SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
                           QUARTER ENDED JUNE 30, 2004

                         SEC Exchange Act No. 000-23601

                            Pathfinder Bancorp, Inc.
               (Exact name of Company as specified in its charter)

                                     Federal
            (State or jurisdiction of incorporation or organization)

                                   16-1540137
                     (I.R.S. Employer Identification Number)


                 214  W.  1st  Street
                 Oswego,  New  York                       13126
--------------------------------------------------------------------------------
(Address  of  principal  executive  office)            (Zip  Code)

         Company's telephone number, including area code: (315) 343-0057

                                 Not Applicable
    (Former name, former address and former fiscal year, if changed since last
                                     report)

     Indicate  by  check  mark  whether  the  Company  (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the Registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.  Yes      X          No  ____
                                       --------

Indicate  by  check  mark  whether  the  Registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Act).      Yes        No   X
                                                    ----------
      Indicate  the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:  There were 2,448,132 shares
of  the  Company's  common  stock  outstanding  as  of  August  6,  2004.

<PAGE>

                            PATHFINDER BANCORP, INC.
                                      INDEX



PART  1   FINANCIAL  INFORMATION                                      PAGE

Item  1.  Financial  Statements

          Consolidated Statements  of  Condition                      1
          Consolidated  Statements  of  Income                        2 - 3
          Consolidated  Statements  of  Shareholders'  Equity         4
          Consolidated  Statements  of  Cash  Flows                   5
          Notes  to  Consolidated  Financial  Statements              6 - 8

Item  2.  Management's  Discussion  and  Analysis  of  Financial      9 - 16
            Condition  and  Results  of  Operations

Item  3.  Quantitative  and Qualitative Disclosure about Market      17 - 18
            Risk

Item  4.  Control  and  Procedures                                   19

PART  II  OTHER  INFORMATION                                         20 - 21

Item  1.  Legal  proceedings
Item  2.  Change  in  securities,  Use  of  Proceeds  and  Issuer
            Purchases  of  Equity  Securities
Item  3.  Defaults  upon  senior  securities
Item  4.  Submission  of  matters  to  a  vote  of  security  holders
Item  5.  Other  information
Item  6.  Exhibits  and  Reports  on  Form  8-K


SIGNATURES
<PAGE>
<TABLE>
<CAPTION>

                                          PATHFINDER  BANCORP, INC.
                                     CONSOLIDATED STATEMENTS OF CONDITION
                               JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

                                                                                         June 30,   December 31,
                                                                                           2004         2003
                              ASSETS
----------------------------------------------------------------------------------------------------------------
       (dollars in thousands, except per share data)
<S>                                                                                     <C>        <C>
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  7,426   $  5,803
Interest earning deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,083      2,911
----------------------------------------------------------------------------------------------------------------
    Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .    14,509      8,714
Investment securities, at fair value. . . . . . . . . . . . . . . . . . . . . . . . . .    75,280     57,559
Federal Home Loan Bank stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . .     1,873      2,048
Mortgage loans held-for-sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       665      3,520
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   186,210    188,717
   Less: Allowance for loan losses. . . . . . . . . . . . . . . . . . . . . . . . . . .     1,835      1,715
----------------------------------------------------------------------------------------------------------------
     Loans receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   184,375    187,002

Premises and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,238      6,650
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,491      1,273
Foreclosed real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       305        202
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,840      3,840
Intangible asset, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       738        850
Bank owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5,689      4,493
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,929      1,789
----------------------------------------------------------------------------------------------------------------
     Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $299,932   $277,940
================================================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------------------

Deposits:
  Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $215,276   $191,104
  Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18,577     15,790
----------------------------------------------------------------------------------------------------------------
     Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   233,853    206,894
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,100      2,100
Long-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34,260     38,860
Junior subordinated debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5,155          -
Company obligated mandatorily redeemable preferred securities of subsidiary, Pathfinder
 Statutory Trust I, holding solely junior subordinated debentures of the Company. . . .         -      5,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,489      3,301
----------------------------------------------------------------------------------------------------------------
     Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   278,857    256,155

Shareholders' equity:
   Preferred stock, authorized shares 1,000,000; no shares issued or outstanding
   Common stock, par value $.01; authorized 10,000,000 shares;
    2,935,419 and 2,919,386 shares issued;  and 2,448,132 and 2,432,099
    shares outstanding, respectively. . . . . . . . . . . . . . . . . . . . . . . . . .        29         29
   Additional paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,397      7,225
   Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21,262     20,747
   Accumulated other comprehensive (loss) income. . . . . . . . . . . . . . . . . . . .    (1,056)       364
   Unearned ESOP shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (55)       (78)
   Treasury Stock, at cost; 487,287 shares. . . . . . . . . . . . . . . . . . . . . . .    (6,502)    (6,502)
----------------------------------------------------------------------------------------------------------------
     Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21,075     21,785
----------------------------------------------------------------------------------------------------------------

     Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . . . . .  $299,932   $277,940
================================================================================================================
</TABLE>

The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        1
<PAGE>

<TABLE>
<CAPTION>

                            PATHFINDER  BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                         For the three    For the three
                                                          months ended    months ended
                                                         June 30, 2004    June 30, 2003
--------------------------------------------------------------------------------------------
<S>                                                       <C>              <C>
(Dollars in thousands, except per share data)
INTEREST INCOME:
 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $2,981       $3,214
 Debt securities:
   Taxable . . .. . . . . . . . . . . . . . . . . . . . . . .     585          538
   Tax-exempt. .. . . . . . . . . . . . . . . . . . . . . . .      59           59
 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . .      35           53
 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .      22           13
--------------------------------------------------------------------------------------------
       Total interest income. . . . . . . . . . . . . . . . .   3,682        3,877
--------------------------------------------------------------------------------------------

INTEREST EXPENSE:
  Interest on deposits. . . . . . . . . . . . . . . . . . . .     915          980
  Interest on short-term borrowings . . . . . . . . . . . . .       7            3
  Interest on long-term borrowings. . . . . . . . . . . . . .     474          549
       Total interest expense . . . . . . . . . . . . . . . .   1,396        1,532
--------------------------------------------------------------------------------------------

          Net interest income . . . . . . . . . . . . . . . .   2,286        2,345
  Provision for loan losses . . . . . . . . . . . . . . . . .     107          260
--------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses   2,179        2,085
--------------------------------------------------------------------------------------------

OTHER INCOME:
  Service charges on deposit accounts . . . . . . . . . . . .     227          216
  Loan servicing fees . . . . . . . . . . . . . . . . . . . .      77           77
  Increase in value of bank owned life insurance. . . . . . .      48           43
  Net gain on sales of securities. . .  . . . . . . . . . . .     330          355
  Net gain on sales of loans/real estate. . . . . . . . . . .      41          136
  Other charges, commissions & fees . . . . . . . . . . . . .     129          147
--------------------------------------------------------------------------------------------
          Total other income. . . . . . . . . . . . . . . . .     852          974
--------------------------------------------------------------------------------------------

OTHER EXPENSES:
  Salaries and employee benefits. . . . . . . . . . . . . . .   1,180        1,083
  Building occupancy. . . . . . . . . . . . . . . . . . . . .     257          249
  Data processing expenses. . . . . . . . . . . . . . . . . .     229          218
  Professional and other services . . . . . . . . . . . . . .     182          194
  Amortization of intangible asset. . . . . . . . . . . . . .      56           56
  Other expenses. . . . . . . . . . . . . . . . . . . . . . .     423          540
--------------------------------------------------------------------------------------------
          Total other expenses. . . . . . . . . . . . . . . .   2,327        2,340
--------------------------------------------------------------------------------------------

Income before income taxes. . . . . . . . . . . . . . . . . .     704          719
Provision for income taxes. . . . . . . . . . . . . . . . . .     182          202
--------------------------------------------------------------------------------------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . .  $  522       $  517
============================================================================================


     NET INCOME PER SHARE - BASIC . . . . . . . . . . . . . .  $ 0.21  $ 0.21
============================================================================================
     NET INCOME PER SHARE - DILUTED . . . . . . . . . . . . .  $ 0.21  $ 0.21
============================================================================================
     DIVIDENDS PER SHARE. . . . . . . . . . . . . . . . . . .  $ 0.10  $ 0.10
============================================================================================
</TABLE>

The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        2
<PAGE>
<TABLE>
<CAPTION>

                                  PATHFINDER  BANCORP, INC.
                              CONSOLIDATED STATEMENTS OF INCOME
                                         (UNAUDITED)


                                                                For the six     For the six
                                                                months ended    months ended
                                                               June 30, 2004   June 30, 2003
--------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
<S>                                                            <C>             <C>
INTEREST INCOME:
 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        5,971  $        6,480
 Debt securities: . . . . . . . . . . . . . . . . . . . . . .
   Taxable . .. . . . . . . . . . . . . . . . . . . . . . . .           1,057           1,145
   Tax-exempt.. . . . . . . . . . . . . . . . . . . . . . . .             107             121
 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . .              71             107
 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .              37              25
--------------------------------------------------------------------------------------------
       Total interest income. . . . . . . . . . . . . . . . .           7,243           7,878
--------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits. . . . . . . . . . . . . . . . . . . .           1,767           2,007
  Interest on short-term borrowings . . . . . . . . . . . . .              16               6
  Interest on long-term borrowings. . . . . . . . . . . . . .             970           1,119
--------------------------------------------------------------------------------------------
       Total interest expense . . . . . . . . . . . . . . . .           2,753           3,132
--------------------------------------------------------------------------------------------

          Net interest income . . . . . . . . . . . . . . . .           4,490           4,746
  Provision for loan losses . . . . . . . . . . . . . . . . .             295             366
--------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses           4,195           4,380
--------------------------------------------------------------------------------------------

OTHER INCOME:
  Service charges on deposit accounts . . . . . . . . . . . .             462             377
  Loan servicing fees . . . . . . . . . . . . . . . . . . . .             118             127
  Increase in value of bank owned life insurance. . . . . . .              96              86
  Net gain on sales of securities.  . . . . . . . . . . . . .             484             521
  Net gain on sales of loans/real estate .. . . . . . . . . .             121             178
  Other charges, commissions & fees . . . . . . . . . . . . .             249             249
--------------------------------------------------------------------------------------------
          Total other income. . . . . . . . . . . . . . . . .           1,530           1,538
--------------------------------------------------------------------------------------------

OTHER EXPENSES:
  Salaries and employee benefits. . . . . . . . . . . . . . .           2,383           2,196
  Building occupancy. . . . . . . . . . . . . . . . . . . . .             534             506
  Data processing expenses. . . . . . . . . . . . . . . . . .             454             416
  Professional and other services . . . . . . . . . . . . . .             328             357
  Amortization of intangible asset. . . . . . . . . . . . . .             112             112
  Other expenses. . . . . . . . . . . . . . . . . . . . . . .             766             954
--------------------------------------------------------------------------------------------
          Total other expenses. . . . . . . . . . . . . . . .           4,577           4,541
--------------------------------------------------------------------------------------------

Income before income taxes. . . . . . . . . . . . . . . . . .           1,148           1,377
Provision for income taxes. . . . . . . . . . . . . . . . . .             303             367
--------------------------------------------------------------------------------------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . .  $          845  $        1,010
                                                               --------------  --------------


     NET INCOME PER SHARE - BASIC . . . . . . . . . . . . . .  $         0.35  $         0.42
                                                               ==============  ==============
     NET INCOME PER SHARE - DILUTED . . . . . . . . . . . . .  $         0.34  $         0.41
                                                               ==============  ==============
     DIVIDENDS PER SHARE. . . . . . . . . . . . . . . . . . .  $         0.20  $         0.20
                                                               ==============  ==============
</TABLE>

The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        3
<PAGE>

<TABLE>
<CAPTION>

                                               PATHFINDER BANCORP, INC.
                                     STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                   SIX MONTHS ENDED JUNE 30, 2004 AND JUNE 30, 2003
                                                      (unaudited)

                                                                                     Accumulated
                                                                 Additional            Other  Com- Unearned
                                            Common Stock Issued  Paid  in   Retained  prehensive    ESOP   Treasury
                                               Shares   Amount    Capital   Earnings Income (Loss) Shares   Stock     Total
------------------------------------------------------------------------------------------------------------------------------

<S>                                             <C>      <C>       <C>    <C>        <C>          <C>       <C>       <C>
BALANCE, DECEMBER 31, 2003 . . . . . . . . . .   2,919   $    29   $7,225  $20,747    $   364       $(78)   $(6,502)  $21,785
Comprehensive income
Net income . . . . . . . . . . . . . . . . . .                                 845                                        845
Other comprehensive loss, net of tax
Unrealized net gains on securities . . . . . .                                         (1,420)                         (1,420)
                                                                                                                       _______
Total Comprehensive loss . . . . . . . . . . .                                                                           (575)
ESOP shares earned . . . . . . . . . . . . . .                         47                             23                   70
Stock option exercised . . . . . . . . . . . .      16         0      125                                                 125
Dividends declared ($.20 per share). . . . . .                                (330)                                      (330)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2004 . . . . . . . . . . . .   2,935   $    29   $7,397  $21,262  $(1,056)       $(55)    $(6,502)  $21,075
===============================================================================================================================

</TABLE>

<TABLE>
<CAPTION>

                                                                                     Accumulated
                                                                 Additional            Other  Com- Unearned
                                            Common Stock Issued  Paid  in   Retained  prehensive    ESOP   Treasury
                                               Shares   Amount    Capital   Earnings Income (Loss) Shares   Stock     Total
------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>      <C>       <C>     <C>          <C>        <C>     <C>       <C>
BALANCE, DECEMBER 31, 2002 . . . . . . . . . .   2,915   $    29   $7,114    $19,746     $281      $(125)   $(3,815)  $23,230
Comprehensive income
Net income . . . . . . . . . . . . . . . .                             . .     1,010                                  $ 1,010
Other comprehensive income, net of tax
Unrealized net gains on securities . . . . . .                                            312                             312
                                                                                                                        -----
Total Comprehensive income . . . . . . . . . .                                                                          1,322
ESOP shares earned . . . . . . . . . . . . . .                        34                              23                   57
Stock option exercised . . . . . . . . . . . .       2        -       15                                                   15
Treasury stock purchased . . . . . . . . . . .                                                               (2,652)   (2,652)
Dividends declared ($.20 per share). . . . . .                                 (484)                                     (484)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003 . . . . . . . . . . . .   2,917   $    29   $7,163    $20,272    $593       $(102)   $(6,467)  $21,488
===============================================================================================================================
</TABLE>

The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.

                                        4
<PAGE>

<TABLE>
<CAPTION>

                               PATHFINDER BANCORP, INC.
                               STATEMENTS OF CASH FLOWS
                                     (Unaudited)

                                                           June 30    June 30,
                                                            2004        2003
------------------------------------------------------------------------------
<S>                                                       <C>        <C>
(Dollars in thousands)
OPERATING ACTIVITIES:

  Net income . . . . . . . . . . . . . . . . . . . . . .  $    845   $   1,010
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Provision for loan losses. . . . . . . . . . . . . . .       295         366
  ESOP and other stock-based compensation earned . . . .        70          57
  Deferred income tax expense. . . . . . . . . . . . . .        32           -
  Proceeds from sale of loans. . . . . . . . . . . . . .     7,263       6,577
  Originations of loans held-for-sale. . . . . . . . . .    (4,317)     (8,514)
  Net gain on sales of:
    Real estate loans through foreclosure. . . . . . . .       (30)        (86)
    Loans. . . . . . . . . . . . . . . . . . . . . . . .       (91)        (92)
    Available-for-sale investment securities . . . . . .      (484)       (521)
  Depreciation . . . . . . . . . . . . . . . . . . . . .       282         248
  Amortization of intangible . . . . . . . . . . . . . .       112         112
  Amortization of deferred financing costs . . . . . . .        15          15
  Amortization of mortgage servicing rights. . . . . . .        81           -
  Increase in surrender value of life insurance. . . . .       (96)        (86)
  Net amortization of premiums on investment securities.       158          83
  (Increase) decrease in interest receivable . . . . . .      (218)         15
  Net change in other assets and liabilities . . . . . .      (981)        671
--------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES. . .     2,936        (145)
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
  Purchase of investment securities available-for-sale .   (28,842)    (22,238)
  Proceeds from maturities and principal reductions of
    investment securities available-for-sale . . . . . .     4,906      11,079
  Proceeds from sales:
    Real estate acquired through foreclosure . . . . . .       100         415
    Available-for-sale investment securities . . . . . .     4,350       7,676
  Purchase of life insurance . . . . . . . . . . . . . .    (1,100)          -
  Net decrease (increase) in loans . . . . . . . . . . .     2,159      (4,939)
  Purchase of premises and equipment . . . . . . . . . .      (870)       (750)
--------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES. . . . . . . . . .   (19,297)     (8,757)
--------------------------------------------------------------------------------

FINANCING ACTIVITIES
  Net increase in demand deposits, NOW accounts
    savings accounts, money market deposit accounts
    and escrow deposits. . . . . . . . . . . . . . . . .    26,595       1,362
  Net increase (decrease) in time deposits . . . . . . .       364      (1,361)
  Payments on long-term borrowings . . . . . . . . . . .    (4,600)          -
  Proceeds from long-term borrowings . . . . . . . . . .         -       5,300
  Proceeds from exercise of stock options. . . . . . . .       125          15
  Cash dividends paid. . . . . . . . . . . . . . . . . .      (328)       (325)
  Treasury stock purchased . . . . . . . . . . . . . . .         -      (2,652)
--------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . . .    22,156       2,339
--------------------------------------------------------------------------------

  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . .     5,795      (6,563)
 Cash and cash equivalents at beginning of period. . . .     8,714      13,740
--------------------------------------------------------------------------------
  CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . .  $ 14,509   $   7,177
================================================================================

</TABLE>
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements

                                        5
<PAGE>

PATHFINDER  BANCORP,  INC.

Notes  to  Financial  Statements

(1)  BASIS  OF  PRESENTATION

The accompanying unaudited financial statements were prepared in accordance with
the instructions for Form 10-Q and Regulation S-X and, therefore, do not include
information  for  footnotes  necessary  for a complete presentation of financial
position,  results  of  operations,  and cash flows in conformity with generally
accepted  accounting  principles.  The  following  material  under  the  heading
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations"  is  written  with  the  presumption  that  the users of the interim
financial  statements have read, or have access to, the Company's latest audited
financial  statements  and  notes thereto, together with Management's Discussion
and Analysis of Financial Condition and Results of Operations as of December 31,
2003 and for the three year period then ended.  Therefore, only material changes
in  financial condition and results of operations are discussed in the remainder
of  Part  1.

Operating  results  for  the  three  and  six months ended June 30, 2004 are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  2004.

(2)  EARNINGS  PER  SHARE

Basic  earnings  per  share  has  been  computed  by  dividing net income by the
weighted average number of common shares outstanding throughout the three months
and  six  months  ended  June  30,  2004 and 2003, using 2,436,878 and 2,416,888
weighted  average  common  shares  outstanding  for  the three months ended, and
2,430,468  and  2,431,556  for  the  six  months  ended,  respectively.  Diluted
earnings  per  share for the three months and six months ended June 30, 2004 and
2003 have been computed using 2,478,570 and 2,463,962 for the three months ended
and  2,477,102  and  2,477,236  for the six months ended, respectively.  Diluted
earnings  per  share  gives  effect  to  weighted  average  shares that would be
outstanding  assuming  the  exercise  of issued stock options using the treasury
stock  method.

(3)  STOCK-BASED  COMPENSATION

The  Company's  stock-based  compensation  plan  is  accounted  for based on the
intrinsic  value  method  set forth in Accounting Principles Board (APB) Opinion
No.  25,  "Accounting  for  Stock  Issued to Employees", and related provisions.
Compensation  expense  for employee stock options is generally not recognized if
the  exercise  price of the option equals or exceeds the fair value of the stock
on  the  date of the grant.  Compensation expense for restricted share awards is
ratably  recognized  over  the period of vesting, usually the restricted period,
based  on  the  fair  value  of  the  stock  on  the  grant  date.

As of December 31, 2003, the stock options previously issued by the Company were
fully  vested.  As  such,  there was no effect on pro forma net income for 2004.
The  following table illustrates the effect on net income and earnings per share
for  the three and six month period ended June 30, 2003, as if the Black-Scholes
fair  value  method  described  in  SFAS  No.  123,  "Accounting for Stock-Based
Compensation",  as  amended,  had  been  applied  to  the  Company's stock-based
compensation  plan:

                                        6
<PAGE>

<TABLE>
<CAPTION>
                                               For  the  three   For  the  six
                                                Months ended     months ended
                                                June 30, 2003    June 30, 2003
------------------------------------------------------------------------------
<S>                                             <C>             <C>
(In thousands, except per share data)
Net Income:
As reported. . . . . . . . . . . . . . . . . .  $          517  $        1,010
Less: Total stock-based employee compensation
expense determined under Black-Scholes option
pricing model, net of tax effect . . . . . . .               7              14
------------------------------------------------------------------------------
Pro forma net income . . . . . . . . . . . . .  $          510  $          996
</TABLE>

<TABLE>
<CAPTION>

                     For the three        For the six
                     Months ended         months ended
                      June 30, 2003       June 30, 2003
-------------------------------------------------------

Earnings per share:  Basic   Diluted   Basic   Diluted
-------------------------------------------------------
<S>                  <C>     <C>       <C>     <C>
As reported . . . .  $ 0.21  $   0.21  $ 0.42  $   0.41
Pro forma . . . . .  $ 0.21  $   0.21  $ 0.41  $   0.40

</TABLE>

For  purposes  of pro forma disclosures, the estimated fair value of the options
is  amortized  to expense over the options vesting period.  Since changes in the
subjective input assumptions can materially affect the fair value estimates, the
existing  model,  in  management's opinion does not necessarily provide a single
reliable  measure  of the fair value of its stock options.  In addition, the pro
forma  effect  on  reported  net  income  and earnings per share for the periods
presented  should  not  be considered representative of the pro forma effects on
reported  net  income  and  earnings  per  share  for  future  periods.

(4)  PENSION  BENEFITS

The  composition  of net periodic benefit plan cost for the three and six months
ended  June  30,  is  as  follows:

<TABLE>
<CAPTION>

                               FOR  THE  THREE    FOR  THE  SIX
                                MONTHS  ENDED     MONTHS  ENDED
                                   JUNE  30,        JUNE  30,
                                  2004    2003    2004    2003
---------------------------------------------------------------
<S>                              <C>     <C>     <C>     <C>
(In thousands)
Service cost. . . . . . . . . .  $  43   $  38   $  86   $  76
Interest cost . . . . . . . . .     52      50     104     100
Expected return on plan assets.    (63)    (57)   (126)   (114)
Amortization of net losses. . .     24      26      48      52
---------------------------------------------------------------
Net periodic benefit cost . . .  $  56   $  57   $ 112   $ 114
===============================================================

</TABLE>
The  Company previously disclosed in its financial statements for the year ended
December  31,  2003, that it expected to contribute $250,000 to its pension plan
in  2004.  As  of  June  30, 2004, $128,000 had been contributed to this pension
plan.   The  Company presently anticipates contributing an additional $64,000 to
fund  its  pension  plan in 2004.  The reduction in the anticipated contribution
resulted  from  a reduction in the plan's accrual formula effective May 1, 2004.

(5)  DIVIDEND  RESTRICTIONS

The  Company maintains a restricted capital account with a $1.0 million balance,
representing  Pathfinder  Bancorp,  M.H.C.'s  portion  of dividends waived as of
June  30,  2004.

                                        7
<PAGE>

(6)  COMPREHENSIVE  INCOME

The  components of other comprehensive (loss) income and related tax effects for
the  three  and  six  month  period ended June 30, 2004 and 2003 are as follows:

<TABLE>
<CAPTION>
                                        For  the  three     For  the  six
                                         Months ended        months ended
                                          June 30,              June 30,
                                          2004     2003      2004     2003
----------------------------------------------------------------------------
<S>                                     <C>       <C>      <C>       <C>
(In thousands)
Gross change in unrealized gains on
  securities available for sale. . . .  $(2,388)  $1,110   $(1,882)  $1,047
Reclassification adjustment for gains
  included in net income . . . . . . .     (330)    (355)     (484)    (521)
----------------------------------------------------------------------------
                                         (2,718)     755    (2,366)     526
Tax effect . . . . . . . . . . . . . .    1,087     (305)      946     (214)
----------------------------------------------------------------------------
Net of tax amount. . . . . . . . . . .  $(1,631)  $  450   $(1,420)  $  312
============================================================================
</TABLE>

(7)  GUARANTEES

The  Company  does  not  issue  any  guarantees  that  would  require  liability
recognition  or  disclosure,  other than its standby letters of credit.  Standby
letters  of  credit written are conditional commitments issued by the Company to
guarantee  the  performance  of  a  customer  to  a third party.  Generally, all
letters  of  credit,  when  issued  have  expiration dates within one year.  The
credit  risk  involved  in  issuing letters of credit is essentially the same as
those that are involved in extending loan facilities to customers.  The Company,
generally,  holds  collateral  and/or  personal  guarantees  supporting  these
commitments.  The  Company  had $998,000 of standby letters of credit as of June
30,  2004.  Management believes that the proceeds obtained through a liquidation
of collateral and the enforcement of guarantees would be sufficient to cover the
potential  amount of future payment required under the corresponding guarantees.
The  current  amount  of  the liability as of June 30, 2004 for guarantees under
standby  letters  of  credit  issued  is  not  material.

(8)  NEW  ACCOUNTING  PRONOUNCEMENTS

In  January  2003,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No.  46,  "Consolidation  of  Variable  Interest  Entities,  an
Interpretation  of  ARB  No.  51"  which  was  revised  in  December 2003.  This
Interpretation  provides  guidance  for  the  consolidation of variable interest
entities  (VIEs).  Pathfinder Statutory Trust I qualifies as a variable interest
entity under FIN 46.  Pathfinder Statutory Trust I issued mandatorily redeemable
preferred  securities  (Trust Preferred Securities) to third-party investors and
loaned  the  proceeds to the Company.  Pathfinder Statutory Trust I holds, as it
sole  asset,  subordinated  debentures  issued  by  the  Company.
FIN  46  required the Company to deconsolidate Pathfinder Statutory Trust I from
the  consolidated  financial statements as of March 31, 2004.  There has been no
restatement of prior periods. The impact of this deconsolidation was to increase
junior subordinated debentures by $5,155,000 and reduce the mandatory redeemable
preferred  securities  line  item  by  $5,000,000,  which  represented the trust
preferred  securities  of the trust.  The Company's equity interest in the trust
subsidiary  of  $155,000, which had previously been eliminated in consolidation,
is  now  reported  in  "Other  assets".  For  regulatory reporting purposes, the
Federal  Reserve Board has indicated that the preferred securities will continue
to  qualify as Tier 1 Capital subject to previously specified limitations, until
further  notice.  If  regulators  make  a  determination  that  Trust  Preferred
Securities  can  no  longer  be considered in regulatory capital, the securities
become callable and the Company may redeem them.  The adoption of FIN 46 did not
have  an  impact  on  the  Company's  results  of  operations  or  liquidity.

                                        8
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

GENERAL

Throughout  the  Management's  Discussion  and  Analysis ("MD&A") the term, "the
Company",  refers  to  the  consolidated  entity  of  Pathfinder  Bancorp,  Inc.
Pathfinder  Bank  and Pathfinder Statutory Trust I are wholly owned subsidiaries
of  Pathfinder  Bancorp, Inc.  Pathfinder Commercial Bank, Pathfinder REIT, Inc.
and  Whispering  Oaks  Development  Corp. represent wholly owned subsidiaries of
Pathfinder  Bank.  Pathfinder  Statutory  Trust  I  is  not  included  in  the
consolidated  financial  statements  for the period ended June 30, 2004. At June
30,  2004,  Pathfinder  Bancorp,  M.H.C.,  the  Company's mutual holding company
parent,  whose  activities  are  not  included  in the M.D.&A held  64.7% of the
Company's  common  stock  and  the  public  held  35.3%.

The  following  discussion reviews the Company's financial condition at June 30,
2004  and  the results of operations for the three and six months ended June 30,
2004  and  June  30,  2003.

This  Quarterly  Report contains certain "forward-looking statements" within the
meaning  of  the  Private  Securities  Litigation  Reform  Act  of  1995.  Such
statements  are  subject  to  certain  risks and uncertainties, including, among
other  things,  changes  in  economic  conditions  in the Company's market area,
changes  in  policies  by  regulatory  agencies, fluctuations in interest rates,
demand for loans in the Company's market areas and competition, that could cause
actual results to differ materially from historical earnings and those presently
anticipated  or  projected.  The  Company wishes to caution readers not to place
undue  reliance  on  any such forward-looking statements, which speak only as of
the  date  made.  The  Company  wishes to advise readers that the factors listed
above  could  affect  the  Company's  financial  performance and could cause the
Company's  actual  results  for  future  periods  to  differ materially from any
opinions  or  statements expressed with respect to future periods in any current
statements.

The  Company  does  not  undertake, and specifically declines any obligation, to
publicly  release  the  result  of  any  revisions  that  may  be  made  to  any
forward-looking  statements to reflect events or circumstances after the date of
such  statements  or  to  reflect the occurrence of anticipated or unanticipated
events.

The  Company's  net  income  is  primarily dependent on its net interest income,
which  is  the  difference  between interest income earned on its investments in
mortgage  loans,  investment  securities  and other loans, and its cost of funds
consisting  of  interest paid on deposits and borrowed funds.  The Company's net
income  is  also  affected  by  its provision for loan losses, as well as by the
amount  of  noninterest  income, including income from fees and service charges,
net  gains  and losses on sales of securities, loans and foreclosed real estate,
and  non  interest expense such as employee compensation and benefits, occupancy
and  equipment costs, data processing and income taxes.  Earnings of the Company
also  are affected significantly by general economic and competitive conditions,
particularly  changes  in market interest rates, government policies and actions
of  regulatory  authorities, which events are beyond the control of the Company.
In  particular,  the  general level of market rates tends to be highly cyclical.

                                        9
<PAGE>
APPLICATION  OF  CRITICAL  ACCOUNTING  POLICIES

The  Company's consolidated financial statements are prepared in accordance with
accounting  principles  generally  accepted  in  the  United  States  and follow
practices within the banking industry.  Application of these principles requires
management  to make estimates, assumptions and judgments that affect the amounts
reported  in  the financial statements and accompanying notes.  These estimates,
assumptions  and  judgments are based on information available as of the date of
the  financial  statements;  accordingly,  as  this  information  changes,  the
financial  statements  could  reflect  different  estimates,  assumptions  and
judgments.  Certain  policies  inherently  have a greater reliance on the use of
estimates,  assumptions  and judgments and as such have a greater possibility of
producing  results  that could be materially different than originally reported.
Estimates,  assumptions  and judgments are necessary when assets and liabilities
are required to be recorded at fair value or when an asset or liability needs to
be  recorded contingent upon a future event.  Carrying assets and liabilities at
fair  value inherently results in more financial statement volatility.  The fair
values  and  information used to record valuation adjustments for certain assets
and  liabilities  are  based  on  quoted  market prices or are provided by other
third-party  sources,  when  available.  When  third  party  information  is not
available,  valuation  adjustments  are  estimated  in good faith by management.

The  most  significant accounting policies followed by the Company are presented
in  Note  1 to the consolidated financial statements included in the 2003 Annual
Report  on Form 10-K ("the Consolidated Financial Statements").  These policies,
along  with the disclosures presented in the other financial statement notes and
in  this  discussion,  provide  information  on  how  significant  assets  and
liabilities  are  valued  in  the  financial statements and how those values are
determined.  Based  on  the  valuation  techniques  used  and the sensitivity of
financial statement amounts to the methods, assumptions and estimates underlying
those  amounts, management has identified the determination of the allowance for
loan  losses  to  be  the  accounting area that requires the most subjective and
complex  judgments,  and  as  such  could be the most subject to revision as new
information  becomes  available.

The  allowance for loan losses represents management's estimate of probable loan
losses  inherent  in the loan portfolio. Determining the amount of the allowance
for loan losses is considered a critical accounting estimate because it requires
significant  judgment  and the use of estimates related to the amount and timing
of  expected  future  cash flows on impaired loans, estimated losses on pools of
homogeneous  loans  based  on  historical  loss experience, and consideration of
current  economic  trends  and  conditions,  all  of which may be susceptible to
significant  change.  The  loan portfolio also represents the largest asset type
on  the  consolidated  balance  sheet.  Note  1  to  the  Consolidated Financial
Statements  describes  the  methodology used to determine the allowance for loan
losses,  and  a  discussion  of the factors driving changes in the amount of the
allowance  for  loan  losses  is  included  in  this  report.

The  Company  carries  all  of its investments at fair value with any unrealized
gains  or  losses  reported net of tax as an adjustment to shareholders' equity.
Based on management's assessment, at June 30, 2004, the Company did not hold any
security  that  had  a fair value decline that is currently expected to be other
than  temporary.  Consequently, any declines in a specific security's fair value
below  amortized  cost  have not been provided for in the income statement.  The
Company's  ability  to  fully  realize  the  value  of its investment in various
securities,  including corporate debt securities, is dependent on the underlying
creditworthiness  of  the  issuing  organization.

RESULTS  OF  OPERATIONS

Net income for the second quarter of 2004 was $522,000 as compared to net income
of  $517,000  for  the same quarter in 2003.  Basic earnings per share was $0.21
per  share for the quarters ended June 30, 2004 and 2003.  The return on average

                                       10
<PAGE>

assets  and  return  on shareholders' equity were 0.69% and 9.85%, respectively,
for  the  three  months  ended  June  30,  2004,  compared with 0.73% and 9.71%,
respectively,  for  the  three  months  ended  June 30, 2003.  During the second
quarter  of 2004 when compared to the second quarter of 2003, provision for loan
losses  and  other  expenses  decreased  $153,000  and  $13,000,  respectively,
partially offset by decreases in net interest income and other income of $59,000
and  $122,000,  respectively. Management expects continued margin compression to
challenge  earnings  growth  over  the  near  term.

For  the  six months ended June 30, 2004, net income was $845,000, a decrease of
$165,000,  or  16%,  as  compared  to  net  income of $1.0 million in 2003.  The
decrease  in  net  income  was  primarily  a result of a decline in net interest
income  of  $256,000, partially offset by declines in provisions for loan losses
and income taxes.  Basic earnings per share decreased to $0.35 per share for the
six  months  ended  June  30,  2004 from $0.42 for the same period in 2003.  The
return  on  average  assets  and  return  on shareholders' equity were 0.57% and
7.79%,  respectively for the six months ended June 30, 2004, compared with 0.72%
and  9.56%  for  the  same  period  in  2003.

NET  INTEREST  INCOME

Net  interest  income  is  the  Company's primary source of operating income for
payment  of  operating expenses and providing for loan losses.  It is the amount
by  which  interest  earned  on  interest-earning deposits, loans and investment
securities,  exceeds  the  interest  paid on deposits and other interest-bearing
liabilities.  Changes  in  net  interest  income  and  net interest margin ratio
result  from  the  interaction  between  the  volume  and composition of earning
assets,  interest-bearing  liabilities,  related  yields  and associated funding
costs.

