
                    preferred securities solely in junior subordinated debt securities of the
                    Company. The debentures held by each trust are the sole assets of that trust.
                    Distributions on the preferred securities issued by each trust are payable
                    semi-annually or quarterly at a rate per annum equal to the interest rate being
                    earned by the trust on the debentures held by that trust and are recorded as
                    interest expense in the consolidated financial statements. The preferred
                    securities are subject to mandatory redemption, in whole or in part, upon
                    repayment of the debentures. The Company has entered into agreements which,
                    taken collectively, fully and unconditionally guarantee the preferred
                    securities subject to the terms of each of the guarantees. The terms of the
                    preferred securities of each trust are as follows:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600">
            <tr>
                <td valign="bottom">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;</font> </td>

                <td valign="bottom">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Issuance<br>
                Date</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Par<br>
                Amount</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Interest
                Rate</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Maturity<br>
                Date</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Call
                Provision</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>

                <td valign="bottom" align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Call
                Price</font></strong> </td>

                <td valign="bottom" align="center">&nbsp;</td>
            </tr>

            <tr>
                <td valign="bottom" colspan="13">
                    <hr noshade size="1">
                </td>

                <td valign="bottom" align="center">&nbsp;</td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom" align="center" width="3%">
                <font face="Times New Roman, Times, serif" size="1">II</font> </td>

                <td valign="bottom" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="center" width="9%">
                <font face="Times New Roman, Times, serif" size="1">7/16/2001</font> </td>

                <td valign="bottom" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right" width="9%">
                <font face="Times New Roman, Times, serif" size="1">$25 million</font> </td>

                <td valign="bottom" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" nowrap align="center">
                <font face="Times New Roman, Times, serif" size="1">6 month LIBOR plus 3.75%
                (9.12%)</font> </td>

                <td valign="bottom" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right" width="9%">
                <font face="Times New Roman, Times, serif" size="1">7/16/2031</font> </td>

                <td valign="bottom" align="right" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" nowrap align="right" width="15%">
                <font face="Times New Roman, Times, serif" size="1">5 year beginning 2006</font>
                </td>

                <td valign="bottom" align="right" width="2%"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" nowrap align="right" width="24%">
                <font face="Times New Roman, Times, serif" size="1">107.6875% declining to par in
                2011</font> </td>

                <td valign="bottom" width="1%"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">III</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">7/31/2001</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" nowrap align="right">
                <font face="Times New Roman, Times, serif" size="1">$24.5 million</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">3 month LIBOR plus 3.58%
                (8.94%)</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">7/31/2031</font> </td>

                <td valign="bottom" align="right"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">5 year beginning 2006</font>
                </td>

                <td valign="bottom" align="right"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">107.5000% declining to par in
                2011</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr bgcolor="#eaf9e8">
                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">IV</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">12/8/2006</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">$75 million</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="center">
                <font face="Times New Roman, Times, serif" size="1">3 month LIBOR plus 1.65%
                (7.34%)</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">12/15/2036</font> </td>

                <td valign="bottom" align="right"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">5 year beginning 2012</font>
                </td>

                <td valign="bottom" align="right"><font size="1">&nbsp;</font> </td>

                <td valign="bottom" align="right">
                <font face="Times New Roman, Times, serif" size="1">Par</font> </td>

                <td valign="bottom"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="bottom" colspan="13">
                    <hr noshade size="2">
                </td>

                <td valign="bottom" align="center">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The Company also entered
                    into an interest rate swap agreement to convert Trust IV&rsquo;s variable rate
                    trust preferred securities into a fixed rate security for a term of five years
                    at a fixed rate of 6.43%. A net gain of $334,000 was recognized for the
                    interest rate swap agreement for the nine months ended September 30, 2007 and
                    was used to offset the interest expense for the trust preferred
                    securities.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE G:&nbsp; INCOME
                    TAXES</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company adopted the
                    provisions of FASB Interpretation No. 48, <i>Accounting for Uncertainty in
                    Income Taxes</i> (FIN 48) an interpretation of FASB Statement No. 109 (SFAS
                    109) on January 1, 2007. As a result of the implementation of FIN 48, the
                    Company recognized no material adjustment in the liability for uncertain tax
                    positions. As of the adoption date of January 1, 2007, the liability, net of
                    applicable deferred tax assets, for unrecognized income tax benefits was $12.2
                    million, of which $11.1 million, if recognized, would favorably affect the
                    Company&rsquo;s effective tax rate. As of September 30, 2007, the liability,
                    net of applicable deferred tax assets, for unrecognized income tax benefits was
                    approximately $12.9 million. During the first nine months of 2007, there were
                    additions of $0.7 million for tax positions related to the current year, all of
                    which was provided through the effective tax rate.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company recognizes
                    interest and penalties related to uncertain tax positions in income tax
                    expense. As of September 30, 2007, the Company had approximately $3.2 million
                    of accrued interest related to uncertain tax positions.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The tax years 2003
                    &ndash; 2006 remain open to examination by the Federal taxing authority. The
                    tax years 1997 - 2006 remain open to examination by New York State. Total
                    unrecognized tax benefits could change significantly during the next twelve
                    months if the NYS examinations for tax years 1997 &ndash; 2004, which are
                    currently in progress, are completed during that time. The amount of this
                    change, if any, cannot reasonably be determined at this time.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">11</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE H:&nbsp; BENEFIT
                    PLANS</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company provides
                    defined benefit pension benefits and post-retirement health and life insurance
                    benefits to eligible employees. The Company also provides supplemental pension
                    retirement benefits for several current and former key employees. The Company
                    accrues for the estimated cost of these benefits through charges to expense
                    during the years that employees earn these benefits. The net periodic benefit
                    cost for the three and nine months ended September 30 is as follows:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th colspan="11"><font face="Times New Roman, Times, Serif" size="1">Pension
                Benefits</font></th>

                <th>&nbsp;</th>

                <th colspan="11">
                <font face="Times New Roman, Times, Serif" size="1">Post-retirement
                Benefits</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th colspan="11">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="11">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Service
                cost</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">837</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">719</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">2,349</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">2,216</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">148</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">130</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">444</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right" width="6%">
                <font face="Times New Roman, Times, Serif" size="1">391</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Interest
                cost</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">680</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">635</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,039</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,902</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">131</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">119</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">392</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">355</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Expected
                return on plan assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(1,007</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(827</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(3,021</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(2,482</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net
                amortization and deferral</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">247</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">270</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">742</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">900</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">29</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">27</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">88</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">81</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Amortization
                of prior service cost</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(18</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">13</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(52</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(71</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">28</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">27</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">82</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">82</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Amortization
                of transition obligation</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">10</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">10</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">31</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">31</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net periodic
                benefit cost</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">739</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">810</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,057</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,465</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">346</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">313</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,037</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">940</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">During the second
                    quarter, the Company made a contribution to its defined benefit pension plan of
                    $9.2 million. No additional contributions in 2007 are required for regulatory
                    purposes.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>NOTE
                    I:&nbsp;&nbsp;COMMITMENTS, CONTINGENT LIABILITIES AND
                    RESTRICTIONS</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company is a party
                    to financial instruments with off-balance-sheet risk in the normal course of
                    business to meet the financing needs of its customers. These financial
                    instruments consist primarily of commitments to extend credit and standby
                    letters of credit. Commitments to extend credit are agreements to lend to
                    customers, generally having fixed expiration dates or other termination clauses
                    that may require payment of a fee. These commitments consist principally of
                    unused commercial and consumer credit lines. Standby letters of credit
                    generally are contingent upon the failure of the customer to perform according
                    to the terms of an underlying contract with a third party. The credit risks
                    associated with commitments to extend credit and standby letters of credit are
                    essentially the same as that involved with extending loans to customers and are
                    subject to normal credit policies. Collateral may be obtained based on
                    management&rsquo;s assessment of the customer&rsquo;s
                    creditworthiness.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The contract amount of
                    commitment and contingencies are as follows:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">September
                30,<br>
                2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">December
                31,<br>
                2006</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Commitments to
                extend credit</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">477,623</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">443,367</font></td>

                <td align="left" width="1%">&nbsp;</td>

                <td align="left" width="38%" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Standby
                letters of credit</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,940</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,082</font></td>

                <td align="left">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">488,563</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">453,449</font></td>

                <td align="left">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="6">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">12</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><a name="a7"></a>Item
                    2. Management&rsquo;s Discussion and Analysis of Financial Condition and
                    Results of Operations</b></font></p>

