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 March 31, 2009.
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from  to.
 No. 0-19028  (Commission file number)
 CCFNB BANCORP, INC.
  PENNSYLVANIA
(State or other jurisdiction of 
incorporation or organization)
    
    23-2254643
(I.R.S. Employer
Identification Number)232 East Street, Bloomsburg, PA
(Address of principal executive offices)
    
    17815
(Zip Code)
 (570) 784-4400
 þ o
 o o
  Large
accelerated
filer oAccelerated
filer oNon-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 Sheet as of March 31,2009 (unaudited) and December 31, 2008
    
    
    3Consolidated Statement of Income (unaudited) for the Three months ended March
31, 2009 and 2008
    
    
    4Consolidated Statement of Changes in Stockholders Equity (unaudited) for the
Three months ended March 31, 2009 and 2008
    
    
    5Consolidated Statement of Cash Flows (unaudited) for the Three Months ended
March 31, 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)March 31,
    
    
    December 31,(In Thousands)
    
    2009
    
    
    2008ASSETSCash and due from banks
    
    $
    9,050
    
    
    $
    10,173Interest-bearing deposits in other banks
    
    
    1,055
    
    
    
    149Federal funds sold
    
    
    1,349
    
    
    
    5,163Total cash and cash equivalents
    
    
    11,454
    
    
    
    15,485Investment securities, available for sale, at fair value
    
    
    197,047
    
    
    
    196,580Loans, net of unearned income
    
    
    325,050
    
    
    
    320,068Less: Allowance for loan losses
    
    
    3,753
    
    
    
    3,758Loans, net
    
    
    321,297
    
    
    
    316,310Premises and equipment, net
    
    
    11,895
    
    
    
    12,609Accrued interest receivable
    
    
    2,256
    
    
    
    2,388Cash surrender value of bank-owned life insurance
    
    
    11,065
    
    
    
    10,943Investment in limited partnerships
    
    
    806
    
    
    
    845Intangible Assets:Core deposit
    
    
    3,243
    
    
    
    3,411Goodwill
    
    
    7,937
    
    
    
    7,937Other assets
    
    
    2,542
    
    
    
    1,811TOTAL ASSETS
    
    $
    569,542
    
    
    $
    568,319LIABILITIESInterest-bearing deposits
    
    $
    396,391
    
    
    $
    381,849Noninterest-bearing deposits
    
    
    50,857
    
    
    
    52,460Total deposits
    
    
    447,248
    
    
    
    434,309Short-term borrowings
    
    
    41,939
    
    
    
    55,462Long-term borrowings
    
    
    9,131
    
    
    
    9,133Junior subordinate debentures
    
    
    4,640
    
    
    
    4,640Accrued interest payable
    
    
    981
    
    
    
    1,075Other liabilities
    
    
    3,711
    
    
    
    2,925TOTAL LIABILITIES
    
    
    507,650
    
    
    
    507,544STOCKHOLDERS EQUITYCommon stock, par value $1.25 per share; authorized
5,000,000 shares; issued and outstanding 2,257,946 shares
in 2009 and 2,253,080 shares in 2008
    
    
    2,822
    
    
    
    2,816Surplus
    
    
    27,256
    
    
    
    27,173Retained earnings
    
    
    30,167
    
    
    
    29,164Accumulated other comprehensive income
    
    
    1,647
    
    
    
    1,622TOTAL STOCKHOLDERS EQUITY
    
    
    61,892
    
    
    
    60,775TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    569,542
    
    
    $
    568,319
  3




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##### 



CCFNB Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
 For the Three Months Ended March 31,(In Thousands, Except Per Share Data)
    
    2009
    
    
    2008INTEREST AND DIVIDEND INCOMEInterest and fees on loans:Taxable
    
    $
    4,733
    
    
    $
    2,583Tax-exempt
    
    
    203
    
    
    
    144Interest and dividends on investment securities:Taxable
    
    
    2,212
    
    
    
    608Tax-exempt
    
    
    87
    
    
    
    45Dividend and other interest income
    
    
    26
    
    
    
    25Federal funds sold
    
    
    5
    
    
    
    64Deposits in other banks
    
    
    