Net  interest  income,  on  a  tax-equivalent basis, remained consistent at $2.3
million for the three months ended June 30, 2004, as compared to the same period
during  2003.  The Company's net interest margin ratio for the second quarter of
2004  decreased  to  3.34% from 3.74% when compared to the same quarter in 2003.
The  decline  in  net  interest  income is attributable to lower market interest
rates  which  decreased  earning asset yields to 5.36% from 6.16% when  compared
to  the  same  period during 2003.   Average interest-earning  assets  increased
9%  to  $276.7  million at June 30, 2004 as compared  to $253.1  million at June
30,  2003.  The  increase  in  average  earning assets is primarily attributable
to a $16.4 million increase in investment securities, a $6.5 million increase in
interest-earning deposits and a $669,000 increase  in loans receivable.  Average
interest-bearing  liabilities  increased  $20.9  million,  while  the  cost  of
funds  decreased  41 basis points to 2.15% from 2.56% for  the  same  period  in
2003.  The  increase  in  the  average  balance  of  interest-bearing
liabilities  resulted  primarily  from  a  $24.2  million  growth  in  average
deposits,  offset  by  a $3.4 million decrease in borrowed funds.  The growth in
deposits  was  primarily  in  money  management  accounts  and resulted from the
Company's  focus  on  attracting  new  municipal  deposit  customers.

For the six months ended June 30, 2004, net interest income, on a tax-equivalent
basis,  decreased  $254,000,  or 5%, as compared to the same period during 2003.
Net  interest  margin  decreased 46 basis points, to 3.39% at June 30, 2004 from
3.85%  at  June  30,  2003.  Average  interest-earning  assets  increased  8% to
$268.0  million  at  June  30,  2004 as compared  to $249.2  million at June 30,
2003,  while  the  yield  on interest earning assets declined 92 basis points to
5.44%  from  6.36%  for  the  comparable  periods.   The  increase  in  average
earning  assets  is  primarily  attributable  to  a  $10.7  million  increase in
investment  securities, a $5.0 million increase in interest-earning deposits and
a  $3.1  million  increase  in  loans  receivable.  Average  interest-bearing
liabilities  increased  $15.6  million,  while  the  cost  of funds decreased 47
basis  points  to  2.19%  from  2.66%  for  the  same  period  in  2003.  The
increase  in  the  average  balance  of  interest-bearing  liabilities  resulted
primarily  from  a  $13.1 million growth in average  deposits and a $2.6 million
increase  in  borrowed  funds.  The  growth  in  deposits was primarily in money
management  accounts  and  resulted  primarily  from  the  Company's  focus  on
attracting  new  municipal  deposit  customers.

                                       11
<PAGE>

INTEREST  INCOME

Total interest income for the quarter ended June 30, 2004 decreased $195,000, or
5%,  to  $3.7  million  from  $3.9  million  at the quarter ended June 30, 2003.
Average loans increased $669,000, with yields declining 52 basis points to 6.37%
for  the  second  quarter  of  2004.  Average  commercial  loans  increased $3.7
million,  and  experienced  a  decline in the average tax-equivalent yield of 41
basis  points,  to  5.87%  from  6.28%,  in  2003.  The decrease in the yield on
commercial  loans  was affected, in part, by the offering of short-term notes to
municipalities  beginning  in  2003.  The  average balance of loans to municipal
entities was $3.0 million, having a tax-equivalent yield of 2.94%. The Company's
residential  mortgage  loan  portfolio  decreased  $4.0  million,  or  3%,  when
comparing  the  second  quarter of 2004 to the same period in 2003.  The average
yield  on  the  residential mortgage loan portfolio decreased 54 basis points to
6.07% in 2004 from 6.61% in 2003.  New loans were originated at lower rates than
in  the  prior  period  and a large volume of existing mortgages had their rates
modified downward or were refinanced at lower rates.  An increase in the average
balance  of  consumer loans of $1.4 million, or 9%, resulted from an increase in
home  equity  loans.  The average yield declined 105 basis points, to 6.76% from
7.81%  in  2003.

Average  investment  securities  (taxable  and tax-exempt) for the quarter ended
June  30,  2004  increased  by $16.4 million, compared to the same period a year
ago,  with  an  increase  in  tax-equivalent interest income from investments of
$30,000,  or  4%,  compared  to  2003.  The  average tax-equivalent yield of the
portfolio  declined  10  basis points, to 3.55% from 3.65%.  The increase in the
average  balance  of investment securities is reflective of the expanded deposit
growth  with  local  municipalities.

Total interest income for the six months ended June 30, 2004 decreased $635,000,
or  8%,  when  compared  to  the  six months ended June 30, 2003.  Average loans
increased  $3.1  million,  with  yields  declining 65 basis points to 6.33% from
6.98%.  Average  commercial  loans  increased  $3.7  million,  while  the  yield
decreased  to  5.39%  from  6.47%  at  June  30,  2003.

For  the  six  months  ended  June 30, 2004, tax-equivalent interest income from
investment securities decreased $145,000, or 10%, compared to the same period in
2003.   The  average  tax-equivalent  yield  of the portfolio declined 114 basis
points,  to  3.62%  from 4.76% and was offset by a $10.7 million increase in the
average  balance  of  investment  securities.

INTEREST  EXPENSE

For  the  three  months  ended  June  30, 2004, total interest expense decreased
$136,000, or 9%, to $1.4 million from $1.5 million for the same quarter in 2003.
Interest  expense  on deposits decreased $65,000, or 7%, as lower interest rates
favorably  impacted  the  average  rate  paid  on deposits, reducing it 36 basis
points to 1.69% in 2004 from 2.04% in 2003. The decrease in the cost of deposits
was  partially  offset  by  an increase in the average deposit balance to $216.4
million in 2004, from $192.1 million for the same period in 2003. In addition to
the  decrease  in  the  cost  of  deposits,  interest expense on borrowings also
decreased  by  $71,000,  or  13%,  from  the  prior  period.

For  the six months ended June 30, 2004, interest expense decreased $379,000, or
12%,  to  $2.8  million  from  $3.1  million  for the same period in 2003.  This
decrease was partially offset by a $13.1 million increase in the average balance
of  deposits and a $2.6 million increase in borrowed funds.  Deposit expense for
the  comparable  periods  declined  $240,000,  or  12%,  as  the average rate on
deposits  decreased  37  basis points, to 1.71% from 2.08%.  Interest expense on
borrowings  declined  92  basis  points  to  4.38%  from  5.30%.

                                       12
<PAGE>

PROVISION  FOR  LOAN  LOSSES

The  provision  for  loans losses was $107,000 for the second quarter of 2004 as
compared to $260,000 for the same period in 2003.  The decrease in the provision
for the quarter primarily resulted from a decrease in commercial charge-offs for
the  period.  Non-performing  loans  totaled  $3.0  million at June 30, 2004 and
December  31,  2003.  Allowance  for  loan  losses,  as  a  percentage of loans,
increased  slightly  to 0.99% at June 30, 2004 compared to 0.91% as December 31,
2003.

For  the  six  months  ended  June  30,  2004, the provision for loan losses was
$295,000  as  compared  to  $366,000  for  the  same  period  in  2003.

NONINTEREST  INCOME

The  Company's  noninterest  income  is  primarily  comprised of fees on deposit
account balances and transactions, loan servicing, commissions, and net gains on
securities,  loans  and  foreclosed  real  estate.

The following table sets forth certain information on noninterest income for the
quarters  indicated:

<TABLE>
<CAPTION>
                                                      Three Months Ended June 30,     Six Months Ended June 30,
                                                    2004     2003       Change        2004    2003      Change
------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S>                                                 <C>    <C>    <C>       <C>     <C>     <C>      <C>    <C>
Service charges on deposit accounts. . . . . . . .  $ 227  $ 216  $    11     5.1%  $  462  $   377  $ 85    22.5%
Loan servicing fees. . . . . . . . . . . . . . . .     77     77        -     0.0%     118      127    (9)   -7.1%
Increase in value of bank owned life insurance . .     48     43        5    11.6%      96       86    10    11.6%
Net gains on sale of loans/foreclosed real estate.     41    136      (95)  -69.9%     121      178   (57)  -32.0%
Other operating income . . . . . . . . . . . . . .    129    147      (18)  -12.2%     249      249     -     0.0%
------------------------------------------------------------------------------------------------------------------
Core noninterest income. . . . . . . . . . . . . .    522    619      (97)  -15.7%   1,046    1,017    29     2.9%
Net gain on sales of securities. . . . . . . . . .    330    355      (25)   -7.1%     484      521   (37)   -7.1%
------------------------------------------------------------------------------------------------------------------
Total other income . . . . . . . . . . . . . . . .  $ 852  $ 974  $  (122)  -12.5%  $1,530  $ 1,538  $ (8)   -0.5%
==================================================================================================================
</TABLE>

For  the  three  months  ended  June 30, 2004, core noninterest income decreased
$97,000,  or  16%,  when  compared  with  the  three months ended June 30, 2003,
primarily  due  to  a reduction in net gains on foreclosed real estate resulting
from  the  sale  of  a significant foreclosed real estate property in the second
quarter of 2003.  The decrease in other operating income was associated with the
reduction  in  volume  of  investment services in comparable quarters. Income on
service  charges on deposit accounts increased as the number of deposit accounts
increased,  combined  with an increase in income generated from the new consumer
overdraft  protection  program.

For  the  six  months  ended  June  30,  2004, core noninterest income increased
primarily  due to increased income generated on deposit accounts as new services
were  introduced  and  consulting  fees  associated  with those new services was
eliminated.  This  increase  was  offset  by  a decrease in net gains on sale of
foreclosed  real  estate.

The  decrease  in net gains on sales of investment securities for the  three and
six months ended June 30, 2004, was the result of gains associated with the sale
of  corporate  debt  securities  in  2003.

NONINTEREST  EXPENSE

The  following  table  sets forth certain information on noninterest expense for
the  quarters  indicated:

                                       13
<PAGE>

<TABLE>
<CAPTION>

                                       Three Months Ended June 30,        Six Months Ended June 30,
                                     2004    2003    Change               2004     2003       Change
------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S>                                 <C>     <C>     <C>       <C>      <C>     <C>      <C>     <C>

Salaries and employee benefits . .  $1,180  $1,083  $    97     8.96%  $2,383  $ 2,196  $ 187     8.52%
Building occupancy . . . . . . . .     257     249        8     3.21%     534      506     28     5.53%
Data processing. . . . . . . . . .     229     218       11     5.05%     454      416     38     9.13%
Professional and other services. .     182     194      (12)   -6.19%     328      357    (29)   -8.12%
Amortization of intangible assets.      56      56        -     0.00%     112      112      -     0.00%
Other operating. . . . . . . . . .     423     540     (117)  -21.67%     766      954   (188)  -19.71%
------------------------------------------------------------------------------------------------------
Total noninterest expense. . . . .  $2,327  $2,340  $   (13)   -0.56%  $4,577  $ 4,541  $  36     0.79%
=======================================================================================================

</TABLE>
Total  noninterest  expense remained relatively consistent for the three and six
months  ended  June  30,  2004 and 2003.  The decrease in professional and other
services  and other operating expenses primarily resulted from operational costs
associated  with  a  foreclosed  real  estate  property  in  2003  and personnel
realignment  expenses  in  2003, not recurring in 2004. The increase in salaries
and employee benefits resulted from increased pension and health insurance costs
and  overall personnel costs due to increased staffing. The Company had 110 full
time  equivalent  employees  at  June 30, 2004 compared to 104 at June 30, 2003.
Building  occupancy  expense  increases  primarily  resulted  from  depreciation
expenses  associated  with the new Fulton branch which opened in August of 2003.
The  increase  in  data  processing  charges  was  due  to  depreciation expense
resulting  from  system  hardware  and  software  acquisitions,  increased  ATM
servicing  charges and check processing charges incurred by the Commercial Bank.

INCOME  TAX  EXPENSE

Income  taxes  decreased $20,000 for the quarter ended June 30, 2004 as compared
to  the  same  period in 2003, which was primarily attributable to a decrease in
the  Company's  pre-tax  income.  For the six months ended June 30, 2004, income
taxes  decreased  $64,000  when  compared  to  the same period in 2003 which was
primarily  attributable  to  a  decrease  in  the  Company's pre-tax income. The
effective tax rate for the first six months of 2004 was 26.4%, compared to 26.7%
for  the  year  ended  December  31,  2003.

CHANGES  IN  FINANCIAL  CONDITION

ASSETS

Total  assets increased approximately $22.0 million, or 8%, to $299.9 million at
June  30,  2004, from $277.9 million at December 31, 2003. The increase in total
assets was primarily the result of an increase in investment securities of $17.7
million,  or  31%, a $5.8 million, or 67%, increase in cash and cash equivalents
and  a  $3.3  million,  or  53%, increase in other assets.  These increases were
partially  offset by a decrease in net loans of $2.6 million, or 1%.  The growth
in  investment  securities  was  primarily  funded  by the increase in municipal
deposits.  The increase in cash and cash equivalents was primarily the result of
the  increased  deposit  levels  and  loans  sales to the secondary market.  The
excess  liquidity  is  expected  to be invested primarily in the commercial real
estate  portfolio  and  investment securities.  The increase in other assets was
due  to  a  $1.1 million purchase of life insurance policies relating to the new
executives and directors deferred compensation plan which was effective December
31,  2003.

LIABILITIES

Total  liabilities increased $22.7 million, or 9%, to $278.9 million at June 30,
2004  from  $256.2 million at December 31, 2003.  The increase in liabilities is
primarily  due  to  a  $24.2 million growth in interest-bearing deposits, a $4.6
million  decrease  in  long-term  borrowings  and  a  $2.8  million  growth  in
noninterest-bearing  deposits.  The  growth  in deposits primarily resulted from
the  Company's  focus  on  attracting  new  municipal  deposit  customers.

                                       14
<PAGE>

LOAN  AND  ASSET  QUALITY  AND  ALLOWANCE  FOR  LOAN  LOSSES

The  following  table  represents information concerning the aggregate amount of
nonperforming  assets:

<TABLE>
<CAPTION>
                                                      For  the  Period  Ending
                                                  June  30, December  31,  June  30,
                                                    2004       2003        2003
-----------------------------------------------------------------------------------
<S>                                                <C>        <C>         <C>
(Dollars in thousands)

Nonaccrual loans:
Commercial. . . . . . . . . . . . . . . . . . . .  $1,876     $1,677      $  144
Consumer. . . . . . . . . . . . . . . . . . . . .     152        172         129
Real estate -  Construction . . . . . . . . . . .       0        270           0
               Mortgage .       . . . . . . . . .     986        873         999
-----------------------------------------------------------------------------------
Total nonaccrual loans. . . . . . . . . . . . . .   3,014      2,992       1,272
Loans past due 90 days or more and still accruing       0          0           0
-----------------------------------------------------------------------------------
Total non-performing loans. . . . . . . . . . . .   3,014      2,992       1,272
Foreclosed real estate. . . . . . . . . . . . . .     305        202       1,582
-----------------------------------------------------------------------------------
Total non-performing assets . . . . . . . . . . .   3,319      3,194       2,854
-----------------------------------------------------------------------------------
Non-performing loans to total loans . . . . . . .    1.61%      1.59%       0.67%
Non-performing assets to total assets . . . . . .    1.11%      1.15%       1.01%
-----------------------------------------------------------------------------------
</TABLE>

Total nonperforming loans at June 30, 2004 were $3.0 million, or 1.61%, of total
loans  as  compared  to  $3.0  million, or 1.59%, of total loans at December 31,
2003.  Foreclosed real estate increased to $305,000 at June 30, 2004 compared to
$202,000  at  December  31,  2003.  Nonperforming loans continue to be addressed
primarily  through  foreclosure  proceedings.  Management believes that adequate
reserves  exist  for  any  potential  losses that may occur from the remediation
process.

The  allowance  for  loan  losses at June 30, 2004 was $1.8 million, or 0.99% of
period  end  loans,  compared  to $1.7 million, or 0.91% of period end loans, at
December  31,  2003.  The  increase  as  a  percentage of loans is primarily the
result  of  the  decline  in  gross  loans.

CAPITAL

Shareholders'  equity  decreased  $710,000,  or 3%, to $21.0 million at June 30,
2004.  The  decrease  in  shareholders'  equity  primarily  resulted from a $1.4
million  increase  in accumulated other comprehensive loss, offset by a $515,000
increase  in  retained  earnings  and  a $172,000 increase in additional paid in
capital  The  Company added $845,000 to retained earnings through net income and
returned  $330,000  to  its  shareholders  in  the  form of cash dividends.  The
Company's  mutual  holding company parent, Pathfinder Bancorp, M.H.C, waived the
dividend  for  the  quarter  ended  June  30,  2004.  (See  Footnote  5).

Risk-based capital provides the basis for which all banks are evaluated in terms
of  capital  adequacy.  Capital  adequacy  is  evaluated primarily by the use of
ratios  which  measure  capital  against  total assets, as well as against total
assets  that  are weighted based on defined risk characteristics.  The Company's
goal  is to maintain a strong capital position, consistent with the risk profile
of  its  subsidiary banks that supports growth and expansion activities while at
the same time exceeding regulatory standards.  At June 30, 2004, Pathfinder Bank
exceeded  all  regulatory required minimum capital ratios and met the regulatory
definition  of  a  "well-capitalized" institution, i.e. a leverage capital ratio
exceeding  5%,  a  Tier  1  risk-based  capital  ratio  exceeding 6% and a total
risk-based  capital  ratio  exceeding  10%.

                                       15
<PAGE>

LIQUIDITY

Liquidity  management  involves  the  Company's  ability  to  generate  cash  or
otherwise  obtain  funds  at reasonable rates to support asset growth and reduce
assets  to  meet  deposit  withdrawals, to maintain reserve requirements, and to
otherwise  operate  the  Company  on  an  ongoing  basis.  The Company's primary
sources  of  funds  are deposits, borrowed funds, amortization and prepayment of
loans  and maturities of investment securities and other short-term investments,
and  earnings  and  funds  provided  from operations.  While scheduled principal
repayments  on loans are a relatively predictable source of funds, deposit flows
and  loan prepayments are greatly influenced by general interest rates, economic
conditions  and  competition.  The  Company  manages  the pricing of deposits to
maintain  a  desired  deposit  balance.  In addition, the Company invests excess
funds  in  short-term interest-earning and other assets, which provide liquidity
to  meet  lending  requirements.

The  Company's liquidity has been enhanced by its membership in the Federal Home
Loan  Bank  of  New York, whose competitive advance programs and lines of credit
provide  the  Company  with  a safe, reliable and convenient source of funds.  A
significant  decrease  in  deposits  in  the  future could result in the Company
having  to  seek  other  sources  of funds for liquidity purposes.  Such sources
could  include,  but  are not limited to, additional borrowings, trust preferred
security  offerings,  brokered  deposits,  negotiated time deposits, the sale of
"available-for-sale"  investment  securities,  the sale of securitized loans, or
the  sale  of whole loans.  Such actions could result in higher interest expense
costs  and/or  losses  on  the  sale  of  securities  or  loans.

The  Asset  Liability  Management Committee (ALCO) of the Company is responsible
for  implementing  the  policies  and  guidelines for the maintenance of prudent
levels of liquidity.  As of June 30, 2004, management believes that liquidity as
measured  by  the  Company  is  in  compliance  with  its  policy  guidelines.

                                       16
<PAGE>

ITEM  3  -  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

The  Company's  risk  of  loss arising from adverse changes in the fair value of
financial  instruments,  or  market risk, is composed primarily of interest rate
risk.  The  management  of  interest rate sensitivity seeks to avoid fluctuating
net  interest  margins  and  to  provide  consistent net interest income through
periods  of  changing  interest  rates.  The  primary objective of the Company's
asset-liability  management  activities is to maximize net interest income while
maintaining  acceptable  levels  of  interest  rate  risk.  The  Company  has an
Asset-Liability  Management  Committee  (ALCO)  which  is  responsible  for
establishing  policies  to  limit  exposure to interest rate risk, and to ensure
procedures  are  established  to  monitor  compliance with those policies. Those
procedures  include  reviewing  the  Company's  assets  and  liability policies,
setting  prices  and  terms  on  rate-sensitive  products,  and  monitoring  and
measuring  the  impact  of  interest  rate changes on the Company's earnings and
capital.  The Company's Board of Directors reviews the guidelines established by
ALCO.

During the past three years, the Federal Reserve lowered interest rates thirteen
times  by  a  total  of  550  basis points.  These interest rate reductions have
caused  significant  repricing  of  the  bank's  interest-earning  assets  and
interest-bearing  liabilities.  Efforts  have been made to shorten the repricing
duration  of  its rate sensitive assets by purchasing investment securities with
maturities  within the next 3 to 5 years and promoting portfolio ARM (adjustable
rate  mortgage)  and hybrid ARM products.  In addition, the Company has extended
the  duration of its rate sensitive liabilities by lengthening the maturities of
its existing borrowings and offering certificates of deposit with three and four
year  terms  which  allow  depositors  to  make a one-time election, at any time
during  the  term  of  the  certificate  of  deposit,  to adjust the rate of the
instrument  to  the then prevailing rate for the certificate of deposit with the
same  term.

In  June of 2004, the Federal Reserve raised their key interest rate one quarter
of  one  percent for the first time in four years.  An additional 25 basis point
increase  was  announced  by  the  Federal  Reserve in early August.  Management
anticipates  that the Federal Reserve will continue to raise its target interest
rate  over the foreseeable future.  Management will continue to seek to minimize
any reduction in net interest income in a period of rising interest rates to the
extent  that  it  can  resist raising its cost of funds during this period.  The
Company  is  continuing  to explore transactions and strategies to both increase
its  net  interest  income  and  minimize  its  interest  rate  risk.

GAP ANALYSIS.  At June 30, 2004, the total interest bearing liabilities maturing
or  repricing within one year exceeded total interest-earning assets maturing or
repricing  in  the  same  period  by  $39.3  million,  representing a cumulative
one-year  gap  ratio  of  a  negative  13.07%.

EARNINGS  AT  RISK AND VALUE AT RISK.  Management believes the simulation of net
interest  income  (Earnings  at Risk) and net portfolio value (Value at Risk) in
different  interest  rate  environments  provides  a  more meaningful measure of
interest  rate  risk.  Income simulation analysis captures both the potential of
all  assets  and  liabilities to mature or reprice and the probability that they
will  do  so.  Income  simulation  also  attends  to  the relative interest rate
sensitivities  of  these  items,  and  projects  their behavior over an extended
period  of  time.  Finally,  income  simulation permits management to assess the
probable effects on the balance sheet not only of changes in interest rates, but
also  of  proposed  strategies  for  responding  to  them.  Net  portfolio value
represents  the  fair  value  of  net  assets (determined as the market value of
assets  minus  the  market  value  of  liabilities  using a discounted cash flow
technique).

The  following table measures the Company's interest rate risk exposure in terms
of the percentage change in its net interest income and net portfolio value as a
result  of hypothetical changes in 100 basis point increments in market interest
rates.  The  table  quantifies  the  changes  in  net  interest  income  and net
portfolio  value  to parallel shifts in the yield curve.  The column "Percentage
Change  in  Net  Interest Income" measures the change to the next twelve month's
projected  net  interest income, due to parallel shifts in the yield curve.  The
column  "Percentage  Change  in  Net  Portfolio  Value"  measures changes in the
current  fair  value  of  assets and liabilities to parallel shifts in the yield
curve.  The  column  "NPV Capital Ratio" measures the ratio of the fair value of
net  assets  to the fair value of total assets at the base case and in 100 basis
point incremental interest rate shocks.  Currently, the Company's model projects
a  300 basis point increase and a 100 basis point decrease during the next year.

                                       17
<PAGE>

With  the federal funds rate at a record low, the Company's ALCO believed it was
a better measure of current risk assuming a minus 100 point scenario, as a minus
300 basis point reduction would be unlikely given that current short-term market
interest  rates  are  already  below  3.00%.  The  Company uses these percentage
changes  as  a means to measure interest rate risk exposure and quantifies those
changes  against  guidelines  set  by  the  Board  of  Directors  as part of the
Company's  Interest  Rate Risk policy.  The Company's current interest rate risk
exposure  is  within  those  guidelines  set  forth.

<TABLE>
<CAPTION>

Change in    NPV
Interest   Capital   Earnings    Value
Rates       Ratio     at Risk   as Risk
---------  --------  ---------  --------
<S>        <C>       <C>        <C>
300 . . .     7.14%    -12.97%   -33.23%
200 . . .     8.13%     -8.51%   -21.88%
100 . . .     9.08%     -4.12%   -10.37%
0             9.87%      ----      ----
-100. . .    10.14%      1.68%     4.96%
</TABLE>
                                       18
<PAGE>

ITEM  4  -  CONTROLS  AND  PROCEDURES

Under  the  supervision  and with the participation of the Company's management,
including  our  Chief Executive Officer and Chief Financial Officer, the Company
has  evaluated  the  effectiveness of the design and operation of its disclosure
controls  and  procedures  (as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange  Act)  as  of  the  end of the period covered by this quarterly report.
Based  upon  that  evaluation,  the  Chief Executive Officer and Chief Financial
Officer  concluded that, as of the end of the period covered by this report, the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required  to  be disclosed in the reports that the Company files or
submits  under  the  Securities  Exchange  Act  of  1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules  and  forms.  There  has  been  no  change  in the
Company's  internal  control  over  financial  reporting  during the most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonable  likely to
materially  affect,  the  Company's  internal  control over financial reporting.

                                       19
<PAGE>

PART  II  -  OTHER  INFORMATION

ITEM  1  -  LEGAL  PROCEEDINGS
------------------------------

None

ITEM 2 - CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUE OR PURCHASES OF EQUITY
--------------------------------------------------------------------------------
SECURITIES
----------

Not  applicable

ITEM  3  -  DEFAULTS  UPON  SENIOR  SECURITIES
----------------------------------------------

Not  applicable

ITEM  4  -  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
-----------------------------------------------------------------------

The Company's Meeting of Shareholders was held on April 28, 2004.  The following
are  the  items  voted  on  and  the  results  of  the  shareholder  voting:

1.     The election of Corte J. Spencer, Janette Resnick and Steven W. Thomas to
serve  as  directors of the Company, each for a term of three years or until his
successor  has  been  elected  and  qualified.

          Name                      For               Withheld

     Corte  J.  Spencer          2,134,262              916
     Janette  Resnick            2,134,395              783
     Steven  W.  Thomas          2,134,262              916

     Set  forth  below  are  the names of the other directors of the Company and
their  terms  of  office.


          Name               Term  Expires
     Chris  C.  Gagas            2005
     Thomas  W.  Schneider       2005
     Chris  R.  Burritt          2005
     Raymond  W.  Jung           2005
     Bruce  Manwaring            2006
     L.  William  Nelson         2006
     George  P.  Joyce           2006

2.     The  ratification  of  the  appointment  of  Beard  Miller Company LLP as
auditors  for  the  Company.

                              For        Against     Abstain
     Number  of  Votes     2,134,095       633         450

ITEM  5  -  OTHER  INFORMATION
------------------------------

On  June  30,  2004,  the  Board  of  Directors declared a $.10 cash dividend to
shareholders  of  record  as  of  June  30,  2004,  payable  on  July  15, 2004.

                                       20
<PAGE>

ITEM  6  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K
-------------------------------------------------

(a)

Exhibit  No.          Description
------------          -----------

10.1 Employment  Agreement  between  the Bank and Thomas W. Schneider, President
     and  Chief  Executive  Officer
10.2 Employment  Agreement  between the Bank and Edward Mervine, Vice- President
     and  General  Counsel
31.1 Rule  13a-14(a)  /  15d-14(a)  Certification of the Chief Executive Officer
31.2 Rule  13a-14(a)  /  15d-14(a)  Certification of the Chief Financial Officer
32.1 Section  1350  Certification  of  the  Chief  Executive and Chief Financial
     Officer


(b)     Reports  on  Form  8-K

     The  Company  has two Current Reports on Form 8-K during the second quarter
of  the  fiscal  year  ended  June  30,  2004  dated April 28, and June 30, 2004
reporting  press releases relating to the first quarter earnings release and the
announcement  of  the  second  quarter  cash  dividends,  respectively.


                                       21
<PAGE>

SIGNATURES


Under  the  requirements of the Securities Exchange Act of 1934, the Company has
duly  caused this report to be signed on its behalf by the undersigned thereunto
duly  authorized.




     PATHFINDER  BANCORP,  INC.
     --------------------------



August 16, 2004          /s/  Thomas  W.  Schneider
---------------------------------------------------------------
Date:                    Thomas  W.  Schneider
                         President,  Chief  Executive  Officer


August 16, 2004         /s/  James  A.  Dowd
---------------------------------------------------------------
Date:                    James  A.  Dowd
                         Vice  President,  Chief  Financial  Officer

<PAGE>


                                                            EXHIBIT 10.1

                            PATHFINDER BANCORP, INC.
                                 PATHFINDER BANK
                              EMPLOYMENT AGREEMENT


     This  Agreement  is made effective as of the 28th day of June, 2004, by and
between  Pathfinder  Bank (the "Bank"), a New York chartered stock savings bank,
with  its  principal administrative office at 214 West First Street, Oswego, New
York  13126-2547,  jointly with Pathfinder Bancorp, Inc, the sole stockholder of
the  Bank, and Thomas W. Schneider (the "Executive"). Any reference to "Company"
herein  shall  mean  Pathfinder  Bancorp,  Inc.  or  any  successor thereto. Any
reference  to  "Employer" herein shall mean both the Bank and the Company or any
successors  thereto

     WHEREAS,  the Employer wishes to assure itself of the services of Executive
for  the  period  provided  in  this  Agreement;  and

     WHEREAS,  Executive  is willing to serve in the employ of the Employer on a
full-time  basis  for  said  period.

     NOW,  THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree  as  follows:

1.     POSITION  AND  RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
President  and  Chief  Executive  Officer of the Bank and as President and Chief
Executive  Officer of the Company.  During said period, Executive also agrees to
serve,  if  elected,  as an officer and director of the Bank, the Company and of
any  subsidiary  or  affiliate of the Employer.  Failure to reelect Executive as
President  and  Chief  Executive Officer of the Bank and the Company without the
consent  of  the  Executive during the term of this Agreement shall constitute a
breach  of  this  Agreement.

2.     TERMS  AND  DUTIES

     (a)  The  period of Executive's employment under this Agreement shall begin
          as  of the date first above written and shall continue for a period of
          thirty-six  (36)  full  calendar  months thereafter. Commencing on the
          first  anniversary  date  of  this  Agreement,  and continuing at each
          anniversary  date  thereafter,  the  Agreement  shall  renew  for  an
          additional  year such that the remaining term shall be three (3) years
          unless written notice is provided to Executive, at least ten (10) days
          and not more than thirty (30) days prior to any such anniversary date,
          that  his  employment shall cease at the end of thirty-six (36) months
          following  such  anniversary  date.  Prior  to  each notice period for
          non-renewal,  the  disinterested  members of the Board of Directors of
          the Bank ("Board") will conduct a comprehensive performance evaluation
          and  review  of  the  Executive for purposes of determining whether to
          extend the Agreement, and the results thereof shall be included in the
          minutes  of  the  Board's  meeting.

     (b)  During  the  period of his employment hereunder, except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and  efforts to the faithful
          performance  of his duties hereunder including activities and services
          related to the organization, operation and management of the Employer;
          provided,  however, that, with the approval of the Board, as evidenced
          by a resolution of such Board, from time to time, Executive may serve,
          or  continue  to  serve,  on  the boards of directors of, and hold any
          other  offices  or positions in, companies or organizations, which, in
          such  Board's judgment, will not present any conflict of interest with
          the  Bank,  or materially affect the performance of Executive's duties
          pursuant  to  this  Agreement.
<PAGE>

     (c)  During  the period of his employment hereunder, if Executive's term as
          a  director  of  the  Bank  or the Company expires, the Employer shall
          nominate  Executive  to be re-elected to the Board of Directors of the
          Bank  and  the Company. If re-elected by shareholders, Executive shall
          serve  as  director.

3.     COMPENSATION  AND  REIMBURSEMENT

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Section 2(b). The
          Bank  shall  pay  Executive  as compensation a salary of not less than
          $185,000  per  year ("Base Salary"). Such Base Salary shall be payable
          biweekly. During the period of this Agreement, Executive's Base Salary
          shall  be  reviewed  at  least annually; the first such review will be
          made  no  later than December 31, 2004. Such review shall be conducted
          by  a  Committee  designated  by the Board, and the Board may increase
          Executive's  Base  Salary.  In addition to the Base Salary provided in
          this  Section  3(a),  the  Bank  shall provide Executive at no cost to
          Executive  with  all  such other benefits as are provided uniformly to
          permanent  full-time  employees  of  the  Bank.

     (b)  The  Bank  will  provide  Executive  with  employee  benefit  plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which  Executive  was participating or otherwise deriving benefit from
          immediately  prior to the beginning of the term of this Agreement, and
          the Bank will not, without Executive's prior written consent, make any
          changes  in  such  plans,  arrangements  or  perquisites  which  would
          adversely  affect  Executive's  rights or benefits thereunder. Without
          limiting the generality of the foregoing provisions of this Subsection
          (b),  Executive will be entitled to participate in or receive benefits
          under  any  employee  benefit  plans  including  but  not  limited to,
          retirement  plans,  supplemental  retirement  plans,  pension  plans,
          profit-sharing  plans,  health-and-accident plans, medical coverage or
          any  other  employee benefit plan or arrangement made available by the
          Bank  in  the  future  to  its  senior  executives  and key management
          employees,  subject  to  and  on  a  basis  consistent with the terms,
          conditions  and overall administration of such plans and arrangements.
          Executive  will  be  entitled to incentive compensation and bonuses as
          provided  in  any  plan  of the Bank in which Executive is eligible to
          participate.  Nothing  paid  to  the  Executive under any such plan or
          arrangement  will  be  deemed  to  be in lieu of other compensation to
          which  the  Executive  is  entitled  under  this  Agreement.

     (c)  In  addition  to the Base Salary provided for by paragraph (a) of this
          Section  3,  the  Employer  shall  pay  or reimburse Executive for all
          reasonable  travel and other reasonable expenses incurred by Executive
          performing  his  obligations under this Agreement and may provide such
          additional compensation in such form and such amounts as the Board may
          from  time  to  time  determine.

     (d)  Compensation  and reimbursement to be paid pursuant to paragraphs (a),
          (b)  and  (c)  of  this  Section  3  shall be paid by the Bank and the
          Company,  respectively  on  a  pro rata basis based upon the amount of
          service  the  Executive devotes to the Bank and Company, respectively.

<PAGE>
4.     PAYMENTS  TO  EXECUTIVE  UPON  AN  EVENT  OF  TERMINATION

     The  provisions  of  this  Section  shall in all respects be subject to the
terms  and  conditions  stated  in  Sections  8  and  15.

