Good day everyone, thank you for holding and welcome to the conference. Please note that this presentation contains forward-looking statements within the provisions of the Private Security Litigation Reform Act of 1995 that are based on current expectations, estimates, and projections about industry, market, and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company’s Annual Report and Form 10-K filed with the Securities and Exchange Commission. And now I would like to introduce today’s call leaders, Mr. Mark Tryniski, President and Chief Executive Officer and Mr. Scott Kingsley, Executive Vice President and Chief Financial Officer of Community Bank System. Gentlemen you may now begin.

Thank you Elaine, good morning everyone and thank you all for joining our 2008 Q1 conference call. The first quarter was a strong one for us with EPS growing 13% over last year. The net interest margin improved for the second quarter in a row as a result of our used deposit and borrowing costs ands in spite of the impact of the contracting loan yields associated with the significant Fed funds rate reduction over the past four months. Our deposit mix continued to improve with time deposits declining $13 million and core deposits increasing $28 million. The significant focus we have placed on generating lower cost deposits has increased non timed deposits from 55% of total deposit funding to 57% over the past four quarters. Core deposits will continue to be a core element of our strategic and operational objectives. For the second consecutive quarter organic loan growth was strong. The first quarter is historically our most difficult in terms of asset generation but this quarter saw $25 million of loan growth in our business banking and consumer mortgage lines with a slight seasonal decline in the consumer installment portfolio. I am particularly pleased with the performance of business banking, for we have made and continue to make increased investments in people, products, and technology. Asset quality metrics continues to be strong and steady across all portfolios, including chargeoffs, non-performers, and delinquencies. At the risk of being repetitive over the past several quarters but necessary in the present environment we have no exposure sub-prime or other higher risk mortgage instruments either in our loan portfolio or our investment books. Non interest income was up over 30% for the quarter with double-digit growth across all lines including banking fees, wealth management revenues, and benefits administration and consulting revenues. In summary, the first quarter was a good one for us that met our expectations. We think we are off to a strong start for the year and we are looking forward to the remainder of the year. With that I will ask Scott to give us a more detailed financial report.

Thank you Mark and good morning everyone. Our first quarter earnings of $10.9 million or $0.36 per share were $0.04 above the $0.32 per share reported in the first quarter of 2007 or a 13% improvement. As Mark mentioned, solid loan growth, continued expansion of non-interest income sources, and improved net interest margin, and stable asset quality resulted in the improved quarterly operating results. Cash earnings per share, which excludes the after-tax effect of the amortization of intangible assets and acquisition-related adjustments, were $0.41 per share in the first quarter, a full $0.05 per share above GAAP reported earning. I will first discuss the balance sheet. Our average earning assets of $4.17 billion were up $143 million from the first quarter of 2007 but were down slightly from the fourth quarter as we chose not to fully reinvest investment cash flows in the quarter. We grew average loans by $138 million from last year including $31 million in business lending, $69 million in consumer mortgages and $37 million in consumer installment products. Average investment securities, including cash equivalents, were only $5 million above the prior year, but do reflect a higher proportion of cash flows being reinvested in tax-exempt securities. We increased average deposits to $3.22 billion for the first quarter 2008 up 1.3% or $41 million above the prior year. Consistent with our focus on expanding core client relationships and reducing higher cost time deposit levels balances in core product relationships grew $67 million or nearly 4% since last year’s first quarter while time deposits were down $26 million. First quarter average borrowings of $883 million decreased $36 million from the fourth quarter, including the redemption of $25 million of trust preferred securities in January as planned. Average loans grew $20 million in the first quarter or 3% annualized,…

Thank you gentlemen. (Operator Instructions) Our first guest today is David Darst.

Scott, the securities transaction, so the first question, you indicated you sold about $130 million taxable and repurchased $52 million of non-taxable.

Actually, David that was a process that we started last year in the fourth quarter, so by the time you get to the end of the first quarter that’s pretty close to the net results, yes.

Okay, so that was over two quarters you did that?

Absolutely.

Okay, any further repositioning you want to do or are there any opportunities for you to leverage a little bit with municipal bonds?

I think that there are still some opportunities in terms of leverage and I think we constructively review those opportunities versus alternative uses of capital opportunities on an ongoing basis. I will say this David; we are not far away from alternative minimum tax levels. So the continued usability and functionality of more tax-exempt securities does actually run into a wall not too far away from where we are.

