Community Bank System, Inc. (NYSE: CBU) completed its acquisition of 16 retail banking branches owned by HSBC Bank NA (“HSBC”) in Upstate New York. The acquired branches are located in Adams, Alexandria Bay, Avon, Fulton, Geneseo, Gowanda, Lowville, Newark, Oswego, Palmyra, Plattsburgh, Springville, Watertown (2), Watkins Glen and Westfield. The acquisition, which adds approximately $697 million in deposits and $107 million in loans, respectively, strengthens the Company’s ability to provide exceptional service to consumer, business banking and private banking clients in these markets while growing its presence and acquiring new customers. “We are delighted to welcome these new customers to Community Bank,” said Mark Tryniski, President and Chief Executive Officer. “We have worked hard to make the transition as simple as possible for customers, and I am grateful for the effort put forth by both the Community Bank associates and the HSBC team and we are pleased to welcome our new colleagues joining from HSBC.” Under the terms of the transaction, Community Bank paid 3.2% premium on deposits, or approximately $23 million. The assumed deposits consist primarily of transaction and savings accounts. The purchased loans consist entirely of in-market performing loans, primarily residential real estate loans. Community Bank offered employment to substantially all of the HSBC employees at the acquired branches. The acquisition and conversion of three additional branches from First Niagara Bank, N.A. is expected to be completed in early September 2012. About Community Bank System, Inc. Community Bank System, Inc. (NYSE: CBU) is headquartered in DeWitt, New York, and has $7.2 billion in assets (as of June 30, 2012) and over 180 customer facilities. The Company’s banking subsidiary, Community Bank, N.A. operates across Upstate New York and Northeastern Pennsylvania, where it conducts business as First Liberty Bank & Trust. Its other subsidiaries include: Benefit Plans Administrative Services, Inc., a national employee benefits consulting and trust administration firm with offices in New York, New Jersey, Pennsylvania and Texas; the CBNA Insurance Agency, with offices in five northern New York communities; Community Investment Services, Inc., a wealth management firm delivering a wide range of financial products throughout the Company’s branch network; and Nottingham Advisors, an investment management and advisory firm with offices in Buffalo, N.Y. and North Palm Beach, Florida. For more information, visit: www.communitybankna.com or www.firstlibertybank.com. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from CBU’s expectations: the successful integration of operations of its acquisitions; competition; changes in economic conditions, interest rates and financial markets; and changes in legislation or regulatory requirements. CBU does not assume any duty to update forward-looking statements.