     (a)  The  provisions  of this Section shall apply upon the occurrence of an
          Event  of  Termination (as herein defined) during the Executive's term
          of  employment  under  this  Agreement.  As used in this Agreement, an
          "Event  of  Termination" shall mean and include any one or more of the
          following:  (i)  the  termination  by  the  Bank  or  the  Company  of
          Executive's  full-time employment hereunder for any reason other than,
          (A)  Disability  or  Retirement  as  defined in Section 6 below, (B) a
          Change  in  Control,  as  defined  in  Section  5(a)  hereof,  or  (C)
          Termination  for  Cause  as  defined  in  Section  7  hereof;  or (ii)
          Executive's  resignation from the Bank's or the Company's employ, upon
          any  (A)  failure  to  elect  or  reelect  or  to appoint or reappoint
          Executive  as  President  and  Chief  Executive  Officer, (B) material
          change  in  Executive's  function,  duties, or responsibilities, which
          change  would  cause  Executive's  position  to  become  one of lesser
          responsibility,  importance, or scope from the position and attributes
          thereof described in Section 1, above, (C) a relocation of Executive's
          principal  place of employment by more than 30 miles from its location
          at  the  effective  date of this Agreement, or a material reduction in
          the  benefits  and  perquisites  to  the  Executive  from  those being
          provided  as  of the effective date of this Agreement, (D) liquidation
          or  dissolution  of  the  Bank  or  Company other than liquidations or
          dissolutions that are caused by reorganizations that do not affect the
          status of Executive, (E) failure of the Employer to nominate Executive
          to  be elected or re-elected as a director of the Bank or the Company,
          or  (F)  breach of this Agreement by the Bank or the Company. Upon the
          occurrence  of  any event described in clauses (ii)(A), (B), (C), (D),
          (E)  or  (F),  above,  Executive  shall  have  the  right  to elect to
          terminate  his  employment  under  this  Agreement by resignation upon
          sixty  (60) days prior written notice given within a reasonable period
          of  time  not  to  exceed four calendar months after the initial event
          giving  rise  to  said  right  to elect. Notwithstanding the preceding
          sentence, in the event of a continuing breach of this Agreement by the
          Employer, the Executive, after giving due notice within the prescribed
          time frame of an initial event specified above, shall not waive any of
          his rights solely under this Agreement and this Section 4 by virtue of
          the fact that Executive has submitted his resignation but has remained
          in  the  employment  of  the  Employer  and  is  engaged in good faith
          discussions to resolve any occurrence of an event described in clauses
          (A),  (B),  (C),  (D),  (E)  and  (F)  above.

     (b)  Upon  the  occurrence  of  an  Event  of  Termination,  on the Date of
          Termination,  as  defined  in  Section  8,  the  Employer  shall  pay
          Executive,  or,  in the event of his subsequent death, his beneficiary
          or  beneficiaries, or his estate, as the case may be, as severance pay
          or liquidated damages, or both, a sum equal to three (3) times the sum
          of  (i)  Base Salary and (ii) the highest rate of bonus awarded to the
          Executive  during  the prior three years, , provided, however, that if
          the  Employer  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Employer's capital to
          be reduced below its minimum capital requirements, such payments shall
          be  deferred until such time as the Employer is in capital compliance.
          At  the  election of the Executive, which election is to be made on an
          annual  basis  during  the  month  of  January,  and which election is
          irrevocable  for  the year in which made and upon the occurrence of an
          Event  of  Termination,  such  payments shall be made in a lump sum or
          paid  monthly during the remaining term of the Agreement following the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  to  the  Executive will be made on a monthly basis during the
          remaining term of the Agreement. Such payments shall not be reduced in
          the event the Executive obtains other employment following termination
          of  employment.

     (c)  Notwithstanding  the  provisions  of Sections 4(a) and (b), and in the
          event  that  there  has  not  been  a  Change in Control as defined in
          Section  5(a) nor an Event of Termination, as defined in Section 4(a),
          upon the voluntary termination by the Executive upon giving sixty days
          notice to the Employer (which itself shall not be deemed to constitute
          an "Event of Termination" as defined), the Employer, at the discretion
          of the Board of Directors, shall pay Executive, or in the event of his
          subsequent  death, his beneficiary or beneficiaries, or his estate, as
<PAGE>

          the  case may be, a severance payment in an amount to be determined by
          the  Board  of  Directors at the time of such voluntary termination by
          the Executive. Such severance payment shall not exceed three (3) times
          the  average  of  the  three  preceding  years' Base Salary, including
          bonuses  and  any other cash compensation paid to the Executive during
          such  years,  and  the amount of any benefits received pursuant to any
          employee  benefit plans, on behalf of the Executive, maintained by the
          Employer during such years; provided, however, that if the Employer is
          not  in  compliance  with  its minimum capital requirements or if such
          payments  would  cause  the Employer's capital to be reduced below its
          minimum  capital  requirements,  such  payments shall be deferred ----
          until such time as the Employer is in capital compliance, and provided
          further,  that in no event shall total severance compensation from all
          sources  exceed  three  times  the  Executive's  Base  Salary  for the
          immediately  preceding  year.  At the election of the Executive, which
          election is to be made on an annual basis during the month of January,
          and  which election is irrevocable for the year in which made and upon
          the Executive's voluntary termination, any payments shall be made in a
          lump  sum  or  paid monthly during the remaining term of the Agreement
          following  the  Executive's termination. In the event that no election
          is  made, any payment to the Executive will be made on a monthly basis
          during the remaining term of the agreement. Such payments shall not be
          reduced  in the event the Executive obtains other employment following
          termination  of  employment.

     (d)  Upon  the  occurrence  of  an  Event of Termination, the Employer will
          cause  to  be  continued life, medical, dental and disability coverage
          substantially identical to the coverage maintained by the Employer for
          Executive  prior to his termination, provided that such benefits shall
          not  be  provided  in  the  event  they should constitute an unsafe or
          unsound  banking  practice  relating  to  executive  compensation  and
          employment  contracts pursuant to applicable regulations, as is now or
          hereafter  in effect. Such coverage shall cease upon the expiration of
          the  remaining  term  of  this  Agreement.

     (e)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  the Supplemental Executive Retirement Plan of the Bank or Company.

     (g)  Upon  the  occurrence  of an Event of Termination, the Executive shall
          become  fully  vested  in  and entitled to all benefits awarded to him
          under  the  Bank's  or the Company's Recognition and Retention Plan or
          any  restricted  stock  plan  in  effect.

5.     CHANGE  IN  CONTROL

     (a)  No  benefit  shall  be payable under this Section 5 unless there shall
          have  been a Change in Control of the Bank or Company. For purposes of
          this  Agreement,  a  "Change  in Control" of the Bank or Company shall
          mean  a change in control of a nature that (i) would be required to be
          reported  in  response to Item 1(a) of the current report on Form 8-K,
          as  in  effect  on the date hereof, pursuant to Section 13 or 15(d) of
          the  Securities  Exchange  Act  of  1934 (the "Exchange Act"); or (ii)
          results  in  a Change in Control of the Bank or the Company within the
          meaning  of the Home Owners Loan Act, as amended, and applicable rules
          and  regulations  promulgated  thereunder, as in effect at the time of
          the  Change  in  Control  (collectively, the "HOLA"); or (iii) without
          limitation  such  a Change in Control shall be deemed to have occurred
          at  such  time  as  (a)  any "person" (as the term is used in Sections
          13(d)  and  14(d)  of  the Exchange Act) is or becomes the "beneficial
          owner"  (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly,  of  securities of the Company representing 25% or more of
          the  combined  voting power of Company's outstanding securities except
          for  any  securities  purchased  by  the  Employer's  employee  stock
          ownership  plan  or  trust;  or  (b)  individuals  who  constitute the
          Company's  Board  of  Directors  on  the  date  hereof (the "Incumbent
          Board")  cease  for  any  reason  to  constitute  at  least a majority
          thereof,  provided  that  any person becoming a director subsequent to
          the  date  hereof  whose  election  was approved by a vote of at least
          three-quarters  of  the  directors  comprising the Incumbent Board, or
          whose  nomination  for  election  by  the  Company's  stockholders was
<PAGE>

          approved  by  the same Nominating Committee serving under an Incumbent
          Board, shall be, for purposes of this clause (b), considered as though
          he  were  a  member  of  the  Incumbent  Board;  or  (c)  a  plan  of
          reorganization,  merger,  consolidation,  sale of all or substantially
          all  the  assets  of the Bank or the Company or similar transaction in
          which  the Bank or Company is not the surviving institution occurs; or
          (d)  a  proxy  statement  soliciting  proxies from stockholders of the
          Company,  by someone other than the current management of the Company,
          seeking  stockholder  approval  of a plan of reorganization, merger or
          consolidation  of  the Company or similar transaction with one or more
          corporations  or  financial  institutions,  and as a result such proxy
          solicitation a plan of reorganization, merger consolidation or similar
          transaction involving the Company is approved by the requisite vote of
          the  Company's  stockholders; or (e) a tender offer is made for 25% or
          more  of  the  voting  securities  of the Company and the shareholders
          owning  beneficially  or  of  record  25%  or  more of the outstanding
          securities  of  the  Company  have  tendered  or offered to sell their
          shares  pursuant  to  such  tender offer and such tendered shares have
          been  accepted  by the tender offeror. Notwithstanding anything to the
          contrary  herein,  a  "Change  in  Control" of the Bank or the Company
          shall  not  be deemed to have occurred in the event of a conversion of
          Pathfinder  Bancorp,  MHC  to  stock  holding  company  form.

     (b)  If  any  of the events described in Section 5(a) hereof constituting a
          Change  in  Control  have occurred, Executive shall be entitled to the
          benefits  provided  in  paragraphs  (c), (d), (e), (f), (g) and (h) of
          this  Section  5  upon his subsequent termination of employment at any
          time  during  the  term  of this Agreement, regardless of whether such
          termination  results  from  (i)  his resignation or (ii) his dismissal
          upon  the  Change  in  Control.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment, the Employer shall pay Executive, or in the
          event  of  his  subsequent death, his beneficiary or beneficiaries, or
          his  estate,  as  the  case  may  be,  as  severance pay or liquidated
          damages,  or  both, a sum equal to the greater of the payments due for
          the  remaining  term of the Agreement or 2.99 times the average of the
          five  preceding  years'  Base  Salary, including bonuses and any other
          cash  compensation  paid  to  the Executive during such years, and the
          amount  of  any  contributions  made to any employee benefit plans, on
          behalf of the Executive, maintained by the Employer during such years,
          (hereinafter  referred  to as "Payment". Such Payment shall be made by
          the  Employer  on  the  Date  of  Termination.  At the election of the
          Executive,  which election shall be made on an annual basis during the
          month  of  January,  and which election is irrevocable for the year in
          which  made  and  upon  the  occurrence  of  a Change in Control, such
          Payment  may  be  made  in  a  lump  sum  or  paid  in  equal  monthly
          installments  during  the  thirty-six  (36)  months  following  the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  of  the  Payment  to the Executive will be made pro-rata on a
          monthly  basis  during  the  remaining  term  of  the  Agreement.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination  of  employment,  the  Employer will cause to be continued
          life,  medical, dental and disability coverage substantially identical
          to  the coverage maintained by the Employer for Executive prior to his
          severance.  Such coverage and payments shall cease upon the expiration
          of  thirty-six  (36)  months.

     (e)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  the Supplemental Executive Retirement Plan of the Bank or Company.

     (g)  Upon the occurrence of a Change in Control, the Executive shall become
          fully  vested in and entitled to all benefits awarded to him under the
          Bank's  or  the  Company's  Recognition  and  Retention  Plan  or  any
          restricted  stock  plan  in  effect.

     (h)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event  that:
<PAGE>

          (i)  the  aggregate  payments  or  benefits  to be made or afforded to
               Executive  under  said  paragraphs  (the  "Termination Benefits")
               would  be  deemed  to include an "excess parachute payment" under
               Section  280G  of  the  Internal  Revenue  Code  or any successor
               thereto,  and

          (ii) if  such  Termination  Benefits  were  reduced  to an amount (the
               "Non-Triggering  Amount"),  the  value  of  which  is  one dollar
               ($1.00) less than an amount equal to the total amount of payments
               permissible  under  Section  280G of the Internal Revenue Code or
               any  successor  thereto, then the Termination Benefits to be paid
               to  Executive  shall  be  so reduced so as to be a Non-Triggering
               Amount.

     (i)  Notwithstanding  the  foregoing,  there  will  be  no reduction in the
          Payment  otherwise payable to Executive during any period during which
          Executive is incapable of performing his duties hereunder by reason of
          temporary  disability.

     (j)  Any Payment made to Executive pursuant to this Agreement or otherwise,
          are  subject  to  and conditioned upon their compliance with 12 U.S.C.
          1818(k)  and  any  applicable  regulations  promulgated  thereunder.

     (k)  The  Executive  shall  not  be entitled to immediately receive Payment
          pursuant  to  this Section 5 if the Employer is not in compliance with
          its  minimum  capital  requirements or if such Payment would cause the
          Employer's  capital  to  be  reduced  below  its  minimum  capital
          requirements.  In  such  event,  Payment  shall be deferred until such
          times  as  the Employer is in capital compliance and provided further,
          that  in  such  event  the  Payment  shall  not exceed three times the
          Executive's  Base  Salary  for  the  immediately  preceding  year.

6.     TERMINATION  UPON  RETIREMENT  OR  DISABILITY

     Termination  by  the  Employer of the Executive based on "Retirement" shall
mean  termination  in  accordance  with  the  Employer's retirement policy or in
accordance  with any retirement arrangement established with Executive's consent
with  respect  to him.  Upon termination of Executive upon Retirement, Executive
shall  be entitled to all benefits under any retirement plan of the Employer and
other  plans  to  which  Executive  is  a  party.

     In the event Executive is unable to perform his duties under this Agreement
on  a  full-time  basis  for a period of six (6) consecutive months by reason of
illness  or other physical or mental disability, the Employer may terminate this
Agreement,  provided that the Employer shall continue to be obligated to pay the
Executive  his  Base  Salary for one year, and provided further that any amounts
actually paid to Executive pursuant to any disability insurance or other similar
such  program  which  the  Employer has provided or may provide on behalf of its
employees  or  pursuant  to  any workman's or social security disability program
shall  not  reduce the compensation to be paid to the Executive pursuant to this
paragraph.

     In  the  event  of  Executive's death during the term of the Agreement, his
estate,  legal  representatives or named beneficiaries (as directed by Executive
in  writing)  shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at  the  rate  in effect at the time Executive's death for the remaining term of
the  Agreement.

7.     TERMINATION  FOR  CAUSE

     The  term  "Termination  for  Cause"  shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
<PAGE>

fiduciary  duty involving personal profit, intentional failure to perform stated
duties,  willful  violation  of any law, rule, or regulation (other than traffic
violations  or  similar  offenses)  or final cease-and-desist order, or material
breach  of  any  provision  of this Agreement.  In determining incompetence, the
acts  or  omissions  shall be measured against standards generally prevailing in
the  financial  services  industry.  For  purposes  of this paragraph, no act or
failure  to  act  on  the part of Executive shall be considered "willful" unless
done,  or  omitted  to  be  done, by the Executive not in good faith and without
reasonable  belief  that  the  Executive's  action  or  omission was in the best
interest of the Employer.  Notwithstanding the foregoing, Executive shall not be
deemed  to have been Terminated for Cause unless and until there shall have been
delivered  to him a copy of a resolution duly adopted by the affirmative vote of
not  less  than  three-fourths  of the members of the Boards of Directors of the
Company  and  the  Bank  at  a  meeting  of said Boards called and held for that
purpose  (after  reasonable  notice  to  Executive  and  an opportunity for him,
together  with counsel, to be heard before the Boards), finding that in the good
faith  opinion  of  the  Boards,  Executive  was  guilty  of  conduct justifying
Termination  for  Cause  and  specifying the particulars thereof in detail.  The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any unexercised stock options granted to
Executive under any stock option plan of the Bank, the Company or any subsidiary
or  affiliate  thereof,  shall  become  null and void effective upon Executive's
receipt  of  Notice  of  Termination for Cause pursuant to Section 8 hereof, and
shall not be exercisable by Executive at any time subsequent to such Termination
for  Cause.

8.     NOTICE

     (a)  Any  purported  termination  by  the Employer or by Executive shall be
          communicated  by  Notice of Termination to the other party hereto. For
          purposes  of  this  Agreement,  a "Notice of Termination" shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of  Executive's  employment  under  the  provision  so  indicated.

     (b)  "Date  of  Termination" shall mean the date specified in the Notice of
          Termination  (which, in the case of a Termination for Cause, shall not
          be less than thirty (30) days from the date such Notice of Termination
          is  given).

     (c)  If,  within thirty (30) days after any Notice of Termination is given,
          the  party  receiving  such  Notice  of Termination notifies the other
          party  that  a  dispute exists concerning the termination, except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in  which  case  the  Date of Termination shall be the date
          specified  in the Notice, the Date of Termination shall be the date on
          which  the  dispute  is  finally  determined, either by mutual written
          agreement  of  the  parties,  by  a binding arbitration award, or by a
          final  judgment,  order or decree of a court of competent jurisdiction
          (the  time  for  appeal  having  expired  and  no  appeal  having been
          perfected)  and provided further that the Date of Termination shall be
          extended  by  a notice of dispute only if such notice is given in good
          faith  and the party giving such notice pursues the resolution of such
          dispute with reasonable diligence. Notwithstanding the pendency of any
          such  dispute,  the  Employer  will continue to pay Executive his full
          compensation  in effect when the notice giving rise to the dispute was
          given  (including,  but  not  limited  to,  Base  Salary) and continue
          Executive  as a participant in all compensation, benefit and insurance
          plans  in  which  he  was participating when the notice of dispute was
          given,  until  the dispute is finally resolved in accordance with this
          Agreement,  provided such dispute is resolved within nine months after
          the  Date  of  Termination  specified  in  the  Notice or Termination;
          notwithstanding  the  foregoing  no  compensation or benefits shall be
          paid  to Executive in the event the Executive is Terminated for Cause.
          In  the  event  that  such Termination for Cause is found to have been
          wrongful  or  such  dispute is otherwise decided in Executive's favor,
          the  Executive  shall  be  entitled  to  receive  all compensation and
          benefits  which  accrued  for  up to a period of nine months after the
          Termination  for  Cause.  If  such dispute is not resolved within such
          nine-  month  period,  the Employer shall not be obligated, upon final
          resolution  of  such  dispute, to pay Executive compensation and other
          payments  accruing  more  than  nine  months  from  the  Date  of  the
          Termination specified in the Notice of Termination. Amounts paid under
          this  Section  are  in  addition  to  all other amounts due under this
          Agreement  and shall not be offset against or reduce any other amounts
          due  under  this  Agreement.
<PAGE>

9.     POST-TERMINATION  OBLIGATIONS

     (a)  All  payments  and benefits to Executive under this Agreement shall be
          subject to Executive's compliance with paragraph (b) of this Section 9
          during  the term of this Agreement and for one (1) full year after the
          expiration  or  termination  hereof.

     (b)  Executive  shall, upon reasonable notice, furnish such information and
          assistance  to  the  Bank as may reasonably be required by the Bank in
          connection  with any litigation in which it or any of its subsidiaries
          or  affiliates  is,  or  may  become,  a  party.

     (c)  The  Employer's  obligation  to  tender  the  payment  of  Payment and
          Termination  Benefits  pursuant  to  Sections  4 and 5 hereof shall be
          conditioned  upon  the  Executive's  prior  written  resignations from
          membership  in  the  Boards  of Directors of the Bank and the Company.

10.     NON-COMPETITION

     (a)  Upon  any  termination of Executive's employment hereunder pursuant to
          Section  4(c)  hereof,  Executive  agrees not to compete with the Bank
          and/or  the  Company  for  a  period  of  one  (1) year following such
          termination  in  any city, town or county in which the Bank and/or the
          Company  has  an  office  or  has  filed an application for regulatory
          approval  to  establish an office, determined as of the effective date
          of such termination, except as agreed to pursuant to a resolution duly
          adopted  by  the  Board.  Executive agrees that during such period and
          within  said  cities, towns and counties, Executive shall not work for
          or  advise,  consult  or otherwise serve with, directly or indirectly,
          any  entity  whose  business  materially competes with the depository,
          lending  or  other business activities of the Bank and/or the Company.
          The parties hereto, recognizing that irreparable injury will result to
          the Bank and/or the Company, its business and property in the event of
          Executive's breach of this Subsection 10(a) agree that in the event of
          any  such  breach  by  Executive,  the Bank and/or the Company will be
          entitled,  in addition to any other remedies and damages available, to
          an  injunction  to  restrain  the  violation  hereof  by  Executive,
          Executive's  partners,  agents, servants, employers, employees and all
          persons acting for or with Executive. Nothing herein will be construed
          as  prohibiting  the  Bank  and/or the Company from pursuing any other
          remedies  available  to the Bank and/or the Company for such breach or
          threatened  breach,  including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business  activities and plans for business activities of the Employer
          and  affiliates  thereof,  as  it  may  exist  from time to time, is a
          valuable,  special  and  unique asset of the business of the Employer.
          Executive  will  not,  during  or  after  the  term of his employment,
          disclose  any  knowledge  of  the past, present, planned or considered
          business  activities  of  the  Employer  or  affiliates thereof to any
          person,  firm,  corporation, or other entity for any reason or purpose
          whatsoever.  Notwithstanding the foregoing, Executive may disclose any
          knowledge  of  banking, financial and/or economic principles, concepts
          or  ideas  which  are  not  solely  and  exclusively  derived from the
          business  plans  and  activities  of  the  Employer, and Executive may
          disclose  any  information  regarding the Bank or the Company which is
          otherwise  publicly  available. In the event of a breach or threatened
          breach  by  the  Executive  of  the Provisions of this Section 10, the
          Employer  will be entitled to an injunction restraining Executive from
          disclosing,  in  whole or in part, the knowledge of the past, present,
          planned  or  considered  business  activities  of  the  Employer  or
          affiliates  thereof,  or  from  rendering  any services to any person,
          firm, corporation, other entity to whom such knowledge, in whole or in
          part,  has  been  disclosed  or is threatened to be disclosed. Nothing
          herein will be construed as prohibiting the Employer from pursuing any
          other  remedies  available  to  the Bank for such breach or threatened
          breach,  including  the  recovery  of  damages  from  Executive.
<PAGE>

11.     SOURCE  OF  PAYMENTS

     All  payments  provided  in  this Agreement shall be timely paid in cash or
check  from  the  general  funds  of the Bank.  The Company, however, guarantees
payment  and  provision  of  all amounts and benefits due hereunder to Executive
and,  if  such  amounts  and  benefits  due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

12.     EFFECT  ON  PRIOR  AGREEMENTS  AND  EXISTING  BENEFITS  PLANS

     (a)  This  Agreement  contains the entire understanding between the parties
          hereto  and  supersedes  any  prior  employment  agreement between the
          Employer or any predecessor of the Employer and Executive, except that
          this  Agreement  shall  not affect or operate to reduce any benefit or
          compensation inuring to the Executive of a kind elsewhere provided. No
          provision  of  this  Agreement  shall  be  interpreted  to  mean  that
          Executive  is subject to receiving fewer benefits than those available
          to  him  without  reference  to  this  Agreement.

     (b)  In  the  event  that  the provisions of this Agreement are in conflict
          with  the provisions of the Bank's or the Company's Stock Option Plan,
          Supplemental  Executive  Retirement Plan, or Recognition and Retention
          Plan  (or any such restricted stock plan in effect) in which Executive
          participates,  this Agreement shall govern; provided further, however,
          that  this  Agreement shall not supercede provisions that specifically
          received  prior  approval  by  vote  of  shareholders  of the Company.

13.     NO  ATTACHMENT

     (a)  Except  as  required  by  law, no right to receive payments under this
          Agreement  shall  be subject to anticipation, commutation, alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or  similar  process  or assignment by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any  such  action  shall  be  null,  void,  and  of  no  effect.

     (b)  This  Agreement  shall  be  binding upon, and inure to the benefit of,
          Executive  and  the  Employer  and  their  respective  successors  and
          assigns.

14.     MODIFICATION  AND  WAIVER

     (a)  This  Agreement may not be modified or amended except by an instrument
          in  writing  signed  by  the  parties  hereto.

     (b)  No  term  or  condition of this Agreement shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged  with such waiver or estoppel. No such written waiver shall be
          deemed  a  continuing  waiver  unless specifically stated therein, and
          each  such  waiver  shall  operate  only  as  to  the specific term or
          condition  waived  and  shall  not constitute a waiver of such term or
          condition  for  the  future as to any act other than that specifically
          waived.

15.     REQUIRED  PROVISIONS

     (a)  The Employer may terminate the Executive's employment at any time, but
          any  termination  by  the  Employer, other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits  under  this Agreement. Executive shall not have the right to
          receive  compensation  or  other  benefits  for  any  period  after
          Termination  for  Cause  as  defined  in  Section  7  hereinabove.

     (b)  If  the  Executive  is  suspended  from  office  and/or  temporarily
          prohibited from participating in the conduct of the Employer's affairs
          by  a  notice  served  under Section 8(e)(3) (12 U.S.C. 1818(e)(3)) or
<PAGE>

          8(g)  (12  U.S.C.  1818(g))  of  the Federal Deposit Insurance Act, as
          amended by the Financial Institutions Reform, Recovery and Enforcement
          Act  of 1989, the Employer's obligations under this Agreement shall be
          suspended  as  of  the  date  of service, unless stayed by appropriate
          proceedings.  If the charges in the notice are dismissed, the Employer
          may  in  its  discretion  (i)  pay  the  Executive  all or part of the
          compensation withheld while their Agreement obligations were suspended
          and  (ii) reinstate (in whole or in part) any of the obligations which
          were  suspended.

     (c)  If  the  Executive  is  removed  and/or  permanently  prohibited  from
          participating  in  the  conduct  of the Employer's affairs by an order
          issued  under  Section  8(e)  (12  U.S.C.  1818(e)) or 8(g) (12 U.S.C.
          1818(g))  of  the  Federal  Deposit  Insurance  Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  effective  date  of  the  order, but vested rights of the
          contracting  parties  shall  not  be  affected.

     (d)  If  the  Employer  is in default as defined in Section 3(x) (12 U.S.C.
          1813(x)(1))  of  the  Federal Deposit Insurance Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  date  of default, but this paragraph shall not affect any
          vested  rights  of  the  contracting  parties.

     (e)  All  obligations  of  the  Employer  under  this  Agreement  shall  be
          terminated,  except  to the extent determined that continuation of the
          Agreement is necessary for the continued operation of the institution,
          (i) by the Federal Deposit Insurance Corporation ("FDIC"), at the time
          FDIC enters into an agreement to provide assistance to or on behalf of
          the  Employer  under  the  authority  contained  in Section 13(c) (12)
          U.S.C.  1823(c))  of  the Federal Deposit Insurance Act, as amended by
          the  Financial  Institutions  Reform,  Recovery and Enforcement Act of
          1989;  or (ii) when the Employer is determined by the FDIC to be in an
          unsafe  or  unsound  condition.  Any  rights  of the parties that have
          already  vested,  however,  shall  not  be  affected  by  such action.

16.     SEVERABILITY

     If,  for  any  reason,  any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of  this  Agreement  or any part of such provision not held so invalid, and each
such  other  provision and part thereof shall to the full extent consistent with
law  continue  in  full  force  and  effect.

17.     HEADINGS  FOR  REFERENCE  ONLY

     The  headings  of  sections  and  paragraphs herein are included solely for
convenience  of reference and shall not control the meaning or interpretation of
any  of  the  provisions  of  this  Agreement.

18.     GOVERNING  LAW

     This  Agreement shall be governed by the laws of the State of New York, but
only  to  the  extent  not  superseded  by  federal  law.
<PAGE>

19.     ARBITRATION

     Any  dispute  or  controversy  arising  under  or  in  connection with this
Agreement  shall  be  settled  exclusively by arbitration in accordance with the
rules  of  the American Arbitration Association then in effect.  Judgment may be
entered  on  the  arbitrator's award in any court having jurisdiction; provided,
however,  that  Executive  shall be entitled to seek specific performance of his
right  to  be  paid  until  the  Date  of Termination during the pendency of any
dispute  or  controversy  arising  under  or  in connection with this Agreement.

20.     PAYMENT  OF  LEGAL  FEES

     All  reasonable  legal  fees  paid or incurred by Executive pursuant to any
dispute  or  question of interpretation relating to this Agreement shall be paid
or  reimbursed  by the Employer, provided that the dispute or interpretation has
been settled by Executive and the Employer or resolved in the Executive's favor.

21.     INDEMNIFICATION

     The  Employer  shall  provide Executive (including his heirs, executors and
administrators)  with  coverage  under  a  standard  directors'  and  officers'
liability  insurance  policy at its expense, or in lieu thereof, shall indemnify
Executive  (and  his  heirs, executors and administrators) to the fullest extent
permitted  under  federal  law  against  all expenses and liabilities reasonably
incurred  by  him  in  connection  with  or  arising  out of any action, suit or
proceeding  in  which he may be involved by reason of his having been a director
or  officer  of  the  Employer  (whether or not he continues to be a director or
officer  at  the  time of incurring such expenses or liabilities), such expenses
and  liabilities  to  include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements (such settlements must be
approved  by  the Boards of Directors of the Employer).  If such action, suit or
proceeding  is  brought  against  Executive  in  his  capacity  as an officer or
director  of  the  Employer,  however,  such indemnification shall not extend to
matters  as  to  which  Executive  is  finally adjudged to be liable for willful
misconduct  in  the performance of his duties.  No Indemnification shall be paid
that  would violate 12 U.S.C. 1828(K) or any regulations promulgated thereunder.

22.     SUCCESSOR  TO  THE  EMPLOYER

     The  Employer  shall  require  any successor or assignee, whether direct or
indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all  or
substantially  all  the business or assets of the Bank or the Company, expressly
and  unconditionally  to  assume and agree to perform the Employer's obligations
under  this  Agreement,  in  the  same  manner  and  to the same extent that the
Employer  would  be  required to perform if no such succession or assignment had
taken  place.

<PAGE>

                                   SIGNATURES


     IN  WITNESS  WHEREOF, the Employer has caused this Agreement to be executed
and  its  seal  to  be  affixed  hereunto  by  its  duly authorized officer, and
Executive  has  signed  this Agreement, on the day and date first above written.

ATTEST:                              PATHFINDER  BANK


/s/ Melissa A. Miller                By: /s/ Janette Resnick
________________________             ___________________________
Secretary                            Janette  Resnick
                                     Chairman


ATTEST:                              PATHFINDER  BANCORP,  INC.


/s/ Melissa A. Miller                By: /s/ Janette Resnick
________________________             ___________________________
Secretary                            Janette  Resnick
                                     Chairman


WITNESS:                              EXECUTIVE


/s/ Tonya Crisafulli                  By:  /s/ Thomas W. Schneider
_________________________             ____________________________
                                      Thomas  W.  Schneider

<PAGE>

                                                                   EXHIBIT 10.2
                            PATHFINDER BANCORP, INC.
                                 PATHFINDER BANK
                              EMPLOYMENT AGREEMENT


     This  Agreement  is made effective as of the 28th day of June, 2004, by and
between  Pathfinder  Bank (the "Bank"), a New York chartered stock savings bank,
with  its  principal administrative office at 214 West First Street, Oswego, New
York  13126-2547,  jointly with Pathfinder Bancorp, Inc, the sole stockholder of
the  Bank,  and  Edward A. Mervine (the "Executive"). Any reference to "Company"
herein  shall  mean  Pathfinder  Bancorp,  Inc.  or  any  successor thereto. Any
reference  to  "Employer" herein shall mean both the Bank and the Company or any
successors  thereto

     WHEREAS,  the Employer wishes to assure itself of the services of Executive
for  the  period  provided  in  this  Agreement;  and

     WHEREAS,  Executive  is willing to serve in the employ of the Employer on a
full-time  basis  for  said  period.

     NOW,  THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree  as  follows:

1.     POSITION  AND  RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
Vice-President  and  General  Counsel  of  the  Bank  and  as  President  and
Vice-President  and  General  Counsel  of  the  Company.  During  said  period,
Executive  also  agrees  to serve, if elected, as an officer and director of the
Bank,  the  Company and of any subsidiary or affiliate of the Employer.  Failure
to  reelect  Executive as Vice-President and General Counsel of the Bank and the
Company  without  the consent of the Executive during the term of this Agreement
shall  constitute  a  breach  of  this  Agreement.

2.     TERMS  AND  DUTIES

     (a)  The  period of Executive's employment under this Agreement shall begin
          as  of the date first above written and shall continue for a period of
          thirty-six  (36)  full  calendar  months thereafter. Commencing on the
          first  anniversary  date  of  this  Agreement,  and continuing at each
          anniversary  date  thereafter,  the  Agreement  shall  renew  for  an
          additional  year such that the remaining term shall be three (3) years
          unless written notice is provided to Executive, at least ten (10) days
          and not more than thirty (30) days prior to any such anniversary date,
          that  his  employment shall cease at the end of thirty-six (36) months
          following  such  anniversary  date.  Prior  to  each notice period for
          non-renewal,  the  disinterested  members of the Board of Directors of
          the Bank ("Board") will conduct a comprehensive performance evaluation
          and  review  of  the  Executive for purposes of determining whether to
          extend the Agreement, and the results thereof shall be included in the
          minutes  of  the  Board's  meeting.

     (b)  During  the  period of his employment hereunder, except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and  efforts to the faithful
          performance  of his duties hereunder including activities and services
          related  to  the legal needs of the Employer; provided, however, that,
          Executive,  ,  hold  any  offices  or  positions  in,  companies  or
          organizations,  which,  in such Board's judgment, will not present any
          conflict  of  interest  with  the  Bank,  or  materially  affect  the
          performance  of  Executive's  duties  pursuant  to  this  Agreement.
          Moreover,  the Executive may continue to practice law independently of
          his  employment  provided (1) said practice does not routinely require
          in  excess  of  10 hours per week of the executive's time and (2) does
          not present a conflict of interest to the Bank unless said conflict is
          waived  by  the  Bank  or  Employer.
<PAGE>

3.     COMPENSATION  AND  REIMBURSEMENT

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Section 2(b). The
          Bank  shall  pay  Executive  as compensation a salary of not less than
          $115,500per  year  ("Base  Salary"). Such Base Salary shall be payable
          biweekly. During the period of this Agreement, Executive's Base Salary
          shall be reviewed at least annually. Such review shall be conducted by
          a  Committee  designated  by  the  Board,  and  the Board may increase
          Executive's  Base  Salary.  In addition to the Base Salary provided in
          this  Section  3(a),  the  Bank  shall provide Executive at no cost to
          Executive  with  all  such other benefits as are provided uniformly to
          permanent  full-time  employees  of  the  Bank.

     (b)  The  Bank  will  provide  Executive  with  employee  benefit  plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which  Executive  was participating or otherwise deriving benefit from
          immediately  prior to the beginning of the term of this Agreement, and
          the Bank will not, without Executive's prior written consent, make any
          changes  in  such  plans,  arrangements  or  perquisites  which  would
          adversely  affect  Executive's  rights or benefits thereunder. Without
          limiting the generality of the foregoing provisions of this Subsection
          (b),  Executive will be entitled to participate in or receive benefits
          under  any  employee  benefit  plans  including  but  not  limited to,
          retirement  plans,  supplemental  retirement  plans,  pension  plans,
          profit-sharing  plans,  health-and-accident plans, medical coverage or
          any  other  employee benefit plan or arrangement made available by the
          Bank  in  the  future  to  its  senior  executives  and key management
          employees,  subject  to  and  on  a  basis  consistent with the terms,
          conditions  and overall administration of such plans and arrangements.
          Executive  will  be  entitled to incentive compensation and bonuses as
          provided  in  any  plan  of the Bank in which Executive is eligible to
          participate.  Nothing  paid  to  the  Executive under any such plan or
          arrangement  will  be  deemed  to  be in lieu of other compensation to
          which  the  Executive  is  entitled  under  this  Agreement.