                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>Introduction</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">This Management&rsquo;s
                    Discussion and Analysis of Financial Condition and Results of Operations
                    (MD&amp;A) primarily reviews the financial condition and results of operations
                    of Community Bank System, Inc. (the Company or CBSI) as of and for the three
                    and nine months ended September 30, 2007 and 2006, although in some
                    circumstances the second quarter of 2007 is also discussed in order to more
                    fully explain recent trends. The following discussion and analysis should be
                    read in conjunction with the Company&rsquo;s Consolidated Financial Statements
                    and related notes that appear on pages 3 through 12. All references in the
                    discussion to the financial condition and results of operations are to those of
                    the Company and its subsidiaries taken as a whole.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Unless otherwise noted,
                    the term &ldquo;this year&rdquo; refers to results in calendar year 2007,
                    &ldquo;third quarter&rdquo; refers to the quarter ended September 30, 2007,
                    earnings per share (EPS) figures refer to diluted EPS, and net interest income
                    and net interest margin are presented on a fully tax-equivalent (FTE)
                    basis.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">This MD&amp;A contains
                    certain forward-looking statements with respect to the financial condition,
                    results of operations and business of the Company. These forward-looking
                    statements involve certain risks and uncertainties. Factors that may cause
                    actual results to differ materially from those proposed by such forward-looking
                    statements are set herein under the caption, &ldquo;Forward-Looking
                    Statements,&rdquo; on page 27.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Critical
                    Accounting Policies</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As a result of the
                    complex and dynamic nature of the Company&rsquo;s business, management must
                    exercise judgment in selecting and applying the most appropriate accounting
                    policies for its various areas of operations. The policy decision process not
                    only ensures compliance with the latest generally accepted accounting
                    principles, but also reflects on management&rsquo;s discretion with regard to
                    choosing the most suitable methodology for reporting the Company&rsquo;s
                    financial performance. It is management&rsquo;s opinion that the accounting
                    estimates covering certain aspects of the business have more significance than
                    others due to the relative importance of those areas to overall performance, or
                    the level of subjectivity in the selection process. These estimates affect the
                    reported amounts of assets and liabilities and disclosures of revenues and
                    expenses during the reporting period. Actual results could differ from those
                    estimates. Management believes that critical accounting estimates
                    include:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                loan losses - The allowance for loan losses reflects management&rsquo;s best
                estimate of probable losses inherent in the loan portfolio. Determination of the
                allowance is inherently subjective. It requires significant estimates including the
                amounts and timing of expected future cash flows on impaired loans and the amount
                of estimated losses on pools of homogeneous loans which is based on historical loss
                experience and consideration of current economic trends, all of which may be
                susceptible to significant change.</font> </td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Actuarial
                assumptions associated with pension, post-retirement and other employee benefit
                plans - These assumptions include discount rate, rate of future compensation
                increases and expected return on plan assets.</font> </td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Provision for
                income taxes - The Company is subject to examinations from various taxing
                authorities. Such examinations may result in challenges to the tax return treatment
                applied by the Company to specific transactions. Management believes that the
                assumptions and judgements used to record tax related assets or liabilities have
                been appropriate. Should tax laws change or the taxing authorities determine that
                management&rsquo;s assumptions were inappropriate an adjustment may be required
                which could have a material effect on the Company&rsquo;s results of
                operations.</font></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Carrying value
                of goodwill and other intangible assets - The carrying value of goodwill and other
                intangible assets is based upon discounted cash flow modeling techniques that
                require management to make estimates regarding the amount and timing of expected
                future cash flows. It also requires use of a discount rate that reflects the
                current return requirements of the market in relation to present risk-free interest
                rates, required equity market premiums, and company-specific risk
                indicators.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">A summary of the
                    accounting policies used by management is disclosed in Note A, &ldquo;Summary
                    of Significant Accounting Policies&rdquo; on pages 46-51 of the most recent
                    Form 10-K (fiscal year ended December 31, 2006) filed with the Securities and
                    Exchange Commission on March 15, 2007.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">13</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Executive
                    Summary</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s
                    business philosophy is to operate as a community bank with local
                    decision-making, principally in non-metropolitan markets, providing a broad
                    array of banking and financial services to retail, commercial and municipal
                    customers.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s core
                    operating objectives are: (i) grow the branch network, primarily through a
                    disciplined acquisition strategy, and certain selective de novo expansions,
                    (ii) build high-quality, profitable loan and deposit portfolios using both
                    organic and acquisition strategies, (iii) increase the noninterest income
                    component of total revenues through development of banking-related fee income,
                    growth in existing financial services business units, and the acquisition of
                    additional financial services and banking businesses, and (iv) utilize
                    technology to deliver customer-responsive products and services and to reduce
                    operating costs.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Significant factors
                    management reviews to evaluate achievement of the Company&rsquo;s operating
                    objectives and its operating results and financial condition include, but are
                    not limited to: net income and earnings per share, return on assets and equity,
                    net interest margins, noninterest income, operating expenses, asset quality,
                    loan and deposit growth, capital management, performance of individual banking
                    and financial services units, liquidity and interest rate sensitivity,
                    enhancements to customer products and services, technology enhancements, market
                    share, peer comparisons, and the performance of acquisition and integration
                    activities.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On June 1, 2007, the
                    Company completed its acquisition of TLNB Financial Corporation, parent company
                    of Tupper Lake National Bank (TLNB), in an all-cash transaction valued at
                    approximately $17.8 million. Based in Tupper Lake, NY, TLNB operated five
                    branches in the northeastern New York State cities of Tupper Lake, Plattsburgh
                    and Saranac Lake, as well as an insurance subsidiary, TLNB Insurance Agency,
                    Inc. On a consolidated basis, TLNB had approximately $100 million in assets and
                    $87 million of deposits.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On May 18, 2007, the
                    Company&rsquo;s subsidiary, Benefit Plans Administrative Services, Inc. (BPAS),
                    completed its acquisition of Hand Benefits &amp; Trust, Inc. (HBT) in an all
                    cash transaction. HBT is a Houston, Texas based provider of employee benefit
                    plan administration and trust services.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company completed
                    two acquisitions in 2006: (1) in August, the Company acquired ES&amp;L
                    Bancorp&nbsp;(Elmira), the parent company of Elmira Savings and Loan, FA, a
                    federally chartered thrift based in Elmira, NY with two branches and
                    approximately $210 million in assets; and (2) in December, the Company acquired
                    ONB Corporation (ONB), the parent company of Ontario National Bank, a federally
                    chartered national bank based in Clifton Springs, NY with four branches and $95
                    million in assets.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Third quarter and
                    September year-to-date (YTD) earnings per share were $0.37 and $1.02,
                    respectively, an increase of $0.01 and $0.02 as compared to the respective
                    prior year periods. The increase was driven by increased interest income on
                    loans and investments, significantly higher noninterest income, and favorable
                    asset quality results. These were partially offset by higher cost of funds and
                    higher operating expenses. Cash earnings per share (which excludes the
                    after-tax effect of the amortization of intangibles assets and
                    acquisition-related market value adjustments) were $0.41 versus $0.40 for the
                    prior year&rsquo;s third quarter and $0.39 for the second quarter of
                    2007.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Asset quality in the
                    third quarter of 2007 was improved in comparison to the same period last year,
                    with reductions in the net charge-off, nonperforming loan and total delinquent
                    loan ratios. The Company experienced year-over-year loan growth in all
                    portfolios: consumer installment, consumer mortgage and business lending, due
                    to organic growth and the acquisitions of TLNB, Elmira and ONB. The size of the
                    investment portfolio increased from both the prior year-end and the third
                    quarter of 2006, principally due to higher short-term investments and cash
                    equivalents, which were up $248 million from September 30, 2006. Average
                    deposits increased in the third quarter of 2007 as compared to both the second
                    quarter of 2007 and the third quarter of 2006, due to organic growth and the
                    TLNB, Elmira and ONB acquisitions. External borrowings increased from the end
                    of December 2006 due to a $200 million short term investment leverage strategy
                    implemented in the third quarter, partially offset by the early redemption of
                    $30 million of fixed-rate trust preferred securities in the beginning of the
                    first quarter of 2007.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Net Income and
                    Profitability</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As shown in Table 2,
                    earnings per share for the third quarter and September YTD of $0.37 and $1.02,
                    respectively, were $0.01 and $0.02 higher than the EPS generated in the same
                    periods of last year. Net income for the quarter of $11.0 million was up 1.4%
                    over the third quarter of 2006 and net income of $31.0 million for the first
                    nine months of 2007 increased 2.7% from the amount earned in the first nine
                    months of 2006. As compared to the second quarter of 2007, net income
                    increased&nbsp;$0.7 million or 6.5%, and earnings per share increased $0.03, or
                    8.8%.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Third quarter net
                    interest income of $34.3 million was up $0.5 million or 1.4% from the
                    comparable prior year period, while net interest income for the first nine
                    months of 2007 decreased $0.1 million as compared to the first nine months of
                    2006. The current quarter&rsquo;s provision for loan losses decreased $0.8
                    million as compared to the third quarter of 2006 and decreased $4.1 million for
                    the first nine months of 2007 as compared to 2006 as a result of favorable and
                    improved asset quality attributes. Third quarter noninterest income, excluding
                    securities losses, was $17.6 million, up $3.8 million or 28% from the third
                    quarter of 2006, while YTD noninterest</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">14</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2">income of $46.1 million
                    increased $7.5 million or 19% from the prior year level. Operating expenses of
                    $36.8 million for the quarter and $104.8 million for the first nine months of
                    2007 were up $4.9 million or 15% and $10.3 million or 10.9%, respectively, from
                    the comparable prior year periods, a significant portion due to the
                    acquisitions of TLNB and HBT during the second quarter of 2007 and Elmira and
                    ONB in the third and fourth quarters of 2006.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">In addition to the
                    earnings results presented above in accordance with generally accepted
                    accounting principles (GAAP), the Company provides cash earnings per share,
                    which excludes the after-tax effect of the amortization of intangible assets
                    and acquisition-related market value adjustments. Management believes that this
                    information helps investors better understand the effect of acquisition
                    activity in reported results. Cash earnings per share for the third quarter and
                    the first nine months of 2007 were $0.41 and $1.16, respectively, up 2.5% and
                    2.7% from the $0.40 and $1.13 earned in the comparable periods of
                    2006.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As reflected in Table 2,
                    the primary reasons for higher earnings in both periods were a lower loan loss
                    provision and higher noninterest income, partially offset by higher operating
                    expenses. Net interest income for the third quarter of 2007 increased slightly
                    as compared to both the third quarter of 2006 and the second quarter of 2007 as
                    acquired and organic loan growth and higher loan yields had a greater impact
                    than the higher cost of funds in the same periods. Excluding security losses,
                    noninterest income increased due to a strong performance by the Company&rsquo;s
                    employee benefits consulting and plan administration business, due to both
                    significant organic growth and the acquisition of HBT, as well as higher
                    banking service fees, including higher debit card related revenues. Improved
                    net charge-off and nonperforming loan ratios were the primary reasons for the
                    decrease in loan loss provision, despite an increase in total loans
                    outstanding. Operating expenses increased for the quarter and year to date
                    periods primarily due to costs associated with the four acquisitions in the
                    last year, as well as employee merit increases, higher medical costs, business
                    development and marketing expenditures, and data processing and communication
                    costs.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">A reconciliation of
                    GAAP-based earnings results to cash-based earnings results and a condensed
                    income statement are as follows:</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    1:&nbsp;&nbsp;Reconciliation of GAAP Net Income to Cash Net Income (Non-GAAP
                    measure)</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font> </th>

                <th align="left">&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net
                income</font></td>

                <td align="left" width="3%">&nbsp;</td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">11,029</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">10,879</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">31,044</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">30,225</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">After-tax cash
                adjustments:</font></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Amortization of
                market value adjustments<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On net assets acquired in mergers</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">172</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">200</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">526</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">612</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Amortization of
                intangible assets</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,233</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,149</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,568</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,399</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net income
                &ndash; cash</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">12,434</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">12,228</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">35,138</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">34,236</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="2">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Diluted
                earnings per share &ndash; cash</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.41</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.40</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.16</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.13</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    2: Summary Income Statements</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted, except per share data)</font> </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net interest
                income</font></td>

