UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009.
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period fromto.
 No. 0-19028
(Commission file number)
 CCFNB BANCORP, INC.
  PENNSYLVANIA
    
    23-2254643(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)232 East Street, Bloomsburg, PA
    
    17815(Address of principal executive offices)
    
    (Zip Code)Registrants telephone
number, including area code: (570) 784-4400
 þ o
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ




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##### 



CCFNB Bancorp, Inc. and Subsidiary
Index to Quarterly Report on Form 10-Q
 PageNumberPart I Financial InformationItem1. Financial StatementsConsolidated Balance Sheets as of June 30, 2009 (unaudited) and December 31, 2008
    
    
    3Consolidated Statements of Income (unaudited) for the Three and Six Months ended
June 30, 2009 and 2008
    
    
    4Consolidated Statement of Changes in Stockholders Equity (unaudited) for the
Six Months ended June 30, 2009 and 2008
    
    
    5Consolidated Statements of Cash Flows (unaudited) for the Six Months ended June
30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Report of Independent Registered Public Accounting Firm
    
    
    17Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    28Part II Other Information
    
    
    28Item 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3. Defaults Upon Senior Securities
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29Item 5. Other Information
    
    
    29Item 6. Exhibits
    
    
    29Signatures
    
    
    30Exhibits
  2




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##### 



PART I Financial Information
 
 Item 1. Financial Statements
 CCFNB Bancorp, Inc.

Consolidated Balance Sheets
 (Unaudited)June 30,
    
    
    December 31,(In Thousands)
    
    2009
    
    
    2008ASSETSCash and due from banks
    
    $
    7,451
    
    
    $
    10,173Interest-bearing deposits in other banks
    
    
    169
    
    
    
    149Federal funds sold
    
    
    1,005
    
    
    
    5,163Total cash and cash equivalents
    
    
    8,625
    
    
    
    15,485Investment securities, available for sale, at fair value
    
    
    198,031
    
    
    
    196,580Loans,net of unearned income
    
    
    328,169
    
    
    
    320,068Less: Allowance for loan losses
    
    
    3,762
    
    
    
    3,758Loans, net
    
    
    324,407
    
    
    
    316,310Premises and equipment, net
    
    
    11,871
    
    
    
    12,609Accrued interest receivable
    
    
    2,076
    
    
    
    2,388Cash surrender value of bank-owned life insurance
    
    
    11,212
    
    
    
    10,943Investment in limited partnerships
    
    
    766
    
    
    
    845Intangible Assets:Core deposit
    
    
    3,076
    
    
    
    3,411Goodwill
    
    
    7,937
    
    
    
    7,937Other assets
    
    
    2,298
    
    
    
    1,811TOTAL ASSETS
    
    $
    570,299
    
    
    $
    568,319LIABILITIESInterest-bearing deposits
    
    $
    391,850
    
    
    $
    381,849Noninterest-bearing deposits
    
    
    49,978
    
    
    
    52,460Total deposits
    
    
    441,828
    
    
    
    434,309Short-term borrowings
    
    
    45,382
    
    
    
    55,462Long-term borrowings
    
    
    12,130
    
    
    
    9,133Junior subordinate debentures
    
    
    4,640
    
    
    
    4,640Accrued interest payable
    
    
    931
    
    
    
    1,075Other liabilities
    
    
    2,489
    
    
    
    2,925TOTAL LIABILITIES
    
    
    507,400
    
    
    
    507,544STOCKHOLDERS EQUITYCommon stock, par value $1.25 per share; authorized
5,000,000 shares; issued 2,261,765 shares
in 2009 and 2,253,080 shares in 2008
    
    
    2,827
    
    
    
    2,816Surplus
    
    
    27,332
    
    
    
    27,173Retained earnings
    
    
    31,176
    
    
    
    29,164Accumulated other comprehensive income
    
    
    1,715
    
    
    
    1,622Treasury stock, at cost; 7,000 shares in 2009 and 0 shares
in 2008
    
    
    (151
    )
    
    
    TOTAL STOCKHOLDERS EQUITY
    
    
    62,899
    
    
    
    60,775TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    570,299
    
    
    $
    568,319
  3




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##### 



CCFNB Bancorp, Inc.

Consolidated Statements of Income
(Unaudited)
 For the Three Months Ended June 30,
    
    
    For the Six Months Ended June 30,(In Thousands, Except Per Share Data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008INTEREST AND DIVIDEND INCOMEInterest and fees on loans:Taxable
    
    $
    4,671
    
    
    $
    2,496
    
    
    $
    9,404
    
    
    $
    5,079Tax-exempt
    
    
    204
    
    
    
    154
    
    
    
    407
    
    
    
    298Interest and dividends on investment securities:Taxable
    
    
    2,015
    
    
    
    645
    
    
    
    4,227
    
    
    
    1,253Tax-exempt
    
    
    105
    
    
    
    39
    
    
    
    192
    
    
    
    84Dividend and other interest income
    
    
    11
    
    
    
    24
    
    
    
    37
    
    
    
    49Federal funds sold
    
    
    1
    
    
    
    44
    
    
    
    6
    
    
    
    108Deposits in other banks
    
    
    1
    
    
    
    7
    
    
    
    1
    
    
    
    20TOTAL INTEREST AND DIVIDEND INCOME
    
    
    7,008
    
    
    
    3,409
    
    
    
    14,274
    
    
    
    6,891INTEREST EXPENSEDeposits
    
    
    1,920
    
    
    
    990
    
    
    
    3,933
    
    
    
    2,026Short-term borrowings
    
    
    78
    
    
    
    130
    
    
    
    159
    
    
    
    358Long-term borrowings
    
    
    150
    
    
    
    138
    
    
    
    287
    
    
    
    292Junior subordinate debentures
    
    
    34
    
    
    