     (c)  In  addition  to the Base Salary provided for by paragraph (a) of this
          Section  3,  the  Employer  shall  pay  or reimburse Executive for all
          reasonable  travel and other reasonable expenses incurred by Executive
          performing  his  obligations under this Agreement and may provide such
          additional compensation in such form and such amounts as the Board may
          from  time  to  time  determine.

     (d)  Compensation  and reimbursement to be paid pursuant to paragraphs (a),
          (b)  and  (c)  of  this  Section  3  shall be paid by the Bank and the
          Company,  respectively  on  a  pro rata basis based upon the amount of
          service  the  Executive devotes to the Bank and Company, respectively.

<PAGE>
4.     PAYMENTS  TO  EXECUTIVE  UPON  AN  EVENT  OF  TERMINATION

     The  provisions  of  this  Section  shall in all respects be subject to the
terms  and  conditions  stated  in  Sections  8  and  15.

     (a)  The  provisions  of this Section shall apply upon the occurrence of an
          Event  of  Termination (as herein defined) during the Executive's term
          of  employment  under  this  Agreement.  As used in this Agreement, an
          "Event  of  Termination" shall mean and include any one or more of the
          following:  (i)  the  termination  by  the  Bank  or  the  Company  of
          Executive's  full-time employment hereunder for any reason other than,
          (A)  Disability  or  Retirement  as  defined in Section 6 below, (B) a
          Change  in  Control,  as  defined  in  Section  5(a)  hereof,  or  (C)
          Termination  for  Cause  as  defined  in  Section  7  hereof;  or (ii)
          Executive's  resignation from the Bank's or the Company's employ, upon
          any  (A)  failure  to  elect  or  reelect  or  to appoint or reappoint
          Executive  as  Vice-President and General Counsel, (B) material change
          in  Executive's  function,  duties,  or responsibilities, which change
          would  cause  Executive's  position  to  become  one  of  lesser
          responsibility,  importance, or scope from the position and attributes
          thereof described in Section 1, above, (C) a relocation of Executive's
          principal  place of employment by more than 30 miles from its location
          at  the  effective  date of this Agreement, or a material reduction in
          the  benefits  and  perquisites  to  the  Executive  from  those being
          provided  as  of the effective date of this Agreement, (D) liquidation
          or  dissolution  of  the  Bank  or  Company other than liquidations or
          dissolutions that are caused by reorganizations that do not affect the
          status  of Executive, (E, or (E) breach of this Agreement by the Bank.
          Upon  the  occurrence  of any event described in clauses (ii)(A), (B),
          (C),  (D),  or  (E), above, Executive shall have the right to elect to
          terminate  his  employment  under  this  Agreement by resignation upon
          sixty  (60) days prior written notice given within a reasonable period
          of  time  not  to  exceed four calendar months after the initial event
          giving  rise  to  said  right  to elect. Notwithstanding the preceding
          sentence, in the event of a continuing breach of this Agreement by the
          Employer, the Executive, after giving due notice within the prescribed
          time frame of an initial event specified above, shall not waive any of
          his rights solely under this Agreement and this Section 4 by virtue of
          the fact that Executive has submitted his resignation but has remained
          in  the  employment  of  the  Employer  and  is  engaged in good faith
          discussions to resolve any occurrence of an event described in clauses
          (A),  (B),  (C),  (D),  ()  and  (E)  above.

     (b)  Upon  the  occurrence  of  an  Event  of  Termination,  on the Date of
          Termination,  as  defined  in  Section  8,  the  Employer  shall  pay
          Executive,  or,  in the event of his subsequent death, his beneficiary
          or  beneficiaries, or his estate, as the case may be, as severance pay
          or liquidated damages, or both, a sum equal to three (3) times the sum
          of  (i)  Base Salary and (ii) the highest rate of bonus awarded to the
          Executive  during  the prior three years, , provided, however, that if
          the  Employer  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Employer's capital to
          be reduced below its minimum capital requirements, such payments shall
          be  deferred until such time as the Employer is in capital compliance.
          At  the  election of the Executive, which election is to be made on an
          annual  basis  during  the  month  of  January,  and which election is
          irrevocable  for  the year in which made and upon the occurrence of an
          Event  of  Termination,  such  payments shall be made in a lump sum or
          paid  monthly during the remaining term of the Agreement following the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  to  the  Executive will be made on a monthly basis during the
          remaining term of the Agreement. Such payments shall not be reduced in
          the event the Executive obtains other employment following termination
          of  employment.

     (c)  Notwithstanding  the  provisions  of Sections 4(a) and (b), and in the
          event  that  there  has  not  been  a  Change in Control as defined in
          Section  5(a) nor an Event of Termination, as defined in Section 4(a),
          upon the voluntary termination by the Executive upon giving sixty days
          notice to the Employer (which itself shall not be deemed to constitute
          an "Event of Termination" as defined), the Employer, at the discretion
          of the Board of Directors, shall pay Executive, or in the event of his
<PAGE>

          subsequent  death, his beneficiary or beneficiaries, or his estate, as
          the  case may be, a severance payment in an amount to be determined by
          the  Board  of  Directors at the time of such voluntary termination by
          the Executive. Such severance payment shall not exceed three (3) times
          the  average  of  the  three  preceding  years' Base Salary, including
          bonuses  and  any other cash compensation paid to the Executive during
          such  years,  and  the amount of any benefits received pursuant to any
          employee  benefit plans, on behalf of the Executive, maintained by the
          Employer during such years; provided, however, that if the Employer is
          not  in  compliance  with  its minimum capital requirements or if such
          payments  would  cause  the Employer's capital to be reduced below its
          minimum  capital  requirements,  such payments shall be deferred until
          such  time  as  the  Employer  is  in capital compliance, and provided
          further,  that in no event shall total severance compensation from all
          sources  exceed  three  times  the  Executive's  Base  Salary  for the
          immediately  preceding  year.  At the election of the Executive, which
          election is to be made on an annual basis during the month of January,
          and  which election is irrevocable for the year in which made and upon
          the Executive's voluntary termination, any payments shall be made in a
          lump  sum  or  paid monthly during the remaining term of the Agreement
          following  the  Executive's termination. In the event that no election
          is  made, any payment to the Executive will be made on a monthly basis
          during the remaining term of the agreement. Such payments shall not be
          reduced  in the event the Executive obtains other employment following
          termination  of  employment.

     (d)  Upon  the  occurrence  of  an  Event of Termination, the Employer will
          cause  to  be  continued life, medical, dental and disability coverage
          substantially identical to the coverage maintained by the Employer for
          Executive  prior to his termination, provided that such benefits shall
          not  be  provided  in  the  event  they should constitute an unsafe or
          unsound  banking  practice  relating  to  executive  compensation  and
          employment  contracts pursuant to applicable regulations, as is now or
          hereafter  in effect. Such coverage shall cease upon the expiration of
          the  remaining  term  of  this  Agreement.

     (e)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  Supplemental  Executive  Retirement  Plan  of  the Bank or Company
          applicable  to  him,  if  any

     (g)  Upon  the  occurrence  of an Event of Termination, the Executive shall
          become  fully  vested  in  and entitled to all benefits awarded to him
          under  the  Bank's  or the Company's Recognition and Retention Plan or
          any  restricted  stock  plan  in  effect.

5.     CHANGE  IN  CONTROL

     (a)  No  benefit  shall  be payable under this Section 5 unless there shall
          have  been a Change in Control of the Bank or Company. For purposes of
          this  Agreement,  a  "Change  in Control" of the Bank or Company shall
          mean  a change in control of a nature that (i) would be required to be
          reported  in  response to Item 1(a) of the current report on Form 8-K,
          as  in  effect  on the date hereof, pursuant to Section 13 or 15(d) of
          the  Securities  Exchange  Act  of  1934 (the "Exchange Act"); or (ii)
          results  in  a Change in Control of the Bank or the Company within the
          meaning  of the Home Owners Loan Act, as amended, and applicable rules
          and  regulations  promulgated  thereunder, as in effect at the time of
          the  Change  in  Control  (collectively, the "HOLA"); or (iii) without
          limitation  such  a Change in Control shall be deemed to have occurred
          at  such  time  as  (a)  any "person" (as the term is used in Sections
          13(d)  and  14(d)  of  the Exchange Act) is or becomes the "beneficial
          owner"  (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly,  of  securities of the Company representing 25% or more of
          the  combined  voting power of Company's outstanding securities except
          for  any  securities  purchased  by  the  Employer's  employee  stock
          ownership  plan  or  trust;  or  (b)  individuals  who  constitute the
          Company's  Board  of  Directors  on  the  date  hereof (the "Incumbent
          Board")  cease  for  any  reason  to  constitute  at  least a majority
          thereof,  provided  that  any person becoming a director subsequent to
          the  date  hereof  whose  election  was approved by a vote of at least
          three-quarters  of  the  directors  comprising the Incumbent Board, or
          whose  nomination  for  election  by  the  Company's  stockholders was
          approved  by  the same Nominating Committee serving under an Incumbent
          Board, shall be, for purposes of this clause (b), considered as though
          he  were  a  member  of  the  Incumbent  Board;  or  (c)  a  plan  of
          reorganization,  merger,  consolidation,  sale of all or substantially
          all  the  assets  of the Bank or the Company or similar transaction in
          which  the Bank or Company is not the surviving institution occurs; or
          (d)  a  proxy  statement  soliciting  proxies from stockholders of the
          Company,  by someone other than the current management of the Company,
          seeking  stockholder  approval  of a plan of reorganization, merger or
          consolidation  of  the Company or similar transaction with one or more
          corporations  or  financial  institutions,  and as a result such proxy
          solicitation a plan of reorganization, merger consolidation or similar
          transaction involving the Company is approved by the requisite vote of
          the  Company's  stockholders; or (e) a tender offer is made for 25% or
<PAGE>

          more  of  the  voting  securities  of the Company and the shareholders
          owning  beneficially  or  of  record  25%  or  more of the outstanding
          securities  of  the  Company  have  tendered  or offered to sell their
          shares  pursuant  to  such  tender offer and such tendered shares have
          been  accepted  by the tender offeror. Notwithstanding anything to the
          contrary  herein,  a  "Change  in  Control" of the Bank or the Company
          shall  not  be deemed to have occurred in the event of a conversion of
          Pathfinder  Bancorp,  MHC  to  stock  holding  company  form.

     (b)  If  any  of the events described in Section 5(a) hereof constituting a
          Change  in  Control  have occurred, Executive shall be entitled to the
          benefits  provided  in  paragraphs  (c), (d), (e), (f), (g) and (h) of
          this  Section  5  upon his subsequent termination of employment at any
          time  during  the  term  of this Agreement, regardless of whether such
          termination  results  from  (i)  his resignation or (ii) his dismissal
          upon  the  Change  in  Control.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment, the Employer shall pay Executive, or in the
          event  of  his  subsequent death, his beneficiary or beneficiaries, or
          his  estate,  as  the  case  may  be,  as  severance pay or liquidated
          damages,  or  both, a sum equal to the greater of the payments due for
          the  remaining  term of the Agreement or 2.99 times the average of the
          five  preceding  years'  Base  Salary, including bonuses and any other
          cash  compensation  paid  to  the Executive during such years, and the
          amount  of  any  contributions  made to any employee benefit plans, on
          behalf of the Executive, maintained by the Employer during such years,
          (hereinafter  referred  to as "Payment". Such Payment shall be made by
          the  Employer  on  the  Date  of  Termination.  At the election of the
          Executive,  which election shall be made on an annual basis during the
          month  of  January,  and which election is irrevocable for the year in
          which  made  and  upon  the  occurrence  of  a Change in Control, such
          Payment  may  be  made  in  a  lump  sum  or  paid  in  equal  monthly
          installments  during  the  thirty-six  (36)  months  following  the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  of  the  Payment  to the Executive will be made pro-rata on a
          monthly  basis  during  the  remaining  term  of  the  Agreement.
     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination  of  employment,  the  Employer will cause to be continued
          life,  medical, dental and disability coverage substantially identical
          to  the coverage maintained by the Employer for Executive prior to his
          severance.  Such coverage and payments shall cease upon the expiration
          of  thirty-six  (36)  months.

     (e)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  Supplemental  Executive  Retirement  Plan of the Bank or Company ,
          applicable  to  him,  if  any.

     (g)  Upon the occurrence of a Change in Control, the Executive shall become
          fully  vested in and entitled to all benefits awarded to him under the
          Bank's  or  the  Company's  Recognition  and  Retention  Plan  or  any
          restricted  stock  plan  in  effect.

     (h)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event  that:

          (i)  the  aggregate  payments  or  benefits  to be made or afforded to
               Executive  under  said  paragraphs  (the  "Termination Benefits")
               would  be  deemed  to include an "excess parachute payment" under
               Section  280G  of  the  Internal  Revenue  Code  or any successor
               thereto,  and

          (ii) if  such  Termination  Benefits  were  reduced  to an amount (the
               "Non-Triggering  Amount"),  the  value  of  which  is  one dollar
               ($1.00) less than an amount equal to the total amount of payments
               permissible  under  Section  280G of the Internal Revenue Code or
               any  successor  thereto, then the Termination Benefits to be paid
               to  Executive  shall  be  so reduced so as to be a Non-Triggering
               Amount.
<PAGE>

     (i)  Notwithstanding  the  foregoing,  there  will  be  no reduction in the
          Payment  otherwise payable to Executive during any period during which
          Executive is incapable of performing his duties hereunder by reason of
          temporary  disability.

     (j)  Any Payment made to Executive pursuant to this Agreement or otherwise,
          are  subject  to  and conditioned upon their compliance with 12 U.S.C.
          1818(k)  and  any  applicable  regulations  promulgated  thereunder.

     (k)  The  Executive  shall  not  be entitled to immediately receive Payment
          pursuant  to  this Section 5 if the Employer is not in compliance with
          its  minimum  capital  requirements or if such Payment would cause the
          Employer's  capital  to  be  reduced  below  its  minimum  capital
          requirements.  In  such  event,  Payment  shall be deferred until such
          times  as  the Employer is in capital compliance and provided further,
          that  in  such  event  the  Payment  shall  not exceed three times the
          Executive's  Base  Salary  for  the  immediately  preceding  year.

6.     TERMINATION  UPON  RETIREMENT  OR  DISABILITY

     Termination  by  the  Employer of the Executive based on "Retirement" shall
mean  termination  in  accordance  with  the  Employer's retirement policy or in
accordance  with any retirement arrangement established with Executive's consent
with  respect  to him.  Upon termination of Executive upon Retirement, Executive
shall  be entitled to all benefits under any retirement plan of the Employer and
other  plans  to  which  Executive  is  a  party.

     In the event Executive is unable to perform his duties under this Agreement
on  a  full-time  basis  for a period of six (6) consecutive months by reason of
illness  or other physical or mental disability, the Employer may terminate this
Agreement,  provided that the Employer shall continue to be obligated to pay the
Executive  his  Base  Salary for one year, and provided further that any amounts
actually paid to Executive pursuant to any disability insurance or other similar
such  program  which  the  Employer has provided or may provide on behalf of its
employees  or  pursuant  to  any workman's or social security disability program
shall  not  reduce the compensation to be paid to the Executive pursuant to this
paragraph.

     In  the  event  of  Executive's death during the term of the Agreement, his
estate,  legal  representatives or named beneficiaries (as directed by Executive
in  writing)  shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at  the  rate  in effect at the time Executive's death for the remaining term of
the  Agreement.

7.     TERMINATION  FOR  CAUSE

     The  term  "Termination  for  Cause"  shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary  duty involving personal profit, intentional failure to perform stated
<PAGE>

duties,  willful  violation  of any law, rule, or regulation (other than traffic
violations  or  similar  offenses)  or final cease-and-desist order, or material
breach  of  any  provision  of this Agreement.  In determining incompetence, the
acts  or  omissions  shall be measured against standards generally prevailing in
the  financial  services  industry.  For  purposes  of this paragraph, no act or
failure  to  act  on  the part of Executive shall be considered "willful" unless
done,  or  omitted  to  be  done, by the Executive not in good faith and without
reasonable  belief  that  the  Executive's  action  or  omission was in the best
interest of the Employer.  Notwithstanding the foregoing, Executive shall not be
deemed  to have been Terminated for Cause unless and until there shall have been
delivered  to him a copy of a resolution duly adopted by the affirmative vote of
not  less  than  three-fourths  of the members of the Boards of Directors of the
Company  and  the  Bank  at  a  meeting  of said Boards called and held for that
purpose  (after  reasonable  notice  to  Executive  and  an opportunity for him,
together  with counsel, to be heard before the Boards), finding that in the good
faith  opinion  of  the  Boards,  Executive  was  guilty  of  conduct justifying
Termination  for  Cause  and  specifying the particulars thereof in detail.  The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any unexercised stock options granted to
Executive under any stock option plan of the Bank, the Company or any subsidiary
or  affiliate  thereof,  shall  become  null and void effective upon Executive's
receipt  of  Notice  of  Termination for Cause pursuant to Section 8 hereof, and
shall not be exercisable by Executive at any time subsequent to such Termination
for  Cause.

8.     NOTICE

     (a)  Any  purported  termination  by  the Employer or by Executive shall be
          communicated  by  Notice of Termination to the other party hereto. For
          purposes  of  this  Agreement,  a "Notice of Termination" shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of  Executive's  employment  under  the  provision  so  indicated.

     (b)  "Date  of  Termination" shall mean the date specified in the Notice of
          Termination  (which, in the case of a Termination for Cause, shall not
          be less than thirty (30) days from the date such Notice of Termination
          is  given).

     (c)  If,  within thirty (30) days after any Notice of Termination is given,
          the  party  receiving  such  Notice  of Termination notifies the other
          party  that  a  dispute exists concerning the termination, except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in  which  case  the  Date of Termination shall be the date
          specified  in the Notice, the Date of Termination shall be the date on
          which  the  dispute  is  finally  determined, either by mutual written
          agreement  of  the  parties,  by  a binding arbitration award, or by a
          final  judgment,  order or decree of a court of competent jurisdiction
          (the  time  for  appeal  having  expired  and  no  appeal  having been
          perfected)  and provided further that the Date of Termination shall be
          extended  by  a notice of dispute only if such notice is given in good
          faith  and the party giving such notice pursues the resolution of such
          dispute with reasonable diligence. Notwithstanding the pendency of any
          such  dispute,  the  Employer  will continue to pay Executive his full
          compensation  in effect when the notice giving rise to the dispute was
          given  (including,  but  not  limited  to,  Base  Salary) and continue
          Executive  as a participant in all compensation, benefit and insurance
          plans  in  which  he  was participating when the notice of dispute was
          given,  until  the dispute is finally resolved in accordance with this
          Agreement,  provided such dispute is resolved within nine months after
          the  Date  of  Termination  specified  in  the  Notice or Termination;
          notwithstanding  the  foregoing  no  compensation or benefits shall be
          paid  to Executive in the event the Executive is Terminated for Cause.
          In  the  event  that  such Termination for Cause is found to have been
          wrongful  or  such  dispute is otherwise decided in Executive's favor,
          the  Executive  shall  be  entitled  to  receive  all compensation and
          benefits  which  accrued  for  up to a period of nine months after the
          Termination  for  Cause.  If  such dispute is not resolved within such
          nine-  month  period,  the Employer shall not be obligated, upon final
          resolution  of  such  dispute, to pay Executive compensation and other
          payments  accruing  more  than  nine  months  from  the  Date  of  the
          Termination specified in the Notice of Termination. Amounts paid under
          this  Section  are  in  addition  to  all other amounts due under this
          Agreement  and shall not be offset against or reduce any other amounts
          due  under  this  Agreement.
<PAGE>

9.     POST-TERMINATION  OBLIGATIONS

     (a)  All  payments  and benefits to Executive under this Agreement shall be
          subject to Executive's compliance with paragraph (b) of this Section 9
          during  the term of this Agreement and for one (1) full year after the
          expiration  or  termination  hereof.

     (b)  Executive  shall, upon reasonable notice, furnish such information and
          assistance  to  the  Bank as may reasonably be required by the Bank in
          connection  with any litigation in which it or any of its subsidiaries
          or  affiliates  is,  or  may  become,  a  party.

10.     NON-COMPETITION

     (a)  Upon  any  termination of Executive's employment hereunder pursuant to
          Section  4(c)  hereof,  Executive  agrees not to compete with the Bank
          and/or  the  Company  for  a  period  of  one  (1) year following such
          termination  in  any city, town or county in which the Bank and/or the
          Company  has  an  office  or  has  filed an application for regulatory
          approval  to  establish an office, determined as of the effective date
          of such termination, except as agreed to pursuant to a resolution duly
          adopted  by  the  Board.  Executive agrees that during such period and
          within  said  cities, towns and counties, Executive shall not work for
          or  advise,  consult  or otherwise serve with, directly or indirectly,
          any  entity  whose  business  materially competes with the depository,
          lending  or  other business activities of the Bank and/or the Company.
          The parties hereto, recognizing that irreparable injury will result to
          the Bank and/or the Company, its business and property in the event of
          Executive's breach of this Subsection 10(a) agree that in the event of
          any  such  breach  by  Executive,  the Bank and/or the Company will be
          entitled,  in addition to any other remedies and damages available, to
          an  injunction  to  restrain  the  violation  hereof  by  Executive,
          Executive's  partners,  agents, servants, employers, employees and all
          persons acting for or with Executive. Nothing herein will be construed
          as  prohibiting  the  Bank  and/or the Company from pursuing any other
          remedies  available  to the Bank and/or the Company for such breach or
          threatened  breach,  including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business  activities and plans for business activities of the Employer
          and  affiliates  thereof,  as  it  may  exist  from time to time, is a
          valuable,  special  and  unique asset of the business of the Employer.
          Executive  will  not,  during  or  after  the  term of his employment,
          disclose  any  knowledge  of  the past, present, planned or considered
          business  activities  of  the  Employer  or  affiliates thereof to any
          person,  firm,  corporation, or other entity for any reason or purpose
          whatsoever.  Notwithstanding the foregoing, Executive may disclose any
          knowledge  of  banking, financial and/or economic principles, concepts
          or  ideas  which  are  not  solely  and  exclusively  derived from the
          business  plans  and  activities  of  the  Employer, and Executive may
          disclose  any  information  regarding the Bank or the Company which is
          otherwise  publicly  available. In the event of a breach or threatened
          breach  by  the  Executive  of  the Provisions of this Section 10, the
          Employer  will be entitled to an injunction restraining Executive from
          disclosing,  in  whole or in part, the knowledge of the past, present,
          planned  or  considered  business  activities  of  the  Employer  or
          affiliates  thereof,  or  from  rendering  any services to any person,
          firm, corporation, other entity to whom such knowledge, in whole or in
          part,  has  been  disclosed  or is threatened to be disclosed. Nothing
          herein will be construed as prohibiting the Employer from pursuing any
          other  remedies  available  to  the Bank for such breach or threatened
          breach,  including  the  recovery  of  damages  from  Executive.
<PAGE>

11.     SOURCE  OF  PAYMENTS

     All  payments  provided  in  this Agreement shall be timely paid in cash or
check  from  the  general  funds  of the Bank.  The Company, however, guarantees
payment  and  provision  of  all amounts and benefits due hereunder to Executive
and,  if  such  amounts  and  benefits  due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

12.     EFFECT  ON  PRIOR  AGREEMENTS  AND  EXISTING  BENEFITS  PLANS

     (a)  This  Agreement  contains the entire understanding between the parties
          hereto  and  supersedes  any  prior  employment  agreement between the
          Employer or any predecessor of the Employer and Executive, except that
          this  Agreement  shall  not affect or operate to reduce any benefit or
          compensation inuring to the Executive of a kind elsewhere provided. No
          provision  of  this  Agreement  shall  be  interpreted  to  mean  that
          Executive  is subject to receiving fewer benefits than those available
          to  him  without  reference  to  this  Agreement.

     (b)  In  the  event  that  the provisions of this Agreement are in conflict
          with  the provisions of the Bank's or the Company's Stock Option Plan,
          Supplemental  Executive  Retirement Plan, or Recognition and Retention
          Plan  (or any such restricted stock plan in effect) in which Executive
          participates,  this Agreement shall govern; provided further, however,
          that  this  Agreement shall not supercede provisions that specifically
          received  prior  approval  by  vote  of  shareholders  of the Company.

13.     NO  ATTACHMENT

     (a)  Except  as  required  by  law, no right to receive payments under this
          Agreement  shall  be subject to anticipation, commutation, alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or  similar  process  or assignment by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any  such  action  shall  be  null,  void,  and  of  no  effect.

     (b)  This  Agreement  shall  be  binding upon, and inure to the benefit of,
          Executive  and  the  Employer  and  their  respective  successors  and
          assigns.

14.     MODIFICATION  AND  WAIVER

     (a)  This  Agreement may not be modified or amended except by an instrument
          in  writing  signed  by  the  parties  hereto.

     (b)  No  term  or  condition of this Agreement shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged  with such waiver or estoppel. No such written waiver shall be
          deemed  a  continuing  waiver  unless specifically stated therein, and
          each  such  waiver  shall  operate  only  as  to  the specific term or
          condition  waived  and  shall  not constitute a waiver of such term or
          condition  for  the  future as to any act other than that specifically
          waived.

15.     REQUIRED  PROVISIONS

     (a)  The Employer may terminate the Executive's employment at any time, but
          any  termination  by  the  Employer, other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits  under  this Agreement. Executive shall not have the right to
          receive  compensation  or  other  benefits  for  any  period  after
          Termination  for  Cause  as  defined  in  Section  7  hereinabove.

     (b)  If  the  Executive  is  suspended  from  office  and/or  temporarily
          prohibited from participating in the conduct of the Employer's affairs

<PAGE>
          by  a  notice  served  under Section 8(e)(3) (12 U.S.C. 1818(e)(3)) or
          8(g)  (12  U.S.C.  1818(g))  of  the Federal Deposit Insurance Act, as
          amended by the Financial Institutions Reform, Recovery and Enforcement
          Act  of  1989,  or if the Executive is suspended ffrom the practice of
          law the Employer's obligations under this Agreement shall be suspended
          as  of  the date of service, unless stayed by appropriate proceedings.
          If  the  charges  in  the  notice are dismissed, or if the Executive's
          suspension to practice is reversed, the Employer may in its discretion
          (i)  pay  the Executive all or part of the compensation withheld while
          their  Agreement  obligations  were  suspended  and (ii) reinstate (in
          whole  or  in  part)  any  of  the  obligations  which were suspended.

     (c)  If  the  Executive  is  removed  and/or  permanently  prohibited  from
          participating  in  the  conduct  of the Employer's affairs by an order
          issued  under  Section  8(e)  (12  U.S.C.  1818(e)) or 8(g) (12 U.S.C.
          1818(g))  of  the  Federal  Deposit  Insurance  Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          or  if  the  Executive  is  disbarred  from  the  practice of law, all
          obligations of the Employer under this Agreement shall terminate as of
          the  effective date of the order, but vested rights of the contracting
          parties  shall  not  be  affected.

     (d)  If  the  Employer  is in default as defined in Section 3(x) (12 U.S.C.
          1813(x)(1))  of  the  Federal Deposit Insurance Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  date  of default, but this paragraph shall not affect any
          vested  rights  of  the  contracting  parties.

     (e)  All  obligations  of  the  Employer  under  this  Agreement  shall  be
          terminated,  except  to the extent determined that continuation of the
          Agreement is necessary for the continued operation of the institution,
          (i) by the Federal Deposit Insurance Corporation ("FDIC"), at the time
          FDIC enters into an agreement to provide assistance to or on behalf of
          the  Employer  under  the  authority  contained  in Section 13(c) (12)
          U.S.C.  1823(c))  of  the Federal Deposit Insurance Act, as amended by
          the  Financial  Institutions  Reform,  Recovery and Enforcement Act of
          1989;  or (ii) when the Employer is determined by the FDIC to be in an
          unsafe  or  unsound  condition.  Any  rights  of the parties that have
          already  vested,  however,  shall  not  be  affected  by  such action.

16.     SEVERABILITY

     If,  for  any  reason,  any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of  this  Agreement  or any part of such provision not held so invalid, and each
such  other  provision and part thereof shall to the full extent consistent with
law  continue  in  full  force  and  effect.

17.     HEADINGS  FOR  REFERENCE  ONLY

     The  headings  of  sections  and  paragraphs herein are included solely for
convenience  of reference and shall not control the meaning or interpretation of
any  of  the  provisions  of  this  Agreement.

18.     GOVERNING  LAW

     This  Agreement shall be governed by the laws of the State of New York, but
only  to  the  extent  not  superseded  by  federal  law.
<PAGE>

19.     ARBITRATION

     Any  dispute  or  controversy  arising  under  or  in  connection with this
Agreement  shall  be  settled  exclusively by arbitration in accordance with the
rules  of  the American Arbitration Association then in effect.  Judgment may be
entered  on  the  arbitrator's award in any court having jurisdiction; provided,
however,  that  Executive  shall be entitled to seek specific performance of his
right  to  be  paid  until  the  Date  of Termination during the pendency of any
dispute  or  controversy  arising  under  or  in connection with this Agreement.

20.     PAYMENT  OF  LEGAL  FEES

     All  reasonable  legal  fees  paid or incurred by Executive pursuant to any
dispute  or  question of interpretation relating to this Agreement shall be paid
or  reimbursed  by the Employer, provided that the dispute or interpretation has
been settled by Executive and the Employer or resolved in the Executive's favor.

21.     INDEMNIFICATION

     The  Employer  shall  provide Executive (including his heirs, executors and
administrators)  with  coverage  under  a  standard  directors'  and  officers'
liability  insurance  policy at its expense, or in lieu thereof, shall indemnify
Executive  (and  his  heirs, executors and administrators) to the fullest extent
permitted  under  federal  law  against  all expenses and liabilities reasonably
incurred  by  him  in  connection  with  or  arising  out of any action, suit or
proceeding in which he may be involved by reason of his having been  an  officer
of  the  Employer  (whether  or not he continues to be an officer at the time of
incurring  such  expenses  or  liabilities),  such  expenses  and liabilities to
include,  but  not be limited to, judgments, court costs and attorneys' fees and
the  cost  of  reasonable  settlements (such settlements must be approved by the
Boards  of  Directors  of  the Employer).  If such action, suit or proceeding is
brought  against  Executive  in  his  capacity  as  an  officer of the Employer,
however,  such indemnification shall not extend to matters as to which Executive
is  finally  adjudged  to be liable for willful misconduct in the performance of
his  duties.  No  Indemnification  shall  be  paid  that would violate 12 U.S.C.
1828(K)  or  any  regulations  promulgated  thereunder.

22.     SUCCESSOR  TO  THE  EMPLOYER

     The  Employer  shall  require  any successor or assignee, whether direct or
indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all  or
substantially  all  the business or assets of the Bank or the Company, expressly
and  unconditionally  to  assume and agree to perform the Employer's obligations
under  this  Agreement,  in  the  same  manner  and  to the same extent that the
Employer  would  be  required to perform if no such succession or assignment had
taken  place.


<PAGE>

                                   SIGNATURES


     IN  WITNESS  WHEREOF, the Employer has caused this Agreement to be executed
and  its  seal  to  be  affixed  hereunto  by  its  duly authorized officer, and
Executive  has  signed  this Agreement, on the day and date first above written.

ATTEST:                              PATHFINDER  BANK


/s/ Melissa A. Miller               By: /s/ Thomas W. Schneider
_________________________          ___________________________________
Secretary                          Thomas  W.  Schneider
                                   President  and  Chief  Executive  Officer


ATTEST:                              PATHFINDER  BANCORP,  INC.



/s/ Melissa A. Miller              By: /s/ Thomas W. Schneider
_________________________          ___________________________________
Secretary                          Thomas  W.  Schneider
                                   President  and  Chief  Executive  Officer


WITNESS:                              EXECUTIVE


Karen Moskal                       By: /s/ Edward A. Mervine
_________________________          ___________________________________
                                   Edward  A.Mervine
<PAGE>

                                                           EXHIBIT  31.1

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer

                    Certification of Chief Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


     I,  Thomas  W.  Schneider,  President  and Chief Executive Officer, certify
that:

1.     I  have  reviewed  the  June  30,  2004  quarterly report on Form 10-Q of
Pathfinder  Bancorp,  Inc.;

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;

3.     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;

4.     The  registrant'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))  for  the  registrant and have:

a)  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;
(b)  Evaluated  the  effectiveness  of  the registrant'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
(c)  Disclosed  in  this  report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter (the registrant's fourth fiscal quarter in the case of an annual
report)  that  has  materially  affected,  or is reasonably likely to materially
affect,  the  registrant's  internal  control  over  financial  reporting;  and
5.     The  registrant's other certifying officer and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting, to the
registrant's  auditors  and  the  audit  committee  of the registrant's board of
directors:
(a)  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's  ability  to  record,  process,
summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.


August 16, 2004               /s/  Thomas  W.  Schneider
________________              ____________________________
Date                          Thomas  W.  Schneider
                              President  and  Chief  Executive  Officer


<PAGE>
                                                                  EXHIBIT  31.2

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial Officer

                    Certification of Chief Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


     I, James A. Dowd, Vice President and Chief Financial Officer, certify that:

1.     I  have  reviewed  the  June  30,  2004  quarterly report on Form 10-Q of
Pathfinder  Bancorp,  Inc.;

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;

3.     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;

4.     The  registrant'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))  for  the  registrant and have:

a)  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;
(b)  Evaluated  the  effectiveness  of  the registrant'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
(c)  Disclosed  in  this  report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter (the registrant's fourth fiscal quarter in the case of an annual
report)  that  has  materially  affected,  or is reasonably likely to materially
affect,  the  registrant's  internal  control  over  financial  reporting;  and
5.     The  registrant's other certifying officer and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting, to the
registrant's  auditors  and  the  audit  committee  of the registrant's board of
directors:
(a)  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's  ability  to  record,  process,
summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.


August 16, 2004               /s/  James  A.  Dowd
___________________           ___________________________________
Date                          James  A.  Dowd
                              Vice  President  and  Chief  Financial  Officer

<PAGE>
                                                                EXHIBIT  32.1

  Section 1350 Certification of the Chief Executive and Chief Financial Officer

                            Certification pursuant to
                             18 U.S.C. Section 1350,
                             as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



Thomas  W.  Schneider, President and Chief Executive Officer, and James A. Dowd,
Vice  President  and  Chief  Financial  Officer of Pathfinder Bancorp, Inc. (the
"Company"),  each  certify  in his capacity as an officer of the Company that he
has  reviewed  the  Quarterly Report of the Company on Form 10-Q for the quarter
ended  June  30,  2004  and  that  to  the  best  of  his  knowledge:

     1.     the report fully complies with the requirements of Sections 13(a) of
the  Securities  Exchange  Act  of  1934;  and

     2.     the  information  contained  in  the  report fairly presents, in all
material  respects,  the  financial  condition  and results of operations of the
Company.