                <td align="left" width="3%">&nbsp;</td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">34,280</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">33,792</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">100,985</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">101,086</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Provision for
                loan losses</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">510</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,300</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,124</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,175</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Noninterest
                income excluding security losses</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">17,588</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">13,744</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">46,093</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">38,605</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Loss on sales
                of investment securities</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(16</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(24</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Operating
                expenses</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">36,765</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31,840</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">104,816</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">94,483</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Income before
                taxes</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">14,577</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">14,396</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">41,114</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">40,033</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Income
                taxes</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,548</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,517</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,070</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">9,808</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net
                income</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">11,029</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,879</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31,044</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30,225</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="2">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Diluted
                earnings per share</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.02</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.00</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">15</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Net Interest
                    Income</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Net interest income is
                    the amount by which interest and fees on earning assets (loans, investments and
                    cash) exceed the cost of funds, primarily interest paid to the Company&rsquo;s
                    depositors and interest on external borrowings. Net interest margin is the
                    difference between the gross yield on earning assets and the cost of
                    interest-bearing funds as a percentage of earning assets.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As shown in Table 3, net
                    interest income (with nontaxable income converted to a fully tax-equivalent
                    basis) for the third quarter of 2007 was $37.9 million, a slight increase from
                    the same period last year and a $0.9 million increase from the second quarter
                    of 2007. A $377 million increase in third quarter interest-earning assets
                    versus the prior year offset a $379 million increase in average
                    interest-bearing liabilities and a 31 basis point decrease in the net interest
                    margin. As reflected in Table 4, the volume and rate increases from interest
                    bearing assets had a $6.3 million favorable impact on net interest income,
                    while the volume and rate increases from interest bearing liabilities had a
                    $6.0 million negative impact on net interest income. September 2007 YTD net
                    interest income of $112.1 million was up $0.1 million or 0.1% from the year
                    earlier period. A $344 million increase in interest bearing assets more than
                    offset a $366 million increase in interest-bearing liabilities and a 33 basis
                    point decrease in the net interest margin. The volume and rate increases from
                    interest bearing assets contributed a positive $20.3 million variance on net
                    interest income, while the volume and rate increases from interest bearing
                    liabilities had a slightly smaller $20.2 million negative impact on net
                    interest income.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Higher third quarter and
                    September YTD average loan balances were attributable to $33.2 million of
                    quarterly average organic loan growth since the third quarter of 2006, driven
                    by growth in the consumer mortgage and consumer installment portfolios.
                    Additionally, contributing to the increase in the average third quarter loan
                    balance was $184 million of loans acquired in the TLNB, Elmira and ONB
                    acquisitions. Average investments for the third quarter and YTD periods were
                    $160 million and $82 million higher than the respective periods of 2006,
                    primarily due to higher interest-earning cash balances and a short-term
                    investment leverage strategy put into place during the third quarter of 2007.
                    In comparison to the prior year, total average deposits were up $222 million or
                    7.2% and $215 million or 7.1% for the quarter and YTD periods, respectively, as
                    a result of organic growth and three banking acquisitions during the past 14
                    months. Quarterly and YTD average deposits from acquired TLNB, Elmira and ONB
                    branches were $259 million and $217 million, respectively. Quarterly and YTD
                    average borrowings increased $184 million and $144 million as compared to the
                    third quarter and first nine months of 2006 due to the $200 million short-term
                    investment leverage strategy put into place during the third quarter of 2007,
                    the all-cash acquisitions of TLNB, Elmira and ONB, and the issuance of $75
                    million of trust preferred securities in the fourth quarter of 2006, partially
                    offset by the early redemption of $30 million of fixed rate trust preferred
                    securities in the first quarter of 2007.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The net interest margin
                    of 3.56% for the third quarter and 3.65% for the year to date period dropped 31
                    basis points and 33 basis points, respectively, versus the same periods in the
                    prior year. These declines were primarily attributable to an increase in the
                    cost of funds (quarter up 31 basis points, YTD up 45 basis points), due to
                    continued customer migration to time deposit products and the impact of
                    completed acquisitions, while earning assets yields increased at a slower rate
                    (quarter up one basis points, YTD up 12 basis points). The change in the
                    earning-asset yield was driven by an increase in loan yields of nine basis
                    points for the quarter and 22 basis points for the YTD period, while investment
                    yields declined 12 basis points for the quarter and eight basis points for the
                    YTD period. Results include the impact of the TLNB, Elmira and ONB
                    acquisitions, which had lower net interest margin attributes than the
                    Company&rsquo;s historical averages. Excluding the $200 million short-term
                    investment leverage strategy in the third quarter, the net interest margin for
                    the third quarter of 2007 would have been 3.69%, an 18 basis point decline from
                    the third quarter of 2006 and a five basis point increase from the second
                    quarter of 2007. This strategy not only produced positive net interest income,
                    but it also served to demonstrate the Company&rsquo;s ability to freely access
                    liquidity sources despite tightened credit market conditions.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The third quarter cost
                    of funds increased 31 basis points versus the prior year quarter due to a 39
                    basis point increase on interest-bearing deposits rates, partially offset by a
                    23 basis point decrease in the average interest rate paid on external
                    borrowings. The increase in the YTD cost of funds was driven by a 53 basis
                    point increase in deposit costs while borrowing rates remained stable,
                    increasing one basis point. Interest rates on selected categories of deposit
                    accounts were raised throughout 2006 and early 2007 in response to market
                    conditions. Additionally, customers continued to move funds from low rate and
                    noninterest-earning accounts to higher yielding checking and time deposit
                    accounts. Additionally, the long-term rate was impacted by the approximately 15
                    basis point decrease in the three and six month LIBOR (London Interbank Offered
                    Rates) over the last twelve months, from which the interest rate on $50 million
                    of the mandatorily redeemable preferred securities is based. The rate on
                    external borrowings was also positively impacted by retiring $30 million of
                    trust preferred securities early in 2007 and replacing it with a new issuance
                    that carried an interest rate approximately 300 basis points lower.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">16</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2">Tables 3a and 3b below
                    sets forth information related to average interest-earning assets and
                    interest-bearing liabilities and their associated yields and rates for the
                    periods indicated. Interest income and yields are on a fully tax-equivalent
                    basis using marginal income tax rates of 38.8% in 2007 and 38.4% in 2006.
                    Average balances are computed by accumulating the daily ending balances in a
                    period and dividing by the number of days in that period. Loan yields and
                    amounts earned include loan fees. Average loan balances include nonaccrual
                    loans and loans held for sale.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    3a: Quarterly Average Balance Sheet</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted except yields and rates)</font> </th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30, 2007</font></th>

                <th>&nbsp;</th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30, 2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="18">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Average<br>
                Balance</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Interest</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Avg.<br>
                Yield/Rate<br>
                Paid</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Average<br>
                Balance</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Interest</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Avg.<br>
                Yield/Rate<br>
                Paid</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="18">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Interest-earning
                assets:</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Cash
                equivalents</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">90,140</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,181</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.20</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">34,264</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">431</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.99</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Taxable investment
                securities <sup>(1)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">881,200</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">11,891</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.35</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">741,764</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">10,031</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Nontaxable
                investment securities <sup>(1)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">477,369</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,184</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.80</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">512,721</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,823</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.83</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Loans (net of
                unearned discount)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,775,337</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">47,995</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.86</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,558,137</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">43,640</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.77</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="4">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                interest-earning assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,224,046</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">69,251</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.50</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,846,886</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">62,925</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.49</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Noninterest-earning
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">455,272</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">425,166</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,679,318</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,272,052</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Interest-bearing
                liabilities:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Interest checking,
                savings and money market deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,255,656</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,640</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1.15</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,161,076</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,186</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1.09</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Time
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,479,693</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">16,651</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.46</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,379,074</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">13,171</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.79</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Short-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">307,090</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,147</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.07</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">125,013</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,327</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.21</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Long-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">536,859</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">7,888</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.83</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">534,811</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">7,685</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.70</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="4">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                interest-bearing liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,579,298</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">31,326</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.47</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,199,974</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">25,369</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.15</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Noninterest-bearing
                liabilities:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Demand
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">583,946</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">557,398</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Other
                liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">53,902</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">57,684</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Shareholders&rsquo;
                equity</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">462,172</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">456,996</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                liabilities and shareholders&rsquo; equity</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,679,318</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,272,052</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                earnings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">37,925</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">37,556</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                spread</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.03</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.34</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                margin on interest-earnings assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.56</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.87</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Fully
                tax-equivalent adjustment</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,645</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,764</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" colspan="2">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="top" width="5%">
                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><sup>(1)</sup></font></p>
                </td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Averages for
                investment securities are based on historical cost basis and the yields do not give
                effect to changes in fair value that is reflected as a component of
                shareholders&rsquo; equity and deferred taxes.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">17</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    3b: Year-to-Date Average Balance Sheet</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted except yields and rates)</font> </th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Nine Months
                Ended<br>
                September 30, 2007</font></th>

                <th>&nbsp;</th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Nine Months
                Ended<br>
                September 30, 2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="18">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Average<br>
                Balance</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Interest</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Avg.<br>
                Yield/Rate<br>
                Paid</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Average<br>
                Balance</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Interest</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Avg.<br>
                Yield/Rate<br>
                Paid</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left" colspan="18">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Interest-earning
                assets:</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="7%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Cash
                equivalents</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">93,305</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,658</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.24</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">24,917</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">910</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.88</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Taxable investment
                securities <sup>(1)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">807,283</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">33,384</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.53</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">764,116</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">31,715</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.55</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Nontaxable
                investment securities <sup>(1)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">487,771</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">25,178</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.90</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">517,680</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">26,689</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.89</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Loans (net of
                unearned discount)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,724,307</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">139,364</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.84</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,462,185</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">121,962</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.62</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="4">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                interest-earning assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,112,666</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">201,584</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.55</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,768,898</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">181,276</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6.43</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Noninterest-earning
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">449,740</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">426,185</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,562,406</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,195,083</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Interest-bearing
                liabilities:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Interest checking,
                savings and money market deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,222,630</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">10,415</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1.14</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,139,608</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,475</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">0.99</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Time
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,469,769</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">48,088</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,331,294</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">35,523</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.57</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Short-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">207,652</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6,406</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4.12</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">138,578</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,935</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.80</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Long-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">579,775</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">24,526</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.66</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">504,507</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">21,282</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5.64</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="4">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                interest-bearing liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,479,826</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">89,435</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.44</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,113,987</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">69,215</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2.97</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Noninterest-bearing
                liabilities:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Demand
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">564,526</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">570,552</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Other
                liabilities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">53,914</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">54,692</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">Shareholders&rsquo;
                equity</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">464,140</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">455,852</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="1">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                liabilities and shareholders&rsquo; equity</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,562,406</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,195,083</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                earnings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">112,149</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">112,061</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right" colspan="2">
                    <hr noshade size="2">
                </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                spread</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.11</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.46</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                margin on interest-earnings assets</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.65</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3.98</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="19"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Fully
                tax-equivalent adjustment</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">11,164</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">10,975</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" colspan="2">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="top" width="5%">
                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><sup>(1)</sup></font></p>
                </td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Averages for
                investment securities are based on historical cost basis and the yields do not give
                effect to changes in fair value that is reflected as a component of
                shareholders&rsquo; equity and deferred taxes.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">18</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="left"><font face="Times New Roman, Times, Serif" size="2">As
                    discussed above and disclosed in Table 4 below, the quarterly change in net
                    interest income (fully tax-equivalent basis) may be analyzed by segregating the
                    volume and rate components of the changes in interest income and interest
                    expense for each underlying category.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    4: Rate/Volume</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">3rd Quarter
                2007 versus 3rd Quarter 2006</font></th>

                <th>&nbsp;</th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Nine Months
                Ended September 30, 2007<br>
                versus September 30, 2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Increase
                (Decrease) Due to Change in <sup>(1)</sup></font></th>

