Core Strength September 2009 Community Bank System, Inc.

Forward-looking Statement This presentation contains certain “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the industry, markets and economic environment in which the Company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the Company’s periodic reports filed with the Securities and Exchange Commission. Annualized, pro forma, projected and estimated amounts are presented for illustrative purposes only and may not reflect actual results. 1

Company Profile Successful, growing community bank headquartered outside of Syracuse, N.Y. One of the largest community banks based in Upstate New York with $5.3 billion in assets. More than 150 customer facilities across Upstate New York and Northeast Pennsylvania. –NY: Community Bank, N.A. –PA: First Liberty Bank & Trust Dominant market share: 1 st or 2 nd in 70% of the towns where we do business. 2

Company Profile As of June 30, 2009: Assets $ 5.3 billion Loans $ 3.1 billion Deposits $ 3.9 billion Shareholders’ Equity $551 million Market Capitalization $596 million (at 8/24/09 closing price of $18.19) 3

Company Profile Diversified financial services products via branches and subsidiaries: –Wealth Management Group Personal Trust Dept. Nottingham Advisors (offices in Buffalo, NY and North Palm Beach, FL) Community Investment Services, Inc. (Broker Dealer) CBNA Insurance Agency (Northern New York) –Benefit Plans Administration and Consulting Benefit Plans Administrative Services, Harbridge Consulting Group, and Hand Benefits & Trust –Employee benefit plans administration, actuarial and consulting services, collective investment trust administration –Offices in Syracuse and Utica, NY; Pittsburgh and Philadelphia, PA; Houston, TX 4

Shareholder Profile # of Shares % Shares Outstanding Dollars # of Owners June 30, 2009 or Most Recent Data Available (in thousands, except # of shareholders) Total Shares Outstanding32,742$ 595,577 –– Shares Held by Institutions20,634$ 375, %155 Insiders988$ 17,9723.0%14 401(k) Plan 993 $ 18, %1,624 Pension Plan348$ 6,3301.1%1 773$ 14,0612.4%1,523Dividend Reinvestment Plan CBU Price at August 24, 2009:$ –– 5

Operating Strategy Market-leading branch system serving predominantly non- urban markets; decentralized decision-making; focus on core accounts. Investment in noninterest revenues. Growth model that leverages both organic and acquired opportunities. 6

Consistent and Favorable Financial Results CAGR Net income 13.3% Net income per share (diluted) 9.1% Non-interest income 15.6% (excluding securities and debt restructuring gains and losses) Dividends per share 7.0% (2001— 2008) 7

Asset Growth 7-year CAGR: 7.1% (in billions) 8

Deposit Growth 7-year CAGR: 5.5% (in billions) 9

Recent Accomplishments Invested in and grew our commercial banking business. Improved our funding mix with significant gains in core deposits. Successfully completed the acquisition of 18 branch banking centers in Northern New York. Raised $50 million in an over-subscribed equity offering. Enhanced our award-winning customer service model. Maintained solid asset quality. 10

First Half 2009 Performance Summary First Half % Change 2009 Results From First (In Millions) Half 2008 Net interest income $ % Non-interest income $ % (excluding securities gains/losses) –Financial services revenue $ % Operating expenses$ % –FDIC Insurance costs$ 5.4 1,397.9% Provision for loan losses $ % Net income$ 19.6 (11.6%) Earnings per share (diluted) $ 0.60 (17.8%) Cash earnings per share $ 0.70 (14.6%) 11

Cash Earnings Per Share $1.60 Cash Return on Total Equity (2008): 11.2% 12

Capital Stability Tangible Equity/Assets Tier I Leverage Ratio Shareholders’ Equity (in millions) 13

Strategy Element #1 Market-leading Branch System Focused on Core Accounts Emphasize responsive, local decision-making and customer support. Focus on generating and retaining core deposit accounts. Mostly non-urban markets where leadership positions can be earned. 14