    
    
    
    
    76
    
    
    
    TOTAL INTEREST EXPENSE
    
    
    2,182
    
    
    
    1,258
    
    
    
    4,455
    
    
    
    2,676NET INTEREST INCOME
    
    
    4,826
    
    
    
    2,151
    
    
    
    9,819
    
    
    
    4,215PROVISION FOR LOAN LOSSES
    
    
    160
    
    
    
    
    
    
    
    220
    
    
    
    NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    4,666
    
    
    
    2,151
    
    
    
    9,599
    
    
    
    4,215NON-INTEREST INCOMEService charges and fees
    
    
    426
    
    
    
    241
    
    
    
    824
    
    
    
    480Gain on sale of loans
    
    
    250
    
    
    
    59
    
    
    
    346
    
    
    
    106Earnings on bank-owned life insurance
    
    
    114
    
    
    
    68
    
    
    
    217
    
    
    
    133Brokerage
    
    
    51
    
    
    
    54
    
    
    
    107
    
    
    
    92Trust
    
    
    160
    
    
    
    36
    
    
    
    312
    
    
    
    74Investment security losses
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )
    
    
    Other
    
    
    421
    
    
    
    79
    
    
    
    782
    
    
    
    152TOTAL NON-INTEREST INCOME
    
    
    1,361
    
    
    
    537
    
    
    
    2,527
    
    
    
    1,037NON-INTEREST EXPENSESalaries
    
    
    1,543
    
    
    
    716
    
    
    
    3,144
    
    
    
    1,419Employee benefits
    
    
    400
    
    
    
    225
    
    
    
    834
    
    
    
    470Occupancy
    
    
    254
    
    
    
    118
    
    
    
    561
    
    
    
    256Furniture and equipment
    
    
    302
    
    
    
    107
    
    
    
    625
    
    
    
    222State shares tax
    
    
    129
    
    
    
    78
    
    
    
    272
    
    
    
    163Professional fees
    
    
    108
    
    
    
    66
    
    
    
    275
    
    
    
    132Directors fees
    
    
    70
    
    
    
    51
    
    
    
    141
    
    
    
    97FDIC assessments
    
    
    366
    
    
    
    5
    
    
    
    438
    
    
    
    10Other
    
    
    932
    
    
    
    319
    
    
    
    1,782
    
    
    
    615TOTAL NON-INTEREST EXPENSE
    
    
    4,104
    
    
    
    1,685
    
    
    
    8,072
    
    
    
    3,384INCOME BEFORE INCOME TAX PROVISION
    
    
    1,923
    
    
    
    1,003
    
    
    
    4,054
    
    
    
    1,868INCOME TAX PROVISION
    
    
    372
    
    
    
    256
    
    
    
    960
    
    
    
    470NET INCOME
    
    $
    1,551
    
    
    $
    747
    
    
    $
    3,094
    
    
    $
    1,398EARNINGS PER SHARE
    
    $
    0.68
    
    
    $
    0.61
    
    
    $
    1.37
    
    
    $
    1.14CASH DIVIDENDS PER SHARE
    
    $
    0.24
    
    
    $
    0.21
    
    
    $
    0.48
    
    
    $
    0.42WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    2,256,348
    
    
    
    1,224,552
    
    
    
    2,255,202
    
    
    
    1,224,552
  4




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##### 



CCFNB Bancorp, Inc.

Consolidated Statements of Changes in Stockholders Equity
(Unaudited)
 AccumulatedCommon
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalStock
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Stockholders(In Thousands Except Per Share Data)
    
    Shares
    
    
    Amount
    
    
    Surplus
    
    
    Earnngs
    
    
    Income (Loss)
    
    
    Stock
    
    
    EquityBalance, December 31,
2007
    
    
    1,226,536
    
    
    $
    1,533
    
    
    $
    2,271
    
    
    $
    27,679
    
    
    $
    144
    
    
    $
    
    
    
    $
    31,627Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,398
    
    
    
    
    
    
    
    
    
    
    
    1,398Change in net
unrealized gain (loss)
on investment
securities
available-for-sale,
net of
reclassification
adjustment and
tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (361
    )
    
    
    
    
    
    
    (361
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,037Common stock issuance
under dividend reinvestment and
stock purchase plans
    
    
    5,247
    
    
    
    7
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128Recognition of employee
stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Purchase of treasury
stock (12,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (304
    )
    
    
    (304
    )Retirement of treasury
stock
    
    
    (12,000
    )
    
    
    (15
    )
    
    
    (289
    )
    
    
    
    
    
    
    
    
    
    
    304
    
    
    
    Cash dividends, ($0.42
per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (514
    )
    
    
    
    
    
    
    
    
    
    
    (514
    )Balance, June 30, 2008
    
    
    1,219,783
    
    
    $
    1,525
    
    
    $
    2,105
    
    
    $
    28,563
    
    
    $
    (217
    )
    
    $
    
    
    
    $
    31,976Balance, December 31,
2008
    
    
    2,253,080
    
    
    $
    2,816
    
    
    $
    27,173
    
    
    $
    29,164
    
    
    $
    1,622
    
    
    $
    
    
    
    $
    60,775Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,094
    
    
    
    
    
    
    
    
    
    
    
    3,094Change in net
unrealized gain on
investment
securities
available-for-sale,
net of
reclassification
adjustment and
tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    93Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,187Common stock issuance
under dividend
reinvestment and
stock purchase plans
    
    
    8,685
    
    
    
    11
    
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168Recognition of employee
stock purchase plan expense
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Purchase of treasury
stock (7,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151
    )
    
    
    (151
    )Cash dividends, ($0.48
per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,082
    )
    
    
    
    
    
    
    
    
    
    
    (1,082
    )Balance, June 30, 2009
    
    
    2,261,765
    
    
    $
    2,827
    
    
    $
    27,332
    
    
    $
    31,176
    
    
    $
    1,715
    
    
    $
    (151
    )
    
    $
    62,899
  5




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##### 



CCFNB Bancorp, Inc.