                <th>&nbsp;</th>

                <th colspan="8"><font face="Times New Roman, Times, Serif" size="1">Increase
                (Decrease) Due to Change in <sup>(1)</sup></font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                </th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Volume</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Rate</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Net
                Change</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Volume</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Rate</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Net
                Change</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="8">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="8%">
                </td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Interest
                earned on:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Cash
                equivalents</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">731</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">19</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">750</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,676</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">72</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,748</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Taxable investment
                securities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,882</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(22</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,860</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,785</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(116</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,669</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Nontaxable
                investment securities</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(607</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(32</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(639</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(1,543</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">32</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(1,511</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Loans (net of
                unearned discount)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,748</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">607</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,355</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">13,310</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">4,092</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">17,402</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Total
                interest-earning assets <sup>(2)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6,182</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">144</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6,326</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">16,797</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,511</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">20,308</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Interest paid
                on:</font></td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Interest checking,
                savings and money<br>
                &nbsp;&nbsp;&nbsp;&nbsp;market deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">268</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">186</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">454</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">647</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,293</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,940</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Time
                deposits</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,011</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,469</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,480</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,958</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,607</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">12,565</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Short-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,867</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(47</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,820</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,105</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">366</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,471</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Long-term
                borrowings</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">29</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">174</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">203</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,184</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">60</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,244</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Total
                interest-bearing liabilities <sup>(2)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,173</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">2,784</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5,957</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,677</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">11,543</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">20,220</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net interest
                earnings <sup>(2)</sup></font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,519</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(3,151</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">369</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">9,778</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">(9,691</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">88</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top" colspan="2">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="top" width="5%">
                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><sup>(1)</sup></font></p>
                </td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">The change in
                interest due to both rate and volume has been allocated in proportion to the
                relationship of the absolute dollar amounts of change in each
                component.</font></td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2"><sup>(2)</sup></font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Changes due to
                volume and rate are computed from the respective changes in average balances and
                rates and are not a summation of the changes of&nbsp;the</font>
                <font face="Times New Roman, Times, Serif" size="2">components.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">19</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Noninterest
                    Income</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s
                    sources of noninterest income are of three primary types: general banking
                    services related to loans, deposits and other core customer activities
                    typically provided through the branch network and electronic banking channels;
                    employee benefit plan administration, actuarial and consulting services
                    (performed by BPA-Harbridge and HBT), trust services, investment and insurance
                    products (performed by Community Investment Services, Inc. or CISI and CBNA
                    Insurance Agency, Inc.) and asset management (performed by Nottingham Advisors
                    or Nottingham); and periodic transactions, most often net gains (losses) from
                    the sale of investment securities and prepayment of debt
                    instruments.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    5: Noninterest Income</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th align="left">&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Deposit
                service charges and fees</font></td>

                <td align="left" width="3%">&nbsp;</td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">8,382</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">7,329</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">23,184</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">21,001</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Benefit plan
                administration, consulting<br>
                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and actuarial fees</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,509</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,271</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">14,248</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">9,807</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Trust,
                investment and asset management fees</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,185</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,815</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">6,054</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,631</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Other banking
                services</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,337</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,113</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,006</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,706</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Mortgage
                banking</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">175</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">216</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">601</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">460</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">17,588</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">13,744</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">46,093</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">38,605</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Loss on sales
                of investment securities</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(16</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">(24</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                noninterest income</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">17,572</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">13,744</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">46,069</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">38,605</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="2">
                </th>

                <th align="left">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th bgcolor="#ffffff">&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Noninterest
                income/total income (FTE)</font></td>

                <td align="left">&nbsp;</td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31.7</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">26.8</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">29.1</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">25.6</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">As displayed in Table 5,
                    noninterest income (excluding securities gains) was $17.6 million in the third
                    quarter and $46.1 million for the first nine months of 2007. This represents an
                    increase of $3.8 million or 28% for the quarter, and $7.5 million or 19% for
                    the YTD period in comparison to one year earlier. A significant portion of the
                    growth in both time intervals was attributable to growth in benefit plan
                    administration, consulting and actuarial fees, a large portion of which was
                    organic. The acquisition of HBT in mid May 2007 generated approximately $1.6
                    million of revenue growth in the quarter and $2.3 million in the year to date
                    period. General recurring banking fees of $9.9 million for the third quarter
                    and $25.8 million for the first nine months of 2007 were up $1.2 million or
                    14.3% and $2.6 million or 11.3%, respectively, as compared to the prior year
                    periods, driven by organic core deposit account growth, higher electronic
                    banking related revenues and incremental income generated from the recently
                    acquired TLNB, Elmira and ONB branches. Consistent with prior years, other
                    banking revenues for the third quarter include the annual dividends from
                    creditor insurance programs in which the Company participates approximating
                    $0.8 million.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Strong performance at
                    BPA-Harbridge, combined with the acquisition of HBT, generated revenue growth
                    of $2.2 million (68%) for the quarter and $4.4 million (45%) for the first nine
                    months. The organic growth was achieved primarily through enhanced service
                    offerings to both new and existing clients. Third quarter trust, investment,
                    asset management, and insurance-related revenues increased $0.4 million as
                    compared to both the prior year and the year-to-date period, a majority of
                    which was attributable to organic growth, with the balance of the increase
                    coming the acquisition of TLNB&rsquo;s Insurance Agency business.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The ratio of noninterest
                    income to total income (FTE basis) was 31.7% for the quarter and 29.1% for the
                    year-to-date period versus 26.8% and 25.6% for the comparable periods in 2006.
                    This improvement is a function of increased noninterest banking and financial
                    services income (excluding net security losses), combined with small increases
                    in net interest income.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">20</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Operating
                    Expenses</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Table 6 below sets forth
                    the quarterly results of the major operating expense categories for the current
                    and prior year, as well as efficiency ratios (defined below), a standard
                    measure of expense utilization effectiveness used in the banking
                    industry.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    6: Operating Expenses</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th colspan="3">
                </th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2007</font>
                </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">2006</font>
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Salaries and
                employee benefits</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">19,099</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">16,741</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">55,771</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">49,948</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Occupancy and
                equipment</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,884</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,350</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">14,109</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">13,557</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Data
                processing and communications</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,240</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,264</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">11,613</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">9,747</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Amortization
                of intangible assets</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,629</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,520</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,725</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,502</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Legal and
                professional fees</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,365</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,119</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,606</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,510</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Office
                supplies and postage</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,168</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,004</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,222</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,063</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Business
                development and marketing</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,800</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,190</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,288</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,085</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">Other</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,580</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,652</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">7,482</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">7,071</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td align="right">&nbsp;</td>

                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total operating
                expenses</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">36,765</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">31,840</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">104,816</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">94,483</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr>
                <td align="right">&nbsp;</td>

                <td align="right">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td bgcolor="#ffffff">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Operating
                expenses/average assets</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3.12</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2.96</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3.07</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3.01</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Efficiency
                ratio</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">63.1</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">58.8</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">63.0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">59.6</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">As shown in Table 6,
                    third quarter 2007 operating expenses were $36.8 million, up $4.9 million or
                    15.5% from the prior year level. Year-to-date operating expenses of $104.8
                    million rose $10.3 million or 10.9% compared to 2006. The increase was
                    primarily attributable to incremental operating expenses related to the TLNB,
                    HBT, Elmira and ONB acquisitions. Additionally, the increase in operating
                    expenses can be attributable to annual merit increases (approximately $0.5
                    million for the quarter, $1.4 million YTD), higher data processing and
                    communication costs ($1.0 million for the quarter, $1.9 million YTD), and an
                    increased level of business development and marketing expense ($0.6 million for
                    the quarter, $1.2 million YTD). Included in total operating expenses of $36.8
                    million and $104.8 million for the third quarter and first nine months of 2007,
                    are non-recurring transaction related acquisition expenses of $0.1 million and
                    $0.4 million, respectively. The increase in data processing and communications
                    costs as well as the increase in business development and marketing expenses
                    reflects the Company&rsquo;s continued investments in strategic technology and
                    business development initiatives to grow and enhance our service
                    offerings.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s
                    efficiency ratio (recurring operating expense excluding intangible amortization
                    and acquisition expenses divided by the sum of net interest income (FTE) and
                    recurring noninterest income) was 63.1% for the third quarter, 4.3 percentage
                    points above the comparable quarter of 2006. This resulted from operating
                    expenses (as described above) increasing 16% primarily due to the acquisitions
                    in the last year, while recurring operating income increased at a slower rate
                    of 8.2% due to a $3.8 million increase in noninterest income excluding security
                    gains and a slight increase in net interest income quarter over quarter. The
                    efficiency ratio of 63.0% for the first nine months of 2007 was up 3.4
                    percentage points from a year earlier due to core operating expenses increasing
                    11.0% while recurring operating income increased at a slower rate of 5.0%. In
                    both periods, operating income growth was inhibited by the contraction of the
                    net interest margin. In addition, the efficiency ratios were adversely affected
                    by the growing proportion of financial services activities, which due to the
                    differing nature of their business carry high efficiency ratios. Operating
                    expenses as a percentage of average assets increased 16 and six basis points
                    for the quarter and year-to-date periods, respectively, as operating expenses
                    increased 15.5% and 10.9%, while average assets increased 9.5% and 8.8% during
                    the same time periods. This ratio was impacted by the comparatively high growth
                    rates of the financial services businesses, which are less asset-intensive with
                    higher efficiency ratio attributes.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Income
                    Taxes</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The third quarter
                    effective income tax rate was 24.3%, compared to the 24.4% effective tax rate
                    in the third quarter of 2006. The year-to-date effective tax rate was 24.5%
                    consistent with the first nine months of 2006.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">21</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>Investments</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As reflected in Table 7
                    below, the carrying value of investments (including unrealized gains on
                    available-for-sale securities) was $1.43 billion at the end of the third
                    quarter, an increase of $204.7 million and $183.7 million from December 31,
                    2006 and September 30, 2006, respectively. The book value (excluding unrealized
                    gains) of investments increased $203.5 million and $181.0 million from December
                    31, 2006 and September 30, 2006, respectively. During 2006, the investment
                    portfolio was allowed to run off in the flat yield curve environment. Cash
                    flows were used to support loan growth and repay borrowings until more
                    advantageous investment opportunities became available. During the first nine
                    months of 2007, cash flows were reinvested in short-term agency securities and
                    other cash equivalents. Additionally, during the third quarter of 2007, a $200
                    million short-term investment leverage strategy was undertaken. The overall mix
                    of securities within the portfolio over the last year changed somewhat, with an
                    increase in the proportion of U.S. Treasury and Agency securities, the purchase
                    of asset-backed securities and a slight decrease in obligations of state and
                    political subdivisions and mortgage-backed securities. The change in the
                    carrying value of investments is impacted by the amount of net unrealized gains
                    in the available for sale portfolio at a point in time. At September 30, 2007,
                    the portfolio had a $9.0 million net unrealized gain, an increase of $1.2
                    million from the unrealized gain at December 31, 2006 and an improvement of
                    $2.7 million from the unrealized gain at September 30, 2006. This fluctuation
                    is indicative of the interest rate movements during the respective time periods
                    and the changes in the size and composition of the portfolio.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    7: Investments</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>
                </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">September 30,
                2007</font> </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">December 31,
                2006</font> </th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">September 30,
                2006</font> </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font> </th>

                <th align="left">&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Amortized<br>
                Cost/Book<br>
                Value</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Fair<br>
                Value</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Amortized<br>
                Cost/Book<br>
                Value</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Fair<br>
                Value</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">Amortized<br>
                Cost/Book<br>
                Value</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Fair<br>
                Value</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <em><font face="Times New Roman, Times, Serif" size="1">Held-to-Maturity
                Portfolio:</font></em></td>

                <td align="left" width="2%"><font size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>

                <td align="right" width="6%">
                </td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;U.S. Treasury and
                Agency securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">127,092</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">124,658</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">127,200</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">124,020</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">127,236</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">122,998</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Obligations of
                state and political subdivisions</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5,718</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">5,723</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">7,242</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">7,257</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,495</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,508</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Other
                securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,996</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">3,996</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">11,417</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">11,417</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">9,326</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">9,326</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                held-to-maturity portfolio</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">136,806</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">134,377</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">145,859</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">142,694</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">145,057</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">140,832</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <em><font face="Times New Roman, Times, Serif" size="1">Available-for-Sale
                Portfolio:</font></em></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="right"><font size="1">&nbsp;</font> </td>