    
    
    
    13TOTAL INTEREST AND DIVIDEND INCOME
    
    
    7,266
    
    
    
    3,482INTEREST EXPENSEDeposits
    
    
    2,013
    
    
    
    1,036Short-term borrowings
    
    
    81
    
    
    
    228Long-term borrowings
    
    
    137
    
    
    
    154Junior subordinate debentures
    
    
    42
    
    
    
    TOTAL INTEREST EXPENSE
    
    
    2,273
    
    
    
    1,418NET INTEREST INCOME
    
    
    4,993
    
    
    
    2,064PROVISION FOR LOAN LOSSES
    
    
    60
    
    
    
    NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
    
    
    4,933
    
    
    
    2,064NON-INTEREST INCOMEService charges and fees
    
    
    398
    
    
    
    239Gain on sale of loans
    
    
    96
    
    
    
    47Earnings on bank-owned life insurance
    
    
    103
    
    
    
    65Brokerage
    
    
    56
    
    
    
    38Trust
    
    
    152
    
    
    
    38Other
    
    
    361
    
    
    
    73TOTAL NON-INTEREST INCOME
    
    
    1,166
    
    
    
    500NON-INTEREST EXPENSESalaries
    
    
    1,601
    
    
    
    703Employee benefits
    
    
    434
    
    
    
    245Occupancy
    
    
    307
    
    
    
    138Furniture and equipment
    
    
    323
    
    
    
    115State shares tax
    
    
    143
    
    
    
    85Professional fees
    
    
    167
    
    
    
    66Directors fees
    
    
    71
    
    
    
    46Other
    
    
    922
    
    
    
    301TOTAL NON-INTEREST EXPENSE
    
    
    3,968
    
    
    
    1,699INCOME BEFORE INCOME TAX PROVISION
    
    
    2,131
    
    
    
    865INCOME TAX PROVISION
    
    
    588
    
    
    
    214NET INCOME
    
    $
    1,543
    
    
    $
    651EARNINGS PER SHARE
    
    $
    0.69
    
    
    $
    0.53CASH DIVIDENDS PER SHARE
    
    $
    0.24
    
    
    $
    0.21WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    2,254,044
    
    
    
    1,227,035
  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
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    EquityBalance, December 31, 2007
    
    
    1,226,536
    
    
    $
    1,533
    
    
    $
    2,271
    
    
    $
    27,679
    
    
    $
    144
    
    
    $
    
    
    
    $
    31,627Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    
    
    
    
    
    
    
    
    651Change in net unrealized gain on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    355Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,006Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    2,828
    
    
    
    3
    
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Purchase of treasury stock (2,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    (52
    )Retirement of treasury stock
    
    
    (2,000
    )
    
    
    (3
    )
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    Cash dividends, ($0.21 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (258
    )
    
    
    
    
    
    
    
    
    
    
    (258
    )Balance, March 31, 2008
    
    
    1,227,364
    
    
    $
    1,533
    
    
    $
    2,291
    
    
    $
    28,072
    
    
    $
    499
    
    
    $
    
    
    
    $
    32,395Balance, December 31, 2008
    
    
    2,253,080
    
    
    $
    2,816
    
    
    $
    27,173
    
    
    $
    29,164
    
    
    $
    1,622
    
    
    $
    
    
    
    $
    60,775Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,543
    
    
    
    
    
    
    
    
    
    
    
    1,543Change in net unrealized gain on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    25Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,568Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    4,866
    
    
    
    6
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Cash dividends, ($0.24 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (540
    )
    
    
    
    
    
    
    
    
    
    
    (540
    )Balance, March 31, 2009
    
    
    2,257,946
    
    
    $
    2,822
    
    
    $
    27,256
    
    
    $
    30,167
    
    
    $
    1,647
    
    
    $
    
    
    
    $
    61,892
  5




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##### 



CCFNB Bancorp, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 For The Three Months Ended March 31,(In Thousands)
    
    2009
    
    
    2008OPERATING ACTIVITIESNet Income
    
    $
    1,543
    
    
    $
    651Adjustments to reconcile net income to net cash
provided by operating activities:Provision for loan losses
    
    
    60
    
    
    