Consolidated Statements of Cash Flows
(Unaudited)
 For The Six Months Ended June 30,(In Thousands)
    
    2009
    
    
    2008OPERATING ACTIVITIESNet Income
    
    $
    3,094
    
    
    $
    1,398Adjustments to reconcile net income to net cash
provided by operating activities:Provision for loan losses
    
    
    220
    
    
    
    Depreciation and amortization of premises and equipment
    
    
    507
    
    
    
    188Impairment loss on securities
    
    
    61
    
    
    
    Amortization and accretion on investment securities
    
    
    189
    
    
    
    20Gain on sale of premises and equipment
    
    
    (183
    )
    
    
    Loss on sale of other real estate owned
    
    
    81
    
    
    
    Deferred income taxes benefit (provision)
    
    
    178
    
    
    
    (62
    )Gain on sale of loans
    
    
    (346
    )
    
    
    (106
    )Proceeds from sale of mortgage loans
    
    
    10,116
    
    
    
    6,182Originations of mortgage loans held for resale
    
    
    (11,326
    )
    
    
    (5,921
    )Amortization of intangibles and invesment in limited
partnerships
    
    
    414
    
    
    
    Decrease in accrued interest receivable
    
    
    312
    
    
    
    61Increases in cash surrender value of bank-owned life
insurance
    
    
    (269
    )
    
    
    (157
    )Decrease in accrued interest payable
    
    
    (144
    )
    
    
    (230
    )Other, net
    
    
    (1,159
    )
    
    
    (753
    )Net cash provided by operating activities
    
    
    1,745
    
    
    
    620INVESTING ACTIVITIESInvestment securities available for sale:Purchases
    
    
    (54,929
    )
    
    
    (29,536
    )Proceeds from sales, maturities and redemptions
    
    
    54,186
    
    
    
    25,377Proceeds from redemption of regulatory stock
    
    
    
    
    
    
    120Purchase of regulatory stock
    
    
    (817
    )
    
    
    (64
    )Net (increase) decrease in loans
    
    
    (7,173
    )
    
    
    64Proceeds from sale of premises and equipment
    
    
    1,294
    
    
    
    Proceeds from sale of other real estate owned
    
    
    343
    
    
    
    Acquisition of premises and equipment
    
    
    (880
    )
    
    
    (18
    )Net cash used for investing activities
    
    
    (7,976
    )
    
    
    (4,057
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    7,519
    
    
    
    4,283Net decrease in short-term borrowings
    
    
    (10,080
    )
    
    
    (538
    )Proceeds from long-term borrowings
    
    
    3,000Repayment of long-term borrowings
    
    
    (3
    )
    
    
    (2,003
    )Acquisition of treasury stock
    
    
    (151
    )
    
    
    (304
    )Proceeds from issuance of common stock
    
    
    168
    
    
    
    128Cash dividends paid
    
    
    (1,082
    )
    
    
    (514
    )Net cash (used for) provided by financing activities
    
    
    (629
    )
    
    
    1,052NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (6,860
    )
    
    
    (2,385
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    15,485
    
    
    
    13,401CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    8,625
    
    
    $
    11,016SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    4,599
    
    
    $
    2,717Income taxes paid
    
    
    871
    
    
    
    622Loans transferred to other real estate owned
    
    
    412
    
    
    
    
  6




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##### 



CCFNB BANCORP, INC.  
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  PRINCIPLES OF CONSOLIDATION
 "
 NATURE OF OPERATIONS
   SEGMENT REPORTING
   USE OF ESTIMATES
  INVESTMENT SECURITIES
    7




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##### 



LOANS
   Past Due Loans
 Non-Accrual Loans
 Impaired Loans
 Allowance for Loan Losses
   PREMISES AND EQUIPMENT
  MORTGAGE SERVICING RIGHTS
  JUNIOR SUBORDINATE DEBENTURES
  8




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##### 



INTANGIBLE ASSETS  GOODWILL
  INTANGIBLE ASSETS  CORE DEPOSIT
   For the Year Ended:Remainder of 2009
    
    $
    308,0002010
    
    
    576,0002011
    
    
    509,0002012
    
    
    442,0002013
    
    
    374,000Thereafter
    
    
    867,000Total
    
    $
    3,076,000
 OTHER REAL ESTATE OWNED
  BANK OWNED LIFE INSURANCE
  INVESTMENTS IN LIMITED PARTNERSHIPS
 94-1 Accounting
for Tax Benefits Resulting from Investments in Affordable Housing Projects
 INVESTMENT IN INSURANCE AGENCY
  9




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##### 



INCOME TAXES
  PER SHARE DATA
 Earnings Per Share
 CASH FLOW INFORMATION
  TRUST ASSETS AND INCOME
  ACCUMULATED OTHER COMPREHENSIVE INCOME
  ADVERTISING COSTS
  RECENT ACCOUNTING PRONOUNCEMENTS
 Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in
Variable Interest Entities.
  Amendments to the Impairment Guidance of
EITF 99-20
 Business Combinations
 10




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##### 



Accounting for Costs Associated with Exit or
Disposal Activities
  Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB 51
 Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance Arrangements
 Accounting for Income
Tax Benefits of Dividends on Share-Based Payment Awards
 Amendment of FASB Interpretation No. 39, Offsetting
of Amounts Related to Certain Contracts
  11




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##### 



The Fair Value Option for Financial Assets
and Liabilities
 Employers Accounting for Defined Benefit Pension and
Other Post Retirement Plans
 Fair
Value Measurements
 Accounting for a Change or
Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged
Lease Transaction
 Accounting for Uncertainty in
Income Taxes
 Accounting for Servicing of Financial Assets
  Accounting for Certain Hybrid Financial Instruments
 12