Okay. What would be an outlook for the securities portfolio from where it is at quarter end?

I think we are certainly planning on a flat line for now. We don’t have a significant amount of investment cash flows coming in the second quarter. We have a little bit larger expectation of cash flows coming back to us in the third quarter, but I think certainly for modeling purposes I think baseline flat out into the end of first quarter is reasonable.

Okay, what would be a good tax rate to use for the second quarter?

I think I would stay in that 22.5-23.5% range. I think we are capable of maintaining that, assuming again that the proportion of non-taxable securities stays similar to what it is today.

Okay. Could you comment on your consumer demand? This quarter, is that seasonal or are you doing anything on the indirect side to let that run off?

Yeah, I guess I would answer that question by separating consumer into their component parts. The consumer mortgage demand has been very strong in the first quarter. We actually had a consumer mortgage growth in two of our three markets in the first quarter which was a good result. The indirect installment portfolio, however, was down. I think it was about $8 million or so in the first quarter which is not unusual. For the first quarter, for us, in that portfolio I think we experienced the same thing, if I am not mistaken, last year in the first quarter. So I think the mortgage component of consumer demand has been strong. The installment, principally auto installment, component of consumer demand has been seasonally down, but what we expect in that portfolio typically comes back with very strong growth in the second quarter and some growth in the third quarter as well and then tapers off a bit. The consumer mortgage and home equity growth continues to be robust and actually above the average for us historically in the first quarter.

Okay, Scott could you comment on your expense run rate?

Yeah, I think it’s fair, David. If you have looked at the first quarter of 2008 in terms of things that actually might make that a little bit higher than some of our future quarter expectations, we clearly had some very high utility and maintenance costs in the first quarter coming out. If we did need a reminder, we got a reminder that it’s more expensive to heat and plow than it is to mow and air-condition in our markets, but in fairness that was probably the one item that sticks out for us that those costs were unusually high for the first quarter. I think in terms of utilization on a run rate basis, we are pretty happy with where we are or save this, we think our expectations, the salaries and the core processing side costs are probably in line with what we expect going forward. In the other words, our first quarter is probably a reasonable run rate for some of those types of things, and again David, the only other thing we are likely to have that is likely to be outside of some of these seasonal things would be in situations where we are working through other real estate owned properties and we’ve got some potential for some cost fluctuations in some of those other categories. Otherwise, I think absent the, sort of, the seasonal maintenance in utilities the first quarter is a decent barometer for that.

I’d just say a broad based comment on that question. David I think if you look at our balance sheet to some of the acquisitions we have done, the growth of our financial service business, a reasonable question might be, why aren’t you getting better operating leverage on that growth, which is a good question. Some of the answer to that is that we made over the past couple of years some sizable investments in our foundation, if I can call it that, people investments, product development investments, investments in our organic business development capabilities and our sales and marketing capabilities, technology capabilities across the company in different ways. So we made a lot of investments in our foundation and you could see that in the higher expense run rate in some of those lines. We think we have got paid for it, because the earnings are growing, our organic growth is better than it has been in a long time, but I think we do need to be mindful of getting better operating leverage going forward on some of those investments that we have made in our foundation. We expect to focus on that and achieve that over the course of the next couple of years or so.

Thank you David, the next guest today is Steve Moss from Janney Montgomery.

Just a little more color on the business lending activity this quarter, was commercial loan growth also driven in part by less competition or just new hires?

I think that is good question. It hasn’t been really new hires. We do have a couple of more lenders, I guess, in this quarter than we would have in the 2007 quarter. So some of this it maybe chalked up to the fact that we have more boots on the ground. I think the real reason frankly is a renewed focus on business development efforts in our business banking line. We are implementing some technology. We have implemented some across the company sales and business development processes that we hadn’t previously had in place and so I think a lot of it is just making a better effort frankly at doing more and better business in our markets.

Steve I have a comment too. I don’t think we have actually seen a significant participant in our marketplace, sort of, advocates or pull away from opportunities, but the one good thing that the first quarter brought up is we actually saw business lending growth in all four regions, so I think for us that is a very good outcome.

In fact, in the second quarter I think we had business lending growth in the fourth quarter last year which again is usually not our toughest quarter, but probably our second toughest quarter; so I think the current trajectory of our business banking line is solid.

On the M&A front, what are your thoughts and are you seeing more opportunities?

