Seneca-Cayuga Bancorp (SCAY) 10QSB 2007 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-QSB

(Mark One)

x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2007

¨ Transition report under Section 13 or l5(d) of the Exchange Act

For the transition period from            to            

Commission file number 000-51726

Seneca-Cayuga Bancorp, Inc.

(Exact name of registrant as specified in its charter)

United States of America	16-1601243
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

19 Cayuga Street, Seneca Falls, NY 13148

(Address of Principal Executive Offices)

(315) 568-5855

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.    x  Yes    ¨  No

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act.)    ¨  Yes    x  No

State the number of shares outstanding of each class of issuer’s classes of common stock as of the last practicable date:

Class	Outstanding at May 14, 2007
Common Stock, par value $0.01	2,380,500

Transitional Small Business Disclosure Format (Check one):    ¨  Yes    x  No

TABLE OF CONTENTS

Part I – Financial Information
Item 1	Financial Statements (unaudited)
	Consolidated Statements of Financial Condition as of March 31, 2007 and December 31, 2006	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2007 and 2006	4
	Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2007 and 2006	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006	6
	Notes to Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis or Plan of Operations	13
Item 3	Controls and Procedures	19
Part II – Other Information
Item 1	Legal Proceedings	20
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3	Defaults Upon Senior Securities	20
Item 4	Submission of Matters to a Vote of Security Holders	20
Item 5	Other Information	20
Item 6	Exhibits	20
Signatures		20

2

Seneca-Cayuga Bancorp, Inc.

Consolidated Statements of Financial Condition (Unaudited)

March 31, 2007 and December 31, 2006

(Dollars in thousands, except per share data)

	March 31, 2007			December 31, 2006
Assets
Cash and due from banks	$	2,555		$	3,026
Interest-bearing deposits in banks		1,012			61
Cash and cash equivalents		3,567			3,087
Interest-bearing term deposits		—			4,000
Trading securities		38,892			—
Securities available for sale		1,571			22,667
Securities held to maturity (fair value 2007 - $3,776 and 2006 - $23,155)		3,674			23,719
Loans held for sale		—			65
Loans receivable, net of allowance for loan losses (2007 - $417 and 2006 - $391)		90,247			87,622
Federal Home Loan Bank of New York stock, at cost		1,172			1,417
Premises and equipment, net		4,361			4,378
Foreclosed assets		140			140
Bank-owned life insurance		2,833			2,809
Prepaid pension expense		501			499
Intangible assets, net and goodwill		406			410
Accrued interest receivable		665			773
Other assets		1,524			1,180
Total assets	$	149,553		$	152,766
Liabilities and Shareholders’ Equity
Liabilities
Non-interest bearing deposits	$	8,838		$	8,706
Interest-bearing deposits		107,206			104,219
Total deposits		116,044			112,925
Short-term borrowings		—			575
Long-term debt		13,519			18,431
Advances from borrowers for taxes and insurance		408			603
Official checks		486			920
Other liabilities		601			588
Total liabilities		131,058			134,042
Commitments and contingencies		—			—
Shareholders’ Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, zero shares issued and outstanding		—			—
Common stock, $0.01 par value, 9,000,000 shares authorized, 2,380,500 shares issued and outstanding		24			24
Additional paid-in-capital		9,941			9,942
Retained earnings		9,923			10,604
Accumulated other comprehensive loss		(507	)		(944	)
Unearned ESOP shares, at cost		(886	)		(902	)
Total Shareholders’ equity		18,495			18,724
Total liabilities and Shareholders’ equity	$	149,553		$	152,766

See accompanying notes to unaudited consolidated financial statements.

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Seneca-Cayuga Bancorp, Inc.

Consolidated Statements of Income (Unaudited)

(In thousands except per share data)

	For the three months ended March 31,
	2007		2006
Interest and dividend income:
Loans, including fees	$	1,355	$	1,248
Debt securities:
Mortgage-backed		50		526
Taxable		—		26
Tax-exempt		2		3
Trading securities		439		—
Other		60		43
Total interest and dividend income		1,906		1,846
Interest expense:
Deposits		822		707
Short-term borrowings		5		76
Long-term debt		154		163
Total interest expense		981		946
Net interest income		925		900
Provision for loan losses		24		25
Net interest income after provision for loan losses		901		875
Non-interest income:
Banking fees and service charges		243		247
Insurance commissions		210		214
Mortgage banking income, net		30		18
Gain on sale of securities available for sale		—		51
Net gain on trading securities		315		—
Other		30		22
Total non-interest income		828		552
Non-interest expense:
Compensation and benefits		782		746
Occupancy and equipment expenses		240		252
Service charges		103		98
Professional fees		66		58
Advertising		90		93
Directors fees		34		31
Supplies		19		19
Telephone and postage		41		49
Amortization of intangible assets		4		6
Other		66		53
Total non-interest expense		1,445		1,405
Income before income taxes		284		22
Income tax expense		107		6
Net income	$	177	$	16
Earnings per common share	$	0.31	$	0.05
Weighted average number of common shares outstanding		2,293		1,309

See accompanying notes to unaudited consolidated financial statements.

4

Seneca-Cayuga Bancorp, Inc.

