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CORTLAND FIRST FINANCIAL CORPORATION
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[NEWSPAPER ADVERTISEMENT]
FIRST NATIONAL BANK
PRESIDENT REFUTES JOB CLAIMS
BY CNY FINANCIAL
An open letter to Cortland First Financial Corporation Shareholders
November 12, 1998
Dear Cortland First Shareholders:
In yesterday's Cortland Standard, our so-called neighbors at Cortland
Savings placed a full-page ad asking you to change your vote at our upcoming
shareholder meeting. The ad says "First National Bank already transferred jobs
to Oneida."
That quote is false and misleading. We at First National have not moved any
jobs to Oneida, nor do we have any plans to reduce overall employment in the
Cortland area as a result of the merger. In fact, many new jobs may be created
as we are successful in expanding our markets and services.
Conversely, if CNY Financial were to acquire our Bank, as proposed by their
press release, many jobs would certainly be lost here in Cortland through the
consolidation of headquarters functions and the closing of banking offices.
Also, this consolidation would reduce the level of banking service and
competitive choices in Cortland.
Clearly, our community will suffer in the event that these desperate plans
by CNY Financial are implemented. Please join me and all of our directors in
winning our proxy vote by voting "YES" for our pending merger of equals.
WHEN YOU VOTE YES, YOU VOTE FOR CORTLAND!
I invite any of you to call me at (607) 758-1201 and I will personally
speak with you about my statements. You won't have to talk to some out-of-towner
like the CNY people are using.
[Picture of D. Alvord] Very truly yours,
David R. Alvord
President, First National Bank of Cortland
[LOGO]
<PAGE>
[PRESS RELEASE]
DATE: November 11, 1998
CONTACTS:
John C. Mott David R. Alvord
President President and CEO
Oneida Valley Bancshares, Inc. Cortland First Financial Corporation
(315) 363-4500 (607) 758-1201
ONEIDA VALLEY BANCSHARES, INC. AND CORTLAND FIRST FINANCIAL REJECT
HOSTILE TAKEOVER PROPOSALS - COMMUNITY BANKS DECIDE TO STAY THE
COURSE
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Oneida Valley Bancshares, Inc. and Cortland First Financial Corporation
jointly announced today that they have rejected all takeover proposals received
from CNY Financial Corporation. Mr. Alvord and Mr. Mott stated, "Both of our
Boards have independently determined that we are not interested in pursuing a
sale of our Banks. We remain fully committed to our pending merger of equals.
Our Boards, after careful consideration, have unanimously reaffirmed that our
Banks are not for sale and have concluded it is in our shareholders best
long-term interest to reject the takeover proposal."
"It is clear now that CNY has launched an aggressive campaign to attempt
to persuade our shareholders to vote against our pending merger of equals. We
view this as a continuation of a desperate attempt by a competitor to break up
our pending merger of equals. The attempt by CNY Financial to take over our
Banks seems to be uniting our shareholders in support of the pending merger of
equals."
Mr. Alvord stated, "It is unfortunate that a friendly competitor in our
community has taken such ill-advised actions as a hostile takeover of our
community bank. We believe our pending merger of equals with Oneida Valley is
the best alternative for our shareholders as
<PAGE>
opposed to any quick sale of our Bank. We have a long-term plan for building
value for our shareholders and our community. We will not permit a competitor in
our marketplace to disrupt our long-term plans for success and merger with
Oneida Valley."
Mr. Mott stated that the phone calls he has received from Oneida Valley
shareholders strongly support the pending merger and that he is not aware of any
shareholder changing his or her vote based on the takeover proposal by CNY
Financial. "Our shareholders seem to understand that this is basically a
competitor coming in at the 'eleventh hour' trying to disrupt our pending
merger."
Mr. Mott and Mr. Alvord stated that the Board of Directors of their banks
have recommended and urged their shareholders to vote yes for the pending merger
of equals. They went on to say, "Our banks have prospered as community banks for
well over 100 years. Our Board of Directors unanimously believes that we should
continue our strategic merger of equals and we are committed to our long-term
plan."