The  purpose  of  this  statement is solely to comply with Title 18, Chapter 63,
Section  1350  of  the  United  States  Code,  as  amended by Section 906 of the
Sarbanes-Oxley  Act  of  2002.





August 16,  2004              /s/  Thomas  W.  Schneider
___________________           ___________________________________
Date                          Thomas  W.  Schneider
                              President  and  Chief  Executive  Officer


August 16,   2004            /s/  James  A.  Dowd
___________________          ___________________________________
Date                         James  A.  Dowd
                             Vice  President  and  Chief  Financial  Officer
[{"type": "10-Q", "sequence": "1", "filename": "doc1.txt", "secsgml_size_bytes": 192987}]
{"company-data": {"conformed-name": "PATHFINDER BANCORP INC", "cik": "0001046188", "assigned-sic": "6036", "irs-number": "161540137", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-23601", "film-number": "04978904"}, "business-address": {"street1": "214 W FIRST ST", "city": "OSWEGO", "state": "DE", "zip": "13126", "phone": "3153430057"}, "mail-address": {"street1": "214 W FIRST ST", "city": "OSWEGO", "state": "DE", "zip": "13126"}}
SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
                           QUARTER ENDED JUNE 30, 2004

                         SEC Exchange Act No. 000-23601

                            Pathfinder Bancorp, Inc.
               (Exact name of Company as specified in its charter)

                                     Federal
            (State or jurisdiction of incorporation or organization)

                                   16-1540137
                     (I.R.S. Employer Identification Number)

                 214  W.  1st  Street
                 Oswego,  New  York                       13126
--------------------------------------------------------------------------------
(Address  of  principal  executive  office)            (Zip  Code)

         Company's telephone number, including area code: (315) 343-0057

                                 Not Applicable
    (Former name, former address and former fiscal year, if changed since last
                                     report)

     Indicate  by  check  mark  whether  the  Company  (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the Registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.  Yes      X          No  ____
                                       --------

Indicate  by  check  mark  whether  the  Registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Act).      Yes        No   X
                                                    ----------
      Indicate  the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:  There were 2,448,132 shares
of  the  Company's  common  stock  outstanding  as  of  August  6,  2004.
PATHFINDER BANCORP, INC.
                                      INDEX

PART  1   FINANCIAL  INFORMATION                                      PAGE

Item  1.  Financial  Statements

          Consolidated Statements  of  Condition                      1
          Consolidated  Statements  of  Income                        2 - 3
          Consolidated  Statements  of  Shareholders'  Equity         4
          Consolidated  Statements  of  Cash  Flows                   5
          Notes  to  Consolidated  Financial  Statements              6 - 8

Item  2.  Management's  Discussion  and  Analysis  of  Financial      9 - 16
            Condition  and  Results  of  Operations

Item  3.  Quantitative  and Qualitative Disclosure about Market      17 - 18
            Risk

Item  4.  Control  and  Procedures                                   19

PART  II  OTHER  INFORMATION                                         20 - 21

Item  1.  Legal  proceedings
Item  2.  Change  in  securities,  Use  of  Proceeds  and  Issuer
            Purchases  of  Equity  Securities
Item  3.  Defaults  upon  senior  securities
Item  4.  Submission  of  matters  to  a  vote  of  security  holders
Item  5.  Other  information
Item  6.  Exhibits  and  Reports  on  Form  8-K

SIGNATURES
PATHFINDER  BANCORP, INC.
                                     CONSOLIDATED STATEMENTS OF CONDITION
                               JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

                                                                                         June 30,   December 31,
                                                                                           2004         2003
                              ASSETS
----------------------------------------------------------------------------------------------------------------
       (dollars in thousands, except per share data)
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  7,426   $  5,803
Interest earning deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,083      2,911
----------------------------------------------------------------------------------------------------------------
    Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .    14,509      8,714
Investment securities, at fair value. . . . . . . . . . . . . . . . . . . . . . . . . .    75,280     57,559
Federal Home Loan Bank stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . .     1,873      2,048
Mortgage loans held-for-sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       665      3,520
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   186,210    188,717
   Less: Allowance for loan losses. . . . . . . . . . . . . . . . . . . . . . . . . . .     1,835      1,715
----------------------------------------------------------------------------------------------------------------
     Loans receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   184,375    187,002

Premises and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,238      6,650
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,491      1,273
Foreclosed real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       305        202
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,840      3,840
Intangible asset, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       738        850
Bank owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5,689      4,493
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,929      1,789
----------------------------------------------------------------------------------------------------------------
     Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $299,932   $277,940
================================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------------------

Deposits:
  Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $215,276   $191,104
  Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18,577     15,790
----------------------------------------------------------------------------------------------------------------
     Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   233,853    206,894
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,100      2,100
Long-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34,260     38,860
Junior subordinated debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5,155          -
Company obligated mandatorily redeemable preferred securities of subsidiary, Pathfinder
 Statutory Trust I, holding solely junior subordinated debentures of the Company. . . .         -      5,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,489      3,301
----------------------------------------------------------------------------------------------------------------
     Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   278,857    256,155

Shareholders' equity:
   Preferred stock, authorized shares 1,000,000; no shares issued or outstanding
   Common stock, par value $.01; authorized 10,000,000 shares;
    2,935,419 and 2,919,386 shares issued;  and 2,448,132 and 2,432,099
    shares outstanding, respectively. . . . . . . . . . . . . . . . . . . . . . . . . .        29         29
   Additional paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,397      7,225
   Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21,262     20,747
   Accumulated other comprehensive (loss) income. . . . . . . . . . . . . . . . . . . .    (1,056)       364
   Unearned ESOP shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (55)       (78)
   Treasury Stock, at cost; 487,287 shares. . . . . . . . . . . . . . . . . . . . . . .    (6,502)    (6,502)
----------------------------------------------------------------------------------------------------------------
     Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21,075     21,785
----------------------------------------------------------------------------------------------------------------

     Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . . . . .  $299,932   $277,940
================================================================================================================
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        1
PATHFINDER  BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                         For the three    For the three
                                                          months ended    months ended
                                                         June 30, 2004    June 30, 2003
--------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
INTEREST INCOME:
 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $2,981       $3,214
 Debt securities:
   Taxable . . .. . . . . . . . . . . . . . . . . . . . . . .     585          538
   Tax-exempt. .. . . . . . . . . . . . . . . . . . . . . . .      59           59
 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . .      35           53
 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .      22           13
--------------------------------------------------------------------------------------------
       Total interest income. . . . . . . . . . . . . . . . .   3,682        3,877
--------------------------------------------------------------------------------------------

INTEREST EXPENSE:
  Interest on deposits. . . . . . . . . . . . . . . . . . . .     915          980
  Interest on short-term borrowings . . . . . . . . . . . . .       7            3
  Interest on long-term borrowings. . . . . . . . . . . . . .     474          549
       Total interest expense . . . . . . . . . . . . . . . .   1,396        1,532
--------------------------------------------------------------------------------------------

          Net interest income . . . . . . . . . . . . . . . .   2,286        2,345
  Provision for loan losses . . . . . . . . . . . . . . . . .     107          260
--------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses   2,179        2,085
--------------------------------------------------------------------------------------------

OTHER INCOME:
  Service charges on deposit accounts . . . . . . . . . . . .     227          216
  Loan servicing fees . . . . . . . . . . . . . . . . . . . .      77           77
  Increase in value of bank owned life insurance. . . . . . .      48           43
  Net gain on sales of securities. . .  . . . . . . . . . . .     330          355
  Net gain on sales of loans/real estate. . . . . . . . . . .      41          136
  Other charges, commissions & fees . . . . . . . . . . . . .     129          147
--------------------------------------------------------------------------------------------
          Total other income. . . . . . . . . . . . . . . . .     852          974
--------------------------------------------------------------------------------------------

OTHER EXPENSES:
  Salaries and employee benefits. . . . . . . . . . . . . . .   1,180        1,083
  Building occupancy. . . . . . . . . . . . . . . . . . . . .     257          249
  Data processing expenses. . . . . . . . . . . . . . . . . .     229          218
  Professional and other services . . . . . . . . . . . . . .     182          194
  Amortization of intangible asset. . . . . . . . . . . . . .      56           56
  Other expenses. . . . . . . . . . . . . . . . . . . . . . .     423          540
--------------------------------------------------------------------------------------------
          Total other expenses. . . . . . . . . . . . . . . .   2,327        2,340
--------------------------------------------------------------------------------------------

Income before income taxes. . . . . . . . . . . . . . . . . .     704          719
Provision for income taxes. . . . . . . . . . . . . . . . . .     182          202
--------------------------------------------------------------------------------------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . .  $  522       $  517
============================================================================================

     NET INCOME PER SHARE - BASIC . . . . . . . . . . . . . .  $ 0.21  $ 0.21
============================================================================================
     NET INCOME PER SHARE - DILUTED . . . . . . . . . . . . .  $ 0.21  $ 0.21
============================================================================================
     DIVIDENDS PER SHARE. . . . . . . . . . . . . . . . . . .  $ 0.10  $ 0.10
============================================================================================
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        2
PATHFINDER  BANCORP, INC.
                              CONSOLIDATED STATEMENTS OF INCOME
                                         (UNAUDITED)

                                                                For the six     For the six
                                                                months ended    months ended
                                                               June 30, 2004   June 30, 2003
--------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
INTEREST INCOME:
 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        5,971  $        6,480
 Debt securities: . . . . . . . . . . . . . . . . . . . . . .
   Taxable . .. . . . . . . . . . . . . . . . . . . . . . . .           1,057           1,145
   Tax-exempt.. . . . . . . . . . . . . . . . . . . . . . . .             107             121
 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . .              71             107
 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .              37              25
--------------------------------------------------------------------------------------------
       Total interest income. . . . . . . . . . . . . . . . .           7,243           7,878
--------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits. . . . . . . . . . . . . . . . . . . .           1,767           2,007
  Interest on short-term borrowings . . . . . . . . . . . . .              16               6
  Interest on long-term borrowings. . . . . . . . . . . . . .             970           1,119
--------------------------------------------------------------------------------------------
       Total interest expense . . . . . . . . . . . . . . . .           2,753           3,132
--------------------------------------------------------------------------------------------

          Net interest income . . . . . . . . . . . . . . . .           4,490           4,746
  Provision for loan losses . . . . . . . . . . . . . . . . .             295             366
--------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses           4,195           4,380
--------------------------------------------------------------------------------------------

OTHER INCOME:
  Service charges on deposit accounts . . . . . . . . . . . .             462             377
  Loan servicing fees . . . . . . . . . . . . . . . . . . . .             118             127
  Increase in value of bank owned life insurance. . . . . . .              96              86
  Net gain on sales of securities.  . . . . . . . . . . . . .             484             521
  Net gain on sales of loans/real estate .. . . . . . . . . .             121             178
  Other charges, commissions & fees . . . . . . . . . . . . .             249             249
--------------------------------------------------------------------------------------------
          Total other income. . . . . . . . . . . . . . . . .           1,530           1,538
--------------------------------------------------------------------------------------------

OTHER EXPENSES:
  Salaries and employee benefits. . . . . . . . . . . . . . .           2,383           2,196
  Building occupancy. . . . . . . . . . . . . . . . . . . . .             534             506
  Data processing expenses. . . . . . . . . . . . . . . . . .             454             416
  Professional and other services . . . . . . . . . . . . . .             328             357
  Amortization of intangible asset. . . . . . . . . . . . . .             112             112
  Other expenses. . . . . . . . . . . . . . . . . . . . . . .             766             954
--------------------------------------------------------------------------------------------
          Total other expenses. . . . . . . . . . . . . . . .           4,577           4,541
--------------------------------------------------------------------------------------------

Income before income taxes. . . . . . . . . . . . . . . . . .           1,148           1,377
Provision for income taxes. . . . . . . . . . . . . . . . . .             303             367
--------------------------------------------------------------------------------------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . .  $          845  $        1,010
                                                               --------------  --------------

     NET INCOME PER SHARE - BASIC . . . . . . . . . . . . . .  $         0.35  $         0.42
                                                               ==============  ==============
     NET INCOME PER SHARE - DILUTED . . . . . . . . . . . . .  $         0.34  $         0.41
                                                               ==============  ==============
     DIVIDENDS PER SHARE. . . . . . . . . . . . . . . . . . .  $         0.20  $         0.20
                                                               ==============  ==============
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.
                                        3
PATHFINDER BANCORP, INC.
                                     STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                   SIX MONTHS ENDED JUNE 30, 2004 AND JUNE 30, 2003
                                                      (unaudited)

                                                                                     Accumulated
                                                                 Additional            Other  Com- Unearned
                                            Common Stock Issued  Paid  in   Retained  prehensive    ESOP   Treasury
                                               Shares   Amount    Capital   Earnings Income (Loss) Shares   Stock     Total
------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2003 . . . . . . . . . .   2,919   $    29   $7,225  $20,747    $   364       $(78)   $(6,502)  $21,785
Comprehensive income
Net income . . . . . . . . . . . . . . . . . .                                 845                                        845
Other comprehensive loss, net of tax
Unrealized net gains on securities . . . . . .                                         (1,420)                         (1,420)
                                                                                                                       _______
Total Comprehensive loss . . . . . . . . . . .                                                                           (575)
ESOP shares earned . . . . . . . . . . . . . .                         47                             23                   70
Stock option exercised . . . . . . . . . . . .      16         0      125                                                 125
Dividends declared ($.20 per share). . . . . .                                (330)                                      (330)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2004 . . . . . . . . . . . .   2,935   $    29   $7,397  $21,262  $(1,056)       $(55)    $(6,502)  $21,075
===============================================================================================================================
Accumulated
                                                                 Additional            Other  Com- Unearned
                                            Common Stock Issued  Paid  in   Retained  prehensive    ESOP   Treasury
                                               Shares   Amount    Capital   Earnings Income (Loss) Shares   Stock     Total
------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2002 . . . . . . . . . .   2,915   $    29   $7,114    $19,746     $281      $(125)   $(3,815)  $23,230
Comprehensive income
Net income . . . . . . . . . . . . . . . .                             . .     1,010                                  $ 1,010
Other comprehensive income, net of tax
Unrealized net gains on securities . . . . . .                                            312                             312
                                                                                                                        -----
Total Comprehensive income . . . . . . . . . .                                                                          1,322
ESOP shares earned . . . . . . . . . . . . . .                        34                              23                   57
Stock option exercised . . . . . . . . . . . .       2        -       15                                                   15
Treasury stock purchased . . . . . . . . . . .                                                               (2,652)   (2,652)
Dividends declared ($.20 per share). . . . . .                                 (484)                                     (484)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003 . . . . . . . . . . . .   2,917   $    29   $7,163    $20,272    $593       $(102)   $(6,467)  $21,488
===============================================================================================================================
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.

                                        4
PATHFINDER BANCORP, INC.
                               STATEMENTS OF CASH FLOWS
                                     (Unaudited)

                                                           June 30    June 30,
                                                            2004        2003
------------------------------------------------------------------------------
(Dollars in thousands)
OPERATING ACTIVITIES:

  Net income . . . . . . . . . . . . . . . . . . . . . .  $    845   $   1,010
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Provision for loan losses. . . . . . . . . . . . . . .       295         366
  ESOP and other stock-based compensation earned . . . .        70          57
  Deferred income tax expense. . . . . . . . . . . . . .        32           -
  Proceeds from sale of loans. . . . . . . . . . . . . .     7,263       6,577
  Originations of loans held-for-sale. . . . . . . . . .    (4,317)     (8,514)
  Net gain on sales of:
    Real estate loans through foreclosure. . . . . . . .       (30)        (86)
    Loans. . . . . . . . . . . . . . . . . . . . . . . .       (91)        (92)
    Available-for-sale investment securities . . . . . .      (484)       (521)
  Depreciation . . . . . . . . . . . . . . . . . . . . .       282         248
  Amortization of intangible . . . . . . . . . . . . . .       112         112
  Amortization of deferred financing costs . . . . . . .        15          15
  Amortization of mortgage servicing rights. . . . . . .        81           -
  Increase in surrender value of life insurance. . . . .       (96)        (86)
  Net amortization of premiums on investment securities.       158          83
  (Increase) decrease in interest receivable . . . . . .      (218)         15
  Net change in other assets and liabilities . . . . . .      (981)        671
--------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES. . .     2,936        (145)
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
  Purchase of investment securities available-for-sale .   (28,842)    (22,238)
  Proceeds from maturities and principal reductions of
    investment securities available-for-sale . . . . . .     4,906      11,079
  Proceeds from sales:
    Real estate acquired through foreclosure . . . . . .       100         415
    Available-for-sale investment securities . . . . . .     4,350       7,676
  Purchase of life insurance . . . . . . . . . . . . . .    (1,100)          -
  Net decrease (increase) in loans . . . . . . . . . . .     2,159      (4,939)
  Purchase of premises and equipment . . . . . . . . . .      (870)       (750)
--------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES. . . . . . . . . .   (19,297)     (8,757)
--------------------------------------------------------------------------------

FINANCING ACTIVITIES
  Net increase in demand deposits, NOW accounts
    savings accounts, money market deposit accounts
    and escrow deposits. . . . . . . . . . . . . . . . .    26,595       1,362
  Net increase (decrease) in time deposits . . . . . . .       364      (1,361)
  Payments on long-term borrowings . . . . . . . . . . .    (4,600)          -
  Proceeds from long-term borrowings . . . . . . . . . .         -       5,300
  Proceeds from exercise of stock options. . . . . . . .       125          15
  Cash dividends paid. . . . . . . . . . . . . . . . . .      (328)       (325)
  Treasury stock purchased . . . . . . . . . . . . . . .         -      (2,652)
--------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . . .    22,156       2,339
--------------------------------------------------------------------------------

  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . .     5,795      (6,563)
 Cash and cash equivalents at beginning of period. . . .     8,714      13,740
--------------------------------------------------------------------------------
  CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . .  $ 14,509   $   7,177
================================================================================
The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements

                                        5
PATHFINDER  BANCORP,  INC.

Notes  to  Financial  Statements

(1)  BASIS  OF  PRESENTATION

The accompanying unaudited financial statements were prepared in accordance with
the instructions for Form 10-Q and Regulation S-X and, therefore, do not include
information  for  footnotes  necessary  for a complete presentation of financial
position,  results  of  operations,  and cash flows in conformity with generally
accepted  accounting  principles.  The  following  material  under  the  heading
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations"  is  written  with  the  presumption  that  the users of the interim
financial  statements have read, or have access to, the Company's latest audited
financial  statements  and  notes thereto, together with Management's Discussion
and Analysis of Financial Condition and Results of Operations as of December 31,
2003 and for the three year period then ended.  Therefore, only material changes
in  financial condition and results of operations are discussed in the remainder
of  Part  1.

Operating  results  for  the  three  and  six months ended June 30, 2004 are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  2004.

(2)  EARNINGS  PER  SHARE

Basic  earnings  per  share  has  been  computed  by  dividing net income by the
weighted average number of common shares outstanding throughout the three months
and  six  months  ended  June  30,  2004 and 2003, using 2,436,878 and 2,416,888
weighted  average  common  shares  outstanding  for  the three months ended, and
2,430,468  and  2,431,556  for  the  six  months  ended,  respectively.  Diluted
earnings  per  share for the three months and six months ended June 30, 2004 and
2003 have been computed using 2,478,570 and 2,463,962 for the three months ended
and  2,477,102  and  2,477,236  for the six months ended, respectively.  Diluted
earnings  per  share  gives  effect  to  weighted  average  shares that would be
outstanding  assuming  the  exercise  of issued stock options using the treasury
stock  method.

(3)  STOCK-BASED  COMPENSATION

The  Company's  stock-based  compensation  plan  is  accounted  for based on the
intrinsic  value  method  set forth in Accounting Principles Board (APB) Opinion
No.  25,  "Accounting  for  Stock  Issued to Employees", and related provisions.
Compensation  expense  for employee stock options is generally not recognized if
the  exercise  price of the option equals or exceeds the fair value of the stock
on  the  date of the grant.  Compensation expense for restricted share awards is
ratably  recognized  over  the period of vesting, usually the restricted period,
based  on  the  fair  value  of  the  stock  on  the  grant  date.

As of December 31, 2003, the stock options previously issued by the Company were
fully  vested.  As  such,  there was no effect on pro forma net income for 2004.
The  following table illustrates the effect on net income and earnings per share
for  the three and six month period ended June 30, 2003, as if the Black-Scholes
fair  value  method  described  in  SFAS  No.  123,  "Accounting for Stock-Based
Compensation",  as  amended,  had  been  applied  to  the  Company's stock-based
compensation  plan:

                                        6
For  the  three   For  the  six
                                                Months ended     months ended
                                                June 30, 2003    June 30, 2003
------------------------------------------------------------------------------
(In thousands, except per share data)
Net Income:
As reported. . . . . . . . . . . . . . . . . .  $          517  $        1,010
Less: Total stock-based employee compensation
expense determined under Black-Scholes option
pricing model, net of tax effect . . . . . . .               7              14
------------------------------------------------------------------------------
Pro forma net income . . . . . . . . . . . . .  $          510  $          996
For the three        For the six
                     Months ended         months ended
                      June 30, 2003       June 30, 2003
-------------------------------------------------------

Earnings per share:  Basic   Diluted   Basic   Diluted
-------------------------------------------------------
As reported . . . .  $ 0.21  $   0.21  $ 0.42  $   0.41
Pro forma . . . . .  $ 0.21  $   0.21  $ 0.41  $   0.40
For  purposes  of pro forma disclosures, the estimated fair value of the options
is  amortized  to expense over the options vesting period.  Since changes in the
subjective input assumptions can materially affect the fair value estimates, the
existing  model,  in  management's opinion does not necessarily provide a single
reliable  measure  of the fair value of its stock options.  In addition, the pro
forma  effect  on  reported  net  income  and earnings per share for the periods
presented  should  not  be considered representative of the pro forma effects on
reported  net  income  and  earnings  per  share  for  future  periods.

(4)  PENSION  BENEFITS

The  composition  of net periodic benefit plan cost for the three and six months
ended  June  30,  is  as  follows:
FOR  THE  THREE    FOR  THE  SIX
                                MONTHS  ENDED     MONTHS  ENDED
                                   JUNE  30,        JUNE  30,
                                  2004    2003    2004    2003
---------------------------------------------------------------
(In thousands)
Service cost. . . . . . . . . .  $  43   $  38   $  86   $  76
Interest cost . . . . . . . . .     52      50     104     100
Expected return on plan assets.    (63)    (57)   (126)   (114)
Amortization of net losses. . .     24      26      48      52
---------------------------------------------------------------
Net periodic benefit cost . . .  $  56   $  57   $ 112   $ 114
===============================================================
The  Company previously disclosed in its financial statements for the year ended
December  31,  2003, that it expected to contribute $250,000 to its pension plan
in  2004.  As  of  June  30, 2004, $128,000 had been contributed to this pension
plan.   The  Company presently anticipates contributing an additional $64,000 to
fund  its  pension  plan in 2004.  The reduction in the anticipated contribution
resulted  from  a reduction in the plan's accrual formula effective May 1, 2004.

(5)  DIVIDEND  RESTRICTIONS

The  Company maintains a restricted capital account with a $1.0 million balance,
representing  Pathfinder  Bancorp,  M.H.C.'s  portion  of dividends waived as of
June  30,  2004.

                                        7
(6)  COMPREHENSIVE  INCOME

The  components of other comprehensive (loss) income and related tax effects for
the  three  and  six  month  period ended June 30, 2004 and 2003 are as follows:
For  the  three     For  the  six
                                         Months ended        months ended
                                          June 30,              June 30,
                                          2004     2003      2004     2003
----------------------------------------------------------------------------
(In thousands)
Gross change in unrealized gains on
  securities available for sale. . . .  $(2,388)  $1,110   $(1,882)  $1,047
Reclassification adjustment for gains
  included in net income . . . . . . .     (330)    (355)     (484)    (521)
----------------------------------------------------------------------------
                                         (2,718)     755    (2,366)     526
Tax effect . . . . . . . . . . . . . .    1,087     (305)      946     (214)
----------------------------------------------------------------------------
Net of tax amount. . . . . . . . . . .  $(1,631)  $  450   $(1,420)  $  312
============================================================================
(7)  GUARANTEES

The  Company  does  not  issue  any  guarantees  that  would  require  liability
recognition  or  disclosure,  other than its standby letters of credit.  Standby
letters  of  credit written are conditional commitments issued by the Company to
guarantee  the  performance  of  a  customer  to  a third party.  Generally, all
letters  of  credit,  when  issued  have  expiration dates within one year.  The
credit  risk  involved  in  issuing letters of credit is essentially the same as
those that are involved in extending loan facilities to customers.  The Company,
generally,  holds  collateral  and/or  personal  guarantees  supporting  these
commitments.  The  Company  had $998,000 of standby letters of credit as of June
30,  2004.  Management believes that the proceeds obtained through a liquidation
of collateral and the enforcement of guarantees would be sufficient to cover the
potential  amount of future payment required under the corresponding guarantees.
The  current  amount  of  the liability as of June 30, 2004 for guarantees under
standby  letters  of  credit  issued  is  not  material.

(8)  NEW  ACCOUNTING  PRONOUNCEMENTS

In  January  2003,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No.  46,  "Consolidation  of  Variable  Interest  Entities,  an
Interpretation  of  ARB  No.  51"  which  was  revised  in  December 2003.  This
Interpretation  provides  guidance  for  the  consolidation of variable interest
entities  (VIEs).  Pathfinder Statutory Trust I qualifies as a variable interest
entity under FIN 46.  Pathfinder Statutory Trust I issued mandatorily redeemable
preferred  securities  (Trust Preferred Securities) to third-party investors and
loaned  the  proceeds to the Company.  Pathfinder Statutory Trust I holds, as it
sole  asset,  subordinated  debentures  issued  by  the  Company.
FIN  46  required the Company to deconsolidate Pathfinder Statutory Trust I from
the  consolidated  financial statements as of March 31, 2004.  There has been no
restatement of prior periods. The impact of this deconsolidation was to increase
junior subordinated debentures by $5,155,000 and reduce the mandatory redeemable
preferred  securities  line  item  by  $5,000,000,  which  represented the trust
preferred  securities  of the trust.  The Company's equity interest in the trust
subsidiary  of  $155,000, which had previously been eliminated in consolidation,
is  now  reported  in  "Other  assets".  For  regulatory reporting purposes, the
Federal  Reserve Board has indicated that the preferred securities will continue
to  qualify as Tier 1 Capital subject to previously specified limitations, until
further  notice.  If  regulators  make  a  determination  that  Trust  Preferred
Securities  can  no  longer  be considered in regulatory capital, the securities
become callable and the Company may redeem them.  The adoption of FIN 46 did not
have  an  impact  on  the  Company's  results  of  operations  or  liquidity.

                                        8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

GENERAL

Throughout  the  Management's  Discussion  and  Analysis ("MD&A") the term, "the
Company",  refers  to  the  consolidated  entity  of  Pathfinder  Bancorp,  Inc.
Pathfinder  Bank  and Pathfinder Statutory Trust I are wholly owned subsidiaries
of  Pathfinder  Bancorp, Inc.  Pathfinder Commercial Bank, Pathfinder REIT, Inc.
and  Whispering  Oaks  Development  Corp. represent wholly owned subsidiaries of
Pathfinder  Bank.  Pathfinder  Statutory  Trust  I  is  not  included  in  the
consolidated  financial  statements  for the period ended June 30, 2004. At June
30,  2004,  Pathfinder  Bancorp,  M.H.C.,  the  Company's mutual holding company
parent,  whose  activities  are  not  included  in the M.D.&A held  64.7% of the
Company's  common  stock  and  the  public  held  35.3%.

The  following  discussion reviews the Company's financial condition at June 30,
2004  and  the results of operations for the three and six months ended June 30,
2004  and  June  30,  2003.

This  Quarterly  Report contains certain "forward-looking statements" within the
meaning  of  the  Private  Securities  Litigation  Reform  Act  of  1995.  Such
statements  are  subject  to  certain  risks and uncertainties, including, among
other  things,  changes  in  economic  conditions  in the Company's market area,
changes  in  policies  by  regulatory  agencies, fluctuations in interest rates,
demand for loans in the Company's market areas and competition, that could cause
actual results to differ materially from historical earnings and those presently
anticipated  or  projected.  The  Company wishes to caution readers not to place
undue  reliance  on  any such forward-looking statements, which speak only as of
the  date  made.  The  Company  wishes to advise readers that the factors listed
above  could  affect  the  Company's  financial  performance and could cause the
Company's  actual  results  for  future  periods  to  differ materially from any
opinions  or  statements expressed with respect to future periods in any current
statements.

The  Company  does  not  undertake, and specifically declines any obligation, to
publicly  release  the  result  of  any  revisions  that  may  be  made  to  any
forward-looking  statements to reflect events or circumstances after the date of
such  statements  or  to  reflect the occurrence of anticipated or unanticipated
events.

The  Company's  net  income  is  primarily dependent on its net interest income,
which  is  the  difference  between interest income earned on its investments in
mortgage  loans,  investment  securities  and other loans, and its cost of funds
consisting  of  interest paid on deposits and borrowed funds.  The Company's net
income  is  also  affected  by  its provision for loan losses, as well as by the
amount  of  noninterest  income, including income from fees and service charges,
net  gains  and losses on sales of securities, loans and foreclosed real estate,
and  non  interest expense such as employee compensation and benefits, occupancy
and  equipment costs, data processing and income taxes.  Earnings of the Company
also  are affected significantly by general economic and competitive conditions,
particularly  changes  in market interest rates, government policies and actions
of  regulatory  authorities, which events are beyond the control of the Company.
In  particular,  the  general level of market rates tends to be highly cyclical.

                                        9
APPLICATION  OF  CRITICAL  ACCOUNTING  POLICIES

The  Company's consolidated financial statements are prepared in accordance with
accounting  principles  generally  accepted  in  the  United  States  and follow
practices within the banking industry.  Application of these principles requires
management  to make estimates, assumptions and judgments that affect the amounts
reported  in  the financial statements and accompanying notes.  These estimates,
assumptions  and  judgments are based on information available as of the date of
the  financial  statements;  accordingly,  as  this  information  changes,  the
financial  statements  could  reflect  different  estimates,  assumptions  and
judgments.  Certain  policies  inherently  have a greater reliance on the use of
estimates,  assumptions  and judgments and as such have a greater possibility of
producing  results  that could be materially different than originally reported.
Estimates,  assumptions  and judgments are necessary when assets and liabilities
are required to be recorded at fair value or when an asset or liability needs to
be  recorded contingent upon a future event.  Carrying assets and liabilities at
fair  value inherently results in more financial statement volatility.  The fair
values  and  information used to record valuation adjustments for certain assets
and  liabilities  are  based  on  quoted  market prices or are provided by other
third-party  sources,  when  available.  When  third  party  information  is not
available,  valuation  adjustments  are  estimated  in good faith by management.

The  most  significant accounting policies followed by the Company are presented
in  Note  1 to the consolidated financial statements included in the 2003 Annual
Report  on Form 10-K ("the Consolidated Financial Statements").  These policies,
along  with the disclosures presented in the other financial statement notes and
in  this  discussion,  provide  information  on  how  significant  assets  and
liabilities  are  valued  in  the  financial statements and how those values are
determined.  Based  on  the  valuation  techniques  used  and the sensitivity of
financial statement amounts to the methods, assumptions and estimates underlying
those  amounts, management has identified the determination of the allowance for
loan  losses  to  be  the  accounting area that requires the most subjective and
complex  judgments,  and  as  such  could be the most subject to revision as new
information  becomes  available.

The  allowance for loan losses represents management's estimate of probable loan
losses  inherent  in the loan portfolio. Determining the amount of the allowance
for loan losses is considered a critical accounting estimate because it requires
significant  judgment  and the use of estimates related to the amount and timing
of  expected  future  cash flows on impaired loans, estimated losses on pools of
homogeneous  loans  based  on  historical  loss experience, and consideration of
current  economic  trends  and  conditions,  all  of which may be susceptible to
significant  change.  The  loan portfolio also represents the largest asset type
on  the  consolidated  balance  sheet.  Note  1  to  the  Consolidated Financial
Statements  describes  the  methodology used to determine the allowance for loan
losses,  and  a  discussion  of the factors driving changes in the amount of the
allowance  for  loan  losses  is  included  in  this  report.

The  Company  carries  all  of its investments at fair value with any unrealized
gains  or  losses  reported net of tax as an adjustment to shareholders' equity.
Based on management's assessment, at June 30, 2004, the Company did not hold any
security  that  had  a fair value decline that is currently expected to be other
than  temporary.  Consequently, any declines in a specific security's fair value
below  amortized  cost  have not been provided for in the income statement.  The
Company's  ability  to  fully  realize  the  value  of its investment in various
securities,  including corporate debt securities, is dependent on the underlying
creditworthiness  of  the  issuing  organization.

RESULTS  OF  OPERATIONS

Net income for the second quarter of 2004 was $522,000 as compared to net income
of  $517,000  for  the same quarter in 2003.  Basic earnings per share was $0.21
per  share for the quarters ended June 30, 2004 and 2003.  The return on average

                                       10
assets  and  return  on shareholders' equity were 0.69% and 9.85%, respectively,
for  the  three  months  ended  June  30,  2004,  compared with 0.73% and 9.71%,
respectively,  for  the  three  months  ended  June 30, 2003.  During the second
quarter  of 2004 when compared to the second quarter of 2003, provision for loan
losses  and  other  expenses  decreased  $153,000  and  $13,000,  respectively,
partially offset by decreases in net interest income and other income of $59,000
and  $122,000,  respectively. Management expects continued margin compression to
challenge  earnings  growth  over  the  near  term.

For  the  six months ended June 30, 2004, net income was $845,000, a decrease of
$165,000,  or  16%,  as  compared  to  net  income of $1.0 million in 2003.  The
decrease  in  net  income  was  primarily  a result of a decline in net interest
income  of  $256,000, partially offset by declines in provisions for loan losses
and income taxes.  Basic earnings per share decreased to $0.35 per share for the
six  months  ended  June  30,  2004 from $0.42 for the same period in 2003.  The
return  on  average  assets  and  return  on shareholders' equity were 0.57% and
7.79%,  respectively for the six months ended June 30, 2004, compared with 0.72%
and  9.56%  for  the  same  period  in  2003.

NET  INTEREST  INCOME

Net  interest  income  is  the  Company's primary source of operating income for
payment  of  operating expenses and providing for loan losses.  It is the amount
by  which  interest  earned  on  interest-earning deposits, loans and investment
securities,  exceeds  the  interest  paid on deposits and other interest-bearing
liabilities.  Changes  in  net  interest  income  and  net interest margin ratio
result  from  the  interaction  between  the  volume  and composition of earning
assets,  interest-bearing  liabilities,  related  yields  and associated funding
costs.