                <td align="left"><font size="1">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;U.S. Treasury and
                Agency securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">563,041</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">564,020</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">372,706</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">370,787</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">385,424</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">382,178</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Obligations of
                state and political subdivisions</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">475,338</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">484,823</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">502,677</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">514,647</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">507,804</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">519,697</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Corporate
                securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">40,492</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">39,708</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">35,603</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">35,080</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">35,639</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">35,021</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Collateralized
                mortgage obligations</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">36,265</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">36,058</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">43,768</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">43,107</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">49,081</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">48,374</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Asset-backed
                securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">48,072</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">48,071</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Mortgage-backed
                securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">72,479</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">71,985</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">76,266</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">75,181</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">78,247</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">77,204</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;Subtotal</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,235,687</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,244,665</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,031,020</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,038,802</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,056,195</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,062,474</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;Equity
                securities</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">52,459</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">52,459</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">44,610</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">44,610</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">42,720</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">42,720</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;Total
                available-for-sale portfolio</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,288,146</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,297,124</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,075,630</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,083,412</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,098,915</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,105,194</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="1">Net unrealized
                gain on available-for-sale portfolio</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">8,978</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">7,782</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">6,279</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total</font></td>

                <td align="left"><font size="1">&nbsp;</font> </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,433,930</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,431,501</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,229,271</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,226,106</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,250,251</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="1">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="1">1,246,026</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="1">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th>
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>Loans</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As shown in Table 8,
                    loans ended the third quarter at $2.79 billion, up $90.4 million (3.3%) from
                    year-end 2006 and up $130.3 million (4.9%) versus one year earlier. The TLNB,
                    ONB and Elmira acquisitions added approximately $98.1 million of loans to the
                    loan portfolio as of September 30, 2007. Excluding the impact of the TLNB, ONB
                    and Elmira acquisitions, loans increased $32.2 million or 1.3% from the third
                    quarter of 2006 with organic growth in both the consumer mortgage and consumer
                    installment portfolios, offset by a small decline in the business lending
                    portfolio. During the third quarter, loans increased $24.7 million with
                    increases in the consumer installment portfolio ($20.1 million) and the
                    consumer mortgage portfolio ($21.1 million), partially offset by a decrease in
                    the business lending portfolio ($16.5 million).</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">22</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    8: Loans</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">September 30,
                2007</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">December 31,
                2006</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">September 30,
                2006</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Business
                lending</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="10%">
                <font face="Times New Roman, Times, Serif" size="2">972,394</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">34.8</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="10%">
                <font face="Times New Roman, Times, Serif" size="2">960,034</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">35.5</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="10%">
                <font face="Times New Roman, Times, Serif" size="2">953,808</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">35.8</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left" width="4%" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Consumer
                mortgage</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">969,567</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">34.7</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">912,505</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">33.8</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">890,939</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">33.5</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Consumer
                installment</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">849,949</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30.5</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">829,019</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30.7</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">816,815</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">30.7</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total
                loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,791,910</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">100.0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,701,558</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">100.0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,661,562</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">100.0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th align="left">&nbsp;</th>

                <th align="left">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">Business lending
                    increased $12.4 million in the first nine months of 2007 and increased $18.6
                    million versus one year ago. Excluding the impact of the TLNB, ONB and Elmira
                    acquisitions, business lending declined $1.8 million over the last nine months
                    and $14.7 million over the last year. The reduction in business lending during
                    the period was impacted by certain unscheduled payoffs and line of credit
                    reductions, including ownership changes and other capital-raising initiatives.
                    The Company continues to face competitive conditions in most of its markets and
                    it maintains its commitment to generating growth in its business portfolio in a
                    manner that adheres to its twin goals of maintaining strong asset quality and
                    producing profitable margins.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Consumer mortgages
                    increased $78.6 million, year-over-year, and $57.1 million in the first nine
                    months of 2007, despite the sale of a portion of longer-term fixed-rate new
                    mortgage originations in the secondary market. Excluding the impact of the
                    TLNB, ONB and Elmira acquisitions, consumer mortgages increased $30.0 million
                    and $30.1 million for the past nine and twelve month periods, respectively.
                    Consumer mortgage growth has been strong over the last few quarters despite
                    interest rates rising above prior year levels. The consumer real estate
                    portfolio does not include exposure to subprime, Alt-A, or other higher-risk
                    mortgage products. The Company&rsquo;s solid performance during a tumultuous
                    period in the overall industry is a testament to the stable, low-risk profile
                    of its portfolio and its ability to successfully meet customer needs at a time
                    when some national mortgage lenders are restricting their lending activities in
                    many of our markets.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Consumer installment
                    loans, including borrowings originated in automobile, marine and recreational
                    vehicle dealerships, as well as branch originated home equity and installment
                    loans, increased $20.9 million in the first nine months of 2007 and increased
                    $33.1 million on a year-over-year basis. Excluding the impact of the TLNB, ONB
                    and Elmira acquisitions, consumer installment lending increased $15.9 million
                    for the first nine months of 2007 and increased $16.8 million for the
                    year-over-year period. Continued moderate interest rates (by historical
                    standards), aggressive dealer and manufacturer incentives on new vehicles, and
                    enhanced business development efforts have helped drive profitable growth in
                    this segment in all the Company&rsquo;s markets over the last year.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b><u>Asset
                    Quality</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Table 9 below exhibits
                    the major components of nonperforming loans and assets and key asset quality
                    metrics for the periods ending September 30, 2007 and 2006 and December 31,
                    2006.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    9: Nonperforming Assets</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font> </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">September 30,<br>
                2007</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">December
                31,<br>
                2006</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">September 30,<br>
                2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Nonaccrual
                loans</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">7,774</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">10,107</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">10,114</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Accruing loans
                90+ days delinquent</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">451</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,207</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,133</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Restructured
                loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,158</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,275</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,300</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                nonperforming loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">9,383</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">12,589</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">12,547</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#eaf9e8">
                <font face="Times New Roman, Times, Serif" size="2">Other real estate
                (OREO)</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,097</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,838</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,320</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                nonperforming assets</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">10,480</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>


    <td align="right"><font face="Times New Roman, Times, Serif" size="2">14</font><font face="Times New Roman, Times, Serif" size="2">,427</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">13,867</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <th align="left">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th nowrap colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                loan losses to total loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.31</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.34</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.33</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                loan losses to nonperforming loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">388</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">288</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">283</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Nonperforming
                loans to total loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.34</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.47</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.47</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Nonperforming
                assets to total loans and other real estate</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.38</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.53</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.52</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Delinquent
                loans (30 days old to nonaccruing) to total loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.10</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.33</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1.22</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net
                charge-offs to average loans outstanding (quarterly)</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.11</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.21</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.17</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Loan loss
                provision to net charge-offs (quarterly)</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">68</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">101</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">117</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">23</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2">As displayed in Table 9,
                    nonperforming assets at September 30, 2007 were $10.5 million, a decrease of
                    $3.4 million versus one year earlier and a $3.9 million decrease as compared to
                    the level at the end of 2006. Nonperforming loans ratios remain at the lowest
                    level in over three years, reflective of disciplined credit management and a
                    relatively stable economic condition over the past few years. Other real estate
                    decreased $0.2 million from one-year ago and decreased $0.7 million from
                    year-end 2006, a result of the Company managing 18 properties at September 30,
                    2007 as compared to 23 OREO properties at December 31, 2006. No single property
                    has a carrying value in excess of $250,000.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Nonperforming loans were
                    0.34% of total loans outstanding at the end of the third quarter, significantly
                    below the 0.47% at both December 31, 2006 and September 30, 2006. The allowance
                    for loan losses to nonperforming loans ratio, a general measure of coverage
                    adequacy, was 388% at the end of the third quarter compared to 288% at year-end
                    2006 and 283% at September 30, 2006, reflective of the low level of
                    nonperforming loans.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Delinquent loans (30
                    days through nonaccruing) as a percent of total loans was 1.10% at the end of
                    the third quarter, substantially below the 1.33% at year-end 2006 and 1.22% at
                    September 30, 2006. Commercial and real estate loan delinquency ratios at the
                    end of the third quarter improved in comparison to both of the earlier periods.
                    The delinquency rate for installment loans decreased as compared to the
                    December 31, 2006, increased slightly as compared to September 30, 2006, and
                    remained below the average level of the past eight quarters. The delinquency
                    level at the end of the current quarter was 13 basis points below the
                    Company&rsquo;s average of 1.23% over the previous eight quarters.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    10: Allowance for Loan Losses Activity</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th colspan="2">&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Three Months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>

                <th colspan="5"><font face="Times New Roman, Times, Serif" size="1">Nine months
                Ended<br>
                September 30,</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="5">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2">
                <font face="Times New Roman, Times, Serif" size="1">2006</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                loan losses at beginning of period</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">36,690</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">32,900</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">36,313</font></td>

                <td align="left" width="4%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="8%">
                <font face="Times New Roman, Times, Serif" size="2">32,581</font></td>

                <td align="left" width="2%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <em><font face="Times New Roman, Times, Serif" size="2">Charge-offs:</font></em></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Business
                lending</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">241</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">582</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">776</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,138</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                mortgage</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">37</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">54</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">317</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">156</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                installment</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,229</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,548</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,641</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,410</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                charge-offs</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,507</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,184</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,734</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">7,704</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <em><font face="Times New Roman, Times, Serif" size="2">Recoveries:</font></em></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Business
                lending</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">116</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">425</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">762</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">664</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                mortgage</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">47</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">23</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">68</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">100</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                installment</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">591</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">621</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,167</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,269</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                recoveries</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">754</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,069</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,997</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,033</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net
                charge-offs</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">753</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,115</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,737</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">4,671</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Provision for
                loans losses</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">510</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,300</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,124</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">5,175</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                acquired loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">0</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,432</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">747</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,432</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="1">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Allowance for
                loan losses at end of period</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">36,447</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">35,517</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">36,447</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">35,517</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td align="right">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td>
                </td>