    Depreciation and amortization of premises and equipment
    
    
    259
    
    
    
    94Amortization and accretion on investment securities
    
    
    22
    
    
    
    (2
    )Deferred income taxes (provision) benefit
    
    
    133
    
    
    
    (34
    )Gain on sale of loans
    
    
    (96
    )
    
    
    (47
    )Proceeds from sale of mortgage loans
    
    
    5,183
    
    
    
    2,579Originations of mortgage loans held for resale
    
    
    (5,124
    )
    
    
    (2,381
    )Amortization of intangibles and invesment in limited partnerships
    
    
    207
    
    
    
    Decrease (increase) in accrued interest receivable
    
    
    132
    
    
    
    (113
    )Increases in cash surrender value of bank-owned life insurance
    
    
    (122
    )
    
    
    (70
    )Decrease in accrued interest payable
    
    
    (94
    )
    
    
    (189
    )Other, net
    
    
    147
    
    
    
    (274
    )Net cash provided by operating activities
    
    
    2,250
    
    
    
    214INVESTING ACTIVITIESInvestment securities available for sale:Purchases
    
    
    (30,806
    )
    
    
    (14,942
    )Proceeds from sales, maturities and redemptions
    
    
    31,171
    
    
    
    13,789Proceeds from redemption of regulatory stock
    
    
    
    
    
    
    120Purchase of regulatory stock
    
    
    (817
    )
    
    
    Net (increase) decrease in loans
    
    
    (5,534
    )
    
    
    1,763Proceeds from sale of premises and equipment
    
    
    916
    
    
    
    Proceeds from sale of other real estate owned
    
    
    220
    
    
    
    Acquisition of premises and equipment
    
    
    (392
    )
    
    
    (1
    )Net cash (used for) provided by investing activities
    
    
    (5,242
    )
    
    
    729FINANCING ACTIVITIESNet increase in deposits
    
    
    12,939
    
    
    
    3,405Net decrease in short-term borrowings
    
    
    (13,523
    )
    
    
    (28
    )Repayment of long-term borrowings
    
    
    (2
    )
    
    
    (2,001
    )Acquisition of treasury stock
    
    
    
    
    
    
    (52
    )Proceeds from issuance of common stock
    
    
    87
    
    
    
    70Cash dividends paid
    
    
    (540
    )
    
    
    (258
    )Net cash (used for) provided by financing activities
    
    
    (1,039
    )
    
    
    1,136NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (4,031
    )
    
    
    2,079CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    15,485
    
    
    
    13,401CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    11,454
    
    
    $
    15,480SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    2,367
    
    
    $
    1,424Income taxes paid
    
    
    103
    
    
    
    402Loans transferred to other real estate owned
    
    
    524
    
    
    
    
  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
    
    $
    475,0002010
    
    
    576,0002011
    
    
    509,0002012
    
    
    442,0002013
    
    
    374,000Thereafter
    
    
    867,000Total
    
    $
    3,243,000
 OTHER REAL ESTATE OWNED
  BANK OWNED LIFE INSURANCE
  INVESTMENTS IN LIMITED PARTNERSHIPS
 Accounting for Tax Benefits Resulting from Investments in Affordable Housing Projects
 INVESTMENT IN INSURANCE AGENCY
  INCOME TAXES
  9




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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 Accounting for Costs Associated with Exit or Disposal Activities
 10




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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
  The Fair Value Option for Financial Assets
and Liabilities
 11




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##### 



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
    
    
    60
    
    
    
    Allowance acquired
    
    
    
    
    
    
    Loans charged off
    
    
    (77
    )
    
    
    (11
    )Recoveries
    
    
    12
    
    
    
    12Balance, March 31,
    
    $
    3,753
    
    
    $
    1,438
  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




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##### 



(In Thousands)
    
    2009
    
    2008Financial instruments whose contract amounts repsresent credit risk:Commitments to extend credit
    
    $
    72,831
    
    
    $
    68,412Standby letters of credit
    
    
    3,197
    
    
    
    3,064Dealer floor plans
    
    
    1,785
    
    
    
    1,129Loans held for sale
    
    
    109
    
    
    