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##### 



RECLASSIFICATIONS
  2. ALLOWANCE FOR LOAN LOSSES
  (In Thousands)
    
    2009
    
    
    2008Balance, beginning of year
    
    $
    3,758
    
    
    $
    1,437Provision charged to operations
    
    
    220
    
    
    
    Allowance acquired
    
    
    
    
    
    
    Loans charged off
    
    
    (233
    )
    
    
    (19
    )Recoveries
    
    
    17
    
    
    
    18Balance, June 30,
    
    $
    3,762
    
    
    $
    1,436
  3. SHORT-TERM BORROWINGS
  4. LONG-TERM BORROWINGS
  5. DEFERRED COMPENSATION PLANS
   6. ACQUISITION
  13




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##### 



(In Thousands)Purchase price
    
    $
    26,316Carrying value of net assets acquired
    
    
    (17,855
    )Excess of purchase price over carrying value
of net assets acquired
    
    
    8,461Purchase accounting adjustments:Loans
    
    
    30Premises and equipment
    
    
    853Deposits
    
    
    1,235Severance and related costs
    
    
    840Deferred taxes
    
    
    208Subtotal
    
    
    11,627Core deposit intangibles
    
    
    (3,690
    )Goodwill
    
    $
    7,937
  (In Thousands)AssetsCash and cash equivalents
    
    $
    5,157Interest-bearing deposits in other banks
    
    
    129Federal funds sold
    
    
    517Investment securities
    
    
    138,257Loans, net of allowance for loan losses
    
    
    160,724Premises and equipment
    
    
    6,492Accrued interest receivable
    
    
    1,534Bank-owned life insurance
    
    
    3,462Investment in limited partnerships
    
    
    919Goodwill and other intangibles
    
    
    11,627Other assets
    
    
    564Total assets
    
    $
    329,382LiabilitiesDeposits
    
    $
    264,692Borrowings
    
    
    31,883Junior subordinate debentures
    
    
    4,640Accrued interest payable
    
    
    764Other liabilities
    
    
    1,087Total liabilities
    
    $
    303,066Fair value of net assets acquired
    
    $
    26,316
 7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF
CREDIT RISK
  14




---



##### 



(In Thousands)
    
    2009
    
    2008Financial instruments whose contract amounts represents credit risk:Commitments to extend credit
    
    $
    77,783
    
    
    $
    68,412Standby letters of credit
    
    
    2,907
    
    
    
    3,064Dealer floor plans
    
    
    988
    
    
    
    1,129Loans held for sale
    
    
    1,628
    
    
    
    72
     8. FAIR VALUE MEASUREMENTS
  Level I:
    
    Quoted prices are available in active markets for identical assets or liabilities as of the reported date.Level II:
    
    Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly
observables as of the reported date. The nature of these assets and liabilities include
items for which quoted prices are available but traded less frequently, and items that
are fair valued using other financial instruments of which can be directly observed.Level III:
    
    Assets and liabilities that have little or no pricing observability as of the
reported date. These items do not have two-way markets and are measured using
managements best estimate of fair value, where the inputs into determination of fair
value require significant management judgment or estimation.
  15




---



##### 



June 30, 2009(In Thousands)
    
    Level I
    
    Level II
    
    Level III
    
    TotalAssets:Investment Securities, available-for-sale
    
    $
    1,714
    
    
    $
    196,317
    
    
    $
    
    
    
    $
    198,031
  (In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAvailable for sale securitiesObligation of US Government AgenciesMortgage-backed
    
    $
    
    
    
    $
    138,414
    
    
    $
    
    
    
    $
    138,414Other
    
    
    
    
    
    
    42,051
    
    
    
    
    
    
    
    42,051Obligations of state and political subdivisions
    
    
    
    
    
    
    12,868
    
    
    
    
    
    
    
    12,868Equity securities
    
    
    1,714
    
    
    
    
    
    
    
    
    
    
    
    1,714Restricted equity securities
    
    
    
    
    
    
    2,984
    
    
    
    
    
    
    
    2,984$
    1,714
    
    
    $
    196,317
    
    
    $
    
    
    
    $
    198,031
  NOTE 9  MANAGEMENTS ASSERTIONS AND COMMENTS REQUIRED TO BE PROVIDED WITH FORM 10Q FILING
   16




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 17




---



##### 



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 CAUTIONARY STATEMENT
  
    
    Our business and financial results are affected by business and economic
conditions, both generally and specifically in the Northcentral Pennsylvania market
in which we operate. In particular, our business and financial results may be
impacted by:
 
    
    Changes in interest rates and valuations in the debt, equity and other financial
markets.
 
    
    Disruptions in the liquidity and other functioning of financial markets,
including such disruptions in the market for real estate and other assets commonly
securing financial products.
 
    
    Actions by the Federal Reserve Board and other government agencies, including
those that impact money supply and market interest rates.
 
    
    Changes in our customers and suppliers performance in general and their
creditworthiness in particular.
 
    
    Changes in customer preferences and behavior, whether as a result of changing
business and economic conditions or other factors.
 
    
    Changes resulting from the newly enacted Emergency Economic Stabilization Act of
2008.
 
    
    A continuation of recent turbulence in significant segments of the United States
and global financial markets, particularly if it worsens, could impact our
performance, both directly by affecting our revenues and the value of our assets and
liabilities and indirectly by affecting our customers and suppliers and the economy
generally.
 
    
    Our business and financial performance could be impacted as the financial
industry restructures in the current environment by changes in the competitive
landscape.
 