                <td align="right" colspan="5">
                    <hr noshade size="2">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Net
                charge-offs to average loans outstanding:</font></td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Business
                lending</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.05</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.07</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.00</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.39</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                mortgage</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.00</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.01</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.04</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.01</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Consumer
                installment</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.30</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.46</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.24</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.36</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total
                loans</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.11</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.17</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.09</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">0.25</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">%</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">As displayed in Table
                    10, net charge-offs during the third quarter were $0.8 million, $0.4 million
                    lower than the equivalent 2006 period. The consumer installment and business
                    lending portfolios experienced declines in the level of charge-offs, while the
                    consumer mortgage portfolio experienced a net recovery position in the third
                    quarter of 2007. The nine months ended September 30, 2006 included charge-offs
                    of $1.7 million related to three dealer floor plan relationships. The net
                    charge-off ratio (net charge-offs as a percentage of average loans outstanding)
                    for the third quarter was 0.11%, six basis points lower than the comparable
                    quarter of 2006 and 11 basis points below the average charge-off ratio for the
                    previous eight quarters. Net charge-offs and the corresponding net charge-off
                    ratios continue to be significantly below the average net charge-off levels of
                    the past several years.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The consumer mortgage
                    portfolio experienced a net recovery for the quarter, while the consumer
                    installment and business lending net charge-off ratios for the third quarter of
                    0.30% and 0.05%, respectively, decreased 16 basis points and two basis points
                    versus prior year&nbsp;levels. For the year-to-date period, the business
                    lending portfolio experienced almost no net charge-offs, the consumer
                    installment net charge-off ratio improved 12 basis points compared to one year
                    earlier, while the consumer mortgage charge-off ratio was higher by three basis
                    points, but still at a favorable level.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">24</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2">A loan loss allowance of
                    $36.4 million was determined as of September 30, 2007, necessitating a $0.5
                    million loan loss provision for the quarter, compared to $1.3 million one year
                    earlier. The third quarter 2007 loan loss provision was $0.2 million below
                    quarterly net charge-offs. The allowance for loan losses rose $0.9 million or
                    2.6% over the last 12 months, less than the 4.9% growth in the loan portfolio.
                    Contributing to the changes was the favorable charge-off, nonperforming and
                    delinquency trends experienced over the last twelve months. This contributed to
                    the ratio of allowance for loan loss to loans outstanding decreasing two basis
                    points to 1.31% for the third quarter, as compared to the levels at September
                    30, 2006 and declining three basis points from the level at December 31, 2006.
                    The decrease was also slightly impacted by the increased proportion of low-risk
                    consumer mortgage and home equity loans in the overall loan portfolio, as a
                    result of both organic and acquired growth.</font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>Deposits</u></b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">As shown in Table 11,
                    average deposits of $3.3 billion in the third quarter were up $184.8 million
                    compared to fourth quarter 2006 and increased $221.7 million versus the same
                    quarter of last year. Excluding the impact of the TLNB, Elmira and ONB
                    acquisitions, average deposits increased $66.6 million as compared to the
                    fourth quarter of 2006 and increased $31.0 million as compared to the third
                    quarter of the prior year. The mix of average deposits changed slightly since
                    the third quarter of 2006. The weightings of time deposits and interest
                    checking deposits increased from their year-ago levels, while demand, savings
                    and money market deposit weightings decreased. During a period of rising rates,
                    time deposits continued to attract more funds, as evidenced by their 2.4% and
                    0.5% increases, excluding the impact of the TLNB, Elmira and ONB acquisitions,
                    as compared to the fourth and third quarters of 2006, respectively. Interest
                    checking account balances are above the prior year levels primarily as a result
                    of new product initiatives that commenced in the second quarter of 2006. This
                    shift in mix, combined with higher interest rates on money market and time
                    deposit accounts increased the quarterly cost of interest-bearing deposits from
                    2.55% in the third quarter of 2006 to 2.94% in the most recent
                    quarter.</font></p>

                    <p align="left"><font face="Times New Roman, Times, Serif" size="2">Average
                    third quarter non-public fund deposits increased $172.9 million or 5.9% versus
                    the fourth quarter of 2006, and were up $228.3 million or 7.9% compared to the
                    year earlier period. Average public funds have increased $12.0 million or 5.8%
                    from the fourth quarter of 2006 and decreased&nbsp;$6.5 million or 2.9% from
                    the third quarter of 2006. The Company continues to focus heavily on growing
                    its core deposits through enhanced marketing and training programs and new
                    product offerings introduced throughout 2006 and the first nine months of
                    2007.</font></p>

                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Table
                    11: Quarterly Average Deposits</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th>&nbsp;</th>

                <th align="left"><font face="Times New Roman, Times, Serif" size="1">(000&rsquo;s
                omitted)</font> </th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">September
                30,<br>
                2007</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">December
                31,<br>
                2006</font></th>

                <th>&nbsp;</th>

                <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">September
                30,<br>
                2006</font></th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" width="11%" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Demand
                deposits</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">583,946</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">558,439</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="11%">
                <font face="Times New Roman, Times, Serif" size="2">557,398</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="left" width="11%" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Interest
                checking deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">458,994</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">389,336</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">364,762</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Savings
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">462,895</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">458,320</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">464,037</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Money market
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">333,767</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">330,150</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">332,277</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Time
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,479,693</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,398,235</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,379,074</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th bgcolor="#ffffff">&nbsp;</th>

                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,319,295</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,134,480</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,097,548</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th bgcolor="#ffffff">&nbsp;</th>

                <th>
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Non-public
                fund deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,102,204</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,929,343</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">2,873,922</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">Public fund
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">217,091</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">205,137</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">223,626</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th bgcolor="#ffffff">&nbsp;</th>

                <th>
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left" bgcolor="#ffffff">&nbsp;</td>

                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;Total
                deposits</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,319,295</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,134,480</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">3,097,548</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left" bgcolor="#ffffff">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <th>&nbsp;</th>

                <th>
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th colspan="2">
                    <hr noshade size="2">
                </th>

                <th>&nbsp;</th>

                <th>&nbsp;</th>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><u><b>Borrowings</b></u></font></p>

                    <p align="left"><font face="Times New Roman, Times, Serif" size="2">At the end
                    of the third quarter, borrowings of $948.5 million were up $143.0 million from
                    December 31, 2006 and were up $239.5 million versus the end of the third
                    quarter of 2006 as a result of the all-cash fundings of three acquisitions, the
                    issuance of trust preferred securities and the initiation of a short term
                    investment leverage strategy in the third quarter. This short term investment
                    leverage strategy not only produced positive net interest income, it also
                    served to demonstrate the Company&rsquo;s ability to readily access liquidity
                    sources despite tightened credit market conditions.</font></p>

                    <p align="left"><font face="Times New Roman, Times, Serif" size="2">The Company
                    is currently in the process of reviewing early extinguishment of its two $25
                    million, variable-rate trust preferred obligations, which include premium call
                    provisions slightly over 6%. The Company estimates the impact of the one-time
                    charge associated with this potential action to be between $0.08 and $0.10 per
                    share, but this action would have a positive impact on future net interest
                    income and margins. The Company expects to conclude its evaluation prior to
                    year-end.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">25</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><u><b>Shareholders&rsquo;
                    Equity</b></u></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On April 20, 2005, the
                    Company announced a twenty-month authorization to repurchase up to 1.5 million
                    of its outstanding shares in open market or privately negotiated transactions.
                    On December 20, 2006, the Company extended the program through December 31,
                    2008 and announced an additional two-year authorization to repurchase up to
                    900,000 of its outstanding shares in open market or privately negotiated
                    transactions. All reacquired shares will become treasury shares and will be
                    used for general corporate purposes, including those related to employee and
                    director stock plan activities. Through September 30, 2007, the Company had
                    repurchased 1,379,811 shares at an aggregate cost of $29.8 million under this
                    program.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Total
                    shareholders&rsquo; equity of $468.3 million at the end of the third quarter
                    increased $6.8 million from the balance at December 31, 2006. This change
                    consisted of net income of $31.0 million, $2.4 million from shares issued under
                    the employee stock plan,&nbsp;$1.7 million from employee stock options earned,
                    and a $0.3 million increase in the after-tax market value adjustment on the
                    available-for-sale investment portfolio partially offset by dividends declared
                    of $18.2 million and treasury stock purchases of $10.3 million. Over the past
                    12 months total shareholders&rsquo; equity increased by $3.7 million, as net
                    income, positive contributions from shares issued under the employee stock plan
                    and a higher market value adjustment more than offset dividends declared,
                    treasury stock purchases, and the impact of the adoption of SFAS 158,
                    <i>Employers&rsquo; Accounting for Defined Benefit Pension and Other
                    Postretirement Plans an Amendment of FASB Statements No. 87, 88, 106, and
                    132(R)</i> (SFAS 158).</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s Tier
                    I leverage ratio, a primary measure of regulatory capital for which 5% is the
                    requirement to be &ldquo;well-capitalized,&rdquo; was 7.67% at the end of the
                    third quarter, down 114 basis points from year-end 2006 and 41 basis points
                    higher than its level one year ago. The decrease in the Tier I leverage ratio
                    compared to December 31, 2006 is primarily the result of the early call of the
                    $30 million of fixed-rate trust preferred securities in the first quarter and
                    assets from the ONB and TLNB acquisitions being included in the average assets
                    for a full quarter versus only one month of ONB assets at December 31, 2006.
                    The increase in Tier I, as compared to the prior year third quarter, is the
                    result of a 15.8% increase in shareholders equity, excluding intangibles and
                    market value adjustment, combined with a smaller 9.6% increase in average
                    assets excluding intangibles and market value adjustment and the $51.4 million
                    net increase in trust preferred securities. The tangible equity-to-assets ratio
                    of 4.66% decreased 41 basis points versus December 31, 2006 and was down 78
                    basis points versus September 30, 2006, mostly due to the acquisitions of HBT,
                    TLNB, Elmira and ONB, treasury share purchases, and the adoption of SFAS
                    158.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The dividend payout
                    ratio (dividends declared divided by net income) for the first nine months of
                    2007 was 58.8%, up from 57.3% for the first nine months of 2006. The ratio
                    increased because dividends declared increased 5.3%, while net income including
                    securities gains increased a lesser 2.7%. The Company&rsquo;s quarterly
                    dividend was raised 5.0% in August 2007, from $0.20 to $0.21. On a cash
                    earnings basis, the dividend payout ratio was 51.9% for the first nine months
                    of 2007 as compared to 50.6% for the first nine months of 2006.</font></p>