    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.
  March 31, 2009(In Thousands)
    
    Level I
    
    Level II
    
    Level III
    
    TotalAssets:Investment Securities, available-for-sale
    
    $
    1,617
    
    
    $
    195,430
    
    
    $ 
    
    $
    197,047
 15




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##### 



(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAvailable for sale securitiesObligation of US Government AgenciesMortgage-backed
    
    $
    
    
    
    $
    129,123
    
    
    $
    
    
    
    $
    129,123Other
    
    
    
    
    
    
    52,923
    
    
    
    
    
    
    
    52,923Obligations of state and political subdivisions
    
    
    
    
    
    
    10,400
    
    
    
    
    
    
    
    10,400Equity securities
    
    
    1,617
    
    
    
    
    
    
    
    
    
    
    
    1,617Restricted equity securities
    
    
    
    
    
    
    2,984
    
    
    
    
    
    
    
    2,984$
    1,617
    
    
    $
    195,430
    
    
    $
    
    
    
    $
    197,047
  NOTE 9  MANAGEMENTS ASSERTIONS AND COMMENTS REQUIRED TO BE PROVIDED WITH FORM 10Q
FILING
   16




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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 17




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##### 



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 businesses 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 businesses 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.
    
    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.
 18




---



##### 




    
    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
THREE MONTHS ENDED MARCH 31,
 2009
    
    
    2008(In Thousands)
    
    Average Balance
    
    
    Interest
    
    
    Average Rate
    
    
    Average Balance
    
    
    Interest
    
    
    Average Rate(1)
    
    
    
    
    
    
    
    
    
    
    (1)ASSETS:Tax-exempt loans
    
    $
    19,891
    
    
    $
    308
    
    
    
    6.28
    %
    
    $
    12,852
    
    
    $
    218
    
    
    
    6.88
    %All other loans
    
    
    303,855
    
    
    
    4,733
    
    
    
    6.32
    %
    
    
    147,855
    
    
    
    2,583
    
    
    
    7.08
    %Total loans (2)(3)(4)
    
    
    323,746
    
    
    
    5,041
    
    
    
    6.31
    %
    
    
    160,707
    
    
    
    2,801
    
    
    
    7.07
    %Taxable securities
    
    
    180,892
    
    
    
    2,238
    
    
    
    4.95
    %
    
    
    55,719
    
    
    
    633
    
    
    
    4.54
    %Tax-exempt securitites (3)
    
    
    9,351
    
    
    
    132
    
    
    
    5.65
    %
    
    
    3,907
    
    
    
    69
    
    
    
    7.06
    %Total securities
    
    
    190,243
    
    
    
    2,370
    
    
    
    4.98
    %
    
    
    59,626
    
    
    
    702
    
    
    
    4.71
    %Federal funds sold
    
    
    10,722
    
    
    
    5
    
    
    
    0.19
    %
    
    
    8,201
    
    
    
    64
    
    
    
    3.16
    %Interest-bearing deposits
    
    
    573
    
    
    
    1
    
    
    
    0.71
    %
    
    
    1,730
    
    
    
    13
    
    
    
    3.05
    %Total interest-earning assets
    
    
    525,284
    
    
    
    7,417
    
    
    
    5.70
    %
    
    
    230,264
    
    
    
    3,580
    
    
    
    6.29
    %Other assets
    
    
    44,292
    
    
    
    
    
    
    
    
    
    
    
    18,909TOTAL ASSETS
    
    $
    569,576
    
    
    
    
    
    
    
    
    
    
    $
    249,173LIABILITIES:Savings
    
    $
    55,231
    
    
    
    54
    
    
    
    0.40
    %
    
    $
    24,094
    
    
    
    24
    
    
    
    0.40
    %Now deposits
    
    
    69,265
    
    
    
    26
    
    
    
    0.15
    %
    
    
    28,054
    
    
    
    21
    
    
    
    0.30
    %Money market deposits
    
    
    42,289
    
    
    
    127
    
    
    
    1.22
    %
    
    
    7,375
    
    
    
    12
    
    
    
    0.66
    %Time deposits
    
    
    227,652
    
    
    
    1,806
    
    
    