    
    Given current economic and financial market conditions, our forward-looking
financial statements are subject to the risk that these conditions will be
substantially different than we are currently expecting. These statements are based
on our current expectations that interest rates will remain low through 2009 with
continued wide market credit spreads and our view that national economic trends
currently point to a continuation of severe recessionary conditions through 2009
followed by a subdued recovery.
 
    
    Legal and regulatory developments could have an impact on our ability to operate
our business or our financial condition or results of operations or our competitive
position or reputation. Reputational impacts, in turn, could affect matters such as business generation and retention, our ability to attract and
retain management, liquidity and funding. These legal and regulatory developments
could include: (a) the unfavorable resolution of legal proceedings or regulatory and
other governmental inquiries; (b) increased litigation risk from recent regulatory and
other governmental developments; (c) the results of the regulatory examination
process, and regulators future use of supervisory and enforcement tools; (d)
legislative and regulatory reforms, including changes to laws and regulations
involving tax, pension, education and mortgage lending, the protection of confidential
customer information, and other aspects of the financial institution industry; and (e)
changes in accounting policies and principles.
 18




---



##### 




    
    Our business and operating results are affected by our ability to identify and
effectively manage risks inherent in our businesses, including, where appropriate,
through the effective use of third-party insurance and capital management
techniques.
 
    
    Our ability to anticipate and respond to technological changes can have an impact
on our ability to respond to customer needs and to meet competitive demands.
 
    
    Our ability to implement our business initiatives and strategies could affect our
financial performance over the next several years.
 
    
    Competition can have an impact on customer acquisition, growth and retention, as
well as on our credit spreads and product pricing, which can affect market share,
deposits and revenues.
 
    
    Our business and operating results can also be affected by widespread natural
disasters, terrorist activities or international hostilities, either as a result of
the impact on the economy and capital and other financial markets generally or on us
or on our customers and suppliers.
   RESULTS OF OPERATIONS
 NET INTEREST INCOME
 2009 vs. 2008
    19




---



##### 



AVERAGE BALANCE SHEET AND RATE ANALYSIS
SIX MONTHS ENDED JUNE 30,
 2009
    
    
    2008Average Balance
    
    
    Interest
    
    
    Average Rate
    
    
    Average Balance
    
    
    Interest
    
    
    Average Rate(In Thousands)
    
    (1)
    
    
    
    
    
    
    
    
    
    
    (1)ASSETS:Tax-exempt loans
    
    $
    19,643
    
    
    $
    546
    
    
    
    5.61
    %
    
    $
    13,183
    
    
    $
    399
    
    
    
    6.10
    %All other loans
    
    
    304,794
    
    
    
    9,403
    
    
    
    6.22
    %
    
    
    147,160
    
    
    
    5,079
    
    
    
    6.96
    %Total loans (2)(3)(4)
    
    
    324,437
    
    
    
    9,949
    
    
    
    6.18
    %
    
    
    160,343
    
    
    
    5,478
    
    
    
    6.89
    %Taxable securities
    
    
    182,479
    
    
    
    4,264
    
    
    
    4.67
    %
    
    
    56,475
    
    
    
    1,301
    
    
    
    4.61
    %Tax-exempt securitites (3)
    
    
    9,126
    
    
    
    258
    
    
    
    5.65
    %
    
    
    3,607
    
    
    
    113
    
    
    
    6.27
    %Total securities
    
    
    191,605
    
    
    
    4,522
    
    
    
    4.72
    %
    
    
    60,082
    
    
    
    1,414
    
    
    
    4.71
    %Federal funds sold
    
    
    7,989
    
    
    
    6
    
    
    
    0.15
    %
    
    
    8,385
    
    
    
    108
    
    
    
    2.60
    %Interest-bearing deposits
    
    
    667
    
    
    
    1
    
    
    
    0.30
    %
    
    
    1,450
    
    
    
    20
    
    
    
    2.78
    %Total interest-earning assets
    
    
    524,698
    
    
    
    14,478
    
    
    
    5.55
    %
    
    
    230,260
    
    
    
    7,020
    
    
    
    6.14
    %Other assets
    
    
    43,676
    
    
    
    
    
    
    
    
    
    
    
    18,236TOTAL ASSETS
    
    $
    568,374
    
    
    
    
    
    
    
    
    
    
    $
    248,496LIABILITIES:Savings
    
    $
    56,204
    
    
    
    111
    
    
    
    0.40
    %
    
    $
    24,809
    
    
    
    49
    
    
    
    0.40
    %Now deposits
    
    
    68,076
    
    
    
    50
    
    
    
    0.15
    %
    
    
    28,863
    
    
    
    45
    
    
    
    0.31
    %Money market deposits
    
    
    44,900
    
    
    
    249
    
    
    
    1.12
    %
    
    
    7,356
    
    
    
    24
    
    
    
    0.66
    %Time deposits
    
    
    225,833
    
    
    
    3,523
    
    
    
    3.15
    %
    
    
    92,719
    
    
    
    1,908
    
    
    
    4.15
    %Total deposits
    
    
    395,013
    
    
    
    3,933
    
    
    
    2.01
    %
    
    
    153,747
    
    
    
    2,026
    
    
    
    2.66
    %Short-term borrowings
    
    
    43,716
    
    
    
    159
    
    
    
    0.73
    %
    
    
    28,559
    
    
    
    358
    
    
    
    2.53
    %Long-term borrowings
    
    
    10,043
    
    
    
    287
    
    
    
    5.76
    %
    
    
    10,034
    
    
    
    292
    
    
    
    5.87
    %Junior subordinate debentures
    
    
    4,640
    
    
    
    76
    
    
    
    3.30
    %
    
    
    
    
    
    
    
    
    
    
    Total borrowings
    
    
    58,399
    
    
    
    522
    
    
    
    1.80
    %
    
    
    38,593
    
    
    
    650
    
    
    