Customer Service Focus Ranked in the top 10 in the ENTIRE NATION by J.D. Power & Associates for three consecutive years (2007 – 2009) in its Retail Banking Satisfaction Studies! 15

Geographic Profile Community Bank, N.A. Branches First Liberty Bank & Trust Branches Administrative/Operations Centers Financial Services Centers November 2008 Branch Acquisition 16

Northern New York Region Branches: 55 Deposits: $1.4 billion November 2008 Branch Acquisition 17

Southern New York Region Branches: 69 Deposits: $1.7 billion 18

Pennsylvania Region Branches: 26 Deposits: $0.8 billion 19

Core Account Growth Deposit Type2Q Q 2008 $ change % change Demand Deposits$671,615 $563,045 $108, % Interest Checking$639,203 $485,113 $154, % Savings/Money Market $1,163,642 $819,033 $344, % Subtotal $2,474,460 $1,867,191 $607, % (Dollars in thousands, average period balances)(12% organic growth) 20

Core Deposit Strength and Focus 65% of Funding in Core (non-time) Accounts 21

Loan Growth Consumer LoansBusiness Loans7-year CAGR = 8.8% (in millions) 22

Loan Portfolio Balance 23

Asset Quality Nonperforming Loans to Total Loans 24

Asset Quality Net Charge-offs to Average Loans 25

Strategy Element #2 Continue to Grow Noninterest Revenues Banking Services Benefits Administration and Consulting Wealth Management 26

Growth In Noninterest Income (excluding securities gains/losses and debt extinguishment) 7-year CAGR: 15.6% Wealth Management Banking Services Noninterest Income/ Operating Income = 33.0% in Benefit Plan Services (in millions) 27

Banking Services Revenue Electronic Banking Depository Fees Lending Fees Mortgage Banking 28

Banking Services Revenue (in millions) 7-year CAGR: 13.3% 29

Defined Contribution Plan Benefit Administration Actuarial Services Health Care and Benefit Plan Consulting Collective Investment Fund Administration Flex Plan Administration Benefit Plan Administration & Consulting Revenue 30

Benefit Plan Administration & Consulting Revenue (in millions) 7-year CAGR: 30.1% 31

Wealth Management Revenue Trust Services Broker-Dealer Investment Advisory Insurance Agency 32

Wealth Management Revenue (In millions) 7-year CAGR: 4.0% 33

Strategy Element #3: Growth Model Banking Acquisitions Assets # of Branches (in millions) Branch Acquisitions November $ 575 December $ 32 November $ 473 Whole-Bank Acquisitions June $ 100 December $ 95 August $ 208 May $ 275 November $ 280 September $ 29 May $ 648 January $

Strategy Element #3: Growth Model Financial Services Acquisitions Year Alliance Benefit Group – MidAtlantic2008 CBNA Insurance Agency2007 Hand Benefits & Trust2007 Harbridge Consulting Group2003 Nottingham Advisors1999 Benefits Plans Administrative Services

Total Shareholder Returns (Through July 31, 2009, or most recent available, Including Reinvestment of Dividends) YTD 2 Years 7 Years 15 Years CBU (23.6%) 4.8% 6.3% 10.2% S&P 600 (32.9%) (29.8%) (6.7%) NA Comm. Bank NASDAQ (15.9%) (21.8%) (1.9%) 5.3% Bank S&P % (11.1%) 3.2% 7.2% Russell % (11.3%) 6.5% 5.7% Source: Bloomberg 36

Consistent Dividend Focus Strong Dividend Payment –4.8% increase in August 2008 –$0.88 per share annualized Excellent Dividend Yield: –4.8% as of August 24, 2009 Outstanding Track Record of Payment Increases –16 straight years; included in Mergent Index –One of just 326 – or 3% – of over 10,000 U.S. public companies to do so! 37

Investment Merits NYSE-listed Company with Significant Liquidity. Long-term Growth Focus. Successful and Effective Operating Strategy. Strong Fundamentals with Excellent Asset Quality. Superior Return to Shareholders. 38

Thank You September 2009 Community Bank System, Inc.