Upstate New York Branch Banking ExpansionThe Company announced on January 20, 2012, that it had entered into purchase and assumption agreements to acquire 19 branch-banking centers across its core Upstate New York markets through its wholly-owned subsidiary, Community Bank, N.A. Under the terms of the agreement, Community Bank will acquire approximately $218 million in loans and $955 million in deposits at a blended deposit premium of 3.22 percent. The transaction is expected to close during the third quarter of 2012, subject to regulatory review and approval. The Company anticipates that approximately $50 million to $60 million of capital will be needed to support the acquisition and expects to achieve that through the use of existing liquidity, balance sheet management or capital issuance alternatives. Benefit Plan Administration and Consulting Services Acquisition The Company completed its acquisition of CAI Benefits, Inc. (CAI) through its Benefit Plans Administrative Services, Inc. subsidiary (BPAS) at the end of November. CAI is a provider of actuarial consulting and retirement plan administration services with offices in New York City and Northern New Jersey. The transaction adds a meaningful presence in an important strategic market, as well as valuable capacity and prospects for enhanced distribution in support of the Company’s broader-based employee benefit service offerings. With the addition of CAI, BPAS’s annual revenue is expected to exceed $36 million. Dividend Declared On January 18, 2012, the Company’s Board of Directors approved a quarterly dividend on its common stock of $0.26 per share, payable on April 10, 2012, to shareholders of record as of March 15, 2012. This two cent (8.3%) increase in the Company’s quarterly cash dividend over the same quarter of last year, represents an annualized yield of 3.7% based on the Company’s closing price of $28.35 on January 20, 2012. Proposed Common Stock Offering The Company intends to commence an underwritten public offering of $50 million of its common stock. The purpose of the offering is in part to provide additional capital to Community Bank, National Association to support its Upstate New York branch banking expansion as discussed above.