Consolidated Statements of Shareholders’ Equity (Unaudited)

For Three Months Ended March 31, 2007 and 2006

(Dollars in thousands)

	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Unearned ESOP Shares			Total Shareholders’ Equity
Balance, January 1, 2006	$	—	$	80		$	10,523		$	(491	)	$	—		$	10,112
Comprehensive loss:
Net income		—		—			16			—			—			16
Unrealized holding losses (net of tax benefit of $18)		—		—			—			(29	)		—			(29	)
Total comprehensive loss																(13	)
Balance, March 31, 2006	$	—	$	80		$	10,539		$	(520	)	$	—		$	10,099
Balance, January 1, 2007	$	24	$	9,942		$	10,604		$	(944	)	$	(902	)	$	18,724
Cumulative effect of a change in accounting principle upon the adoption of SFAS 157 and SFAS 159 (net of tax of $545)		—		—			(858	)		464			—			(394	)
Comprehensive income:
Net income		—		—			177			—			—			177
Unrealized holding losses (net of tax benefit of $18)		—		—			—			(27	)		—			(27	)
Total comprehensive income																150
ESOP shares committed to be released (1,556 shares)		—		(1	)		—			—			16			15
Balance, March 31, 2007	$	24	$	9,941		$	9,923		$	(507	)	$	(886	)	$	18,495

See accompanying notes to unaudited consolidated financial statements.

5

Seneca-Cayuga Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	For the three months ended March 31,
	2007			2006
Cash flows from operating activities:
Net income	$	177		$	16
Adjustments to reconcile net income to net cash used by operating activities:
Amortization of premiums, net of accretion of discounts		(2	)		3
Market gains on trading securities		(315	)		—
Gains on sale of securities		—			(51	)
Loans originated for sale		(57	)		(2,279	)
Proceeds from sale of loans		122			2,147
Losses on sale of loans		—			7
Provision for loans losses		24			25
Depreciation and amortization		97			115
Non-cash ESOP expense		15			—
Income from bank-owned life insurance		(24	)		(17	)
Increase in prepaid pension expense		(2	)		(37	)
Amortization of intangible assets		4			6
Decrease in accrued interest receivable		108			88
Increase in other assets		(76	)		(343	)
Decrease in official checks and other liabilities		(421	)		(46	)
Net cash used by operating activities		(350	)		(366	)
Cash flows from investing activities:
Maturity of interest-bearing term deposits		4,000			—
Principal repayments on trading securities		1,752			—
Principal repayments on mortgage-backed securities held-to-maturity		141			1,202
Proceeds from sale of securities available for sale		—			1,061
Maturities and calls of securities held-to-maturity		5			5
Principal repayments on mortgage-backed securities available for sale		—			1,686
Purchases of trading securities		(21	)		—
Purchases of securities available for sale		—			(17	)
Net increase in loans		(2,649	)		(943	)
Purchases of Federal Home Loan Bank stock		(244	)		(370	)
Proceeds from sale of Federal Home Loan Bank stock		489			454
Purchases of premises and equipment		(80	)		(47	)
Net cash provided by investing activities		3,393			3,031
Cash flows from financing activities:
Increase in deposits		3,119			2,588
Net decrease in short-term borrowings		(575	)		(4,750	)
Proceeds from long-term debt		—			4,000
Repayment of long-term debt		(4,912	)		(2,708	)
Decrease in advance payments by borrowers for taxes and insurance		(195	)		(138	)
Net cash used by financing activities		(2,563	)		(1,008	)
Net change in cash and cash equivalents		480			1,657
Cash and cash equivalents at beginning of period		3,087			3,418
Cash and cash equivalents at end of period	$	3,567		$	5,075
Supplementary information:
Interest paid	$	1,007		$	933
Net loans transferred to foreclosed real estate		—			42
Income taxes paid		2			—

See accompanying notes to unaudited consolidated financial statements.

6

Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Seneca-Cayuga Bancorp, Inc. and its wholly owned subsidiary (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions for Form 10-QSB. Accordingly, they do not include all of the information and footnotes necessary for a complete presentation of consolidated financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.

The unaudited consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the years ended December 31, 2006 and 2005, included in its Annual Report filed on Form 10-KSB dated March 27, 2007.

Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

The consolidated financial statements at March 31, 2007 and for the three months ended March 31, 2007 and 2006 include the accounts of the Seneca-Cayuga Bancorp, Inc., Seneca Falls Savings Bank (the “Bank”) and the Bank’s wholly-owned subsidiary, Seneca-Cayuga Personal Services, LLC. All intercompany balances and transactions have been eliminated in consolidation.

2. Earnings Per Share

Basic earnings per common share is calculated by dividing the net income by the weighted-average number of common shares outstanding during the period. The common shares issued to Seneca Falls Savings Bank, MHC of 1,309,275 are assumed to be outstanding for all periods represented, consistent with the provisions of SFAS No. 128,Earnings per Share, pertaining to changes in capital structure. The 1,071,225 shares issued to the public are included in the weighted average common shares outstanding calculation for the entire period. Diluted earnings per common share is computed in a manner similar to basic earnings per share, except that the weighted average number of common shares outstanding is increased to include the incremental common shares (as computed using the treasury stock method) that would have been outstanding if all potentially dilutive common stock equivalents were issued during the period. Common stock equivalents may include restricted stock awards and stock options. The Company has a simple capital structure as it has not granted any restricted stock awards or stock options and, during the three months ended March 31, 2007 and 2006, had no potentially dilutive common stock equivalents. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating both basic and diluted earnings per common share until they are committed to be released.

