Exhibit B

					August 6, 2001

Board of Directors
Pathfinder Bancorp, Inc.
214 West First Street
Oswego, NY 13126

	Attention: Chris C. Gagas

Ladies & Gentlemen:

	On behalf of the Board of Trustees of Fulton Savings Bank
("Fulton Savings"), I am writing to formally submit Fulton Savings'
proposal to acquire 100% of the outstanding stock of Pathfinder
Bancorp, Inc. ("Pathfinder"). As you know, I previously contacted
you to indicate the interest of Fulton Savings in pursuing a
business combination with Pathfinder, and by letter dated
June 25, 2001 you advised us that Pathfinder was not interested
in pursuing such a business combination. Nevertheless, the Fulton
Savings Board of Trustees continues to be strongly committed to
pursuing an acquisition of Pathfinder, and they directed me to
contact you again and set forth with specificity the terms under
which we would be prepared to proceed. As you know, Fulton Savings
has a long-standing record of commitment to the communities it
serves. Fulton Savings' board of trustees believes that a business
combination with Pathfinder will create a strong, competitive local
mutual savings bank that will continue its long-term commitment to
our local markets. The terms of the proposed merger should serve to
satisfy the fiduciary duties of the board of directors of Pathfinder
to its minority stockholders as well as to its customer and to the
local communities.

TRANSACTION ISSUES

	Structure of Transaction. The transaction would be structured
as a series of mergers with Fulton Savings being the resulting bank.
The transaction will be structured as a tax-free organization and
will be a purchase for accounting purposes.

	Consideration. Subject to our due diligence review of Pathfinder
and full cooperation by the management and board of directors of
Pathfinder, the public shareholders of Pathfinder will receive cash
consideration valued at $17.00 per share for each of their shares of
Pathfinder stock and the shares of Pathfinder owned by Pathfinder
Bancorp, HMC will be cancelled as part of the merger. Our proposed
consideration is based on the total amount of shares of Pathfinder
held by the public (based upon Pathfinder's March 31, 2001 Form 10-Q)
of 1,023,256. The price represents a substantial premium to Pathfinder's
current market price and is particularly attractive to the minority
stockholders because of the lack of liquidity in the public market
in Pathfinder's stock. Moreover, based upon our analysis, this proposal
would maximize the value received by the minority stockholders whereas a
second step conversion would serve to dilute the minority stockholder
position.

	Stock Options. Holders of the 84,000 stock options for Pathfinder's
common stock granted under the stock option plan (based upon the
information in Pathfinder's most recent Form 10-K), would receive cash at
the close of the transaction in the amount equal to $17.00 less the option
exercise price.

	Other Benefit Plans. We understand that Pathfinder has a number of
qualified pension plans including an employee stock ownership plan as well
as non-qualified plans. After a review of the terms of these plans, Fulton
Savings will consider terminating or merging these plans consistent with
the terms of the plans and applicable law.

	Proposed Timetable. Fulton Savings is prepared to proceed
immediately to conduct its due diligence review of Pathfinder and to
concurrently begin the preparation of the definitive merger agreement.
We currently anticipate that the merger would be completed by the end of
the first quarter of 2002.


PERSONNEL ISSUES

	Management. We would attempt to minimize any disruption to your
management and staff. It would be necessary, however, to consolidate
support and administrative activities where possible. We will consider
placing qualified employees of Pathfinder within the Fulton Savings
organization. Areas of responsibility for these individuals will
include realizing the synergies of the merger as well as ongoing
banking responsibilities commensurate with their demonstrated
professional capabilities.

	Description of Employee Benefits. Employees of Pathfinder who
continue employment with Fulton Savings will be eligible to participate
in the employee benefit plans as may be in effect generally for employees
of Fulton Savings. Pathfinder employees who are employed by Fulton Savings
will be given credit for service with Pathfinder for purposes of
determining eligibility for participation and vesting but not for
benefit accrual purposes. A description of Fulton Savings benefit plans
will be provided at your request.


OTHER ISSUES

	Continuing Role of Pathfinder's Board of Directors. We would
like to discuss with Pathfinder's directors their continued service
following the transaction as members of an Advisory Board. For the
continued protection of the Pathfinder directors, Fulton Savings will
consider purchasing reasonable director and officer liability coverage.

	Operating Restrictions Pending Closing. The definitive agreement
would contain customary covenants requiring Pathfinder to operate its
business in the usual and ordinary course of business consistent with
past practice. In order to provide for a smooth transition we would
require, in the definitive agreement, that a representative of Fulton
Savings be permitted to attend meetings of the Board of Directors of
Pathfinder.

	Proposed due Diligence Procedures. This indication of interest is
based upon the publicly available information. Our indication of interest
is subject to verification of the accuracy of such information and
completion of a due diligence review of Pathfinder and its operations
to our satisfaction.

	Other Conditions. Other than the conditions noted above, any
transaction would be subject to the negotiation of a definitive agreement
that would contain customary representations, warranties and conditions
to closing, including receipt of regulatory and shareholder approval,
as well as customary "deal protection" provisions and agreements.

	On behalf of the Board of Trustees, I want to emphasize that Fulton
Savings is ready and able to move forward with all due speed to negotiate
and conclude a transaction as outlined above. We believe that Fulton Savings
clearly has the capital and the liquidity levels necessary to obtain the
requisite regulatory approvals and to consummate the transaction quickly
and successfully. Moreover, from the standpoint of expeditious regulatory
approval, there is clear precedent for the acquisition of a mutual holding
company by a mutual institution. By contrast, there has never been an
acquisition of a mutual holding company by any entity other than a mutual
institution. Accordingly, if Pathfinder is to pursue a business combination
transaction, the only transaction that would pass regulatory scrutiny in a
reasonable time frame, indeed if at all, would be an acquisition by a mutual
institution such as Fulton Savings.

	But more importantly, we believe that a combined Fulton
Savings/Pathfinder will greatly enhance our abilities to serve our
communities and will provide a substantial premium to Pathfinder
stockholders over the current market price. We urge you to give our
proposal serious consideration.

	This expression of interest shall expire and be withdrawn unless
a favorable response is received from Pathfinder's Board of Directors by
August 27, 2001.

	We look forward to your early response to this indication of interest.
Upon receiving an affirmative response to this letter, Fulton Savings
intends to promptly commence a due diligence investigation and
simultaneously enter into negotiations as described above with a view
to promptly concluding a definitive agreement.

	We would be very pleased to answer any question or provide any
additional information about our proposal. Thank you for your very
kind consideration.


					Sincerely,


					Michael J. Pollock
					President and Chief Executive Officer