Net  interest  income,  on  a  tax-equivalent basis, remained consistent at $2.3
million for the three months ended June 30, 2004, as compared to the same period
during  2003.  The Company's net interest margin ratio for the second quarter of
2004  decreased  to  3.34% from 3.74% when compared to the same quarter in 2003.
The  decline  in  net  interest  income is attributable to lower market interest
rates  which  decreased  earning asset yields to 5.36% from 6.16% when  compared
to  the  same  period during 2003.   Average interest-earning  assets  increased
9%  to  $276.7  million at June 30, 2004 as compared  to $253.1  million at June
30,  2003.  The  increase  in  average  earning assets is primarily attributable
to a $16.4 million increase in investment securities, a $6.5 million increase in
interest-earning deposits and a $669,000 increase  in loans receivable.  Average
interest-bearing  liabilities  increased  $20.9  million,  while  the  cost  of
funds  decreased  41 basis points to 2.15% from 2.56% for  the  same  period  in
2003.  The  increase  in  the  average  balance  of  interest-bearing
liabilities  resulted  primarily  from  a  $24.2  million  growth  in  average
deposits,  offset  by  a $3.4 million decrease in borrowed funds.  The growth in
deposits  was  primarily  in  money  management  accounts  and resulted from the
Company's  focus  on  attracting  new  municipal  deposit  customers.

For the six months ended June 30, 2004, net interest income, on a tax-equivalent
basis,  decreased  $254,000,  or 5%, as compared to the same period during 2003.
Net  interest  margin  decreased 46 basis points, to 3.39% at June 30, 2004 from
3.85%  at  June  30,  2003.  Average  interest-earning  assets  increased  8% to
$268.0  million  at  June  30,  2004 as compared  to $249.2  million at June 30,
2003,  while  the  yield  on interest earning assets declined 92 basis points to
5.44%  from  6.36%  for  the  comparable  periods.   The  increase  in  average
earning  assets  is  primarily  attributable  to  a  $10.7  million  increase in
investment  securities, a $5.0 million increase in interest-earning deposits and
a  $3.1  million  increase  in  loans  receivable.  Average  interest-bearing
liabilities  increased  $15.6  million,  while  the  cost  of funds decreased 47
basis  points  to  2.19%  from  2.66%  for  the  same  period  in  2003.  The
increase  in  the  average  balance  of  interest-bearing  liabilities  resulted
primarily  from  a  $13.1 million growth in average  deposits and a $2.6 million
increase  in  borrowed  funds.  The  growth  in  deposits was primarily in money
management  accounts  and  resulted  primarily  from  the  Company's  focus  on
attracting  new  municipal  deposit  customers.

                                       11
INTEREST  INCOME

Total interest income for the quarter ended June 30, 2004 decreased $195,000, or
5%,  to  $3.7  million  from  $3.9  million  at the quarter ended June 30, 2003.
Average loans increased $669,000, with yields declining 52 basis points to 6.37%
for  the  second  quarter  of  2004.  Average  commercial  loans  increased $3.7
million,  and  experienced  a  decline in the average tax-equivalent yield of 41
basis  points,  to  5.87%  from  6.28%,  in  2003.  The decrease in the yield on
commercial  loans  was affected, in part, by the offering of short-term notes to
municipalities  beginning  in  2003.  The  average balance of loans to municipal
entities was $3.0 million, having a tax-equivalent yield of 2.94%. The Company's
residential  mortgage  loan  portfolio  decreased  $4.0  million,  or  3%,  when
comparing  the  second  quarter of 2004 to the same period in 2003.  The average
yield  on  the  residential mortgage loan portfolio decreased 54 basis points to
6.07% in 2004 from 6.61% in 2003.  New loans were originated at lower rates than
in  the  prior  period  and a large volume of existing mortgages had their rates
modified downward or were refinanced at lower rates.  An increase in the average
balance  of  consumer loans of $1.4 million, or 9%, resulted from an increase in
home  equity  loans.  The average yield declined 105 basis points, to 6.76% from
7.81%  in  2003.

Average  investment  securities  (taxable  and tax-exempt) for the quarter ended
June  30,  2004  increased  by $16.4 million, compared to the same period a year
ago,  with  an  increase  in  tax-equivalent interest income from investments of
$30,000,  or  4%,  compared  to  2003.  The  average tax-equivalent yield of the
portfolio  declined  10  basis points, to 3.55% from 3.65%.  The increase in the
average  balance  of investment securities is reflective of the expanded deposit
growth  with  local  municipalities.

Total interest income for the six months ended June 30, 2004 decreased $635,000,
or  8%,  when  compared  to  the  six months ended June 30, 2003.  Average loans
increased  $3.1  million,  with  yields  declining 65 basis points to 6.33% from
6.98%.  Average  commercial  loans  increased  $3.7  million,  while  the  yield
decreased  to  5.39%  from  6.47%  at  June  30,  2003.

For  the  six  months  ended  June 30, 2004, tax-equivalent interest income from
investment securities decreased $145,000, or 10%, compared to the same period in
2003.   The  average  tax-equivalent  yield  of the portfolio declined 114 basis
points,  to  3.62%  from 4.76% and was offset by a $10.7 million increase in the
average  balance  of  investment  securities.

INTEREST  EXPENSE

For  the  three  months  ended  June  30, 2004, total interest expense decreased
$136,000, or 9%, to $1.4 million from $1.5 million for the same quarter in 2003.
Interest  expense  on deposits decreased $65,000, or 7%, as lower interest rates
favorably  impacted  the  average  rate  paid  on deposits, reducing it 36 basis
points to 1.69% in 2004 from 2.04% in 2003. The decrease in the cost of deposits
was  partially  offset  by  an increase in the average deposit balance to $216.4
million in 2004, from $192.1 million for the same period in 2003. In addition to
the  decrease  in  the  cost  of  deposits,  interest expense on borrowings also
decreased  by  $71,000,  or  13%,  from  the  prior  period.

For  the six months ended June 30, 2004, interest expense decreased $379,000, or
12%,  to  $2.8  million  from  $3.1  million  for the same period in 2003.  This
decrease was partially offset by a $13.1 million increase in the average balance
of  deposits and a $2.6 million increase in borrowed funds.  Deposit expense for
the  comparable  periods  declined  $240,000,  or  12%,  as  the average rate on
deposits  decreased  37  basis points, to 1.71% from 2.08%.  Interest expense on
borrowings  declined  92  basis  points  to  4.38%  from  5.30%.

                                       12
PROVISION  FOR  LOAN  LOSSES

The  provision  for  loans losses was $107,000 for the second quarter of 2004 as
compared to $260,000 for the same period in 2003.  The decrease in the provision
for the quarter primarily resulted from a decrease in commercial charge-offs for
the  period.  Non-performing  loans  totaled  $3.0  million at June 30, 2004 and
December  31,  2003.  Allowance  for  loan  losses,  as  a  percentage of loans,
increased  slightly  to 0.99% at June 30, 2004 compared to 0.91% as December 31,
2003.

For  the  six  months  ended  June  30,  2004, the provision for loan losses was
$295,000  as  compared  to  $366,000  for  the  same  period  in  2003.

NONINTEREST  INCOME

The  Company's  noninterest  income  is  primarily  comprised of fees on deposit
account balances and transactions, loan servicing, commissions, and net gains on
securities,  loans  and  foreclosed  real  estate.

The following table sets forth certain information on noninterest income for the
quarters  indicated:
Three Months Ended June 30,     Six Months Ended June 30,
                                                    2004     2003       Change        2004    2003      Change
------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Service charges on deposit accounts. . . . . . . .  $ 227  $ 216  $    11     5.1%  $  462  $   377  $ 85    22.5%
Loan servicing fees. . . . . . . . . . . . . . . .     77     77        -     0.0%     118      127    (9)   -7.1%
Increase in value of bank owned life insurance . .     48     43        5    11.6%      96       86    10    11.6%
Net gains on sale of loans/foreclosed real estate.     41    136      (95)  -69.9%     121      178   (57)  -32.0%
Other operating income . . . . . . . . . . . . . .    129    147      (18)  -12.2%     249      249     -     0.0%
------------------------------------------------------------------------------------------------------------------
Core noninterest income. . . . . . . . . . . . . .    522    619      (97)  -15.7%   1,046    1,017    29     2.9%
Net gain on sales of securities. . . . . . . . . .    330    355      (25)   -7.1%     484      521   (37)   -7.1%
------------------------------------------------------------------------------------------------------------------
Total other income . . . . . . . . . . . . . . . .  $ 852  $ 974  $  (122)  -12.5%  $1,530  $ 1,538  $ (8)   -0.5%
==================================================================================================================
For  the  three  months  ended  June 30, 2004, core noninterest income decreased
$97,000,  or  16%,  when  compared  with  the  three months ended June 30, 2003,
primarily  due  to  a reduction in net gains on foreclosed real estate resulting
from  the  sale  of  a significant foreclosed real estate property in the second
quarter of 2003.  The decrease in other operating income was associated with the
reduction  in  volume  of  investment services in comparable quarters. Income on
service  charges on deposit accounts increased as the number of deposit accounts
increased,  combined  with an increase in income generated from the new consumer
overdraft  protection  program.

For  the  six  months  ended  June  30,  2004, core noninterest income increased
primarily  due to increased income generated on deposit accounts as new services
were  introduced  and  consulting  fees  associated  with those new services was
eliminated.  This  increase  was  offset  by  a decrease in net gains on sale of
foreclosed  real  estate.

The  decrease  in net gains on sales of investment securities for the  three and
six months ended June 30, 2004, was the result of gains associated with the sale
of  corporate  debt  securities  in  2003.

NONINTEREST  EXPENSE

The  following  table  sets forth certain information on noninterest expense for
the  quarters  indicated:

                                       13
Three Months Ended June 30,        Six Months Ended June 30,
                                     2004    2003    Change               2004     2003       Change
------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Salaries and employee benefits . .  $1,180  $1,083  $    97     8.96%  $2,383  $ 2,196  $ 187     8.52%
Building occupancy . . . . . . . .     257     249        8     3.21%     534      506     28     5.53%
Data processing. . . . . . . . . .     229     218       11     5.05%     454      416     38     9.13%
Professional and other services. .     182     194      (12)   -6.19%     328      357    (29)   -8.12%
Amortization of intangible assets.      56      56        -     0.00%     112      112      -     0.00%
Other operating. . . . . . . . . .     423     540     (117)  -21.67%     766      954   (188)  -19.71%
------------------------------------------------------------------------------------------------------
Total noninterest expense. . . . .  $2,327  $2,340  $   (13)   -0.56%  $4,577  $ 4,541  $  36     0.79%
=======================================================================================================
Total  noninterest  expense remained relatively consistent for the three and six
months  ended  June  30,  2004 and 2003.  The decrease in professional and other
services  and other operating expenses primarily resulted from operational costs
associated  with  a  foreclosed  real  estate  property  in  2003  and personnel
realignment  expenses  in  2003, not recurring in 2004. The increase in salaries
and employee benefits resulted from increased pension and health insurance costs
and  overall personnel costs due to increased staffing. The Company had 110 full
time  equivalent  employees  at  June 30, 2004 compared to 104 at June 30, 2003.
Building  occupancy  expense  increases  primarily  resulted  from  depreciation
expenses  associated  with the new Fulton branch which opened in August of 2003.
The  increase  in  data  processing  charges  was  due  to  depreciation expense
resulting  from  system  hardware  and  software  acquisitions,  increased  ATM
servicing  charges and check processing charges incurred by the Commercial Bank.

INCOME  TAX  EXPENSE

Income  taxes  decreased $20,000 for the quarter ended June 30, 2004 as compared
to  the  same  period in 2003, which was primarily attributable to a decrease in
the  Company's  pre-tax  income.  For the six months ended June 30, 2004, income
taxes  decreased  $64,000  when  compared  to  the same period in 2003 which was
primarily  attributable  to  a  decrease  in  the  Company's pre-tax income. The
effective tax rate for the first six months of 2004 was 26.4%, compared to 26.7%
for  the  year  ended  December  31,  2003.

CHANGES  IN  FINANCIAL  CONDITION

ASSETS

Total  assets increased approximately $22.0 million, or 8%, to $299.9 million at
June  30,  2004, from $277.9 million at December 31, 2003. The increase in total
assets was primarily the result of an increase in investment securities of $17.7
million,  or  31%, a $5.8 million, or 67%, increase in cash and cash equivalents
and  a  $3.3  million,  or  53%, increase in other assets.  These increases were
partially  offset by a decrease in net loans of $2.6 million, or 1%.  The growth
in  investment  securities  was  primarily  funded  by the increase in municipal
deposits.  The increase in cash and cash equivalents was primarily the result of
the  increased  deposit  levels  and  loans  sales to the secondary market.  The
excess  liquidity  is  expected  to be invested primarily in the commercial real
estate  portfolio  and  investment securities.  The increase in other assets was
due  to  a  $1.1 million purchase of life insurance policies relating to the new
executives and directors deferred compensation plan which was effective December
31,  2003.

LIABILITIES

Total  liabilities increased $22.7 million, or 9%, to $278.9 million at June 30,
2004  from  $256.2 million at December 31, 2003.  The increase in liabilities is
primarily  due  to  a  $24.2 million growth in interest-bearing deposits, a $4.6
million  decrease  in  long-term  borrowings  and  a  $2.8  million  growth  in
noninterest-bearing  deposits.  The  growth  in deposits primarily resulted from
the  Company's  focus  on  attracting  new  municipal  deposit  customers.

                                       14
LOAN  AND  ASSET  QUALITY  AND  ALLOWANCE  FOR  LOAN  LOSSES

The  following  table  represents information concerning the aggregate amount of
nonperforming  assets:
For  the  Period  Ending
                                                  June  30, December  31,  June  30,
                                                    2004       2003        2003
-----------------------------------------------------------------------------------
(Dollars in thousands)

Nonaccrual loans:
Commercial. . . . . . . . . . . . . . . . . . . .  $1,876     $1,677      $  144
Consumer. . . . . . . . . . . . . . . . . . . . .     152        172         129
Real estate -  Construction . . . . . . . . . . .       0        270           0
               Mortgage .       . . . . . . . . .     986        873         999
-----------------------------------------------------------------------------------
Total nonaccrual loans. . . . . . . . . . . . . .   3,014      2,992       1,272
Loans past due 90 days or more and still accruing       0          0           0
-----------------------------------------------------------------------------------
Total non-performing loans. . . . . . . . . . . .   3,014      2,992       1,272
Foreclosed real estate. . . . . . . . . . . . . .     305        202       1,582
-----------------------------------------------------------------------------------
Total non-performing assets . . . . . . . . . . .   3,319      3,194       2,854
-----------------------------------------------------------------------------------
Non-performing loans to total loans . . . . . . .    1.61%      1.59%       0.67%
Non-performing assets to total assets . . . . . .    1.11%      1.15%       1.01%
-----------------------------------------------------------------------------------
Total nonperforming loans at June 30, 2004 were $3.0 million, or 1.61%, of total
loans  as  compared  to  $3.0  million, or 1.59%, of total loans at December 31,
2003.  Foreclosed real estate increased to $305,000 at June 30, 2004 compared to
$202,000  at  December  31,  2003.  Nonperforming loans continue to be addressed
primarily  through  foreclosure  proceedings.  Management believes that adequate
reserves  exist  for  any  potential  losses that may occur from the remediation
process.

The  allowance  for  loan  losses at June 30, 2004 was $1.8 million, or 0.99% of
period  end  loans,  compared  to $1.7 million, or 0.91% of period end loans, at
December  31,  2003.  The  increase  as  a  percentage of loans is primarily the
result  of  the  decline  in  gross  loans.

CAPITAL

Shareholders'  equity  decreased  $710,000,  or 3%, to $21.0 million at June 30,
2004.  The  decrease  in  shareholders'  equity  primarily  resulted from a $1.4
million  increase  in accumulated other comprehensive loss, offset by a $515,000
increase  in  retained  earnings  and  a $172,000 increase in additional paid in
capital  The  Company added $845,000 to retained earnings through net income and
returned  $330,000  to  its  shareholders  in  the  form of cash dividends.  The
Company's  mutual  holding company parent, Pathfinder Bancorp, M.H.C, waived the
dividend  for  the  quarter  ended  June  30,  2004.  (See  Footnote  5).

Risk-based capital provides the basis for which all banks are evaluated in terms
of  capital  adequacy.  Capital  adequacy  is  evaluated primarily by the use of
ratios  which  measure  capital  against  total assets, as well as against total
assets  that  are weighted based on defined risk characteristics.  The Company's
goal  is to maintain a strong capital position, consistent with the risk profile
of  its  subsidiary banks that supports growth and expansion activities while at
the same time exceeding regulatory standards.  At June 30, 2004, Pathfinder Bank
exceeded  all  regulatory required minimum capital ratios and met the regulatory
definition  of  a  "well-capitalized" institution, i.e. a leverage capital ratio
exceeding  5%,  a  Tier  1  risk-based  capital  ratio  exceeding 6% and a total
risk-based  capital  ratio  exceeding  10%.

                                       15
LIQUIDITY

Liquidity  management  involves  the  Company's  ability  to  generate  cash  or
otherwise  obtain  funds  at reasonable rates to support asset growth and reduce
assets  to  meet  deposit  withdrawals, to maintain reserve requirements, and to
otherwise  operate  the  Company  on  an  ongoing  basis.  The Company's primary
sources  of  funds  are deposits, borrowed funds, amortization and prepayment of
loans  and maturities of investment securities and other short-term investments,
and  earnings  and  funds  provided  from operations.  While scheduled principal
repayments  on loans are a relatively predictable source of funds, deposit flows
and  loan prepayments are greatly influenced by general interest rates, economic
conditions  and  competition.  The  Company  manages  the pricing of deposits to
maintain  a  desired  deposit  balance.  In addition, the Company invests excess
funds  in  short-term interest-earning and other assets, which provide liquidity
to  meet  lending  requirements.

The  Company's liquidity has been enhanced by its membership in the Federal Home
Loan  Bank  of  New York, whose competitive advance programs and lines of credit
provide  the  Company  with  a safe, reliable and convenient source of funds.  A
significant  decrease  in  deposits  in  the  future could result in the Company
having  to  seek  other  sources  of funds for liquidity purposes.  Such sources
could  include,  but  are not limited to, additional borrowings, trust preferred
security  offerings,  brokered  deposits,  negotiated time deposits, the sale of
"available-for-sale"  investment  securities,  the sale of securitized loans, or
the  sale  of whole loans.  Such actions could result in higher interest expense
costs  and/or  losses  on  the  sale  of  securities  or  loans.

The  Asset  Liability  Management Committee (ALCO) of the Company is responsible
for  implementing  the  policies  and  guidelines for the maintenance of prudent
levels of liquidity.  As of June 30, 2004, management believes that liquidity as
measured  by  the  Company  is  in  compliance  with  its  policy  guidelines.

                                       16
ITEM  3  -  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

The  Company's  risk  of  loss arising from adverse changes in the fair value of
financial  instruments,  or  market risk, is composed primarily of interest rate
risk.  The  management  of  interest rate sensitivity seeks to avoid fluctuating
net  interest  margins  and  to  provide  consistent net interest income through
periods  of  changing  interest  rates.  The  primary objective of the Company's
asset-liability  management  activities is to maximize net interest income while
maintaining  acceptable  levels  of  interest  rate  risk.  The  Company  has an
Asset-Liability  Management  Committee  (ALCO)  which  is  responsible  for
establishing  policies  to  limit  exposure to interest rate risk, and to ensure
procedures  are  established  to  monitor  compliance with those policies. Those
procedures  include  reviewing  the  Company's  assets  and  liability policies,
setting  prices  and  terms  on  rate-sensitive  products,  and  monitoring  and
measuring  the  impact  of  interest  rate changes on the Company's earnings and
capital.  The Company's Board of Directors reviews the guidelines established by
ALCO.

During the past three years, the Federal Reserve lowered interest rates thirteen
times  by  a  total  of  550  basis points.  These interest rate reductions have
caused  significant  repricing  of  the  bank's  interest-earning  assets  and
interest-bearing  liabilities.  Efforts  have been made to shorten the repricing
duration  of  its rate sensitive assets by purchasing investment securities with
maturities  within the next 3 to 5 years and promoting portfolio ARM (adjustable
rate  mortgage)  and hybrid ARM products.  In addition, the Company has extended
the  duration of its rate sensitive liabilities by lengthening the maturities of
its existing borrowings and offering certificates of deposit with three and four
year  terms  which  allow  depositors  to  make a one-time election, at any time
during  the  term  of  the  certificate  of  deposit,  to adjust the rate of the
instrument  to  the then prevailing rate for the certificate of deposit with the
same  term.

In  June of 2004, the Federal Reserve raised their key interest rate one quarter
of  one  percent for the first time in four years.  An additional 25 basis point
increase  was  announced  by  the  Federal  Reserve in early August.  Management
anticipates  that the Federal Reserve will continue to raise its target interest
rate  over the foreseeable future.  Management will continue to seek to minimize
any reduction in net interest income in a period of rising interest rates to the
extent  that  it  can  resist raising its cost of funds during this period.  The
Company  is  continuing  to explore transactions and strategies to both increase
its  net  interest  income  and  minimize  its  interest  rate  risk.

GAP ANALYSIS.  At June 30, 2004, the total interest bearing liabilities maturing
or  repricing within one year exceeded total interest-earning assets maturing or
repricing  in  the  same  period  by  $39.3  million,  representing a cumulative
one-year  gap  ratio  of  a  negative  13.07%.

EARNINGS  AT  RISK AND VALUE AT RISK.  Management believes the simulation of net
interest  income  (Earnings  at Risk) and net portfolio value (Value at Risk) in
different  interest  rate  environments  provides  a  more meaningful measure of
interest  rate  risk.  Income simulation analysis captures both the potential of
all  assets  and  liabilities to mature or reprice and the probability that they
will  do  so.  Income  simulation  also  attends  to  the relative interest rate
sensitivities  of  these  items,  and  projects  their behavior over an extended
period  of  time.  Finally,  income  simulation permits management to assess the
probable effects on the balance sheet not only of changes in interest rates, but
also  of  proposed  strategies  for  responding  to  them.  Net  portfolio value
represents  the  fair  value  of  net  assets (determined as the market value of
assets  minus  the  market  value  of  liabilities  using a discounted cash flow
technique).

The  following table measures the Company's interest rate risk exposure in terms
of the percentage change in its net interest income and net portfolio value as a
result  of hypothetical changes in 100 basis point increments in market interest
rates.  The  table  quantifies  the  changes  in  net  interest  income  and net
portfolio  value  to parallel shifts in the yield curve.  The column "Percentage
Change  in  Net  Interest Income" measures the change to the next twelve month's
projected  net  interest income, due to parallel shifts in the yield curve.  The
column  "Percentage  Change  in  Net  Portfolio  Value"  measures changes in the
current  fair  value  of  assets and liabilities to parallel shifts in the yield
curve.  The  column  "NPV Capital Ratio" measures the ratio of the fair value of
net  assets  to the fair value of total assets at the base case and in 100 basis
point incremental interest rate shocks.  Currently, the Company's model projects
a  300 basis point increase and a 100 basis point decrease during the next year.

                                       17
With  the federal funds rate at a record low, the Company's ALCO believed it was
a better measure of current risk assuming a minus 100 point scenario, as a minus
300 basis point reduction would be unlikely given that current short-term market
interest  rates  are  already  below  3.00%.  The  Company uses these percentage
changes  as  a means to measure interest rate risk exposure and quantifies those
changes  against  guidelines  set  by  the  Board  of  Directors  as part of the
Company's  Interest  Rate Risk policy.  The Company's current interest rate risk
exposure  is  within  those  guidelines  set  forth.
Change in    NPV
Interest   Capital   Earnings    Value
Rates       Ratio     at Risk   as Risk
---------  --------  ---------  --------
300 . . .     7.14%    -12.97%   -33.23%
200 . . .     8.13%     -8.51%   -21.88%
100 . . .     9.08%     -4.12%   -10.37%
0             9.87%      ----      ----
-100. . .    10.14%      1.68%     4.96%
18
ITEM  4  -  CONTROLS  AND  PROCEDURES

Under  the  supervision  and with the participation of the Company's management,
including  our  Chief Executive Officer and Chief Financial Officer, the Company
has  evaluated  the  effectiveness of the design and operation of its disclosure
controls  and  procedures  (as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange  Act)  as  of  the  end of the period covered by this quarterly report.
Based  upon  that  evaluation,  the  Chief Executive Officer and Chief Financial
Officer  concluded that, as of the end of the period covered by this report, the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required  to  be disclosed in the reports that the Company files or
submits  under  the  Securities  Exchange  Act  of  1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules  and  forms.  There  has  been  no  change  in the
Company's  internal  control  over  financial  reporting  during the most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonable  likely to
materially  affect,  the  Company's  internal  control over financial reporting.

                                       19
PART  II  -  OTHER  INFORMATION

ITEM  1  -  LEGAL  PROCEEDINGS
------------------------------

None

ITEM 2 - CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUE OR PURCHASES OF EQUITY
--------------------------------------------------------------------------------
SECURITIES
----------

Not  applicable

ITEM  3  -  DEFAULTS  UPON  SENIOR  SECURITIES
----------------------------------------------

Not  applicable

ITEM  4  -  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
-----------------------------------------------------------------------

The Company's Meeting of Shareholders was held on April 28, 2004.  The following
are  the  items  voted  on  and  the  results  of  the  shareholder  voting:

1.     The election of Corte J. Spencer, Janette Resnick and Steven W. Thomas to
serve  as  directors of the Company, each for a term of three years or until his
successor  has  been  elected  and  qualified.

          Name                      For               Withheld

     Corte  J.  Spencer          2,134,262              916
     Janette  Resnick            2,134,395              783
     Steven  W.  Thomas          2,134,262              916

     Set  forth  below  are  the names of the other directors of the Company and
their  terms  of  office.

          Name               Term  Expires
     Chris  C.  Gagas            2005
     Thomas  W.  Schneider       2005
     Chris  R.  Burritt          2005
     Raymond  W.  Jung           2005
     Bruce  Manwaring            2006
     L.  William  Nelson         2006
     George  P.  Joyce           2006

2.     The  ratification  of  the  appointment  of  Beard  Miller Company LLP as
auditors  for  the  Company.

                              For        Against     Abstain
     Number  of  Votes     2,134,095       633         450

ITEM  5  -  OTHER  INFORMATION
------------------------------

On  June  30,  2004,  the  Board  of  Directors declared a $.10 cash dividend to
shareholders  of  record  as  of  June  30,  2004,  payable  on  July  15, 2004.

                                       20
ITEM  6  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K
-------------------------------------------------

(a)

Exhibit  No.          Description
------------          -----------

10.1 Employment  Agreement  between  the Bank and Thomas W. Schneider, President
     and  Chief  Executive  Officer
10.2 Employment  Agreement  between the Bank and Edward Mervine, Vice- President
     and  General  Counsel
31.1 Rule  13a-14(a)  /  15d-14(a)  Certification of the Chief Executive Officer
31.2 Rule  13a-14(a)  /  15d-14(a)  Certification of the Chief Financial Officer
32.1 Section  1350  Certification  of  the  Chief  Executive and Chief Financial
     Officer

(b)     Reports  on  Form  8-K

     The  Company  has two Current Reports on Form 8-K during the second quarter
of  the  fiscal  year  ended  June  30,  2004  dated April 28, and June 30, 2004
reporting  press releases relating to the first quarter earnings release and the
announcement  of  the  second  quarter  cash  dividends,  respectively.

                                       21
SIGNATURES

Under  the  requirements of the Securities Exchange Act of 1934, the Company has
duly  caused this report to be signed on its behalf by the undersigned thereunto
duly  authorized.

     PATHFINDER  BANCORP,  INC.
     --------------------------

August 16, 2004          /s/  Thomas  W.  Schneider
---------------------------------------------------------------
Date:                    Thomas  W.  Schneider
                         President,  Chief  Executive  Officer

August 16, 2004         /s/  James  A.  Dowd
---------------------------------------------------------------
Date:                    James  A.  Dowd
                         Vice  President,  Chief  Financial  Officer
EXHIBIT 10.1

                            PATHFINDER BANCORP, INC.
                                 PATHFINDER BANK
                              EMPLOYMENT AGREEMENT

     This  Agreement  is made effective as of the 28th day of June, 2004, by and
between  Pathfinder  Bank (the "Bank"), a New York chartered stock savings bank,
with  its  principal administrative office at 214 West First Street, Oswego, New
York  13126-2547,  jointly with Pathfinder Bancorp, Inc, the sole stockholder of
the  Bank, and Thomas W. Schneider (the "Executive"). Any reference to "Company"
herein  shall  mean  Pathfinder  Bancorp,  Inc.  or  any  successor thereto. Any
reference  to  "Employer" herein shall mean both the Bank and the Company or any
successors  thereto

     WHEREAS,  the Employer wishes to assure itself of the services of Executive
for  the  period  provided  in  this  Agreement;  and

     WHEREAS,  Executive  is willing to serve in the employ of the Employer on a
full-time  basis  for  said  period.

     NOW,  THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree  as  follows:

1.     POSITION  AND  RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
President  and  Chief  Executive  Officer of the Bank and as President and Chief
Executive  Officer of the Company.  During said period, Executive also agrees to
serve,  if  elected,  as an officer and director of the Bank, the Company and of
any  subsidiary  or  affiliate of the Employer.  Failure to reelect Executive as
President  and  Chief  Executive Officer of the Bank and the Company without the
consent  of  the  Executive during the term of this Agreement shall constitute a
breach  of  this  Agreement.

2.     TERMS  AND  DUTIES

     (a)  The  period of Executive's employment under this Agreement shall begin
          as  of the date first above written and shall continue for a period of
          thirty-six  (36)  full  calendar  months thereafter. Commencing on the
          first  anniversary  date  of  this  Agreement,  and continuing at each
          anniversary  date  thereafter,  the  Agreement  shall  renew  for  an
          additional  year such that the remaining term shall be three (3) years
          unless written notice is provided to Executive, at least ten (10) days
          and not more than thirty (30) days prior to any such anniversary date,
          that  his  employment shall cease at the end of thirty-six (36) months
          following  such  anniversary  date.  Prior  to  each notice period for
          non-renewal,  the  disinterested  members of the Board of Directors of
          the Bank ("Board") will conduct a comprehensive performance evaluation
          and  review  of  the  Executive for purposes of determining whether to
          extend the Agreement, and the results thereof shall be included in the
          minutes  of  the  Board's  meeting.

     (b)  During  the  period of his employment hereunder, except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and  efforts to the faithful
          performance  of his duties hereunder including activities and services
          related to the organization, operation and management of the Employer;
          provided,  however, that, with the approval of the Board, as evidenced
          by a resolution of such Board, from time to time, Executive may serve,
          or  continue  to  serve,  on  the boards of directors of, and hold any
          other  offices  or positions in, companies or organizations, which, in
          such  Board's judgment, will not present any conflict of interest with
          the  Bank,  or materially affect the performance of Executive's duties
          pursuant  to  this  Agreement.
(c)  During  the period of his employment hereunder, if Executive's term as
          a  director  of  the  Bank  or the Company expires, the Employer shall
          nominate  Executive  to be re-elected to the Board of Directors of the
          Bank  and  the Company. If re-elected by shareholders, Executive shall
          serve  as  director.

3.     COMPENSATION  AND  REIMBURSEMENT

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Section 2(b). The
          Bank  shall  pay  Executive  as compensation a salary of not less than
          $185,000  per  year ("Base Salary"). Such Base Salary shall be payable
          biweekly. During the period of this Agreement, Executive's Base Salary
          shall  be  reviewed  at  least annually; the first such review will be
          made  no  later than December 31, 2004. Such review shall be conducted
          by  a  Committee  designated  by the Board, and the Board may increase
          Executive's  Base  Salary.  In addition to the Base Salary provided in
          this  Section  3(a),  the  Bank  shall provide Executive at no cost to
          Executive  with  all  such other benefits as are provided uniformly to
          permanent  full-time  employees  of  the  Bank.

     (b)  The  Bank  will  provide  Executive  with  employee  benefit  plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which  Executive  was participating or otherwise deriving benefit from
          immediately  prior to the beginning of the term of this Agreement, and
          the Bank will not, without Executive's prior written consent, make any
          changes  in  such  plans,  arrangements  or  perquisites  which  would
          adversely  affect  Executive's  rights or benefits thereunder. Without
          limiting the generality of the foregoing provisions of this Subsection
          (b),  Executive will be entitled to participate in or receive benefits
          under  any  employee  benefit  plans  including  but  not  limited to,
          retirement  plans,  supplemental  retirement  plans,  pension  plans,
          profit-sharing  plans,  health-and-accident plans, medical coverage or
          any  other  employee benefit plan or arrangement made available by the
          Bank  in  the  future  to  its  senior  executives  and key management
          employees,  subject  to  and  on  a  basis  consistent with the terms,
          conditions  and overall administration of such plans and arrangements.
          Executive  will  be  entitled to incentive compensation and bonuses as
          provided  in  any  plan  of the Bank in which Executive is eligible to
          participate.  Nothing  paid  to  the  Executive under any such plan or
          arrangement  will  be  deemed  to  be in lieu of other compensation to
          which  the  Executive  is  entitled  under  this  Agreement.

     (c)  In  addition  to the Base Salary provided for by paragraph (a) of this
          Section  3,  the  Employer  shall  pay  or reimburse Executive for all
          reasonable  travel and other reasonable expenses incurred by Executive
          performing  his  obligations under this Agreement and may provide such
          additional compensation in such form and such amounts as the Board may
          from  time  to  time  determine.

     (d)  Compensation  and reimbursement to be paid pursuant to paragraphs (a),
          (b)  and  (c)  of  this  Section  3  shall be paid by the Bank and the
          Company,  respectively  on  a  pro rata basis based upon the amount of
          service  the  Executive devotes to the Bank and Company, respectively.
4.     PAYMENTS  TO  EXECUTIVE  UPON  AN  EVENT  OF  TERMINATION

     The  provisions  of  this  Section  shall in all respects be subject to the
terms  and  conditions  stated  in  Sections  8  and  15.