3. Pension Benefits

The composition of net periodic benefit plan cost for the three months ended March 31 is as follows:

	For the Three Months Ended March 31,
	2007			2006
	(in thousands)
Service cost	$	50		$	39
Interest cost		50			44
Expected return on assets		(85	)		(74	)
Amortization of unrecognized loss		10			12
Amortization of past service liability		3			2
Net periodic pension expense	$	28		$	23

The Company expects to contribute $102,000 to its pension plan in 2007. As of March 31, 2007, $25,000 had been contributed to the pension plan.

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Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

4. Comprehensive Loss

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the statement of financial condition, such items, along with net income, are components of comprehensive income (loss).

The components of other comprehensive loss and related tax effects for the three months ended March 31 are as follows:

	For the Three Months Ended March 31,
	2007			2006
	(in thousands)
Gross change in unrealized losses on securities available for sale	$	(45	)	$	4
Reclassification adjustment for gains included in net income		—			(51	)
		(45	)		(47	)
Tax benefit		18			18
Other comprehensive loss	$	(27	)	$	(29	)

5. Fair Value Accounting

In September 2006, the FASB issued FASB Statement No. 157,Fair Value Measurements (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, and for interim periods within those fiscal years.

In February 2007, the FASB issued SFAS No. 159The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment to FASB Statement No. 115 (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The purpose of SFAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS 159 is effective January 1, 2008. SFAS 159 provides for early adoption for fiscal years beginning after November 15, 2007, provided:

• the choice to adopt early is made within 120 days of the beginning of the fiscal year of adoption;

• SFAS 157 is adopted at the same time;

• the entity has not yet issued financial statements for any interim period of the fiscal year that includes the early adoption date; and

• the choices to apply or not apply the fair value option are retroactive to the early adoption date.

We have opted to adopt the provisions of SFAS 157 and SFAS 159 (the “new standards”) as of January 1, 2007. We began evaluating the potential impact of SFAS 157 and of SFAS 159 after the issuance of SFAS 150 in February 2007. The primary effect of SFAS 157 on the Company was to expand the required disclosures pertaining to the methods used to determine the fair values. Under SFAS 159, available-for-sale and held-to-maturity securities held at the date of adoption are eligible for the fair value option on that date. By adopting the new standards early, we are able to modify our balance sheet management strategies in the context of a broader use of fair value accounting. The factors influencing our decision to adopt the new standards early included:

• the inversion of the Treasury yield curve has compressed interest rate spreads on earning assets;

8

Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

• competition for low-cost deposits has increased significantly in our market place which has caused an increased dependence upon higher cost time deposits;

• during 2006, in response to our current and projected economy, we reduced our balance sheet leverage and began to implement strategies for improving net income;

• accounting for certain financial assets, primarily securities, at fair value enables us to more closely align their financial performance with the economic value of those assets; and

• 2007 balance sheet management strategies shifted to altering the construct and usage of investment securities, increase our consumer loan portfolio, more closely align anticipated cash flows from borrowings with selected securities, and increase use of short-term securities.

Under the new standards, the use of fair value is specifically prohibited for our deposits. As our deposits represent a very significant portion of our liabilities, we determined that to use fair value for most of our assets was not appropriate, as we would be measuring assets and liabilities differently and the overall presentation would not fairly present our financial position. As our investment portfolio is utilized to address interest rate management objectives, we elected fair value for most of our securities portfolio. The remaining securities for which the use of fair value reporting was not elected include our investment in a large cap equity fund carried in our available-for-sale portfolio, several mortgage-backed securities held to maturity and our municipal bonds held-to-maturity. The large cap equity fund is held by the Holding Company and is maintained to provide sufficient income to cover the Holding Company’s expenses rather than to address specific interest rate management objectives. The mortgage-backed securities held-to-maturity either have very small balances, are pledged as collateral against a specific borrowing, or have projected cash flows that are closely aligned with anticipated cash flows from borrowings. The municipal bonds are pledged as collateral against a specific borrowing.

Our objective is to more actively trade securities and remove longer term and lower yielding securities and replace them with new securities of different types with shorter terms. The new securities will be included in our trading portfolio to the extent they are not aligned with anticipated cash flows from borrowings. We may also sell a portion of the trading portfolio and use the proceeds to fund loan originations or to purchase loans.

The following table is a summary of the securities transferred to trading upon the early adoption of the new standards at January 1, 2007:

	Amortized Cost		Pre-tax Loss Upon the Adoption of the New Standards			Fair Value
	(in thousands)
Securities transferred to trading securities from:
Securities available for sale:
Mortgage-backed securities	$	20,077	$	(713	)	$	19,364
Equity securities		1,732		(48	)		1,684
Subtotal	$	21,809	$	(761	)	$	21,048
Securities held-to-maturity:
U.S. Government and federal agency obligations	$	2,500	$	(52	)	$	2,448
Mortgage-backed securities		17,401		(590	)		16,811
Subtotal	$	19,901		(642	)	$	19,259
Total securities transferred to trading	$	41,710	$	(1,403	)	$	40,307

The cumulative effect adjustment recorded in retained earnings at January 1, 2007 is as follows:

Pre-tax loss upon the adoption of the new standards	$	(1,403	)
Tax effect		545
Net of tax amount recorded as an adjustment to retained earnings	$	(858	)

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Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Upon the adoption of the new standards at January 1, 2007, an additional $249,000 was recorded as a deferred tax related to the unrealized net loss on trading securities.

For securities carried at fair value, interest and dividends earned are separately reported on the Statement of Income.