    3.22
    %
    
    
    92,840
    
    
    
    979
    
    
    
    4.28
    %Total deposits
    
    
    394,437
    
    
    
    2,013
    
    
    
    2.07
    %
    
    
    152,363
    
    
    
    1,036
    
    
    
    2.76
    %Short-term borrowings
    
    
    46,623
    
    
    
    81
    
    
    
    0.70
    %
    
    
    28,705
    
    
    
    228
    
    
    
    3.22
    %Long-term borrowings
    
    
    9,132
    
    
    
    137
    
    
    
    6.08
    %
    
    
    10,257
    
    
    
    154
    
    
    
    6.09
    %Junior subordinate debentures
    
    
    4,640
    
    
    
    42
    
    
    
    3.67
    %
    
    
    
    
    
    
    
    
    
    
    Total borrowings
    
    
    60,395
    
    
    
    260
    
    
    
    1.75
    %
    
    
    38,962
    
    
    
    382
    
    
    
    3.98
    %Total interest-bearing liabilities
    
    
    454,832
    
    
    
    2,273
    
    
    
    2.03
    %
    
    
    191,325
    
    
    
    1,418
    
    
    
    3.01
    %Demand deposits
    
    
    49,751
    
    
    
    
    
    
    
    
    
    
    
    18,477Other liabilities
    
    
    3,385
    
    
    
    
    
    
    
    
    
    
    
    7,905Stockholders equity
    
    
    61,608
    
    
    
    
    
    
    
    
    
    
    
    31,466TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    569,576
    
    
    
    
    
    
    
    
    
    
    $
    249,173Interest rate spread (6)
    
    
    
    
    
    
    
    
    
    
    3.67
    %
    
    
    
    
    
    
    
    
    
    
    3.28
    %Net interest income/margin (5)
    
    
    
    
    
    $
    5,144
    
    
    
    3.95
    %
    
    
    
    
    
    $
    2,162
    
    
    
    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 Three Months Ended March 31,
 (In Thousands)
    
    2009
    
    
    2008Total interest income
    
    $
    7,266
    
    
    $
    3,482Total interest expense
    
    
    2,273
    
    
    
    1,418Net interest income
    
    
    4,993
    
    
    
    2,064Tax equivalent adjustment
    
    
    151
    
    
    
    98Net interest income
(fully taxable equivalent)
    
    $
    5,144
    
    
    $
    2,162
 Rate/Volume Analysis
  Three Months Ended March 31,2009 vs 2008Increase (Decrease)Due to(In Thousands)
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Loans, tax-exempt
    
    $
    109
    
    
    $
    (19
    )
    
    $
    90Loans
    
    
    2,430
    
    
    
    (280
    )
    
    
    2,150Taxable investment securities
    
    
    1,549
    
    
    
    56
    
    
    
    1,605Tax-exempt investment securities
    
    
    77
    
    
    
    (14
    )
    
    
    63Federal funds sold
    
    
    1
    
    
    
    (60
    )
    
    
    (59
    )Interest bearing deposits
    
    
    (2
    )
    
    
    (10
    )
    
    
    (12
    )Total interest-earning assets
    
    
    4,164
    
    
    
    (327
    )
    
    
    3,837Interest expense:Savings
    
    
    30
    
    
    
    
    
    
    
    30NOW deposits
    
    
    15
    
    
    
    (10
    )
    
    
    5Money market deposits
    
    
    105
    
    
    
    10
    
    
    
    115Time deposits
    
    
    1,069
    
    
    
    (242
    )
    
    
    827Short-term borrowings
    
    
    31
    
    
    
    (178
    )
    
    
    (147
    )Long-term borrowings, FHLB
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )Junior subordinate debentures
    
    
    42
    
    
    
    
    
    
    
    42Total interest-bearing liabilities
    
    
    1,275
    
    
    
    (420
    )
    
    
    855Change in net interest income
    
    $
    2,889
    
    
    $
    93
    
    
    $
    2,982
 21




---



##### 



PROVISION FOR LOAN LOSSES
 2009 vs. 2008
    NON-INTEREST INCOME
 2009 vs. 2008
  For The Three Months EndedMarch 31, 2009
    