Well, as you know our strategic objective is to continue to grow our institution organically and through high value partnerships with other community oriented institutions as well as non-bank financial services opportunities that meet our criteria. So we are continually alert for those opportunities, both those and we are proactive in pursuing in those which I guess to come our way. I have not seen a real change in the flow of opportunity and potential opportunity. As a general observation I would say, you know, folks don’t sell when prices are low they sell when the prices are high, but we continue to tail opportunities and pursue opportunities and continue to expect that we will continue to be able to grow successfully with high value acquisitions there that are accretive and that are consistent with our quantitative and qualitative objectives.

Your next guest today is Damon Delmonte. Damon Delmonte - Keefe, Bruyette & Woods, Inc.: Could you just provide a little color with regards to your margin? Obviously, you know the factors that were there that were driving the increase this quarter, how sustainable do you think the 380 Level is?

Yeah, it’s great question David. I think if we were sort of coming off that 363 coming out of the fourth quarter and I think we kind of guided people this way in January, we knew we were going to get about 9 or 10 basis points coming out of the debt restructuring that we completed in the fourth quarter. So I think we were starting off with an expectation that was in that low to mid 370s range. I think what we are actually quite happy with is that we were capable of moving down deposit funding costs in the quarter at a rate that at least or obviously based on the outcome more than kept up with the re-pricing of the variable rate lending instruments. So I think we are pretty happy with that outcome, and I think we think we are being aggressive enough, Damon to be able to sustain that, absent against some other giant shock to the rate system, in terms of -- I am not so sure, 200 or more is possible, but thinking of an expectation of 25 to 50 more we could see some continuing erosion of the margin on some of those variable or those adjustable credits, but at the same point in time we have been very proactive on the deposit side and also quite frankly have the ability right now based on our balance sheet to not have to participate if high funding needs from some of our competition actually comes back into the market. In fairness we are actually not seeing that in our market we’re actually seeing very responsible deposit pricing from everyone. So we’re not seeing a couple of outliers or anybody actually not consistently moving down with the trend.

I think even some of those larger banks that have already affected recapitalizations and fund capital raisings and the like, they are a little less pressure, I think, in some of the bigger institutions that really scrambled in the last quarter of 2007 to preserve capital to preserve liquidity. So we’re seeing a little bit less pressure on rates there as well. Damon Delmonte - Keefe, Bruyette & Woods, Inc.: With regards to the consumer installment portfolio what's the breakout between home equity and indirect auto?

David, it’s roughly $275 million of home equity and $450 million of indirect auto and then the rest is in sort of smaller one-off direct based or branch based instruments, and in that $275 million of home equity, $100 million of that is adjustable ELOCs. Damon Delmonte - Keefe, Bruyette & Woods, Inc.: Okay, great, and are you guys seeing any stress in your indirect auto portfolio at all?

Not really, the charge-off rate, the delinquency rate is not pretty consistent actually for a number of quarters.

I think that’s another area where -- and I think we have now said this in couple of different quarters before this. We’d be shocked if our quality numbers actually got better, but that being said, we’re not seeing a very steep erosion or something to that effect going on in any of the portfolios, including indirect auto. In other words, in our marketplaces, in fairness, the consumer seems to have survived the winter quite well. Damon Delmonte - Keefe, Bruyette & Woods, Inc.: So with net charge-offs also about 11 basis points this quarter; that’s still a very low rate, do you see that kind of creeping up a little bit then?

We would think so David. We would certainly think so over time as the year goes along. But again, I think during 2008, we would be overtly disappointed if we went back to some of those historical numbers that we saw, say in the 2003-2005 cycles. Damon Delmonte - Keefe, Bruyette & Woods, Inc.: With respect to like the seasonal factors in your fee lines of business, does the benefit plan administration section does that have any benefit in the first quarter that might kind of go away in the second quarter?

Excellent question, it does. The actuarial side of our benefits administration consulting practice does have a heavier workload in the first quarter, just based on year end valuations and financial reporting guidelines. So that number might be $250,000 more robust than we would think it’d be capable of sustaining and I think you can see from the banking on interest income side, historically, the first quarter is a very low point for us in terms of services utilization and product utilization, whether a card related or just straight account relationship based. So we would certainly expect those to tick back up to a more historical based run rates for the second, third, and fourth quarter.

Currently, there are no more questions in queue. (Operator Instructions) Gentlemen, I have no further questions.

Great, thank you Elaine, thanks everyone, we will see you next quarter.

Thank you, that concludes today’s conference, you may now disconnect.