For assets measured at fair value on a recurring basis, the fair value measurements used at March 31, 2007 are as follows:

			Fair Value Measurements at March 31, 2007
Description	March 31, 2007		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(in thousands)
Trading securities	$	38,892	$	38,892	$	—	$	—
Foreclosed assets		140		—		140		—
Bank-owned life insurance		2,833		2,833		—		—
Total	$	41,865	$	41,725	$	140	$	—

For assets measured at fair value on a nonrecurring basis, the fair value measurements used are as follows:

			Fair Value Measurements at March 31, 2007
	December 31, 2006		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(in thousands)
Amortized intangible assets:
Customer lists	$	48	$	—	$	—	$	45
Non-compete agreements		35		—		—		34
Goodwill		327		—		—		327
Total	$	410	$	—	$	—	$	406

Amortization of $4,000 was recorded for the intangible assets during the quarter ended March 31, 2007 and was included as a component of other non-interest expense. The remaining intangible asset balance approximates the estimated value of the acquired customer lists and non-compete agreements based on the sum of discounted cash flows over an estimated remaining life of 112 months. The estimated fair value of goodwill is determined based the difference between the Agency’s tangible assets less liabilities and estimated discounted commissions over the next ten years factoring in the Agency’s performance over the past five years.

6. Segment Reporting

The Company has determined that it has two primary business segments, its community banking franchise and its insurance agency.

The community banking segment provides financial services to consumers and businesses principally in the Finger Lakes region of New York State. These services include providing various types of loans to customers, accepting deposits, mortgage banking and other traditional banking services. Parent company and treasury function income is included in the community-banking segment, as the majority of effort of these functions is related to this segment. Major revenue sources include net interest income and service fees on deposit accounts. Expenses include personnel and branch support network support charges.

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Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

The insurance agency segment offers insurance coverage to businesses and individuals in the Finger Lakes region. The insurance activities consisted of those conducted through the Bank’s wholly owned subsidiary, Seneca-Cayuga Personal Services, LLC d/b/a Royce & Rosenkrans, Inc. Major revenue sources include commission income. Expenses include personnel and office support charges.

Information about the segments is presented in the following table for the period indicated:

	For the Quarter Ended March 31, 2007									For the Quarter Ended March 31, 2006
	Banking Activities			Insurance Activities			Total			Banking Activities			Insurance Activities			Total
	(in thousands)
Net interest income	$	925		$	—		$	925		$	908		$	(8	)	$	900
Provision for loan losses		24			—			24			25			—			25
Net interest income after provision for loan losses		901			—			901			883			(8	)		875
Other income		618			210			828			287			265			552
Compensation and benefits		(659	)		(123	)		(782	)		(628	)		(118	)		(746	)
Amortization of intangible assets		—			(4	)		(4	)		—			(6	)		(6	)
Other non-interest expense		(614	)		(45	)		(659	)		(610	)		(43	)		(653	)
Income before income taxes		246			38			284			(68	)		90			22
Income tax (expense) benefit		(92	)		(15	)		(107	)		11			(17	)		(6	)
Net income	$	154		$	23		$	177		$	(57	)	$	73		$	16
Total assets	$	148,706		$	924		$	149,630		$	150,047		$	869		$	150,916

The following represents a reconciliation of the Company’s reported segment assets as of March 31:

	March 31,
	2007			2006
	(in thousands)
Total assets for reportable segments	$	149,630		$	150,916
Elimination of intercompany balances		(77	)		(33	)
Consolidated total	$	149,553		$	150,883

The accounting policies of each segment are the same as those described in the summary of significant accounting policies.

7. Recent Accounting Pronouncements

In February 2006, the FASB issued SFAS No. 155,Accounting for Certain Hybrid Financial Instruments (“SFAS 155”). SFAS 155 amends FASB Statement No. 133 and FASB Statement No. 140, and improves the financial reporting of certain hybrid financial instruments by requiring more consistent accounting that eliminates exemptions and provides a means to simplify the accounting for these instruments. Specifically, SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. The Company adopted the provisions of SFAS 155, as required, on January 1, 2007, with no impact on the Company’s consolidated financial position and results of operations.

In March 2006, the FASB issued SFAS No. 156,Accounting for Servicing of Financial Assets—An Amendment of FASB Statement No. 140 (“SFAS 156”). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. The statement permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. The Company adopted the provisions of SFAS 156, as required, on January 1, 2007, with no impact on the Company’s consolidated financial position and results of operations.

11

Seneca-Cayuga Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

In July 2006, the FASB issued FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that companies recognize in their financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective for years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company adopted the provisions of FIN 48, as required, on January 1, 2007, with no impact on the Company’s consolidated financial position and results of operations.

8. Subsequent Events

During April 2007, the Company sold all mortgage-backed securities and mortgage-backed bonds held in its trading portfolio. These securities were moved to the trading portfolio from our held-to-maturity and available-for-sale portfolios with the early adoption of SFAS 159.

With the adoption of SFAS 159, the Company changed its method for managing securities. As opposed to holding securities with long-term maturities with characteristics that primarily focused on their effect on our interest rate sensitivity goals, we began to weigh more heavily the economic value of the securities and their total return. In addition, we anticipated that securities would be sold in order to more closely align anticipated cash flows from borrowings with selected securities and to shorten the average life of our security portfolio.

The decision to sell the securities was made on April 17, 2007 based on the a loss of value between March 31, 2007 and that date. The trading portfolio had recorded net gains of $315,000 on a pre-tax basis between January 1, 2007 and March 31, 2007. However, by April 17, 2007, we had estimated that the market value for these securities had declined by over $370,000. In addition, economic forecasts reflected increased uncertainty with regard to both the short-term and long-term interest rate futures, which implied that the interest rate yield curve would remain inverted indefinitely.