                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><u><b>Liquidity</b></u></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Management of the
                    Company&rsquo;s liquidity is critical due to the potential for unexpected
                    fluctuations in deposits and loans. Adequate sources of both on and off-balance
                    sheet funding are in place to effectively respond to such unexpected
                    fluctuations.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company&rsquo;s
                    primary approach to measuring liquidity is known as the Basic Surplus/Deficit
                    model. It is used to calculate liquidity over two time periods: first, the
                    amount of cash that could be made available within 30 days (calculated as
                    liquid assets less short-term liabilities); and second, a projection of
                    subsequent cash availability over an additional 60 days. The minimum policy
                    level of liquidity under the Basic Surplus/Deficit approach is 7.5% of total
                    assets for both the 30 and 90-day time horizons. As of September 30, 2007, this
                    ratio was 17.5% for 30 days and 17.4% for 90 days, excluding the
                    Company&rsquo;s capacity to borrow additional funds from the Federal Home Loan
                    Bank.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">To measure longer-term
                    liquidity, a baseline projection of loan and deposit growth for five years is
                    made to reflect how current liquidity levels could change over time. This
                    five-year measure reflects adequate liquidity to fund loan and other asset
                    growth over the next five years.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">26</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="left">
                    <font face="Times New Roman, Times, Serif" size="2"><u><b>Forward-Looking
                    Statements</b></u></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">This document contains
                    comments or information that constitute forward-looking statements (within the
                    meaning of the Private Securities Litigation Reform Act of 1995), which involve
                    significant risks and uncertainties. Actual results may differ materially from
                    the results discussed in the forward-looking statements. Moreover, the
                    Company&rsquo;s plans, objectives and intentions are subject to change based on
                    various factors (some of which are beyond the Company&rsquo;s control). Factors
                    that could cause actual results to differ from those discussed in the
                    forward-looking statements include:&nbsp;(1) risks related to credit quality,
                    interest rate sensitivity and liquidity;&nbsp;(2) the strength of the U.S.
                    economy in general and the strength of the local economies where the Company
                    conducts its business;&nbsp;(3) the effect of, and changes in, monetary and
                    fiscal policies and laws, including interest rate policies of the Board of
                    Governors of the Federal Reserve System;&nbsp;(4) inflation, interest rate,
                    market and monetary fluctuations;&nbsp;(5) the timely development of new
                    products and services and customer perception of the overall value thereof
                    (including features, pricing and quality) compared to competing products and
                    services;&nbsp;(6) changes in consumer spending, borrowing and savings
                    habits;&nbsp;(7) technological changes;&nbsp;(8) any acquisitions or mergers
                    that might be considered or consummated by the Company and the costs and
                    factors associated therewith;&nbsp;(9) the ability to maintain and increase
                    market share and control expenses;&nbsp;(10) the effect of changes in laws and
                    regulations (including laws and regulations concerning taxes, banking,
                    securities and insurance) and accounting principles generally accepted in the
                    United States;&nbsp;(11) changes in the Company&rsquo;s organization,
                    compensation and benefit plans and in the availability of, and compensation
                    levels for, employees in its geographic markets;&nbsp;(12) the costs and
                    effects of litigation and of any adverse outcome in such litigation; (13) other
                    risk factors outlined in the Company&rsquo;s filings with the Securities and
                    Exchange Commission from time to time; and (14) the success of the Company at
                    managing the risks of the foregoing.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The foregoing list of
                    important factors is not all-inclusive. Such forward-looking statements speak
                    only as of the date on which they are made and the Company does not undertake
                    any obligation to update any forward-looking statement, whether written or
                    oral, to reflect events or circumstances after the date on which such statement
                    is made. If the Company does update or correct one or more forward-looking
                    statements, investors and others should not conclude that the Company would
                    make additional updates or corrections with respect thereto or with respect to
                    other forward-looking statements.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">27</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><a name="a8"></a>Item
                    3. Quantitative and Qualitative Disclosure about Market Risk</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Market risk is the risk
                    of loss in a financial instrument arising from adverse changes in market rates,
                    prices or credit risk. Credit risk associated with the Company&rsquo;s loan
                    portfolio has been previously discussed in the asset quality section of
                    Management&rsquo;s Discussion and Analysis of Financial Condition and Results
                    of Operations. Management believes that the tax risk of the Company&rsquo;s
                    municipal investments associated with potential future changes in statutory,
                    judicial and regulatory actions is minimal. The Company has an insignificant
                    amount of credit risk in its investment portfolio because essentially all of
                    the fixed-income securities in the portfolio are AAA-rated (highest possible
                    rating). Therefore, almost all the market risk in the investment portfolio is
                    related to interest rates.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The ongoing monitoring
                    and management of both interest rate risk and liquidity, in the short and long
                    term time horizons is an important component of the Company&rsquo;s
                    asset/liability management process, which is governed by limits established in
                    the policies reviewed and approved annually by the Board of Directors. The
                    Board of Directors delegates responsibility for carrying out the policies to
                    the Asset/Liability Committee (ALCO) which meets each month and is made up of
                    the Company&rsquo;s senior management as well as regional and line-of-business
                    managers who oversee specific earning asset classes and various funding
                    sources. As the Company does not believe it is possible to reliably predict
                    future interest rate movements, it has maintained an appropriate process and
                    set of measurement tools, which enable it to identify and quantify sources of
                    interest rate risk in varying rate environments. The primary tool used by the
                    Company in managing interest rate risk is income simulation.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">While a wide variety of
                    strategic balance sheet and treasury yield curve scenarios are tested on an
                    ongoing basis, the following reflects the Company&rsquo;s projected net
                    interest income sensitivity over the subsequent twelve months based
                    on:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Asset and
                liability levels using September 30, 2007 as a starting point.</font></td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">There are
                assumed to be conservative levels of balance sheet growth&mdash;low to mid single
                digit growth in loans and deposits, while using the cashflows from investment
                contractual maturities and prepayments to repay short-term capital market
                borrowings.</font></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">The prime rate
                and federal funds rates are assumed to move up 200 basis points and down 100 basis
                points over a 12-month period while moving the long end of the treasury curve to
                spreads over federal funds that are more consistent with historical norms. Deposit
                rates are assumed to move in a manner that reflects the historical relationship
                between deposit rate movement and changes in the federal funds rate.</font></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="24">
                <font face="Times New Roman, Times, Serif" size="2">&bull;</font></td>

                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">Cash flows are
                based on contractual maturity, optionality and amortization schedules along with
                applicable prepayments derived from internal historical data and external
                sources.</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p align="center"><font face="Times New Roman, Times, Serif" size="2"><b>Net
                    Interest Income Sensitivity&nbsp;Model</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600">
            <tr valign="bottom">
                <td align="center">&nbsp;</td>

                <td align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Change in interest<br>
                rates</font></strong> </td>

                <td align="center">&nbsp;</td>

                <td align="center">
                <strong><font face="Times New Roman, Times, serif" size="1">Calculated
                annualized<br>
                increase (decrease) in<br>
                projected net interest income<br>
                at September 30, 2007</font></strong> </td>

                <td>&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="center">&nbsp;</td>

                <td align="center" colspan="3">
                    <hr noshade size="1">
                </td>

                <td>&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td width="27%">&nbsp;</td>

                <td align="center" bgcolor="#eaf9e8">
                <font face="Times New Roman, Times, serif" size="2">+ 200 basis points</font> </td>

                <td align="center" width="2%" bgcolor="#eaf9e8">&nbsp;</td>

                <td align="center" width="24%" bgcolor="#eaf9e8">
                <font face="Times New Roman, Times, serif" size="2">(0.6%)</font> </td>

                <td width="27%">
                </td>
            </tr>

            <tr valign="bottom">
                <td>&nbsp;</td>

                <td align="center"><font face="Times New Roman, Times, serif" size="2">- 100 basis
                points</font> </td>

                <td align="center">&nbsp;</td>

                <td align="center">
                <font face="Times New Roman, Times, serif" size="2">(1.2%)</font> </td>

                <td>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p><font face="Times New Roman, Times, Serif" size="2">The modeled net interest
                    income does not significantly change as interest rates increase/decrease over a
                    12-month period. The Bank remains fairly neutral in each of the above rate
                    environments. Over a longer time period, however, the Bank is asset sensitive
                    as net interest income improves in a rising rate environment as a result of
                    lower yielding earning assets running off and being replaced at increased rates
                    having a greater impact than increases in funding costs.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The analysis does not
                    represent a Company forecast and should not be relied upon as being indicative
                    of expected operating results. These hypothetical estimates are based upon
                    numerous assumptions: the nature and timing of interest rate levels (including
                    yield curve shape), prepayments on loans and securities, deposit decay rates,
                    pricing decisions on loans and deposits, reinvestment/replacement of asset and
                    liability cash flows, and other factors. While the assumptions are developed
                    based upon current economic and local market conditions, the Company cannot
                    make any assurances as to the predictive nature of these assumptions, including
                    how customer preferences or competitor influences might change. Furthermore,
                    the sensitivity analysis does not reflect actions that ALCO might take in
                    responding to or anticipating changes in interest rates.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">28</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p><font face="Times New Roman, Times, Serif" size="2"><b><a name="a9"></a>Item
                    4. Controls and Procedures</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company maintains
                    disclosure controls and procedures, as defined in Rule 13a &ndash; 15(e) under
                    the Securities Exchange Act of 1934, designed to: (i) record, process,
                    summarize, and report within the time periods specified in the Securities and
                    Exchange Commission&rsquo;s (SEC) rules and forms, and (ii) accumulate and
                    communicate to management, including the principal executive and principal
                    financial officers, as appropriate, to allow timely decisions regarding
                    disclosure. Based on management&rsquo;s evaluation of the Company&rsquo;s
                    disclosure controls and procedures, with the participation of the Chief
                    Executive Officer and the Chief Financial Officer, it has concluded that, as of
                    the end of the period covered by this Quarterly Report on Form 10-Q, these
                    disclosure controls and procedures were effective as of September 30,
                    2007.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">There have been no
                    changes in the Company&rsquo;s internal controls over financial reporting in
                    connection with the evaluation referenced in the paragraph above that occurred
                    during the Company&rsquo;s last fiscal quarter that has materially affected, or
                    is reasonably likely to materially affect, the Company&rsquo;s internal control
                    over financial reporting.</font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2"><b>Part II.
                    &nbsp;&nbsp;&nbsp;&nbsp; Other Information</b></font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a10"></a>Item
                    1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal Proceedings&nbsp;</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">The Company and its
                    subsidiaries are subject in the normal course of business to various pending
                    and threatened legal proceedings in which claims for monetary damages are
                    asserted. Management, after consultation with legal counsel, does not
                    anticipate that the aggregate liability, if any, arising out of litigation
                    pending against the Company or its subsidiaries will have a material effect on
                    the Company&rsquo;s consolidated financial position or results of
                    operations.</font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a11"></a>Item
                    1A. &nbsp;&nbsp; Risk Factors</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">There has not been any
                    material change in the risk factors disclosure from that contained in the
                    Company&rsquo;s 2006 Form 10-K for the fiscal year ended December 31, 2006
                    (filed with the SEC on March 15, 2007).</font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a12"></a>Item
                    2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unregistered Sales of Equity Securities
                    and Use of Proceeds&nbsp;</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">On April 20, 2005, the
                    Company announced a twenty-month authorization to repurchase up to 1,500,000 of
                    its outstanding shares in open market or privately negotiated transactions. On
                    December 20, 2006, the Company extended the program through December 31, 2008
                    and announced an additional two-year authorization to repurchase up to 900,000
                    of its shares in open market or privately negotiated transactions. These
                    repurchases will be for general corporate purposes, including those related to
                    stock plan activities. The following table shows treasury stock purchases
                    during the third quarter of 2007.</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Number
                of<br>
                Shares<br>
                Purchased</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Average
                Price<br>
                Paid<br>
                Per share</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Total
                Number of Shares<br>
                Purchased as Part of Publicly<br>
                Announced Plans or Programs</font></th>

                <th>&nbsp;</th>

                <th nowrap colspan="2"><font face="Times New Roman, Times, Serif" size="1">Maximum
                Number of Shares<br>
                That May Yet Be Purchased<br>
                Under the Plans or Programs</font></th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom">
                <th colspan="13">
                    <hr noshade size="1">
                </th>

                <th>&nbsp;</th>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">July
                2007</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="10%">
                <font face="Times New Roman, Times, Serif" size="2">73,050</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right" width="9%">
                <font face="Times New Roman, Times, Serif" size="2">18.12</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="22%">
                <font face="Times New Roman, Times, Serif" size="2">1,220,011</font></td>

                <td align="left" width="3%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                <td align="right" width="22%">
                <font face="Times New Roman, Times, Serif" size="2">1,179,989</font></td>

                <td align="left" width="1%">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">August
                2007</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">120,100</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">17.97</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,340,111</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,059,889</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#eaf9e8">
                <td align="left"><font face="Times New Roman, Times, Serif" size="2">September
                2007</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">39,700</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">19.71</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,379,811</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">1,020,189</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="4">
                    <hr noshade size="1">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;Total</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">232,850</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">$</font></td>

                <td align="right">
                <font face="Times New Roman, Times, Serif" size="2">18.31</font></td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="right"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>

                <td align="left"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" colspan="7">
                    <hr noshade size="2">
                </td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="right">&nbsp;</td>

                <td align="left">&nbsp;</td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a13"></a>Item
                    3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defaults Upon Senior
                    Securities&nbsp;</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Not
                    applicable.</font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a14"></a>Item
                    4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of
                    Security Holders&nbsp;</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">There were no matters
                    submitted to a vote of the shareholders during the quarter ending September 30,
                    2007.</font></p>