    3.40
    %Total interest-bearing liabilities
    
    
    453,412
    
    
    
    4,455
    
    
    
    1.98
    %
    
    
    192,340
    
    
    
    2,676
    
    
    
    2.81
    %Demand deposits
    
    
    50,201
    
    
    
    
    
    
    
    
    
    
    
    20,009Other liabilities
    
    
    2,554
    
    
    
    
    
    
    
    
    
    
    
    4,340Stockholders equity
    
    
    62,207
    
    
    
    
    
    
    
    
    
    
    
    31,807TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    568,374
    
    
    
    
    
    
    
    
    
    
    $
    248,496Interest rate spread (6)
    
    
    
    
    
    
    
    
    
    
    3.57
    %
    
    
    
    
    
    
    
    
    
    
    3.33
    %Net interest income/margin (5)
    
    
    
    
    
    $
    10,023
    
    
    
    3.84
    %
    
    
    
    
    
    $
    4,344
    
    
    
    3.79
    %
 
 (1)
    
    Average volume information was compared using daily (or monthly) averages for interest-earning
and bearing accounts.Certain balance sheet items utilized quarter-end balances for averages.(2)
    
    Interest on loans includes fee income.(3)
    
    Tax exempt interest revenue is shown on a tax-equivalent basis using a statutory federal income
tax rate of 34 percent for 2009 and 2008.(4)
    
    Nonaccrual loans have been included with loans for the purpose of analyzing net interest
earnings.(5)
    
    Net interest margin is computed by dividing annualized net interest income by total interest
earning assets.(6)
    
    Interest rate spread represents the difference between the average rate earned on
interest-earning assets and the average
rate paid on interest-bearing liabilities. 20




---



##### 



Reconcilement of Taxable Equivalent Net Interest Income For
the Six Months Ended June 30,
 (In Thousands)
    
    2009
    
    
    2008Total interest income
    
    $
    14,274
    
    
    $
    6,891Total interest expense
    
    
    4,455
    
    
    
    2,676Net interest income
    
    
    9,819
    
    
    
    4,215Tax equivalent adjustment
    
    
    204
    
    
    
    129Net interest income(fully taxable equivalent)
    
    $
    10,023
    
    
    $
    4,344
 Rate/Volume Analysis
  Six Months Ended June 30,2009 vs 2008Increase (Decrease)Due to(In Thousands)
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Loans, tax-exempt
    
    $
    180
    
    
    $
    (33
    )
    
    $
    147Loans
    
    
    4,864
    
    
    
    (539
    )
    
    
    4,325Taxable investment securities
    
    
    2,944
    
    
    
    19
    
    
    
    2,963Tax-exempt investment securities
    
    
    156
    
    
    
    (11
    )
    
    
    145Federal funds sold
    
    
    
    
    
    
    (102
    )
    
    
    (102
    )Interest bearing deposits
    
    
    (1
    )
    
    
    (18
    )
    
    
    (19
    )Total interest-earning assets
    
    
    8,143
    
    
    
    (684
    )
    
    
    7,459Interest expense:Savings
    
    
    62
    
    
    
    
    
    
    
    62NOW deposits
    
    
    29
    
    
    
    (24
    )
    
    
    5Money market deposits
    
    
    208
    
    
    
    17
    
    
    
    225Time deposits
    
    
    2,077
    
    
    
    (462
    )
    
    
    1,615Short-term borrowings
    
    
    55
    
    
    
    (254
    )
    
    
    (199
    )Long-term borrowings, FHLB
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )Junior subordinate debentures
    
    
    77
    
    
    
    
    
    
    
    77Total interest-bearing liabilities
    
    
    2,508
    
    
    
    (728
    )
    
    
    1,780Change in net interest income
    
    $
    5,635
    
    
    $
    44
    
    
    $
    5,679
 21




---



##### 



PROVISION FOR LOAN LOSSES
 2009 vs. 2008
    NON-INTEREST INCOME
 2009 vs. 2008
  For The Six Months EndedJune 30, 2009
    
    June 30, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Service charges and fees
    
    $
    824
    
    
    
    32.6
    %
    
    $
    480
    
    
    
    46.3
    %
    
    $
    344
    
    
    
    71.7
    %Gain on sale of loans
    
    
    346
    
    
    
    13.7
    
    
    
    106
    
    
    
    10.2
    
    
    
    240
    
    
    
    226.4Earnings on bank-owned life insurance
    
    
    217
    
    
    
    8.6
    
    
    
    133
    
    
    
    12.8
    
    
    
    84
    
    
    
    63.2Brokerage and insurance
    
    
    107
    
    
    
    4.2
    
    
    
    92
    
    
    
    8.9
    
    
    
    15
    
    
    
    16.3Trust
    
    
    312
    
    
    
    12.3
    
    
    
    74
    
    
    
    7.1
    
    
    
    238
    
    
    
    321.6Investment security losses
    
    
    (61
    )
    
    
    (2.4
    )
    
    
    
    
    
    
    
    
    
    
    (61
    )
    
    
    Other
    
    
    782
    
    
    
    31.0
    
    
    
    152
    
    
    
    14.7
    
    
    
    630
    
    
    
    414.5Total non-interest income
    
    $
    2,527
    
    
    
    100.0
    %
    
    $
    1,037
    
    
    
    100.0
    %
    
    $
    1,490
    
    
    
    143.7
    %
 NON-INTEREST EXPENSE
 2009 vs. 2008
  22




---



##### 



For The Six Months EndedJune 30, 2009
    
    June 30, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Salaries
    
    $
    3,144
    
    
    
    38.9
    %
    
    $
    1,419
    
    
    
    41.9
    %
    
    $
    1,725
    
    
    
    121.6
    %Employee benefits
    
    
    834
    
    
    
    10.3
    
    
    
    470
    
    
    