The sale resulted in the Company realizing a pre-tax net loss of $361,000. The proceeds of the purchase will be used to either:

• purchase held-to-maturity securities to more closely match the repayment schedule of our FHLB amortizing borrowings and FHLB term advances totaling $13.4 million at March 31, 2007; or

• purchase trading securities that maintain their economic value in a flat rate environment and are generally of a much shorter duration than the trading portfolio at March 31, 2007.

We purchased $9.4 million in CMOs and REMICs with projected cash flows closely aligned with our FHLB borrowings, which are expected to settle no later than May 15, 2007. These securities will be classified as held-to-maturity and have an estimated weighted average duration of 1.59 years as compared to an average duration of 2.36 years for the trading portfolio at March 31, 2007. We have also purchased $2.0 million in CMOs and REMICs that are expected to settle no later than May 15, 2007 which will be included in our trading portfolio.

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Item 2 – Management’s Discussion and Analysis or Plan of Operations

General

Throughout the Management’s Discussion and Analysis (“MD&A”) the term, “Company”, refers to the consolidated entity of Seneca-Cayuga Bancorp, Inc. (the “Company”), Seneca Falls Savings Bank (the “Bank”) and Seneca-Cayuga Personal Services, LLC. Seneca-Cayuga Personal Services, LLC is a wholly owned subsidiary of the Bank. At March 31, 2007, Seneca Falls Savings Bank, MHC, the Company’s mutual holding company parent, whose activities are not included in the MD&A, held 55% of the Company’s common stock.

Forward-Looking Statements

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 including real estate values 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.

Critical Accounting Policies

The most significant accounting policies followed by the Company are presented in Note 2 to the consolidated financial statements (“the Consolidated Financial Statements”) included in the Company’s Annual Report filed on Form 10-KSB dated March 27, 2007. 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 consolidated financial statements and how those values are determined. We have identified the accounting of our allowance for loan losses as our critical accounting policy.

Our allowance for loan losses is the amount estimated by management as necessary to cover credit losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses which is charged against income. In determining the allowance for loan losses, management makes significant estimates and has identified this policy as one of our most critical. The methodology for determining the allowance for loan losses is considered a critical accounting policy by management due to the high degree of judgment involved, the subjectivity of the assumptions utilized and the potential for changes in the economic environment that could result in changes to the amount of the recorded allowance for loan losses.

As a substantial amount of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans and discounted cash flow valuations of properties are critical in determining the amount of the allowance required for specific loans. Assumptions for appraisals and discounted cash flow valuations are instrumental in determining the value of properties. Overly optimistic assumptions or negative changes to assumptions could significantly affect the valuation of a property securing a loan and the related allowance determined. The assumptions supporting such appraisals and discounted cash flow valuations are carefully reviewed by management to determine that the resulting values reasonably reflect amounts realizable on the related loans.

Management performs a quarterly evaluation of the adequacy of the allowance for loan losses. We consider a variety of factors in establishing this estimate including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates by management that may be susceptible to significant change based on changes in economic and real estate market conditions.

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The evaluation has a specific and general component. The specific component relates to loans that are delinquent or otherwise identified as a problem loan through the application of our loan review process and our loan grading system. All such loans are evaluated individually, with principal consideration given to the value of the collateral securing the loan. Specific allowances are established as required by this analysis. The general component is determined by segregating the remaining loans by type of loan, risk weighting (if applicable) and payment history. We also analyze historical loss experience, delinquency trends, general economic conditions and geographic and industry concentrations. This analysis establishes factors that are applied to the loan groups to determine the amount of the general component of the allowance for loan losses.

Actual loan losses may be significantly more than the allowances we have established which could have a material negative effect on our financial results.

Overview

Our results of operations depend in part on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets, consisting primarily of loans, investment securities (including mortgage-backed and other securities) and other interest-earning assets primarily cash and interest bearing deposits, and the interest paid on our interest-bearing liabilities, consisting primarily of savings accounts, money market accounts, transaction accounts, certificates of deposit, long- and short-term borrowings and Federal Home Loan Bank advances. Our results of operations also are affected by our provisions for loan losses, noninterest income and noninterest expense. Noninterest income currently consists primarily of deposit account fees, insurance agency commissions, dividends on mutual funds, increases in cash value-insurance, gains and losses on the sale of securities, gains and losses on trading securities and miscellaneous other income. In addition, as a result of our adoption of SFAS 159, non-interest income will now reflect change in fair value of our trading securities. This could have a significant impact on our future results of operations. Noninterest expense currently consists primarily of compensation and employee benefits, occupancy and equipment expenses, advertising and marketing, service charges, professional fees, directors’ fees, supplies, and other operating expenses. Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.

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Analysis of Net Interest Income

The following tables set forth average balance sheets, average yields and costs, and certain other information at the date and for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income.