                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a15"></a>Item
                    5. &nbsp; &nbsp;&nbsp;&nbsp; Other Information</b></font></p>

                    <p><font face="Times New Roman, Times, Serif" size="2">Not
                    applicable.</font></p>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">29</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p>
                    <font face="Times New Roman, Times, Serif" size="2"><b><a name="a16"></a>Item
                    6. &nbsp; &nbsp;&nbsp;&nbsp; Exhibits</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="1"><b>Exhibit
                No.</b></font></td>

                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="1"><b>Description</b></font></td>
            </tr>

            <tr>
                <td valign="top">
                    <hr align="left" width="48" noshade size="1">
                </td>

                <td valign="top">
                    <hr align="left" width="48" noshade size="1">
                </td>
            </tr>

            <tr>
                <td valign="top" colspan="2">
                <font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;</font> </td>
            </tr>

            <tr>
                <td valign="top" width="15%">
                <font face="Times New Roman, Times, Serif" size="2">31.1</font></td>

                <td valign="top">
                <a href="d72933_ex31-1.htm"><font face="Times New Roman, Times, Serif" size="2">Certification
                of Mark E. Tryniski, President and Chief Executive Officer of the Registrant,
                pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of
                1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.</font></a></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2">31.2</font></td>

                <td valign="top">
                <a href="d72933_ex31-2.htm"><font face="Times New Roman, Times, Serif" size="2">Certification
                of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant,
                pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of
                1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.</font></a></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2">32.1</font></td>

                <td valign="top">
                <a href="d72933_ex32-1.htm"><font face="Times New Roman, Times, Serif" size="2">Certification
                of Mark E. Tryniski, President and Chief Executive Officer of the Registrant,
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.</font></a></td>
            </tr>

            <tr>
                <td valign="top">
                </td>

                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top">
                <font face="Times New Roman, Times, Serif" size="2">32.2</font></td>

                <td valign="top">
                <a href="d72933_ex32-2.htm"><font face="Times New Roman, Times, Serif" size="2">Certification
                of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant,
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002</font></a></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">30</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>

        <p style="PAGE-BREAK-AFTER: always"></p>
        <PAGE><br>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td>
                    <p align="center">
                    <font face="Times New Roman, Times, Serif" size="2"><b><u>SIGNATURES</u></b></font></p>

                    <p align="left"><font face="Times New Roman, Times, Serif" size="2">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 thereunto
                    duly authorized.</font></p>

                    <p align="center">
                    <font face="Times New Roman, Times, Serif" size="2"><b>Community Bank System,
                    Inc.</b></font></p>
                </td>
            </tr>

            <tr>
                <td valign="top">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font>
                </td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr>
                <td width="30%"><font face="Times New Roman, Times, Serif" size="2">Date: November
                7, 2007</font></td>

                <td>&nbsp;</td>

                <td width="40%"><font face="Times New Roman, Times, Serif" size="2">/s/ Mark E.
                Tryniski</font></td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>
                    <hr noshade size="1">
                </td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, Serif" size="2">Mark E. Tryniski, President
                and Chief<br>
                Executive Officer</font> </td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>&nbsp;</td>
            </tr>

            <tr>
                <td><font face="Times New Roman, Times, Serif" size="2">Date: November 7,
                2007</font></td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, Serif" size="2">/s/ Scott
                Kingsley</font></td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td>
                    <hr noshade size="1">
                </td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, Serif" size="2">Scott Kingsley, Treasurer
                and Chief</font></td>
            </tr>

            <tr>
                <td>&nbsp;</td>

                <td>&nbsp;</td>

                <td><font face="Times New Roman, Times, Serif" size="2">Financial
                Officer</font></td>
            </tr>
        </table>

        <table cellspacing="0" cellpadding="0" width="600" border="0">
            <tr valign="top">
                <td width="600">
                    <br>


                    <p align="center">
                    <font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">31</font></p>
                    <hr color="gray" noshade size="5">
                </td>
            </tr>
        </table>
    </body>
</html>

</TEXT>
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`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>d72933_ex31-1.htm
<DESCRIPTION>RULE 13A-14(A)/15D-14(A) CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>
<body>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td align="right"><FONT face="Times New Roman, Times, Serif" size=2>Exhibit 31.1</FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD><P align=center><FONT face="Times New Roman, Times, Serif" size=2>CERTIFICATION PURSUANT TO</FONT><br>
            <FONT face="Times New Roman, Times, Serif" size=2>18 U.S.C. SECTION 1350,</FONT><br>
            <FONT face="Times New Roman, Times, Serif" size=2>AS ADOPTED PURSUANT TO</FONT><br>
            <FONT face="Times New Roman, Times, Serif" size=2>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
        <P align=left><FONT face="Times New Roman, Times, Serif" size=2>I, Mark E. Tryniski, certify that:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="4%" valign="top"><FONT face="Times New Roman, Times, serif" size=2>1.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>I have reviewed this quarterly report on Form 10-Q of Community Bank System, Inc.;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>2.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
        fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>3.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
        in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>4.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls
        and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
        and we have:</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="4%" valign="top"><FONT face="Times New Roman, Times, serif" size=2>a)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
        to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
        this report is being prepared;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>b)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
        our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
        accepted accounting principles;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>c)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions
        about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>d)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s
        most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s
        internal control over financial reporting; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>5.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
        over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>a)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
        are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>b)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s
        internal control over financial reporting.</FONT></td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Date:&nbsp; November 7, 2007</FONT></td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>/s/ Mark E. Tryniski</FONT></td>
  </tr>
  <tr>
    <td><hr noshade size=1></td>
    <td width="80%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Mark E. Tryniski</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>President, Chief Executive Officer and Director</FONT></td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>&nbsp;</FONT></P>
      <HR color=gray noShade SIZE=5>
    </TD>
  </TR>
</TABLE>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>d72933_ex31-2.htm
<DESCRIPTION>RULE 13A-14(A)/15D-14(A) CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>

<body>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="right"><FONT face="Times New Roman, Times, Serif" size=2>Exhibit 31.2</FONT></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD><P align=center><FONT face="Times New Roman, Times, Serif" size=2>CERTIFICATION PURSUANT TO</FONT><br>
      <FONT face="Times New Roman, Times, Serif" size=2>18 U.S.C. SECTION 1350,</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>AS ADOPTED PURSUANT TO</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
      <P><FONT face="Times New Roman, Times, Serif" size=2>I, Scott Kingsley, certify that:</FONT></P>    </TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="4%" valign="top"><FONT face="Times New Roman, Times, serif" size=2>1.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>I have reviewed this quarterly report on Form 10-Q of Community Bank System, Inc.;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>2.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
    the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>3.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
    the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>4.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="4%" valign="top"><FONT face="Times New Roman, Times, serif" size=2>a)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
        that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
    report is being prepared;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>b)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
        to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
    principles;</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>c)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the
    effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>d)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s
        most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s
    internal control over financial reporting; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>5.</FONT></td>
    <td colspan="2" valign="top"><FONT face="Times New Roman, Times, serif" size=2>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
    reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>a)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
    likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</FONT></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>b)</FONT></td>
    <td valign="top"><FONT face="Times New Roman, Times, serif" size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control
    over financial reporting.</FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>

  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Dated:&nbsp; November 7, 2007</FONT></td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>/s/ Scott Kingsley</FONT></td>
  </tr>
  <tr>
    <td><hr noshade size=1></td>
    <td width="80%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Scott Kingsley</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Treasurer and Chief Financial Officer </FONT></td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>&nbsp;</FONT></P>
      <HR color=gray noShade SIZE=5>
    </TD>
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>d72933_ex32-1.htm
<DESCRIPTION>SECTION 1350 CERTIFICATION
<TEXT>
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  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="right"><FONT face="Times New Roman, Times, Serif" size=2>Exhibit 32.1</FONT></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD><P align=center><FONT face="Times New Roman, Times, Serif" size=2>CERTIFICATION PURSUANT TO</FONT><br>
      <FONT face="Times New Roman, Times, Serif" size=2>18 U.S.C. SECTION 1350,</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>AS ADOPTED PURSUANT TO</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
      <P align=left><FONT face="Times New Roman, Times, Serif" size=2>In connection with the Quarterly Report of Community Bank System, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended
          September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof&nbsp;(the &#147;Report&#148;), I, Mark E. Tryniski, President and Chief Executive Officer of the Company,
          certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley&nbsp;Act of 2002, that to the best of my knowledge:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=48><FONT face="Times New Roman, Times, Serif" size=2>(1) </FONT></TD>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=48><FONT face="Times New Roman, Times, Serif" size=2>(2) </FONT></TD>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
        of the Company.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><P><FONT face="Times New Roman, Times, Serif" size=2>This certification accompanies this Form 10-Q and shall not be deemed &#147;filed&#148; for purposes of Section 18 of the Securities
          Exchange Act of 1934, or otherwise subject to the liability of that Section.</FONT></P>
    </TD>
  </TR>
</TABLE>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>

  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>/s/ Mark E. Tryniski</FONT></td>
  </tr>
  <tr>
    <td><hr noshade size=1></td>
    <td width="80%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Mark E. Tryniski</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>President, Chief Executive Officer and Director</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>November 7, 2007</FONT></td>
  </tr>
</table>
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  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>&nbsp;</FONT></P>
      <HR color=gray noShade SIZE=5>
    </TD>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>d72933_ex32-2.htm
<DESCRIPTION>SECTION 1350 CERTIFICATION
<TEXT>
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<title></title>
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    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="right"><FONT face="Times New Roman, Times, Serif" size=2>Exhibit 32.2</FONT></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD><P align=center><FONT face="Times New Roman, Times, Serif" size=2>CERTIFICATION PURSUANT TO</FONT><br>
      <FONT face="Times New Roman, Times, Serif" size=2>18 U.S.C. SECTION 1350,</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>AS ADOPTED PURSUANT TO</FONT><br>
        <FONT face="Times New Roman, Times, Serif" size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
      <P align=left><FONT face="Times New Roman, Times, Serif" size=2>In connection with the Quarterly Report of Community Bank System, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ended
          September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Scott Kingsley, Treasurer and Chief Financial Officer of the Company, certify,
          pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=48><FONT face="Times New Roman, Times, Serif" size=2>(1) </FONT></TD>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=48><FONT face="Times New Roman, Times, Serif" size=2>(2) </FONT></TD>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>the information&nbsp;contained in the Report fairly&nbsp;presents,&nbsp;in all material respects, the financial condition and results
        of operations of the Company.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><P><FONT face="Times New Roman, Times, Serif" size=2>This certification accompanies this Form 10-Q and shall not be deemed &#147;filed&#148; for purposes of Section 18 of the Securities
          Exchange Act of 1934, or otherwise subject to the liability of that Section.</FONT></P>
    </TD>
  </TR>
</TABLE>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>/s/ Scott Kingsley</FONT></td>
  </tr>
  <tr>
    <td><hr noshade size=1></td>
    <td width="80%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Scott Kingsley</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>Treasurer and Chief Financial Officer</FONT></td>
  </tr>
  <tr>
    <td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>November 7, 2007</FONT></td>
  </tr>
</table>
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    <TD width="600"><BR>
        <P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2></FONT></P>
      <HR color=gray noShade SIZE=5>
        </TD>
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