     (a)  The  provisions  of this Section shall apply upon the occurrence of an
          Event  of  Termination (as herein defined) during the Executive's term
          of  employment  under  this  Agreement.  As used in this Agreement, an
          "Event  of  Termination" shall mean and include any one or more of the
          following:  (i)  the  termination  by  the  Bank  or  the  Company  of
          Executive's  full-time employment hereunder for any reason other than,
          (A)  Disability  or  Retirement  as  defined in Section 6 below, (B) a
          Change  in  Control,  as  defined  in  Section  5(a)  hereof,  or  (C)
          Termination  for  Cause  as  defined  in  Section  7  hereof;  or (ii)
          Executive's  resignation from the Bank's or the Company's employ, upon
          any  (A)  failure  to  elect  or  reelect  or  to appoint or reappoint
          Executive  as  President  and  Chief  Executive  Officer, (B) material
          change  in  Executive's  function,  duties, or responsibilities, which
          change  would  cause  Executive's  position  to  become  one of lesser
          responsibility,  importance, or scope from the position and attributes
          thereof described in Section 1, above, (C) a relocation of Executive's
          principal  place of employment by more than 30 miles from its location
          at  the  effective  date of this Agreement, or a material reduction in
          the  benefits  and  perquisites  to  the  Executive  from  those being
          provided  as  of the effective date of this Agreement, (D) liquidation
          or  dissolution  of  the  Bank  or  Company other than liquidations or
          dissolutions that are caused by reorganizations that do not affect the
          status of Executive, (E) failure of the Employer to nominate Executive
          to  be elected or re-elected as a director of the Bank or the Company,
          or  (F)  breach of this Agreement by the Bank or the Company. Upon the
          occurrence  of  any event described in clauses (ii)(A), (B), (C), (D),
          (E)  or  (F),  above,  Executive  shall  have  the  right  to elect to
          terminate  his  employment  under  this  Agreement by resignation upon
          sixty  (60) days prior written notice given within a reasonable period
          of  time  not  to  exceed four calendar months after the initial event
          giving  rise  to  said  right  to elect. Notwithstanding the preceding
          sentence, in the event of a continuing breach of this Agreement by the
          Employer, the Executive, after giving due notice within the prescribed
          time frame of an initial event specified above, shall not waive any of
          his rights solely under this Agreement and this Section 4 by virtue of
          the fact that Executive has submitted his resignation but has remained
          in  the  employment  of  the  Employer  and  is  engaged in good faith
          discussions to resolve any occurrence of an event described in clauses
          (A),  (B),  (C),  (D),  (E)  and  (F)  above.

     (b)  Upon  the  occurrence  of  an  Event  of  Termination,  on the Date of
          Termination,  as  defined  in  Section  8,  the  Employer  shall  pay
          Executive,  or,  in the event of his subsequent death, his beneficiary
          or  beneficiaries, or his estate, as the case may be, as severance pay
          or liquidated damages, or both, a sum equal to three (3) times the sum
          of  (i)  Base Salary and (ii) the highest rate of bonus awarded to the
          Executive  during  the prior three years, , provided, however, that if
          the  Employer  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Employer's capital to
          be reduced below its minimum capital requirements, such payments shall
          be  deferred until such time as the Employer is in capital compliance.
          At  the  election of the Executive, which election is to be made on an
          annual  basis  during  the  month  of  January,  and which election is
          irrevocable  for  the year in which made and upon the occurrence of an
          Event  of  Termination,  such  payments shall be made in a lump sum or
          paid  monthly during the remaining term of the Agreement following the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  to  the  Executive will be made on a monthly basis during the
          remaining term of the Agreement. Such payments shall not be reduced in
          the event the Executive obtains other employment following termination
          of  employment.

     (c)  Notwithstanding  the  provisions  of Sections 4(a) and (b), and in the
          event  that  there  has  not  been  a  Change in Control as defined in
          Section  5(a) nor an Event of Termination, as defined in Section 4(a),
          upon the voluntary termination by the Executive upon giving sixty days
          notice to the Employer (which itself shall not be deemed to constitute
          an "Event of Termination" as defined), the Employer, at the discretion
          of the Board of Directors, shall pay Executive, or in the event of his
          subsequent  death, his beneficiary or beneficiaries, or his estate, as
the  case may be, a severance payment in an amount to be determined by
          the  Board  of  Directors at the time of such voluntary termination by
          the Executive. Such severance payment shall not exceed three (3) times
          the  average  of  the  three  preceding  years' Base Salary, including
          bonuses  and  any other cash compensation paid to the Executive during
          such  years,  and  the amount of any benefits received pursuant to any
          employee  benefit plans, on behalf of the Executive, maintained by the
          Employer during such years; provided, however, that if the Employer is
          not  in  compliance  with  its minimum capital requirements or if such
          payments  would  cause  the Employer's capital to be reduced below its
          minimum  capital  requirements,  such  payments shall be deferred ----
          until such time as the Employer is in capital compliance, and provided
          further,  that in no event shall total severance compensation from all
          sources  exceed  three  times  the  Executive's  Base  Salary  for the
          immediately  preceding  year.  At the election of the Executive, which
          election is to be made on an annual basis during the month of January,
          and  which election is irrevocable for the year in which made and upon
          the Executive's voluntary termination, any payments shall be made in a
          lump  sum  or  paid monthly during the remaining term of the Agreement
          following  the  Executive's termination. In the event that no election
          is  made, any payment to the Executive will be made on a monthly basis
          during the remaining term of the agreement. Such payments shall not be
          reduced  in the event the Executive obtains other employment following
          termination  of  employment.

     (d)  Upon  the  occurrence  of  an  Event of Termination, the Employer will
          cause  to  be  continued life, medical, dental and disability coverage
          substantially identical to the coverage maintained by the Employer for
          Executive  prior to his termination, provided that such benefits shall
          not  be  provided  in  the  event  they should constitute an unsafe or
          unsound  banking  practice  relating  to  executive  compensation  and
          employment  contracts pursuant to applicable regulations, as is now or
          hereafter  in effect. Such coverage shall cease upon the expiration of
          the  remaining  term  of  this  Agreement.

     (e)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  the Supplemental Executive Retirement Plan of the Bank or Company.

     (g)  Upon  the  occurrence  of an Event of Termination, the Executive shall
          become  fully  vested  in  and entitled to all benefits awarded to him
          under  the  Bank's  or the Company's Recognition and Retention Plan or
          any  restricted  stock  plan  in  effect.

5.     CHANGE  IN  CONTROL

     (a)  No  benefit  shall  be payable under this Section 5 unless there shall
          have  been a Change in Control of the Bank or Company. For purposes of
          this  Agreement,  a  "Change  in Control" of the Bank or Company shall
          mean  a change in control of a nature that (i) would be required to be
          reported  in  response to Item 1(a) of the current report on Form 8-K,
          as  in  effect  on the date hereof, pursuant to Section 13 or 15(d) of
          the  Securities  Exchange  Act  of  1934 (the "Exchange Act"); or (ii)
          results  in  a Change in Control of the Bank or the Company within the
          meaning  of the Home Owners Loan Act, as amended, and applicable rules
          and  regulations  promulgated  thereunder, as in effect at the time of
          the  Change  in  Control  (collectively, the "HOLA"); or (iii) without
          limitation  such  a Change in Control shall be deemed to have occurred
          at  such  time  as  (a)  any "person" (as the term is used in Sections
          13(d)  and  14(d)  of  the Exchange Act) is or becomes the "beneficial
          owner"  (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly,  of  securities of the Company representing 25% or more of
          the  combined  voting power of Company's outstanding securities except
          for  any  securities  purchased  by  the  Employer's  employee  stock
          ownership  plan  or  trust;  or  (b)  individuals  who  constitute the
          Company's  Board  of  Directors  on  the  date  hereof (the "Incumbent
          Board")  cease  for  any  reason  to  constitute  at  least a majority
          thereof,  provided  that  any person becoming a director subsequent to
          the  date  hereof  whose  election  was approved by a vote of at least
          three-quarters  of  the  directors  comprising the Incumbent Board, or
          whose  nomination  for  election  by  the  Company's  stockholders was
approved  by  the same Nominating Committee serving under an Incumbent
          Board, shall be, for purposes of this clause (b), considered as though
          he  were  a  member  of  the  Incumbent  Board;  or  (c)  a  plan  of
          reorganization,  merger,  consolidation,  sale of all or substantially
          all  the  assets  of the Bank or the Company or similar transaction in
          which  the Bank or Company is not the surviving institution occurs; or
          (d)  a  proxy  statement  soliciting  proxies from stockholders of the
          Company,  by someone other than the current management of the Company,
          seeking  stockholder  approval  of a plan of reorganization, merger or
          consolidation  of  the Company or similar transaction with one or more
          corporations  or  financial  institutions,  and as a result such proxy
          solicitation a plan of reorganization, merger consolidation or similar
          transaction involving the Company is approved by the requisite vote of
          the  Company's  stockholders; or (e) a tender offer is made for 25% or
          more  of  the  voting  securities  of the Company and the shareholders
          owning  beneficially  or  of  record  25%  or  more of the outstanding
          securities  of  the  Company  have  tendered  or offered to sell their
          shares  pursuant  to  such  tender offer and such tendered shares have
          been  accepted  by the tender offeror. Notwithstanding anything to the
          contrary  herein,  a  "Change  in  Control" of the Bank or the Company
          shall  not  be deemed to have occurred in the event of a conversion of
          Pathfinder  Bancorp,  MHC  to  stock  holding  company  form.

     (b)  If  any  of the events described in Section 5(a) hereof constituting a
          Change  in  Control  have occurred, Executive shall be entitled to the
          benefits  provided  in  paragraphs  (c), (d), (e), (f), (g) and (h) of
          this  Section  5  upon his subsequent termination of employment at any
          time  during  the  term  of this Agreement, regardless of whether such
          termination  results  from  (i)  his resignation or (ii) his dismissal
          upon  the  Change  in  Control.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment, the Employer shall pay Executive, or in the
          event  of  his  subsequent death, his beneficiary or beneficiaries, or
          his  estate,  as  the  case  may  be,  as  severance pay or liquidated
          damages,  or  both, a sum equal to the greater of the payments due for
          the  remaining  term of the Agreement or 2.99 times the average of the
          five  preceding  years'  Base  Salary, including bonuses and any other
          cash  compensation  paid  to  the Executive during such years, and the
          amount  of  any  contributions  made to any employee benefit plans, on
          behalf of the Executive, maintained by the Employer during such years,
          (hereinafter  referred  to as "Payment". Such Payment shall be made by
          the  Employer  on  the  Date  of  Termination.  At the election of the
          Executive,  which election shall be made on an annual basis during the
          month  of  January,  and which election is irrevocable for the year in
          which  made  and  upon  the  occurrence  of  a Change in Control, such
          Payment  may  be  made  in  a  lump  sum  or  paid  in  equal  monthly
          installments  during  the  thirty-six  (36)  months  following  the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  of  the  Payment  to the Executive will be made pro-rata on a
          monthly  basis  during  the  remaining  term  of  the  Agreement.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination  of  employment,  the  Employer will cause to be continued
          life,  medical, dental and disability coverage substantially identical
          to  the coverage maintained by the Employer for Executive prior to his
          severance.  Such coverage and payments shall cease upon the expiration
          of  thirty-six  (36)  months.

     (e)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  the Supplemental Executive Retirement Plan of the Bank or Company.

     (g)  Upon the occurrence of a Change in Control, the Executive shall become
          fully  vested in and entitled to all benefits awarded to him under the
          Bank's  or  the  Company's  Recognition  and  Retention  Plan  or  any
          restricted  stock  plan  in  effect.

     (h)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event  that:
(i)  the  aggregate  payments  or  benefits  to be made or afforded to
               Executive  under  said  paragraphs  (the  "Termination Benefits")
               would  be  deemed  to include an "excess parachute payment" under
               Section  280G  of  the  Internal  Revenue  Code  or any successor
               thereto,  and

          (ii) if  such  Termination  Benefits  were  reduced  to an amount (the
               "Non-Triggering  Amount"),  the  value  of  which  is  one dollar
               ($1.00) less than an amount equal to the total amount of payments
               permissible  under  Section  280G of the Internal Revenue Code or
               any  successor  thereto, then the Termination Benefits to be paid
               to  Executive  shall  be  so reduced so as to be a Non-Triggering
               Amount.

     (i)  Notwithstanding  the  foregoing,  there  will  be  no reduction in the
          Payment  otherwise payable to Executive during any period during which
          Executive is incapable of performing his duties hereunder by reason of
          temporary  disability.

     (j)  Any Payment made to Executive pursuant to this Agreement or otherwise,
          are  subject  to  and conditioned upon their compliance with 12 U.S.C.
          1818(k)  and  any  applicable  regulations  promulgated  thereunder.

     (k)  The  Executive  shall  not  be entitled to immediately receive Payment
          pursuant  to  this Section 5 if the Employer is not in compliance with
          its  minimum  capital  requirements or if such Payment would cause the
          Employer's  capital  to  be  reduced  below  its  minimum  capital
          requirements.  In  such  event,  Payment  shall be deferred until such
          times  as  the Employer is in capital compliance and provided further,
          that  in  such  event  the  Payment  shall  not exceed three times the
          Executive's  Base  Salary  for  the  immediately  preceding  year.

6.     TERMINATION  UPON  RETIREMENT  OR  DISABILITY

     Termination  by  the  Employer of the Executive based on "Retirement" shall
mean  termination  in  accordance  with  the  Employer's retirement policy or in
accordance  with any retirement arrangement established with Executive's consent
with  respect  to him.  Upon termination of Executive upon Retirement, Executive
shall  be entitled to all benefits under any retirement plan of the Employer and
other  plans  to  which  Executive  is  a  party.

     In the event Executive is unable to perform his duties under this Agreement
on  a  full-time  basis  for a period of six (6) consecutive months by reason of
illness  or other physical or mental disability, the Employer may terminate this
Agreement,  provided that the Employer shall continue to be obligated to pay the
Executive  his  Base  Salary for one year, and provided further that any amounts
actually paid to Executive pursuant to any disability insurance or other similar
such  program  which  the  Employer has provided or may provide on behalf of its
employees  or  pursuant  to  any workman's or social security disability program
shall  not  reduce the compensation to be paid to the Executive pursuant to this
paragraph.

     In  the  event  of  Executive's death during the term of the Agreement, his
estate,  legal  representatives or named beneficiaries (as directed by Executive
in  writing)  shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at  the  rate  in effect at the time Executive's death for the remaining term of
the  Agreement.

7.     TERMINATION  FOR  CAUSE

     The  term  "Termination  for  Cause"  shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary  duty involving personal profit, intentional failure to perform stated
duties,  willful  violation  of any law, rule, or regulation (other than traffic
violations  or  similar  offenses)  or final cease-and-desist order, or material
breach  of  any  provision  of this Agreement.  In determining incompetence, the
acts  or  omissions  shall be measured against standards generally prevailing in
the  financial  services  industry.  For  purposes  of this paragraph, no act or
failure  to  act  on  the part of Executive shall be considered "willful" unless
done,  or  omitted  to  be  done, by the Executive not in good faith and without
reasonable  belief  that  the  Executive's  action  or  omission was in the best
interest of the Employer.  Notwithstanding the foregoing, Executive shall not be
deemed  to have been Terminated for Cause unless and until there shall have been
delivered  to him a copy of a resolution duly adopted by the affirmative vote of
not  less  than  three-fourths  of the members of the Boards of Directors of the
Company  and  the  Bank  at  a  meeting  of said Boards called and held for that
purpose  (after  reasonable  notice  to  Executive  and  an opportunity for him,
together  with counsel, to be heard before the Boards), finding that in the good
faith  opinion  of  the  Boards,  Executive  was  guilty  of  conduct justifying
Termination  for  Cause  and  specifying the particulars thereof in detail.  The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any unexercised stock options granted to
Executive under any stock option plan of the Bank, the Company or any subsidiary
or  affiliate  thereof,  shall  become  null and void effective upon Executive's
receipt  of  Notice  of  Termination for Cause pursuant to Section 8 hereof, and
shall not be exercisable by Executive at any time subsequent to such Termination
for  Cause.

8.     NOTICE

     (a)  Any  purported  termination  by  the Employer or by Executive shall be
          communicated  by  Notice of Termination to the other party hereto. For
          purposes  of  this  Agreement,  a "Notice of Termination" shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of  Executive's  employment  under  the  provision  so  indicated.

     (b)  "Date  of  Termination" shall mean the date specified in the Notice of
          Termination  (which, in the case of a Termination for Cause, shall not
          be less than thirty (30) days from the date such Notice of Termination
          is  given).

     (c)  If,  within thirty (30) days after any Notice of Termination is given,
          the  party  receiving  such  Notice  of Termination notifies the other
          party  that  a  dispute exists concerning the termination, except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in  which  case  the  Date of Termination shall be the date
          specified  in the Notice, the Date of Termination shall be the date on
          which  the  dispute  is  finally  determined, either by mutual written
          agreement  of  the  parties,  by  a binding arbitration award, or by a
          final  judgment,  order or decree of a court of competent jurisdiction
          (the  time  for  appeal  having  expired  and  no  appeal  having been
          perfected)  and provided further that the Date of Termination shall be
          extended  by  a notice of dispute only if such notice is given in good
          faith  and the party giving such notice pursues the resolution of such
          dispute with reasonable diligence. Notwithstanding the pendency of any
          such  dispute,  the  Employer  will continue to pay Executive his full
          compensation  in effect when the notice giving rise to the dispute was
          given  (including,  but  not  limited  to,  Base  Salary) and continue
          Executive  as a participant in all compensation, benefit and insurance
          plans  in  which  he  was participating when the notice of dispute was
          given,  until  the dispute is finally resolved in accordance with this
          Agreement,  provided such dispute is resolved within nine months after
          the  Date  of  Termination  specified  in  the  Notice or Termination;
          notwithstanding  the  foregoing  no  compensation or benefits shall be
          paid  to Executive in the event the Executive is Terminated for Cause.
          In  the  event  that  such Termination for Cause is found to have been
          wrongful  or  such  dispute is otherwise decided in Executive's favor,
          the  Executive  shall  be  entitled  to  receive  all compensation and
          benefits  which  accrued  for  up to a period of nine months after the
          Termination  for  Cause.  If  such dispute is not resolved within such
          nine-  month  period,  the Employer shall not be obligated, upon final
          resolution  of  such  dispute, to pay Executive compensation and other
          payments  accruing  more  than  nine  months  from  the  Date  of  the
          Termination specified in the Notice of Termination. Amounts paid under
          this  Section  are  in  addition  to  all other amounts due under this
          Agreement  and shall not be offset against or reduce any other amounts
          due  under  this  Agreement.
9.     POST-TERMINATION  OBLIGATIONS

     (a)  All  payments  and benefits to Executive under this Agreement shall be
          subject to Executive's compliance with paragraph (b) of this Section 9
          during  the term of this Agreement and for one (1) full year after the
          expiration  or  termination  hereof.

     (b)  Executive  shall, upon reasonable notice, furnish such information and
          assistance  to  the  Bank as may reasonably be required by the Bank in
          connection  with any litigation in which it or any of its subsidiaries
          or  affiliates  is,  or  may  become,  a  party.

     (c)  The  Employer's  obligation  to  tender  the  payment  of  Payment and
          Termination  Benefits  pursuant  to  Sections  4 and 5 hereof shall be
          conditioned  upon  the  Executive's  prior  written  resignations from
          membership  in  the  Boards  of Directors of the Bank and the Company.

10.     NON-COMPETITION

     (a)  Upon  any  termination of Executive's employment hereunder pursuant to
          Section  4(c)  hereof,  Executive  agrees not to compete with the Bank
          and/or  the  Company  for  a  period  of  one  (1) year following such
          termination  in  any city, town or county in which the Bank and/or the
          Company  has  an  office  or  has  filed an application for regulatory
          approval  to  establish an office, determined as of the effective date
          of such termination, except as agreed to pursuant to a resolution duly
          adopted  by  the  Board.  Executive agrees that during such period and
          within  said  cities, towns and counties, Executive shall not work for
          or  advise,  consult  or otherwise serve with, directly or indirectly,
          any  entity  whose  business  materially competes with the depository,
          lending  or  other business activities of the Bank and/or the Company.
          The parties hereto, recognizing that irreparable injury will result to
          the Bank and/or the Company, its business and property in the event of
          Executive's breach of this Subsection 10(a) agree that in the event of
          any  such  breach  by  Executive,  the Bank and/or the Company will be
          entitled,  in addition to any other remedies and damages available, to
          an  injunction  to  restrain  the  violation  hereof  by  Executive,
          Executive's  partners,  agents, servants, employers, employees and all
          persons acting for or with Executive. Nothing herein will be construed
          as  prohibiting  the  Bank  and/or the Company from pursuing any other
          remedies  available  to the Bank and/or the Company for such breach or
          threatened  breach,  including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business  activities and plans for business activities of the Employer
          and  affiliates  thereof,  as  it  may  exist  from time to time, is a
          valuable,  special  and  unique asset of the business of the Employer.
          Executive  will  not,  during  or  after  the  term of his employment,
          disclose  any  knowledge  of  the past, present, planned or considered
          business  activities  of  the  Employer  or  affiliates thereof to any
          person,  firm,  corporation, or other entity for any reason or purpose
          whatsoever.  Notwithstanding the foregoing, Executive may disclose any
          knowledge  of  banking, financial and/or economic principles, concepts
          or  ideas  which  are  not  solely  and  exclusively  derived from the
          business  plans  and  activities  of  the  Employer, and Executive may
          disclose  any  information  regarding the Bank or the Company which is
          otherwise  publicly  available. In the event of a breach or threatened
          breach  by  the  Executive  of  the Provisions of this Section 10, the
          Employer  will be entitled to an injunction restraining Executive from
          disclosing,  in  whole or in part, the knowledge of the past, present,
          planned  or  considered  business  activities  of  the  Employer  or
          affiliates  thereof,  or  from  rendering  any services to any person,
          firm, corporation, other entity to whom such knowledge, in whole or in
          part,  has  been  disclosed  or is threatened to be disclosed. Nothing
          herein will be construed as prohibiting the Employer from pursuing any
          other  remedies  available  to  the Bank for such breach or threatened
          breach,  including  the  recovery  of  damages  from  Executive.
11.     SOURCE  OF  PAYMENTS

     All  payments  provided  in  this Agreement shall be timely paid in cash or
check  from  the  general  funds  of the Bank.  The Company, however, guarantees
payment  and  provision  of  all amounts and benefits due hereunder to Executive
and,  if  such  amounts  and  benefits  due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

12.     EFFECT  ON  PRIOR  AGREEMENTS  AND  EXISTING  BENEFITS  PLANS

     (a)  This  Agreement  contains the entire understanding between the parties
          hereto  and  supersedes  any  prior  employment  agreement between the
          Employer or any predecessor of the Employer and Executive, except that
          this  Agreement  shall  not affect or operate to reduce any benefit or
          compensation inuring to the Executive of a kind elsewhere provided. No
          provision  of  this  Agreement  shall  be  interpreted  to  mean  that
          Executive  is subject to receiving fewer benefits than those available
          to  him  without  reference  to  this  Agreement.

     (b)  In  the  event  that  the provisions of this Agreement are in conflict
          with  the provisions of the Bank's or the Company's Stock Option Plan,
          Supplemental  Executive  Retirement Plan, or Recognition and Retention
          Plan  (or any such restricted stock plan in effect) in which Executive
          participates,  this Agreement shall govern; provided further, however,
          that  this  Agreement shall not supercede provisions that specifically
          received  prior  approval  by  vote  of  shareholders  of the Company.

13.     NO  ATTACHMENT

     (a)  Except  as  required  by  law, no right to receive payments under this
          Agreement  shall  be subject to anticipation, commutation, alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or  similar  process  or assignment by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any  such  action  shall  be  null,  void,  and  of  no  effect.

     (b)  This  Agreement  shall  be  binding upon, and inure to the benefit of,
          Executive  and  the  Employer  and  their  respective  successors  and
          assigns.

14.     MODIFICATION  AND  WAIVER

     (a)  This  Agreement may not be modified or amended except by an instrument
          in  writing  signed  by  the  parties  hereto.

     (b)  No  term  or  condition of this Agreement shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged  with such waiver or estoppel. No such written waiver shall be
          deemed  a  continuing  waiver  unless specifically stated therein, and
          each  such  waiver  shall  operate  only  as  to  the specific term or
          condition  waived  and  shall  not constitute a waiver of such term or
          condition  for  the  future as to any act other than that specifically
          waived.

15.     REQUIRED  PROVISIONS

     (a)  The Employer may terminate the Executive's employment at any time, but
          any  termination  by  the  Employer, other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits  under  this Agreement. Executive shall not have the right to
          receive  compensation  or  other  benefits  for  any  period  after
          Termination  for  Cause  as  defined  in  Section  7  hereinabove.

     (b)  If  the  Executive  is  suspended  from  office  and/or  temporarily
          prohibited from participating in the conduct of the Employer's affairs
          by  a  notice  served  under Section 8(e)(3) (12 U.S.C. 1818(e)(3)) or
8(g)  (12  U.S.C.  1818(g))  of  the Federal Deposit Insurance Act, as
          amended by the Financial Institutions Reform, Recovery and Enforcement
          Act  of 1989, the Employer's obligations under this Agreement shall be
          suspended  as  of  the  date  of service, unless stayed by appropriate
          proceedings.  If the charges in the notice are dismissed, the Employer
          may  in  its  discretion  (i)  pay  the  Executive  all or part of the
          compensation withheld while their Agreement obligations were suspended
          and  (ii) reinstate (in whole or in part) any of the obligations which
          were  suspended.

     (c)  If  the  Executive  is  removed  and/or  permanently  prohibited  from
          participating  in  the  conduct  of the Employer's affairs by an order
          issued  under  Section  8(e)  (12  U.S.C.  1818(e)) or 8(g) (12 U.S.C.
          1818(g))  of  the  Federal  Deposit  Insurance  Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  effective  date  of  the  order, but vested rights of the
          contracting  parties  shall  not  be  affected.

     (d)  If  the  Employer  is in default as defined in Section 3(x) (12 U.S.C.
          1813(x)(1))  of  the  Federal Deposit Insurance Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  date  of default, but this paragraph shall not affect any
          vested  rights  of  the  contracting  parties.

     (e)  All  obligations  of  the  Employer  under  this  Agreement  shall  be
          terminated,  except  to the extent determined that continuation of the
          Agreement is necessary for the continued operation of the institution,
          (i) by the Federal Deposit Insurance Corporation ("FDIC"), at the time
          FDIC enters into an agreement to provide assistance to or on behalf of
          the  Employer  under  the  authority  contained  in Section 13(c) (12)
          U.S.C.  1823(c))  of  the Federal Deposit Insurance Act, as amended by
          the  Financial  Institutions  Reform,  Recovery and Enforcement Act of
          1989;  or (ii) when the Employer is determined by the FDIC to be in an
          unsafe  or  unsound  condition.  Any  rights  of the parties that have
          already  vested,  however,  shall  not  be  affected  by  such action.

16.     SEVERABILITY

     If,  for  any  reason,  any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of  this  Agreement  or any part of such provision not held so invalid, and each
such  other  provision and part thereof shall to the full extent consistent with
law  continue  in  full  force  and  effect.

17.     HEADINGS  FOR  REFERENCE  ONLY

     The  headings  of  sections  and  paragraphs herein are included solely for
convenience  of reference and shall not control the meaning or interpretation of
any  of  the  provisions  of  this  Agreement.

18.     GOVERNING  LAW

     This  Agreement shall be governed by the laws of the State of New York, but
only  to  the  extent  not  superseded  by  federal  law.
19.     ARBITRATION

     Any  dispute  or  controversy  arising  under  or  in  connection with this
Agreement  shall  be  settled  exclusively by arbitration in accordance with the
rules  of  the American Arbitration Association then in effect.  Judgment may be
entered  on  the  arbitrator's award in any court having jurisdiction; provided,
however,  that  Executive  shall be entitled to seek specific performance of his
right  to  be  paid  until  the  Date  of Termination during the pendency of any
dispute  or  controversy  arising  under  or  in connection with this Agreement.

20.     PAYMENT  OF  LEGAL  FEES

     All  reasonable  legal  fees  paid or incurred by Executive pursuant to any
dispute  or  question of interpretation relating to this Agreement shall be paid
or  reimbursed  by the Employer, provided that the dispute or interpretation has
been settled by Executive and the Employer or resolved in the Executive's favor.

21.     INDEMNIFICATION

     The  Employer  shall  provide Executive (including his heirs, executors and
administrators)  with  coverage  under  a  standard  directors'  and  officers'
liability  insurance  policy at its expense, or in lieu thereof, shall indemnify
Executive  (and  his  heirs, executors and administrators) to the fullest extent
permitted  under  federal  law  against  all expenses and liabilities reasonably
incurred  by  him  in  connection  with  or  arising  out of any action, suit or
proceeding  in  which he may be involved by reason of his having been a director
or  officer  of  the  Employer  (whether or not he continues to be a director or
officer  at  the  time of incurring such expenses or liabilities), such expenses
and  liabilities  to  include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements (such settlements must be
approved  by  the Boards of Directors of the Employer).  If such action, suit or
proceeding  is  brought  against  Executive  in  his  capacity  as an officer or
director  of  the  Employer,  however,  such indemnification shall not extend to
matters  as  to  which  Executive  is  finally adjudged to be liable for willful
misconduct  in  the performance of his duties.  No Indemnification shall be paid
that  would violate 12 U.S.C. 1828(K) or any regulations promulgated thereunder.

22.     SUCCESSOR  TO  THE  EMPLOYER

     The  Employer  shall  require  any successor or assignee, whether direct or
indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all  or
substantially  all  the business or assets of the Bank or the Company, expressly
and  unconditionally  to  assume and agree to perform the Employer's obligations
under  this  Agreement,  in  the  same  manner  and  to the same extent that the
Employer  would  be  required to perform if no such succession or assignment had
taken  place.
SIGNATURES

     IN  WITNESS  WHEREOF, the Employer has caused this Agreement to be executed
and  its  seal  to  be  affixed  hereunto  by  its  duly authorized officer, and
Executive  has  signed  this Agreement, on the day and date first above written.

ATTEST:                              PATHFINDER  BANK

/s/ Melissa A. Miller                By: /s/ Janette Resnick
________________________             ___________________________
Secretary                            Janette  Resnick
                                     Chairman

ATTEST:                              PATHFINDER  BANCORP,  INC.

/s/ Melissa A. Miller                By: /s/ Janette Resnick
________________________             ___________________________
Secretary                            Janette  Resnick
                                     Chairman

WITNESS:                              EXECUTIVE

/s/ Tonya Crisafulli                  By:  /s/ Thomas W. Schneider
_________________________             ____________________________
                                      Thomas  W.  Schneider
EXHIBIT 10.2
                            PATHFINDER BANCORP, INC.
                                 PATHFINDER BANK
                              EMPLOYMENT AGREEMENT

     This  Agreement  is made effective as of the 28th day of June, 2004, by and
between  Pathfinder  Bank (the "Bank"), a New York chartered stock savings bank,
with  its  principal administrative office at 214 West First Street, Oswego, New
York  13126-2547,  jointly with Pathfinder Bancorp, Inc, the sole stockholder of
the  Bank,  and  Edward A. Mervine (the "Executive"). Any reference to "Company"
herein  shall  mean  Pathfinder  Bancorp,  Inc.  or  any  successor thereto. Any
reference  to  "Employer" herein shall mean both the Bank and the Company or any
successors  thereto

     WHEREAS,  the Employer wishes to assure itself of the services of Executive
for  the  period  provided  in  this  Agreement;  and

     WHEREAS,  Executive  is willing to serve in the employ of the Employer on a
full-time  basis  for  said  period.

     NOW,  THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree  as  follows:

1.     POSITION  AND  RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
Vice-President  and  General  Counsel  of  the  Bank  and  as  President  and
Vice-President  and  General  Counsel  of  the  Company.  During  said  period,
Executive  also  agrees  to serve, if elected, as an officer and director of the
Bank,  the  Company and of any subsidiary or affiliate of the Employer.  Failure
to  reelect  Executive as Vice-President and General Counsel of the Bank and the
Company  without  the consent of the Executive during the term of this Agreement
shall  constitute  a  breach  of  this  Agreement.

2.     TERMS  AND  DUTIES

     (a)  The  period of Executive's employment under this Agreement shall begin
          as  of the date first above written and shall continue for a period of
          thirty-six  (36)  full  calendar  months thereafter. Commencing on the
          first  anniversary  date  of  this  Agreement,  and continuing at each
          anniversary  date  thereafter,  the  Agreement  shall  renew  for  an
          additional  year such that the remaining term shall be three (3) years
          unless written notice is provided to Executive, at least ten (10) days
          and not more than thirty (30) days prior to any such anniversary date,
          that  his  employment shall cease at the end of thirty-six (36) months
          following  such  anniversary  date.  Prior  to  each notice period for
          non-renewal,  the  disinterested  members of the Board of Directors of
          the Bank ("Board") will conduct a comprehensive performance evaluation
          and  review  of  the  Executive for purposes of determining whether to
          extend the Agreement, and the results thereof shall be included in the
          minutes  of  the  Board's  meeting.

     (b)  During  the  period of his employment hereunder, except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and  efforts to the faithful
          performance  of his duties hereunder including activities and services
          related  to  the legal needs of the Employer; provided, however, that,
          Executive,  ,  hold  any  offices  or  positions  in,  companies  or
          organizations,  which,  in such Board's judgment, will not present any
          conflict  of  interest  with  the  Bank,  or  materially  affect  the
          performance  of  Executive's  duties  pursuant  to  this  Agreement.
          Moreover,  the Executive may continue to practice law independently of
          his  employment  provided (1) said practice does not routinely require
          in  excess  of  10 hours per week of the executive's time and (2) does
          not present a conflict of interest to the Bank unless said conflict is
          waived  by  the  Bank  or  Employer.
3.     COMPENSATION  AND  REIMBURSEMENT

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Section 2(b). The
          Bank  shall  pay  Executive  as compensation a salary of not less than
          $115,500per  year  ("Base  Salary"). Such Base Salary shall be payable
          biweekly. During the period of this Agreement, Executive's Base Salary
          shall be reviewed at least annually. Such review shall be conducted by
          a  Committee  designated  by  the  Board,  and  the Board may increase
          Executive's  Base  Salary.  In addition to the Base Salary provided in
          this  Section  3(a),  the  Bank  shall provide Executive at no cost to
          Executive  with  all  such other benefits as are provided uniformly to
          permanent  full-time  employees  of  the  Bank.

     (b)  The  Bank  will  provide  Executive  with  employee  benefit  plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which  Executive  was participating or otherwise deriving benefit from
          immediately  prior to the beginning of the term of this Agreement, and
          the Bank will not, without Executive's prior written consent, make any
          changes  in  such  plans,  arrangements  or  perquisites  which  would
          adversely  affect  Executive's  rights or benefits thereunder. Without
          limiting the generality of the foregoing provisions of this Subsection
          (b),  Executive will be entitled to participate in or receive benefits
          under  any  employee  benefit  plans  including  but  not  limited to,
          retirement  plans,  supplemental  retirement  plans,  pension  plans,
          profit-sharing  plans,  health-and-accident plans, medical coverage or
          any  other  employee benefit plan or arrangement made available by the
          Bank  in  the  future  to  its  senior  executives  and key management
          employees,  subject  to  and  on  a  basis  consistent with the terms,
          conditions  and overall administration of such plans and arrangements.
          Executive  will  be  entitled to incentive compensation and bonuses as
          provided  in  any  plan  of the Bank in which Executive is eligible to
          participate.  Nothing  paid  to  the  Executive under any such plan or
          arrangement  will  be  deemed  to  be in lieu of other compensation to
          which  the  Executive  is  entitled  under  this  Agreement.

     (c)  In  addition  to the Base Salary provided for by paragraph (a) of this
          Section  3,  the  Employer  shall  pay  or reimburse Executive for all
          reasonable  travel and other reasonable expenses incurred by Executive
          performing  his  obligations under this Agreement and may provide such
          additional compensation in such form and such amounts as the Board may
          from  time  to  time  determine.