	For the Quarter Ended March 31,
	2007							2006
	Average Balance		Interest			Yield/ Cost		Average Balance		Interest			Yield/ Cost
	(Dollars in thousands)
Assets:
Interest-earning assets:
Loans	$	89,167	$	1,355		6.08	%	$	79,836	$	1,248		6.25	%
Mortgage-backed securities		3,635		50		5.50			49,333		526		4.17
Trading securities		39,744		439		4.42			—		—		—
Other interest-earning assets		5,327		62		4.66			8,570		72		3.36
Total interest-earning assets		137,873		1,906		5.53			137,739		1,846		5.36
Noninterest-earning assets		13,065							13,025
Total assets	$	150,938						$	150,764
Liabilities and equity:
Interest bearing liabilities:
Interest-bearing demand deposits and escrow	$	6,832	$	6		.35	%	$	6,512	$	8		.49	%
Money market accounts		5,513		23		1.67			7,729		33		1.71
Savings accounts		44,022		233		2.12			50,107		264		2.11
Certificates of deposit		49,756		560		4.50			41,641		402		3.86
Total interest-bearing deposits		106,123		822		3.10			105,989		707		2.67
Borrowings		16,007		159		3.97			25,661		239		3.73
Total interest-bearing liabilities		122,130		981		3.21			131,650		946		2.87
Other noninterest-bearing liabilities		10,213							8,918
Total liabilities		132,343							140,568
Equity		18,595							10,196
Total liabilities and equity	$	150,938						$	150,764
Net interest income			$	925						$	900
Interest rate spread						2.32	%						2.49	%
Net interest-earning assets	$	15,743						$	6,089
Net interest margin						2.68	%						2.61	%
Average interest-earning assets to average interest-bearing liabilities				112.89	%						104.63	%

Results of Operations for the Three Months Ended March 31, 2007 and 2006

General. Net income increased $161,000 to $177,000 for the three months ended March 31, 2007 compared to $16,000 for the same period in the prior year. The increase was primarily attributable to a $25,000 increase in net interest income and a $276,000 increase in non-interest income offset partially by a $40,000 increase in non-interest expenses and a $101,000 increase in income tax expense.

Net Interest Income. Net interest income increased $25,000, or 2.8%, to $925,000 for the three months ended March 31, 2007 from $900,000 for the three months ended March 31, 2006. The increase was due primarily to a $9.5 million decline in the average balance of interest-bearing liabilities, which was offset by a decline in our interest rate spread resulting from a 17-basis point increase in the yield on average interest-earning assets offset partially by a 34-basis point increase in the cost of interest-bearing liabilities. The increased yield from interest-earning assets was primarily the result of higher yields earned on interest-earning deposits held at the Federal Home Loan Bank of New York and reduced net premium amortization as the result of the implementation of SFAS 157

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and SFAS 159 under which select securities from the available-for-sale and held-to-maturity portfolios were transferred to trading securities at market value, the effects of which lessened the impact of a flat yield curve during the period that has caused continued interest rate spread compression.

Interest Income.Interest income increased $60,000, or 3.3%, to $1.9 million for the three months ended March 31, 2007 from $1.8 million for the three months ended March 31, 2006. The average interest-earning assets increased $134,000, or 0.1%, to $137.9 million at March 31, 2007 from $137.7 million at March 31, 2006. The increase in interest income resulted primarily from an increase of $107,000, or 8.6%, in interest and fee income from loans offset partially by a $47,000 net decline in interest and dividends earned from mortgage-backed securities, trading securities and other interest-earning assets. In addition, bonds and an equity investment included with other interest-earning assets, were transferred to the trading portfolio.

The increased interest and fee income from loans is primarily due to the $9.3 million, or 11.7%, increase in the average loans outstanding to $89.2 million for the quarter ended March 31, 2007 from $79.8 million for the quarter ended March 31, 2006.

With the adoption of SFAS 159, a significant portion of the mortgage-backed securities were transferred from our held-to-maturity and available-for-sale portfolios to the trading portfolio as reflected in the $45.7 million decrease in mortgage-backed security average balances and a $476,000 decrease in interest earned on mortgage-backed securities. The yield on mortgage-backed securities increased 124 basis points, or 29.1%, to 5.50% for the quarter ended March 21, 2007 from 4.26% for the quarter ended March 31, 2006 primarily because the mortgage-backed securities remaining in the held-to-maturity portfolio have higher coupon rates than the mortgage-backed securities that were transferred. These remaining mortgage-backed securities have anticipated cash-flows similar to a portion of our borrowings or have small remaining balances.

The average other interest earning assets decreased $3.2 million, or 37.8%, to $5.3 million for the quarter ended March 31, 2007 from $8.6 million for the quarter ended March 31, 2006 because an equity investment and three bonds totaling $4.1 million were transferred from the other interest-earning assets category to trading securities with the adoption of SFAS 159. In addition, a $4.0 million interest-bearing term deposit was outstanding two months during the quarter ended March 31, 2007 that was not outstanding during the quarter ended March 31, 2006, which also accounts for the yield increasing 130 basis points, or 38.7%, to 4.66% for the quarter ended March 31, 2007 from 3.36% for the quarter ended March 31, 2006.

Interest Expense. Interest expense increased $35,000, or 3.7%, to $981,000 for the three months ended March 31, 2007 from $946,000 for the three months ended March 31, 2006. The increase in interest expense resulted from a $158,000, or 39.3%, increase in certificates of deposit interest expense, offset partially by a $31,000, or 11.7%, decrease in savings accounts interest expense and an $80,000, or 33.5%, decrease in borrowings interest expense.

The higher certificate of deposit interest expense is attributable to an $8.1 million, or 19.5%, increase in average certificates of deposit to $49.8 million for the quarter ended March 31, 2007 from $41.6 million for the quarter ended March 31, 2006 and a 64 basis point, or 16.6%, increase in the average certificates of deposit cost during the same comparable period, which was the result of offering higher certificate of deposit rates in 2006 as the cost was favorable compared to alternative funding sources.