<PAGE>
[NEWSPAPER ADVERTISEMENT]
SEVEN IMPORTANT QUESTIONS FOR
THE SHAREHOLDERS OF
ONEIDA VALLEY BANCSHARES, INC.
Are you tired of the assault on our community and our bank?
[ ] YES [ ] NO
Are you dismayed by the personal attacks on
our bank management and our board?
[ ] YES [ ] NO
Are you upset at tactics of desperate people who use hired spokesmen and
New York City lawyers to speak for them?
[ ] YES [ ] NO
Are you worried about the long-term prospects in our community,
without the stability of a hometown commercial bank
managed and directed by hometown people?
[ ] YES [ ] NO
Are you confident that our directors and management
will do what is best for you and our communities?
[ ] YES [ ] NO
Do you want to retain your ownership in a profitable,
well-managed banking company headquartered in Oneida?
[ ] YES [ ] NO
Are you interested in the long-term growth of your investment
in your company?
[ ] YES [ ] NO
If you answered "YES" to these questions, then vote "YES" on our pending
merger of equals with Cortland First Financial Corporation.
WHEN YOU VOTE YES, YOU VOTE FOR ONEIDA!
[LOGO]
<PAGE>
[Shareholder Mailing]
November 12, 1998
To Our Shareholders:
The past week has been an especially divisive one in the Cortland community.
This bothers me. I was born in Marathon and have spent my entire life in Central
New York. I joined the Bank 35 years ago and have lived in Cortland during the
entire time. With my wife Kathleen, I have raised three children in this
community. My concern for Cortland is heartfelt and of long standing.
In the spirit of community, I felt it important to write this letter to you
about the events which have engulfed our Bank. The First National Bank of
Cortland has been a part of our local community for over 100 years. We are a
well run Bank which has performed for our shareholders while serving the needs
of our customers and our communities. There is hardly a local charitable event
which is not well attended by our employees. They live in this community and
support it with their actions.
When we met with the people in Oneida, we found they were a lot like we were. As
we discussed a merger, our first concern (as was theirs) was to design a
partnership. There was no talk of takeover. Instead, we talked of a shared
culture of community banking. We put together a merger-of-equals with a partner
that held our values and with which we feel we can continue our tradition of
independent community banking.
It is truly distressing to me to find that our local competitor, Cortland
Savings Bank, is now attempting to upset our proposed merger. They have retained
New York City lawyers and have used bare-knuckles tactics to confuse the issues
related to our merger. The ads which they have used along with the quotes which
have appeared in the newspaper have been designed to divide this community. I
will not respond to them. I will not sink to their level.
The Cortland community itself has convinced me that this is the proper course.
The calls that I have received in response to CNY Financial's actions have been
overwhelming in their support of our Bank. This has given me great comfort
during this trying time. I thank you all.
But those calls will not be enough. We need all of our shareholders to make this
choice:
Will I vote yes on the merger with Oneida and support local community
banking in Cortland or will I vote no and reward divisive actions which
will lead to a takeover of our institution and the resulting job loss
and consolidation of banking locations implied by such an action?
Our Board of Directors is composed of people you know. They are a part of this
community and
<PAGE>
have its interests at heart. The proposal made by CNY Financial was made more
than three months after we announced our merger, and less than two weeks before
our shareholders meeting. Nevertheless, our Board met to consider the proposal.
We weighed all of the factors that are important to the shareholders of our
Company. Based on a deliberative discussion, we unanimously rejected the
proposal and recommended proceeding with the merger-of-equals with Oneida.
It is our belief that the partnership we will form with Oneida will indeed be an
alliance of similarly constituted Banks. We chose the name Alliance Financial
Corporation in that spirit.
As I close, I urge you to support the commitment to our community that we have
exhibited since 1869. The Board of Directors of Cortland First Financial
Corporation urges you to vote yes on our merger with Oneida Valley Bancshares,
Inc.
When you vote "YES", you vote for Cortland.
Very truly yours,
David R. Alvord
President & CEO