     (d)  Compensation  and reimbursement to be paid pursuant to paragraphs (a),
          (b)  and  (c)  of  this  Section  3  shall be paid by the Bank and the
          Company,  respectively  on  a  pro rata basis based upon the amount of
          service  the  Executive devotes to the Bank and Company, respectively.
4.     PAYMENTS  TO  EXECUTIVE  UPON  AN  EVENT  OF  TERMINATION

     The  provisions  of  this  Section  shall in all respects be subject to the
terms  and  conditions  stated  in  Sections  8  and  15.

     (a)  The  provisions  of this Section shall apply upon the occurrence of an
          Event  of  Termination (as herein defined) during the Executive's term
          of  employment  under  this  Agreement.  As used in this Agreement, an
          "Event  of  Termination" shall mean and include any one or more of the
          following:  (i)  the  termination  by  the  Bank  or  the  Company  of
          Executive's  full-time employment hereunder for any reason other than,
          (A)  Disability  or  Retirement  as  defined in Section 6 below, (B) a
          Change  in  Control,  as  defined  in  Section  5(a)  hereof,  or  (C)
          Termination  for  Cause  as  defined  in  Section  7  hereof;  or (ii)
          Executive's  resignation from the Bank's or the Company's employ, upon
          any  (A)  failure  to  elect  or  reelect  or  to appoint or reappoint
          Executive  as  Vice-President and General Counsel, (B) material change
          in  Executive's  function,  duties,  or responsibilities, which change
          would  cause  Executive's  position  to  become  one  of  lesser
          responsibility,  importance, or scope from the position and attributes
          thereof described in Section 1, above, (C) a relocation of Executive's
          principal  place of employment by more than 30 miles from its location
          at  the  effective  date of this Agreement, or a material reduction in
          the  benefits  and  perquisites  to  the  Executive  from  those being
          provided  as  of the effective date of this Agreement, (D) liquidation
          or  dissolution  of  the  Bank  or  Company other than liquidations or
          dissolutions that are caused by reorganizations that do not affect the
          status  of Executive, (E, or (E) breach of this Agreement by the Bank.
          Upon  the  occurrence  of any event described in clauses (ii)(A), (B),
          (C),  (D),  or  (E), above, Executive shall have the right to elect to
          terminate  his  employment  under  this  Agreement by resignation upon
          sixty  (60) days prior written notice given within a reasonable period
          of  time  not  to  exceed four calendar months after the initial event
          giving  rise  to  said  right  to elect. Notwithstanding the preceding
          sentence, in the event of a continuing breach of this Agreement by the
          Employer, the Executive, after giving due notice within the prescribed
          time frame of an initial event specified above, shall not waive any of
          his rights solely under this Agreement and this Section 4 by virtue of
          the fact that Executive has submitted his resignation but has remained
          in  the  employment  of  the  Employer  and  is  engaged in good faith
          discussions to resolve any occurrence of an event described in clauses
          (A),  (B),  (C),  (D),  ()  and  (E)  above.

     (b)  Upon  the  occurrence  of  an  Event  of  Termination,  on the Date of
          Termination,  as  defined  in  Section  8,  the  Employer  shall  pay
          Executive,  or,  in the event of his subsequent death, his beneficiary
          or  beneficiaries, or his estate, as the case may be, as severance pay
          or liquidated damages, or both, a sum equal to three (3) times the sum
          of  (i)  Base Salary and (ii) the highest rate of bonus awarded to the
          Executive  during  the prior three years, , provided, however, that if
          the  Employer  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Employer's capital to
          be reduced below its minimum capital requirements, such payments shall
          be  deferred until such time as the Employer is in capital compliance.
          At  the  election of the Executive, which election is to be made on an
          annual  basis  during  the  month  of  January,  and which election is
          irrevocable  for  the year in which made and upon the occurrence of an
          Event  of  Termination,  such  payments shall be made in a lump sum or
          paid  monthly during the remaining term of the Agreement following the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  to  the  Executive will be made on a monthly basis during the
          remaining term of the Agreement. Such payments shall not be reduced in
          the event the Executive obtains other employment following termination
          of  employment.

     (c)  Notwithstanding  the  provisions  of Sections 4(a) and (b), and in the
          event  that  there  has  not  been  a  Change in Control as defined in
          Section  5(a) nor an Event of Termination, as defined in Section 4(a),
          upon the voluntary termination by the Executive upon giving sixty days
          notice to the Employer (which itself shall not be deemed to constitute
          an "Event of Termination" as defined), the Employer, at the discretion
          of the Board of Directors, shall pay Executive, or in the event of his
subsequent  death, his beneficiary or beneficiaries, or his estate, as
          the  case may be, a severance payment in an amount to be determined by
          the  Board  of  Directors at the time of such voluntary termination by
          the Executive. Such severance payment shall not exceed three (3) times
          the  average  of  the  three  preceding  years' Base Salary, including
          bonuses  and  any other cash compensation paid to the Executive during
          such  years,  and  the amount of any benefits received pursuant to any
          employee  benefit plans, on behalf of the Executive, maintained by the
          Employer during such years; provided, however, that if the Employer is
          not  in  compliance  with  its minimum capital requirements or if such
          payments  would  cause  the Employer's capital to be reduced below its
          minimum  capital  requirements,  such payments shall be deferred until
          such  time  as  the  Employer  is  in capital compliance, and provided
          further,  that in no event shall total severance compensation from all
          sources  exceed  three  times  the  Executive's  Base  Salary  for the
          immediately  preceding  year.  At the election of the Executive, which
          election is to be made on an annual basis during the month of January,
          and  which election is irrevocable for the year in which made and upon
          the Executive's voluntary termination, any payments shall be made in a
          lump  sum  or  paid monthly during the remaining term of the Agreement
          following  the  Executive's termination. In the event that no election
          is  made, any payment to the Executive will be made on a monthly basis
          during the remaining term of the agreement. Such payments shall not be
          reduced  in the event the Executive obtains other employment following
          termination  of  employment.

     (d)  Upon  the  occurrence  of  an  Event of Termination, the Employer will
          cause  to  be  continued life, medical, dental and disability coverage
          substantially identical to the coverage maintained by the Employer for
          Executive  prior to his termination, provided that such benefits shall
          not  be  provided  in  the  event  they should constitute an unsafe or
          unsound  banking  practice  relating  to  executive  compensation  and
          employment  contracts pursuant to applicable regulations, as is now or
          hereafter  in effect. Such coverage shall cease upon the expiration of
          the  remaining  term  of  this  Agreement.

     (e)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon the occurrence of an Event of Termination, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  Supplemental  Executive  Retirement  Plan  of  the Bank or Company
          applicable  to  him,  if  any

     (g)  Upon  the  occurrence  of an Event of Termination, the Executive shall
          become  fully  vested  in  and entitled to all benefits awarded to him
          under  the  Bank's  or the Company's Recognition and Retention Plan or
          any  restricted  stock  plan  in  effect.

5.     CHANGE  IN  CONTROL

     (a)  No  benefit  shall  be payable under this Section 5 unless there shall
          have  been a Change in Control of the Bank or Company. For purposes of
          this  Agreement,  a  "Change  in Control" of the Bank or Company shall
          mean  a change in control of a nature that (i) would be required to be
          reported  in  response to Item 1(a) of the current report on Form 8-K,
          as  in  effect  on the date hereof, pursuant to Section 13 or 15(d) of
          the  Securities  Exchange  Act  of  1934 (the "Exchange Act"); or (ii)
          results  in  a Change in Control of the Bank or the Company within the
          meaning  of the Home Owners Loan Act, as amended, and applicable rules
          and  regulations  promulgated  thereunder, as in effect at the time of
          the  Change  in  Control  (collectively, the "HOLA"); or (iii) without
          limitation  such  a Change in Control shall be deemed to have occurred
          at  such  time  as  (a)  any "person" (as the term is used in Sections
          13(d)  and  14(d)  of  the Exchange Act) is or becomes the "beneficial
          owner"  (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly,  of  securities of the Company representing 25% or more of
          the  combined  voting power of Company's outstanding securities except
          for  any  securities  purchased  by  the  Employer's  employee  stock
          ownership  plan  or  trust;  or  (b)  individuals  who  constitute the
          Company's  Board  of  Directors  on  the  date  hereof (the "Incumbent
          Board")  cease  for  any  reason  to  constitute  at  least a majority
          thereof,  provided  that  any person becoming a director subsequent to
          the  date  hereof  whose  election  was approved by a vote of at least
          three-quarters  of  the  directors  comprising the Incumbent Board, or
          whose  nomination  for  election  by  the  Company's  stockholders was
          approved  by  the same Nominating Committee serving under an Incumbent
          Board, shall be, for purposes of this clause (b), considered as though
          he  were  a  member  of  the  Incumbent  Board;  or  (c)  a  plan  of
          reorganization,  merger,  consolidation,  sale of all or substantially
          all  the  assets  of the Bank or the Company or similar transaction in
          which  the Bank or Company is not the surviving institution occurs; or
          (d)  a  proxy  statement  soliciting  proxies from stockholders of the
          Company,  by someone other than the current management of the Company,
          seeking  stockholder  approval  of a plan of reorganization, merger or
          consolidation  of  the Company or similar transaction with one or more
          corporations  or  financial  institutions,  and as a result such proxy
          solicitation a plan of reorganization, merger consolidation or similar
          transaction involving the Company is approved by the requisite vote of
          the  Company's  stockholders; or (e) a tender offer is made for 25% or
more  of  the  voting  securities  of the Company and the shareholders
          owning  beneficially  or  of  record  25%  or  more of the outstanding
          securities  of  the  Company  have  tendered  or offered to sell their
          shares  pursuant  to  such  tender offer and such tendered shares have
          been  accepted  by the tender offeror. Notwithstanding anything to the
          contrary  herein,  a  "Change  in  Control" of the Bank or the Company
          shall  not  be deemed to have occurred in the event of a conversion of
          Pathfinder  Bancorp,  MHC  to  stock  holding  company  form.

     (b)  If  any  of the events described in Section 5(a) hereof constituting a
          Change  in  Control  have occurred, Executive shall be entitled to the
          benefits  provided  in  paragraphs  (c), (d), (e), (f), (g) and (h) of
          this  Section  5  upon his subsequent termination of employment at any
          time  during  the  term  of this Agreement, regardless of whether such
          termination  results  from  (i)  his resignation or (ii) his dismissal
          upon  the  Change  in  Control.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment, the Employer shall pay Executive, or in the
          event  of  his  subsequent death, his beneficiary or beneficiaries, or
          his  estate,  as  the  case  may  be,  as  severance pay or liquidated
          damages,  or  both, a sum equal to the greater of the payments due for
          the  remaining  term of the Agreement or 2.99 times the average of the
          five  preceding  years'  Base  Salary, including bonuses and any other
          cash  compensation  paid  to  the Executive during such years, and the
          amount  of  any  contributions  made to any employee benefit plans, on
          behalf of the Executive, maintained by the Employer during such years,
          (hereinafter  referred  to as "Payment". Such Payment shall be made by
          the  Employer  on  the  Date  of  Termination.  At the election of the
          Executive,  which election shall be made on an annual basis during the
          month  of  January,  and which election is irrevocable for the year in
          which  made  and  upon  the  occurrence  of  a Change in Control, such
          Payment  may  be  made  in  a  lump  sum  or  paid  in  equal  monthly
          installments  during  the  thirty-six  (36)  months  following  the
          Executive's  termination.  In  the  event  that  no  election is made,
          payment  of  the  Payment  to the Executive will be made pro-rata on a
          monthly  basis  during  the  remaining  term  of  the  Agreement.
     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination  of  employment,  the  Employer will cause to be continued
          life,  medical, dental and disability coverage substantially identical
          to  the coverage maintained by the Employer for Executive prior to his
          severance.  Such coverage and payments shall cease upon the expiration
          of  thirty-six  (36)  months.

     (e)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  any  Stock  Option  Plan  of  the  Bank  or  Company.

     (f)  Upon  the  occurrence  of  a Change in Control, Executive shall become
          fully  vested  in and entitled to all benefits granted to him pursuant
          to  Supplemental  Executive  Retirement  Plan of the Bank or Company ,
          applicable  to  him,  if  any.

     (g)  Upon the occurrence of a Change in Control, the Executive shall become
          fully  vested in and entitled to all benefits awarded to him under the
          Bank's  or  the  Company's  Recognition  and  Retention  Plan  or  any
          restricted  stock  plan  in  effect.

     (h)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event  that:

          (i)  the  aggregate  payments  or  benefits  to be made or afforded to
               Executive  under  said  paragraphs  (the  "Termination Benefits")
               would  be  deemed  to include an "excess parachute payment" under
               Section  280G  of  the  Internal  Revenue  Code  or any successor
               thereto,  and

          (ii) if  such  Termination  Benefits  were  reduced  to an amount (the
               "Non-Triggering  Amount"),  the  value  of  which  is  one dollar
               ($1.00) less than an amount equal to the total amount of payments
               permissible  under  Section  280G of the Internal Revenue Code or
               any  successor  thereto, then the Termination Benefits to be paid
               to  Executive  shall  be  so reduced so as to be a Non-Triggering
               Amount.
(i)  Notwithstanding  the  foregoing,  there  will  be  no reduction in the
          Payment  otherwise payable to Executive during any period during which
          Executive is incapable of performing his duties hereunder by reason of
          temporary  disability.

     (j)  Any Payment made to Executive pursuant to this Agreement or otherwise,
          are  subject  to  and conditioned upon their compliance with 12 U.S.C.
          1818(k)  and  any  applicable  regulations  promulgated  thereunder.

     (k)  The  Executive  shall  not  be entitled to immediately receive Payment
          pursuant  to  this Section 5 if the Employer is not in compliance with
          its  minimum  capital  requirements or if such Payment would cause the
          Employer's  capital  to  be  reduced  below  its  minimum  capital
          requirements.  In  such  event,  Payment  shall be deferred until such
          times  as  the Employer is in capital compliance and provided further,
          that  in  such  event  the  Payment  shall  not exceed three times the
          Executive's  Base  Salary  for  the  immediately  preceding  year.

6.     TERMINATION  UPON  RETIREMENT  OR  DISABILITY

     Termination  by  the  Employer of the Executive based on "Retirement" shall
mean  termination  in  accordance  with  the  Employer's retirement policy or in
accordance  with any retirement arrangement established with Executive's consent
with  respect  to him.  Upon termination of Executive upon Retirement, Executive
shall  be entitled to all benefits under any retirement plan of the Employer and
other  plans  to  which  Executive  is  a  party.

     In the event Executive is unable to perform his duties under this Agreement
on  a  full-time  basis  for a period of six (6) consecutive months by reason of
illness  or other physical or mental disability, the Employer may terminate this
Agreement,  provided that the Employer shall continue to be obligated to pay the
Executive  his  Base  Salary for one year, and provided further that any amounts
actually paid to Executive pursuant to any disability insurance or other similar
such  program  which  the  Employer has provided or may provide on behalf of its
employees  or  pursuant  to  any workman's or social security disability program
shall  not  reduce the compensation to be paid to the Executive pursuant to this
paragraph.

     In  the  event  of  Executive's death during the term of the Agreement, his
estate,  legal  representatives or named beneficiaries (as directed by Executive
in  writing)  shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at  the  rate  in effect at the time Executive's death for the remaining term of
the  Agreement.

7.     TERMINATION  FOR  CAUSE

     The  term  "Termination  for  Cause"  shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary  duty involving personal profit, intentional failure to perform stated
duties,  willful  violation  of any law, rule, or regulation (other than traffic
violations  or  similar  offenses)  or final cease-and-desist order, or material
breach  of  any  provision  of this Agreement.  In determining incompetence, the
acts  or  omissions  shall be measured against standards generally prevailing in
the  financial  services  industry.  For  purposes  of this paragraph, no act or
failure  to  act  on  the part of Executive shall be considered "willful" unless
done,  or  omitted  to  be  done, by the Executive not in good faith and without
reasonable  belief  that  the  Executive's  action  or  omission was in the best
interest of the Employer.  Notwithstanding the foregoing, Executive shall not be
deemed  to have been Terminated for Cause unless and until there shall have been
delivered  to him a copy of a resolution duly adopted by the affirmative vote of
not  less  than  three-fourths  of the members of the Boards of Directors of the
Company  and  the  Bank  at  a  meeting  of said Boards called and held for that
purpose  (after  reasonable  notice  to  Executive  and  an opportunity for him,
together  with counsel, to be heard before the Boards), finding that in the good
faith  opinion  of  the  Boards,  Executive  was  guilty  of  conduct justifying
Termination  for  Cause  and  specifying the particulars thereof in detail.  The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any unexercised stock options granted to
Executive under any stock option plan of the Bank, the Company or any subsidiary
or  affiliate  thereof,  shall  become  null and void effective upon Executive's
receipt  of  Notice  of  Termination for Cause pursuant to Section 8 hereof, and
shall not be exercisable by Executive at any time subsequent to such Termination
for  Cause.

8.     NOTICE

     (a)  Any  purported  termination  by  the Employer or by Executive shall be
          communicated  by  Notice of Termination to the other party hereto. For
          purposes  of  this  Agreement,  a "Notice of Termination" shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of  Executive's  employment  under  the  provision  so  indicated.

     (b)  "Date  of  Termination" shall mean the date specified in the Notice of
          Termination  (which, in the case of a Termination for Cause, shall not
          be less than thirty (30) days from the date such Notice of Termination
          is  given).

     (c)  If,  within thirty (30) days after any Notice of Termination is given,
          the  party  receiving  such  Notice  of Termination notifies the other
          party  that  a  dispute exists concerning the termination, except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in  which  case  the  Date of Termination shall be the date
          specified  in the Notice, the Date of Termination shall be the date on
          which  the  dispute  is  finally  determined, either by mutual written
          agreement  of  the  parties,  by  a binding arbitration award, or by a
          final  judgment,  order or decree of a court of competent jurisdiction
          (the  time  for  appeal  having  expired  and  no  appeal  having been
          perfected)  and provided further that the Date of Termination shall be
          extended  by  a notice of dispute only if such notice is given in good
          faith  and the party giving such notice pursues the resolution of such
          dispute with reasonable diligence. Notwithstanding the pendency of any
          such  dispute,  the  Employer  will continue to pay Executive his full
          compensation  in effect when the notice giving rise to the dispute was
          given  (including,  but  not  limited  to,  Base  Salary) and continue
          Executive  as a participant in all compensation, benefit and insurance
          plans  in  which  he  was participating when the notice of dispute was
          given,  until  the dispute is finally resolved in accordance with this
          Agreement,  provided such dispute is resolved within nine months after
          the  Date  of  Termination  specified  in  the  Notice or Termination;
          notwithstanding  the  foregoing  no  compensation or benefits shall be
          paid  to Executive in the event the Executive is Terminated for Cause.
          In  the  event  that  such Termination for Cause is found to have been
          wrongful  or  such  dispute is otherwise decided in Executive's favor,
          the  Executive  shall  be  entitled  to  receive  all compensation and
          benefits  which  accrued  for  up to a period of nine months after the
          Termination  for  Cause.  If  such dispute is not resolved within such
          nine-  month  period,  the Employer shall not be obligated, upon final
          resolution  of  such  dispute, to pay Executive compensation and other
          payments  accruing  more  than  nine  months  from  the  Date  of  the
          Termination specified in the Notice of Termination. Amounts paid under
          this  Section  are  in  addition  to  all other amounts due under this
          Agreement  and shall not be offset against or reduce any other amounts
          due  under  this  Agreement.
9.     POST-TERMINATION  OBLIGATIONS

     (a)  All  payments  and benefits to Executive under this Agreement shall be
          subject to Executive's compliance with paragraph (b) of this Section 9
          during  the term of this Agreement and for one (1) full year after the
          expiration  or  termination  hereof.

     (b)  Executive  shall, upon reasonable notice, furnish such information and
          assistance  to  the  Bank as may reasonably be required by the Bank in
          connection  with any litigation in which it or any of its subsidiaries
          or  affiliates  is,  or  may  become,  a  party.

10.     NON-COMPETITION

     (a)  Upon  any  termination of Executive's employment hereunder pursuant to
          Section  4(c)  hereof,  Executive  agrees not to compete with the Bank
          and/or  the  Company  for  a  period  of  one  (1) year following such
          termination  in  any city, town or county in which the Bank and/or the
          Company  has  an  office  or  has  filed an application for regulatory
          approval  to  establish an office, determined as of the effective date
          of such termination, except as agreed to pursuant to a resolution duly
          adopted  by  the  Board.  Executive agrees that during such period and
          within  said  cities, towns and counties, Executive shall not work for
          or  advise,  consult  or otherwise serve with, directly or indirectly,
          any  entity  whose  business  materially competes with the depository,
          lending  or  other business activities of the Bank and/or the Company.
          The parties hereto, recognizing that irreparable injury will result to
          the Bank and/or the Company, its business and property in the event of
          Executive's breach of this Subsection 10(a) agree that in the event of
          any  such  breach  by  Executive,  the Bank and/or the Company will be
          entitled,  in addition to any other remedies and damages available, to
          an  injunction  to  restrain  the  violation  hereof  by  Executive,
          Executive's  partners,  agents, servants, employers, employees and all
          persons acting for or with Executive. Nothing herein will be construed
          as  prohibiting  the  Bank  and/or the Company from pursuing any other
          remedies  available  to the Bank and/or the Company for such breach or
          threatened  breach,  including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business  activities and plans for business activities of the Employer
          and  affiliates  thereof,  as  it  may  exist  from time to time, is a
          valuable,  special  and  unique asset of the business of the Employer.
          Executive  will  not,  during  or  after  the  term of his employment,
          disclose  any  knowledge  of  the past, present, planned or considered
          business  activities  of  the  Employer  or  affiliates thereof to any
          person,  firm,  corporation, or other entity for any reason or purpose
          whatsoever.  Notwithstanding the foregoing, Executive may disclose any
          knowledge  of  banking, financial and/or economic principles, concepts
          or  ideas  which  are  not  solely  and  exclusively  derived from the
          business  plans  and  activities  of  the  Employer, and Executive may
          disclose  any  information  regarding the Bank or the Company which is
          otherwise  publicly  available. In the event of a breach or threatened
          breach  by  the  Executive  of  the Provisions of this Section 10, the
          Employer  will be entitled to an injunction restraining Executive from
          disclosing,  in  whole or in part, the knowledge of the past, present,
          planned  or  considered  business  activities  of  the  Employer  or
          affiliates  thereof,  or  from  rendering  any services to any person,
          firm, corporation, other entity to whom such knowledge, in whole or in
          part,  has  been  disclosed  or is threatened to be disclosed. Nothing
          herein will be construed as prohibiting the Employer from pursuing any
          other  remedies  available  to  the Bank for such breach or threatened
          breach,  including  the  recovery  of  damages  from  Executive.
11.     SOURCE  OF  PAYMENTS

     All  payments  provided  in  this Agreement shall be timely paid in cash or
check  from  the  general  funds  of the Bank.  The Company, however, guarantees
payment  and  provision  of  all amounts and benefits due hereunder to Executive
and,  if  such  amounts  and  benefits  due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

12.     EFFECT  ON  PRIOR  AGREEMENTS  AND  EXISTING  BENEFITS  PLANS

     (a)  This  Agreement  contains the entire understanding between the parties
          hereto  and  supersedes  any  prior  employment  agreement between the
          Employer or any predecessor of the Employer and Executive, except that
          this  Agreement  shall  not affect or operate to reduce any benefit or
          compensation inuring to the Executive of a kind elsewhere provided. No
          provision  of  this  Agreement  shall  be  interpreted  to  mean  that
          Executive  is subject to receiving fewer benefits than those available
          to  him  without  reference  to  this  Agreement.

     (b)  In  the  event  that  the provisions of this Agreement are in conflict
          with  the provisions of the Bank's or the Company's Stock Option Plan,
          Supplemental  Executive  Retirement Plan, or Recognition and Retention
          Plan  (or any such restricted stock plan in effect) in which Executive
          participates,  this Agreement shall govern; provided further, however,
          that  this  Agreement shall not supercede provisions that specifically
          received  prior  approval  by  vote  of  shareholders  of the Company.

13.     NO  ATTACHMENT

     (a)  Except  as  required  by  law, no right to receive payments under this
          Agreement  shall  be subject to anticipation, commutation, alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or  similar  process  or assignment by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any  such  action  shall  be  null,  void,  and  of  no  effect.

     (b)  This  Agreement  shall  be  binding upon, and inure to the benefit of,
          Executive  and  the  Employer  and  their  respective  successors  and
          assigns.

14.     MODIFICATION  AND  WAIVER

     (a)  This  Agreement may not be modified or amended except by an instrument
          in  writing  signed  by  the  parties  hereto.

     (b)  No  term  or  condition of this Agreement shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged  with such waiver or estoppel. No such written waiver shall be
          deemed  a  continuing  waiver  unless specifically stated therein, and
          each  such  waiver  shall  operate  only  as  to  the specific term or
          condition  waived  and  shall  not constitute a waiver of such term or
          condition  for  the  future as to any act other than that specifically
          waived.

15.     REQUIRED  PROVISIONS

     (a)  The Employer may terminate the Executive's employment at any time, but
          any  termination  by  the  Employer, other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits  under  this Agreement. Executive shall not have the right to
          receive  compensation  or  other  benefits  for  any  period  after
          Termination  for  Cause  as  defined  in  Section  7  hereinabove.

     (b)  If  the  Executive  is  suspended  from  office  and/or  temporarily
          prohibited from participating in the conduct of the Employer's affairs
by  a  notice  served  under Section 8(e)(3) (12 U.S.C. 1818(e)(3)) or
          8(g)  (12  U.S.C.  1818(g))  of  the Federal Deposit Insurance Act, as
          amended by the Financial Institutions Reform, Recovery and Enforcement
          Act  of  1989,  or if the Executive is suspended ffrom the practice of
          law the Employer's obligations under this Agreement shall be suspended
          as  of  the date of service, unless stayed by appropriate proceedings.
          If  the  charges  in  the  notice are dismissed, or if the Executive's
          suspension to practice is reversed, the Employer may in its discretion
          (i)  pay  the Executive all or part of the compensation withheld while
          their  Agreement  obligations  were  suspended  and (ii) reinstate (in
          whole  or  in  part)  any  of  the  obligations  which were suspended.

     (c)  If  the  Executive  is  removed  and/or  permanently  prohibited  from
          participating  in  the  conduct  of the Employer's affairs by an order
          issued  under  Section  8(e)  (12  U.S.C.  1818(e)) or 8(g) (12 U.S.C.
          1818(g))  of  the  Federal  Deposit  Insurance  Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          or  if  the  Executive  is  disbarred  from  the  practice of law, all
          obligations of the Employer under this Agreement shall terminate as of
          the  effective date of the order, but vested rights of the contracting
          parties  shall  not  be  affected.

     (d)  If  the  Employer  is in default as defined in Section 3(x) (12 U.S.C.
          1813(x)(1))  of  the  Federal Deposit Insurance Act, as amended by the
          Financial  Institutions  Reform, Recovery and Enforcement Act of 1989,
          all  obligations  of the Employer under this Agreement shall terminate
          as  of  the  date  of default, but this paragraph shall not affect any
          vested  rights  of  the  contracting  parties.

     (e)  All  obligations  of  the  Employer  under  this  Agreement  shall  be
          terminated,  except  to the extent determined that continuation of the
          Agreement is necessary for the continued operation of the institution,
          (i) by the Federal Deposit Insurance Corporation ("FDIC"), at the time
          FDIC enters into an agreement to provide assistance to or on behalf of
          the  Employer  under  the  authority  contained  in Section 13(c) (12)
          U.S.C.  1823(c))  of  the Federal Deposit Insurance Act, as amended by
          the  Financial  Institutions  Reform,  Recovery and Enforcement Act of
          1989;  or (ii) when the Employer is determined by the FDIC to be in an
          unsafe  or  unsound  condition.  Any  rights  of the parties that have
          already  vested,  however,  shall  not  be  affected  by  such action.

16.     SEVERABILITY

     If,  for  any  reason,  any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of  this  Agreement  or any part of such provision not held so invalid, and each
such  other  provision and part thereof shall to the full extent consistent with
law  continue  in  full  force  and  effect.

17.     HEADINGS  FOR  REFERENCE  ONLY

     The  headings  of  sections  and  paragraphs herein are included solely for
convenience  of reference and shall not control the meaning or interpretation of
any  of  the  provisions  of  this  Agreement.

18.     GOVERNING  LAW

     This  Agreement shall be governed by the laws of the State of New York, but
only  to  the  extent  not  superseded  by  federal  law.
19.     ARBITRATION

     Any  dispute  or  controversy  arising  under  or  in  connection with this
Agreement  shall  be  settled  exclusively by arbitration in accordance with the
rules  of  the American Arbitration Association then in effect.  Judgment may be
entered  on  the  arbitrator's award in any court having jurisdiction; provided,
however,  that  Executive  shall be entitled to seek specific performance of his
right  to  be  paid  until  the  Date  of Termination during the pendency of any
dispute  or  controversy  arising  under  or  in connection with this Agreement.

20.     PAYMENT  OF  LEGAL  FEES

     All  reasonable  legal  fees  paid or incurred by Executive pursuant to any
dispute  or  question of interpretation relating to this Agreement shall be paid
or  reimbursed  by the Employer, provided that the dispute or interpretation has
been settled by Executive and the Employer or resolved in the Executive's favor.

21.     INDEMNIFICATION

     The  Employer  shall  provide Executive (including his heirs, executors and
administrators)  with  coverage  under  a  standard  directors'  and  officers'
liability  insurance  policy at its expense, or in lieu thereof, shall indemnify
Executive  (and  his  heirs, executors and administrators) to the fullest extent
permitted  under  federal  law  against  all expenses and liabilities reasonably
incurred  by  him  in  connection  with  or  arising  out of any action, suit or
proceeding in which he may be involved by reason of his having been  an  officer
of  the  Employer  (whether  or not he continues to be an officer at the time of
incurring  such  expenses  or  liabilities),  such  expenses  and liabilities to
include,  but  not be limited to, judgments, court costs and attorneys' fees and
the  cost  of  reasonable  settlements (such settlements must be approved by the
Boards  of  Directors  of  the Employer).  If such action, suit or proceeding is
brought  against  Executive  in  his  capacity  as  an  officer of the Employer,
however,  such indemnification shall not extend to matters as to which Executive
is  finally  adjudged  to be liable for willful misconduct in the performance of
his  duties.  No  Indemnification  shall  be  paid  that would violate 12 U.S.C.
1828(K)  or  any  regulations  promulgated  thereunder.

22.     SUCCESSOR  TO  THE  EMPLOYER

     The  Employer  shall  require  any successor or assignee, whether direct or
indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all  or
substantially  all  the business or assets of the Bank or the Company, expressly
and  unconditionally  to  assume and agree to perform the Employer's obligations
under  this  Agreement,  in  the  same  manner  and  to the same extent that the
Employer  would  be  required to perform if no such succession or assignment had
taken  place.
SIGNATURES

     IN  WITNESS  WHEREOF, the Employer has caused this Agreement to be executed
and  its  seal  to  be  affixed  hereunto  by  its  duly authorized officer, and
Executive  has  signed  this Agreement, on the day and date first above written.

ATTEST:                              PATHFINDER  BANK

/s/ Melissa A. Miller               By: /s/ Thomas W. Schneider
_________________________          ___________________________________
Secretary                          Thomas  W.  Schneider
                                   President  and  Chief  Executive  Officer

ATTEST:                              PATHFINDER  BANCORP,  INC.

/s/ Melissa A. Miller              By: /s/ Thomas W. Schneider
_________________________          ___________________________________
Secretary                          Thomas  W.  Schneider
                                   President  and  Chief  Executive  Officer

WITNESS:                              EXECUTIVE

Karen Moskal                       By: /s/ Edward A. Mervine
_________________________          ___________________________________
                                   Edward  A.Mervine
EXHIBIT  31.1

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer

                    Certification of Chief Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     I,  Thomas  W.  Schneider,  President  and Chief Executive Officer, certify
that:

1.     I  have  reviewed  the  June  30,  2004  quarterly report on Form 10-Q of
Pathfinder  Bancorp,  Inc.;

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;

3.     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;

4.     The  registrant'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))  for  the  registrant and have:

a)  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;
(b)  Evaluated  the  effectiveness  of  the registrant'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
(c)  Disclosed  in  this  report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter (the registrant's fourth fiscal quarter in the case of an annual
report)  that  has  materially  affected,  or is reasonably likely to materially
affect,  the  registrant's  internal  control  over  financial  reporting;  and
5.     The  registrant's other certifying officer and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting, to the
registrant's  auditors  and  the  audit  committee  of the registrant's board of
directors:
(a)  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's  ability  to  record,  process,
summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.

August 16, 2004               /s/  Thomas  W.  Schneider
________________              ____________________________
Date                          Thomas  W.  Schneider
                              President  and  Chief  Executive  Officer
EXHIBIT  31.2

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial Officer

                    Certification of Chief Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     I, James A. Dowd, Vice President and Chief Financial Officer, certify that:

1.     I  have  reviewed  the  June  30,  2004  quarterly report on Form 10-Q of
Pathfinder  Bancorp,  Inc.;

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;

3.     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;

4.     The  registrant'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))  for  the  registrant and have:

a)  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;
(b)  Evaluated  the  effectiveness  of  the registrant'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
(c)  Disclosed  in  this  report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter (the registrant's fourth fiscal quarter in the case of an annual
report)  that  has  materially  affected,  or is reasonably likely to materially
affect,  the  registrant's  internal  control  over  financial  reporting;  and
5.     The  registrant's other certifying officer and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting, to the
registrant's  auditors  and  the  audit  committee  of the registrant's board of
directors:
(a)  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's  ability  to  record,  process,
summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.

August 16, 2004               /s/  James  A.  Dowd
___________________           ___________________________________
Date                          James  A.  Dowd
                              Vice  President  and  Chief  Financial  Officer
EXHIBIT  32.1

  Section 1350 Certification of the Chief Executive and Chief Financial Officer

                            Certification pursuant to
                             18 U.S.C. Section 1350,
                             as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Thomas  W.  Schneider, President and Chief Executive Officer, and James A. Dowd,
Vice  President  and  Chief  Financial  Officer of Pathfinder Bancorp, Inc. (the
"Company"),  each  certify  in his capacity as an officer of the Company that he
has  reviewed  the  Quarterly Report of the Company on Form 10-Q for the quarter
ended  June  30,  2004  and  that  to  the  best  of  his  knowledge:

     1.     the report fully complies with the requirements of Sections 13(a) of
the  Securities  Exchange  Act  of  1934;  and

     2.     the  information  contained  in  the  report fairly presents, in all
material  respects,  the  financial  condition  and results of operations of the
Company.

The  purpose  of  this  statement is solely to comply with Title 18, Chapter 63,
Section  1350  of  the  United  States  Code,  as  amended by Section 906 of the
Sarbanes-Oxley  Act  of  2002.

August 16,  2004              /s/  Thomas  W.  Schneider
___________________           ___________________________________
Date                          Thomas  W.  Schneider
                              President  and  Chief  Executive  Officer

August 16,   2004            /s/  James  A.  Dowd
___________________          ___________________________________
Date                         James  A.  Dowd
                             Vice  President  and  Chief  Financial  Officer