Savings interest expense decreased primarily due to a $6.1 million, or 12.1%, decrease in average savings outstanding to $44.0 million for the quarter ended March 31, 2007 from $50.1 million for the quarter ended March 31, 2006, which was the result of our desire not to increase savings rates as the additional cost outweighed the benefits of retaining the balances.

The primary reason for the decreased borrowing expense is that the average borrowings decreased $9.7 million, or 37.6%, to $16.0 million for the quarter ended March 31, 2007 from $25.7 million for the quarter ended March 31, 2006. We have been reducing borrowings through application of cash flows generated from our mortgage-backed securities, maturing interest earning time deposits and by obtaining funds from deposit growth.

Provision for Loan Losses. The provision for loan losses was $24,000 for the three months ended March 31, 2007 as compared to $25,000 for the three months ended March 31, 2006. Loans in non-accrual status that were included

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in loans receivable totaled $314,000 as of March 31, 2007 as compared to $376,000 at December 31, 2006. The allowance for loan losses as of March 31, 2007 and December 31, 2006 represented 0.46% and 0.45% of total loans, respectively.

Non-Interest Income. Non-interest income increased $276,000, or 50.0%, to $828,000 for the three months ended March 31, 2007 from $552,000 for the three months ended March 31, 2006. The Company realized $315,000 in net gains in fair market values of trading securities during the quarter ended March 31, 2007. There were no trading securities held during the quarter ended March 31, 2006 as we adopted SFAS 159 effective January 1, 2007. In addition, mortgage banking income increased $12,000 due to fewer loans being sold with less loss realized and bank-owned life insurance earnings increased $7,000. A $51,000 gain on the sale of securities available for sale earned during the three months ended March 31, 2006 was not repeated in the three months ended March 31, 2007. Future non-interest income levels are likely to vary significantly depending on changes in value of our trading securities.

Non-Interest Expense. Non-interest expense increased $40,000, or 2.8%, and was $1.4 million for the three months ended March 31, 2007 and for the three months ended March 31, 2006. The increase was the result of a $36,000 increase in compensation and benefits primarily due to the adoption of the ESOP, a $12,000 reduction in occupancy and equipment expenses, a $10,000 increase in losses on insufficient checking account balances and a $6,000 net increase in other operating expenses.

Income Taxes. The income tax expense was $107,000 for the three months ended March 31, 2007 as compared to $6,000 for the three months ended March 31, 2006. The effective tax rate was 37.7% for the three months ended March 31, 2007 compared to 27.3% for the same period in 2006. Higher levels of pre-tax income have resulted in an increase in both the income tax expense and the effective tax rate.

Comparison of Financial Condition at March 31, 2007 and December 31, 2006

Assets.Total assets decreased by $3.2 million, or 2.1%, to $149.6 million at March 31, 2007 from $152.8 million at December 31, 2006. The decrease in total assets was the result of the maturity of an interest-bearing term deposit, continued decline in mortgage-backed securities portfolio and the repayment of long-term borrowings, offset by an increase in loans receivable and net deposit growth.

Interest-bearing term deposits.There were no interest-bearing term deposits at March 31, 2007. The $4.0 million term deposit held at the Federal Home Loan Bank of New York at December 31, 2006 matured during the quarter ended March 31, 2007. The proceeds of the matured term deposit were used to repay borrowings that matured in the first quarter of 2007.

Loans Receivable.Loans receivable, including loans held for sale, increased by $2.6 million, or 2.9%, to $90.2 million at March 31, 2007 from $87.7 million at December 31, 2006. We limited our loan sales significantly during the quarter ended March 31, 2007, selling $122,000 in residential mortgages, as compared to loan sales of $2.1 million during the quarter ended March 31, 2006. We determined to maintain the newly originated mortgages as a strategy to increase yield on the Company’s interest-earning asset portfolio.

Trading securities.Trading securities were $38.9 million at March 31, 2007. There were no trading securities at December 31, 2006. With the early adoption of SFAS 157 and SFAS 159, the Company transferred $21.0 million in securities from the available-for-sale portfolio and $19.3 million in securities from the held-to-maturity portfolio at market values effective January 1, 2007. Since changes in the fair value of our trading securities will be reflected in our earnings, our earnings volatility may increase. During the quarter ended March 31, 2007, principal payments of $1.8 million were received mortgage-backed securities classified as trading securities. At March 31, 2007, our trading securities included $34.7 million in mortgage-backed securities with a weighted average life of 257 months, $2.5 million of Federal Home Loan Bank callable bonds with a weighted average life of 69 months and $1.7 million in a mutual fund invested in adjustable rate mortgage backed securities.

Securities.Investment securities decreased by $41.1 million, or 88.7%, to $5.2 million at March 31, 2007 from $46.4 million at December 31, 2006. The decrease is primarily attributable to the $40.3 million transfer of securities to trading securities with the adoption of SFAS 157 and SFAS 159, net of $1.4 million in unrealized net losses and $503,000 of net premiums and discounts. In addition, $141,000 in principal payments were received from our mortgage-backed securities.

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Deposits.Deposits increased by $3.1 million, or 2.8%, to $116.0 million at March 31, 2007 from $112.9 million at December 31, 2006. Most of the growth in deposits represented savings accounts and time deposits, offset partially by a decrease in money market accounts.