    13.9
    
    
    
    364
    
    
    
    77.4Occupancy
    
    
    561
    
    
    
    6.9
    
    
    
    256
    
    
    
    7.6
    
    
    
    305
    
    
    
    119.1Furniture and equipment
    
    
    625
    
    
    
    7.7
    
    
    
    222
    
    
    
    6.6
    
    
    
    403
    
    
    
    181.5State shares tax
    
    
    272
    
    
    
    3.4
    
    
    
    163
    
    
    
    4.8
    
    
    
    109
    
    
    
    66.9Professional fees
    
    
    275
    
    
    
    3.4
    
    
    
    132
    
    
    
    3.9
    
    
    
    143
    
    
    
    108.3Directors fees
    
    
    141
    
    
    
    1.7
    
    
    
    97
    
    
    
    2.9
    
    
    
    44
    
    
    
    45.4FDIC assessments
    
    
    438
    
    
    
    5.4
    
    
    
    10
    
    
    
    0.3
    
    
    
    428
    
    
    
    4,280.0Other
    
    
    1,782
    
    
    
    22.3
    
    
    
    615
    
    
    
    18.1
    
    
    
    1,167
    
    
    
    189.8Total non-interest expense
    
    $
    8,072
    
    
    
    100.0
    %
    
    $
    3,384
    
    
    
    100.0
    %
    
    $
    4,688
    
    
    
    138.5
    %
 FINANCIAL CONDITION
    INVESTMENTS
  June 30, 2009EstimatedAmortized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    135,337
    
    
    $
    138,414Other
    
    
    41,704
    
    
    
    42,051Obligations of state and political subdivisions
    
    
    12,845
    
    
    
    12,868Total debt securities
    
    
    189,886
    
    
    
    193,333Marketable equity securities
    
    
    2,562
    
    
    
    1,714Restricted equity securities
    
    
    2,984
    
    
    
    2,984Total investment securities AFS
    
    $
    195,432
    
    
    $
    198,031
 23




---



##### 



December 31, 2008EstimatedAmortized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    116,357
    
    
    $
    118,046Other
    
    
    63,031
    
    
    
    64,080Obligations of state and political subdivisions
    
    
    9,944
    
    
    
    9,994Total debt securities
    
    
    189,332
    
    
    
    192,120Marketable equity securities
    
    
    2,623
    
    
    
    2,293Restricted equity securities
    
    
    2,167
    
    
    
    2,167Total investment securities AFS
    
    $
    194,122
    
    
    $
    196,580
 LOANS
   Change(In Thousands)
    
    June 30, 2009
    
    
    December 31, 2008
    
    
    Amount
    
    
    %Commercial, financial and agricultural
    
    $
    28,380
    
    
    $
    27,165
    
    
    $
    1,215
    
    
    
    4.5
    %Tax-exempt
    
    
    19,611
    
    
    
    16,762
    
    
    
    2,849
    
    
    
    17.0Real estate
    
    
    266,467
    
    
    
    262,539
    
    
    
    3,928
    
    
    
    1.5Real estate construction
    
    
    5,898
    
    
    
    5,307
    
    
    
    591
    
    
    
    11.1Installment loans to individuals
    
    
    7,737
    
    
    
    8,202
    
    
    
    (465
    )
    
    
    (5.7
    )Add (deduct): Unearned discount
    
    
    (20
    )
    
    
    (24
    )
    
    
    4
    
    
    
    (16.7
    )Unamortized loan costs, net of fees
    
    
    96
    
    
    
    117
    
    
    
    (21
    )
    
    
    (17.9
    )Gross loans
    
    $
    328,169
    
    
    $
    320,068
    
    
    $
    8,101
    
    
    
    2.5
    %
  June 30, 2009
    
    December 31, 2008Commercial, financial and agricultural
    
    
    8.6
    %
    
    
    8.5
    %Tax-exempt
    
    
    6.0
    
    
    
    5.2Real estate
    
    
    81.2
    
    
    
    82.1Real estate construction
    
    
    1.8
    
    
    
    1.7Installment loans to individuals
    
    
    2.4
    
    
    
    2.5Gross loans
    
    
    100.0
    %
    
    
    100.0
    %
 ALLOWANCE FOR LOAN LOSSES
  24




---



##### 



For the Six Months Ended June 30,(In Thousands)
    
    2009
    
    
    2008Average Loans Outstanding during
the period
    
    $
    324,437
    
    
    $
    160,343Balance, beginning of year
    
    $
    3,758
    
    
    $
    1,437Provision charged to operations
    
    
    220
    
    
    
    Allowance acquired
    
    
    
    
    
    
    Loans charged off:Commercial, financial, and agricultural
    
    
    (220
    )
    
    
    Real estate mortgages
    
    
    
    
    
    
    Installment loans to indiviuals
    
    
    (13
    )
    
    
    (19
    )Recoveries:Commercial, financial, and agricultural
    
    
    
    
    
    
    Real estate mortgages
    
    
    8
    
    
    
    2Installment loans to indiviuals
    
    
    9
    
    
    
    16Balance, end of period
    
    $
    3,762
    
    
    $
    1,436Net charge-offs to Average loans
outstanding during the period
    
    
    -0.07
    %
    
    
    0.00
    %
 NON-PERFORMING LOANS
   (In Thousands)
    
    June 30, 2009
    
    
    December 31, 2008Commercial, financial and agriculturalDays 30-89
    
    $
    484
    
    
    $
    61Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    464
    
    
    
    581Real estateDays 30-89
    
    
    2,490
    
    
    
    1,528Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    4,092
    
    
    
    3,780Installment loans to individualsDays 30-89
    
    
    28
    
    
    
    9Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    71
    
    
    
    92$
    7,629
    
    
    $
    6,051Days 30-89
    
    $
    3,002
    
    
    $
    1,598Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    4,627
    
    
    
