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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                   ----------


                                    FORM 8-K


                                 CURRENT REPORT

                     Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934


                       Date of Report: September 17, 1998
                        (Date of earliest event reported)



                           COMMUNITY BANK SYSTEM, INC.
               --------------------------------------------------
               (Exact name of registrant as specified in charter)

          DELAWARE                     0-11716                  16-1213679
- ----------------------------         ------------         ----------------------
(State of other Jurisdiction         (Commission              (IRS Employer
     of incorporation)               File Number)         Identification Number)


    5790 WIDEWATERS PARKWAY, DEWITT, NEW YORK                      13214
    -----------------------------------------                   -----------
    (Address of principal executive offices)                    (Zip Codes)


       Registrant's telephone number, including area code: (315) 445-2282


                                 Not Applicable
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)

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                          This report contains 6 pages

                        Exhibit index located at page 2.








Item 5.   Other Events


          Press release dated September 17, 1998 announcing stock repurchase
          program of Community Bank System, Inc.


                                       2






COMMUNITY BANK SYSTEM, INC.                                  NEWS
5790 Widewaters Parkway                             For Further Information
DeWitt, New York  13214                               please contact:

                                                    David G. Wallace, S.V.P. and
                                                    Chief Financial Officer
                                                    Office: (315)445-2282
                                                    Fax:    (315)445-2997

FOR IMMEDIATE RELEASE

                     CBSI ANNOUNCES STOCK REPURCHASE PROGRAM

     Syracuse, New York, September 17, 1998 -- Community Bank System, Inc.
(NYSE: CBU), a DeWitt-based bank holding company with $1.7 billion in assets,
has announced that it is commencing a stock repurchase program to acquire up to
750,000 of its shares, which represents approximately 10% of the outstanding
common stock. Shares will be purchased from time to time predominantly in open
market transactions, and the program is expected to be completed within the next
twelve months. As of June 30, 1998, the company had 7.622 million shares
outstanding. The closing price on September 16, 1998 was $26.06 per share with
an annualized dividend yield of 3.5%.

     The company also stated that the share repurchase program is intended to be
accompanied by a reduction in its investment securities portfolio, largely
through run-off due to anticipated prepayments and bond calls over the next
several quarters. The company expects to use the resulting cash to reduce
selected high cost liabilities.

     Sanford A. Belden, President and Chief Executive Officer, commented, "We
believe that the share repurchase program combined with planned liability
reduction represents an effective use of securities cash flow in the current
financial market environment, which offers limited opportunity to purchase
replacement investment securities providing an adequate return. It appears to be
an opportune time to reduce our reliance on earnings from the investment
portfolio necessitated over the last several years by our significant branch
deposit acquisition program. Presently, the fair market value of the portfolio
is well in excess of cost, with all sectors contributing to the market value
gain."

     Belden went on to say, "If our strategy is successful, we expect that
earnings per share and return on equity are likely to benefit, and our earning
asset mix of loans and securities should become more favorable. Moreover, we
believe that we have sufficient financial resources to conduct the share
repurchase program while still maintaining the financial flexibility to move
forward with our strategic growth plans,







including possible acquisitions. This deleverage/stock buy-back strategy, as
well as our recently announced 15% dividend increase, represent the company's
continuing commitment to prudently enhance shareholder value."

     Approximately 65,000 of the shares will be purchased with funds received
from the exercise of stock options over the last two years. All reacquired
shares will become treasury shares and will be used for general corporate
purposes, including the issuance of shares in connection with the exercise of
stock options.

     The company pointed out that the share repurchase program is dependent on
market conditions and that there is no guarantee as to the exact number of
shares to be repurchased. In addition, purchases may be further limited if the
company's strategy to reduce its balance sheet, which is particularly dependent
on lowering high cost liabilities, cannot be fully achieved. Shares purchased in
the open market must comply with Securities Exchange Commission Rule 10b-18,
which includes the requirement that daily purchases will generally not exceed
25% of the average daily trading volume of the common stock over the preceding
four weeks, except for block purchases. For the period ended August 31, 1998,
that limitation is approximately 3,000 shares per day. Unsolicited negotiated
transactions or other types of repurchases are possible.

     CBSI is a registered bank holding company based in DeWitt, New York. Its
wholly-owned banking subsidiary, Community Bank, N.A. (www.communitybankna.com),
is the fourth largest commercial banking franchise headquartered in Upstate New
York, having 67 customer facilities located throughout Northern New York, the
Finger Lakes Region, the Southern Tier, and Southwestern New York. CBSI is also
parent to Benefit Plans Administrative Services, Inc. (BPA), a pension
administration and consulting firm located in Utica, New York serving sponsors
of defined benefit and defined contribution plans.

                           FORWARD-LOOKING STATEMENTS

     This news release contains comments or information that constitute
forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995), which involve significant risks and
uncertainties. Actual results may differ materially from the results discussed
in the forward-looking statements. Moreover, the company's plans, objectives and
intentions are subject to change based on various factors (some of which are
beyond the company's control). Factors that could cause actual results to differ
from those discussed in the forward-looking statements include: (1) risks
related to credit 






quality, interest rate sensitivity and liquidity; (2) the strength of the U.S.
economy in general and the strength of the local economies where the company is
located; (3) the effect of, and changes in, monetary and fiscal policies and
laws, including interest rate policies of the Board of Governors of the Federal
Reserve System; (4) inflation, interest rate, market and monetary fluctuations;
(5) the timely development of new products and services and customer perception
of the overall value thereof (including features, pricing and quality) compared
to competing products and services; (6) changes in consumer spending, borrowing
and savings habits; (7) technological changes; (8) any acquisitions or mergers
that might be considered by the company and the costs and factors associated
therewith; (9) the ability to maintain and increase market share and control
expenses; (10) the effect of changes in laws and regulations (including laws and
regulations concerning taxes, banking, securities and insurance) and generally
accepted accounting principles; (11) changes in the company's organization,
compensation and benefit plans and in the availability of, and compensation
levels for, employees in its geographic markets; (12) the costs and effects of
litigation and of any adverse outcome in such litigation; and (13) the success
of the company at managing the risks of the foregoing.

     The foregoing list of important factors is not exclusive. Such
forward-looking statements speak only as of the date on which they are made and
the company does not undertake any obligation to update any forward-looking
statement, whether written or oral, to reflect events or circumstances after the
date on which such statement is made. If the company does update or correct one
or more forward-looking statements, investors and others should not conclude
that the company will make additional updates or corrections with respect
thereto or with respect to other forward-looking statements.







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


                                          COMMUNITY BANK SYSTEM, INC.
                                            (Registrant)


                                          by: /s/ SANFORD A. BELDEN
                                              ----------------------------------
                                                  Sanford A. Belden
                                                  President and
                                                  Chief Executive Officer



October 6, 1998