Borrowings.Borrowings decreased by $5.5 million, or 28.9%, to $13.5 million at March 31, 2007 from $19.0 million at December 31, 2006. Two term borrowings of $2.0 million each matured during the quarter ended March 31, 2007, which were repaid from proceeds of an interest-bearing term deposit that matured during the same time frame.

Shareholders’ Equity.Total Shareholders’ equity decreased $229,000, or 1.2%, to $18.5 million at March 31, 2007 from $18.7 million at December 31, 2006. The net decrease was a primarily the result of a $858,000 cumulative effect adjustment to retained earnings representing net unrealized losses, net of taxes, on securities transferred from available-for-sale and held-to-maturity to trading securities upon the adoption of SFAS 157 and SFAS 159, of which $464,000 was a reclassification of net unrealized losses, net of taxes, on available-for-sale securities previously included as a component of other comprehensive loss, offset partially by net income of $177,000 for the three months ended March 31, 2007.

Nonperforming Assets

The table below is a summary of the Company’s non-performing assets at the dates indicated:

	March 31, 2007			December 31, 2006
Non-accrual loans:
Real estate mortgages:
One- to-four-family	$	168		$	245
Non-residential		85			85
Home equity		61			46
Total non-accrual loans	$	314		$	376
Foreclosed assets, net		140			140
Total non-performing assets	$	454		$	516
Ratios:
Non-performing loans to total loans		0.35	%		0.43	%
Non-performing loans to total assets		0.21	%		0.25	%
Non-performing assets to total assets		0.30	%		0.34	%

At March 31, 2007, there were no other loans or other assets that are not disclosed in the table or disclosed as classified or special mention, where known information about the possible credit problems of borrowers caused us to have serious doubts as to the ability of the borrowers to comply with the present loan repayment terms and which may result in disclosure of such loans in the future.

Liquidity and Capital Resources

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 consist of deposits, scheduled amortization and prepayments of loans and mortgage-backed securities, maturities of investments, interest-bearing deposits at other financial institutions and funds provided from operations. Loan repayments and maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of investment securities, and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions, and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds.

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The Company has an agreement with the Federal Home Loan Bank of New York that allows it to borrow up to $52.0 million. At March 31, 2007, the Company had outstanding advances and amortizing notes totaling $13.5 million. The Company also has a repurchase agreement with a correspondent bank providing an additional $10 million in liquidity, which is secured by the Company’s mortgage-backed securities. There were no advances outstanding under the repurchase agreement at March 31, 2007.

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.

At March 31, 2007, the Company had loan commitments to borrowers of approximately $1.5 million and unused lines of credit of approximately $5.4 million. For the first quarter ended March 31, 2007, the Company originated loans of $6.0 million, as compared to $6.5 million of loans originated in the first quarter of March 31, 2006. Proceeds from loans sold during the first quarter ended March 31, 2007 were $122,000 as compared to $2.1 million for the first quarter of March 31, 2006. There were no letters of credit outstanding at March 31, 2007.

Time deposit accounts scheduled to mature within one year were $34.8 million at March 31, 2007. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain with the Company. We are committed to maintaining a strong liquidity position; therefore, the Company monitors its liquidity position on a daily basis. The Company anticipates that it will have sufficient funds to meet its current funding commitments. The marginal cost of new funding however, whether from deposits or borrowings from the Federal Home Loan Bank, will be carefully considered as the Company monitors its liquidity needs. Therefore, in order to minimize its costs of funds, the Company may consider additional borrowings from the Federal Home Loan Bank in the future.

At March 31, 2007, the Seneca Falls Savings Bank (“Bank”) exceeded each of the applicable regulatory capital requirements. The Bank’s leverage (Tier 1) capital at March 31, 2007 was $16.5 million, or 11.04% of adjusted assets. In order to be classified as “well-capitalized” by the Office of Thrift Supervision (“OTS”), the Bank is required to have Tier 1 capital of $7.5 million, or 5.00% of adjusted assets. To be classified as a well-capitalized bank by the OTS, the Bank must also have a total risk-based capital ratio of 10.0%. At March 31, 2007, the Bank had a total risk-based capital ratio of 21.80%.

Item 3 – Controls and Procedures

The Company has adopted disclosure controls and procedures designed to facilitate the Company’s financial reporting. The disclosure controls currently consist of communications between the Chief Executive Officer, Chief Financial Officer and each department head to identify any new transactions, events, trends or contingencies which may be material to the Company’s operations. In addition, the Company’s Chief Executive Officer, Chief Financial Officer, Audit Committee and independent accountants meet on a quarterly basis and discuss the Company’s material accounting policies. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of these disclosure controls as of the end of the period covered by this report and found them to be adequate.

The Company maintains internal control over financial reporting. There have not been any significant changes in such internal control over financial reporting in the last quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – Other Information

Item 1 – Legal Proceedings

At March 31, 2007, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3 – Defaults Upon Senior Securities

Not applicable.

Item 4 – Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5 – Other Information

Not applicable.

Item 6 – Exhibits

Exhibit No.	Description
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 Officer and Chief Financial Officer

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Seneca-Cayuga Bancorp, Inc.

Date: May 14, 2007	/s/ Robert E. Kernan, Jr.
	Robert E. Kernan, Jr. President and Chief Executive Officer

Date: May 14, 2007	/s/ Menzo D. Case
	Menzo D. Case Executive Vice President and Chief Financial Officer

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Index toExhibits

Exhibit No.	Description	Page No.
31.1	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer	22
31.2	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial Officer	23
32.1	Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer	24

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