    4,453$
    7,629
    
    
    $
    6,051Restructured loans still accruing
    
    $
    57
    
    
    $
    58Other real estate owned
    
    $
    361
    
    
    $
    373
 25




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##### 



DEPOSITS
 .
  June 30, 2009
    
    December 31, 2008Average
    
    
    
    
    
    Average
    
    Change(In Thousands)
    
    Balance
    
    Rate
    
    Balance
    
    Rate
    
    Amount
    
    %Non-interest bearing
    
    $
    49,978
    
    
    
    
    %
    
    $
    52,460
    
    
    
    
    %
    
    $
    (2,482
    )
    
    
    (4.7
    )%Savings
    
    
    57,303
    
    
    
    0.40
    
    
    
    54,717
    
    
    
    0.40
    
    
    
    2,586
    
    
    
    4.7Now deposits
    
    
    66,062
    
    
    
    0.15
    
    
    
    63,776
    
    
    
    0.27
    
    
    
    2,286
    
    
    
    3.6Money market deposits
    
    
    44,303
    
    
    
    1.12
    
    
    
    37,120
    
    
    
    1.66
    
    
    
    7,183
    
    
    
    19.4Time deposits
    
    
    224,182
    
    
    
    3.15
    
    
    
    226,236
    
    
    
    3.53
    
    
    
    (2,054
    )
    
    
    Total deposits
    
    $
    441,828
    
    
    
    1.78
    %
    
    $
    434,309
    
    
    
    2.07
    %
    
    $
    7,519
    
    
    
    1.7
    %
 BORROWED FUNDS
  June 30, 2009
    
    December 31, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Short-term borrowings:FHLB repurchase agreements
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %Short-term borrowings, FHLB
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Securities sold under agreement to repurchase
    
    
    45,382
    
    
    
    73.0
    
    
    
    55,462
    
    
    
    80.1
    
    
    
    (10,080
    )
    
    
    (18.2
    )Total short-term borrowings
    
    
    45,382
    
    
    
    73.0
    %
    
    
    55,462
    
    
    
    80.1
    %
    
    
    (10,080
    )
    
    
    (18.2
    )Junior subordinate debentures
    
    
    4,640
    
    
    
    7.5
    
    
    
    4,640
    
    
    
    6.7
    
    
    
    
    
    
    
    Long-term borrowings, FHLB
    
    
    12,130
    
    
    
    19.5
    
    
    
    9,133
    
    
    
    13.2
    
    
    
    2,997
    
    
    
    32.8Total borrowed funds
    
    $
    62,152
    
    
    
    100.0
    %
    
    $
    69,235
    
    
    
    100.0
    %
    
    $
    (7,083
    )
    
    
    (10.2
    )%
 LIQUIDITY
   CAPITAL RESOURCES
    26




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##### 



2009
    
    2008(In Thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal Capital
(to Risk-weighted Assets)Actual
    
    $
    58,024
    
    
    
    17.8
    %
    
    $
    55,851
    
    
    
    16.5
    %For Capital Adequacy Purposes
    
    
    26,083
    
    
    
    8.0
    
    
    
    27,112
    
    
    
    8.0To Be Well-Capitalized
    
    
    32,604
    
    
    
    10.0
    
    
    
    33,890
    
    
    
    10.0Tier I Capital
(to Risk-weighted Assets)Actual
    
    $
    54,252
    
    
    
    16.6
    %
    
    $
    52,083
    
    
    
    15.4
    %For Capital Adequacy Purposes
    
    
    13,042
    
    
    
    4.0
    
    
    
    13,556
    
    
    
    4.0To Be Well-Capitalized
    
    
    19,562
    
    
    
    6.0
    
    
    
    20,334
    
    
    
    6.0Tier I Capital
(to Average Assets)Actual
    
    $
    54,252
    
    
    
    9.7
    %
    
    $
    52,083
    
    
    
    9.3
    %For Capital Adequacy Purposes
    
    
    22,336
    
    
    
    4.0
    
    
    
    22,476
    
    
    
    4.0To Be Well-Capitalized
    
    
    27,920
    
    
    
    5.0
    
    
    
    28,095
    
    
    
    5.0
  INTEREST RATE RISK MANAGEMENT
        27




---



##### 



Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
   
 Item 4.
    
    Controls and Procedures
    
 PART II Other Information
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  28




---



##### 



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Total
    
    Average
    
    Total Number of
    
    Maximum Number (orNumber of
    
    Price Paid
    
    Shares (or Units)
    
    Approximate Dollar Value)Shares (or
    
    per Share
    
    Purchased as Part of
    
    of Shares (or Units) thatUnits)
    
    (or Units)
    
    Publicly Announced
    
    May Yet Be PurchasedPeriod
    
    Purchased
    
    Purchased
    
    Plans or Programs (1)
    
    Under the Plans or ProgramsMonth #1 (April 1  April 30,
2009)
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    200,000Month #2 (May 1  May 31, 2009)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000Month #3 (June 1  June 30, 2009)
    
    
    7,000
    
    
    
    21.60
    
    
    
    7,000
    
    
    
    193,000
 
 (1)
    
    This program was announced in 2009 and represents the third buy-back program. The
Board of Directors approved the purchase of 200,000 shares. There was no expiration date
associated with this program. 
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 
 Item 5.
    
    Other Information
 None
 
 Item 6.
    
    Exhibits
 31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32
    
    Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
 29




---



##### 



SIGNATURES
  CCFNB BANCORP, INC.
                       (Registrant)By /s/ Lance O. DiehlLance O. DiehlPresident and CEODate: August 11, 2009 By  /s/ Jeffrey T. ArnoldJeffrey T. Arnold, CPA, CIAChief Financial OfficerDate: August 11, 2009 30