    March 31, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Service charges and fees
    
    $
    398
    
    
    
    34.1
    %
    
    $
    239
    
    
    
    47.8
    %
    
    $
    159
    
    
    
    66.5
    %Gain on sale of loans
    
    
    96
    
    
    
    8.2
    
    
    
    47
    
    
    
    9.4
    
    
    
    49
    
    
    
    104.3Earnings on bank-owned life insurance
    
    
    103
    
    
    
    8.8
    
    
    
    65
    
    
    
    13.0
    
    
    
    38
    
    
    
    58.5Brokerage and insurance
    
    
    56
    
    
    
    4.8
    
    
    
    38
    
    
    
    7.6
    
    
    
    18
    
    
    
    47.4Trust
    
    
    152
    
    
    
    13.0
    
    
    
    38
    
    
    
    7.6
    
    
    
    114
    
    
    
    300.0Other
    
    
    361
    
    
    
    31.1
    
    
    
    73
    
    
    
    14.6
    
    
    
    288
    
    
    
    394.5Total non-interest income
    
    $
    1,166
    
    
    
    100.0
    %
    
    $
    500
    
    
    
    100.0
    %
    
    $
    666
    
    
    
    133.2
    %
 NON-INTEREST EXPENSE
 2009 vs. 2008
  22




---



##### 



For The Three Months EndedMarch 31, 2009
    
    March 31, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Salaries
    
    $
    1,601
    
    
    
    40.3
    %
    
    $
    703
    
    
    
    41.4
    %
    
    $
    898
    
    
    
    127.7
    %Employee benefits
    
    
    434
    
    
    
    10.9
    
    
    
    245
    
    
    
    14.4
    
    
    
    189
    
    
    
    77.1Occupancy
    
    
    307
    
    
    
    7.7
    
    
    
    138
    
    
    
    8.1
    
    
    
    169
    
    
    
    122.5Furniture and equipment
    
    
    323
    
    
    
    8.1
    
    
    
    115
    
    
    
    6.8
    
    
    
    208
    
    
    
    180.9State shares tax
    
    
    143
    
    
    
    3.6
    
    
    
    85
    
    
    
    5.0
    
    
    
    58
    
    
    
    68.2Professional fees
    
    
    167
    
    
    
    4.2
    
    
    
    66
    
    
    
    3.9
    
    
    
    101
    
    
    
    153.0Directors fees
    
    
    71
    
    
    
    1.8
    
    
    
    46
    
    
    
    2.7
    
    
    
    25
    
    
    
    54.3Other
    
    
    922
    
    
    
    23.4
    
    
    
    301
    
    
    
    17.7
    
    
    
    621
    
    
    
    206.3Total non-interest expense
    
    $
    3,968
    
    
    
    100.0
    %
    
    $
    1,699
    
    
    
    100.0
    %
    
    $
    2,269
    
    
    
    133.5
    %
 FINANCIAL CONDITION
    INVESTMENTS
  March 31, 2009EstimatedAmortized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    126,521
    
    
    $
    129,123Other
    
    
    52,112
    
    
    
    52,923Obligations of state and political subdivisions
    
    
    10,313
    
    
    
    10,400Total debt securities
    
    
    188,946
    
    
    
    192,446Marketable equity securities
    
    
    2,623
    
    
    
    1,617Restricted equity securities
    
    
    2,984
    
    
    
    2,984Total investment securities AFS
    
    $
    194,553
    
    
    $
    197,047
 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)
    
    3/31/2009
    
    
    12/31/2008
    
    
    Amount
    
    
    %Commercial, financial and agricultural
    
    $
    25,990
    
    
    $
    27,165
    
    
    $
    (1,175
    )
    
    
    (4.3)
    %Tax-exempt
    
    
    19,589
    
    
    
    16,762
    
    
    
    2,827
    
    
    
    16.9Real estate
    
    
    263,998
    
    
    
    262,539
    
    
    
    1,459
    
    
    
    0.6Real estate construction
    
    
    7,507
    
    
    
    5,307
    
    
    
    2,200
    
    
    
    41.5Installment loans to individuals
    
    
    7,899
    
    
    
    8,202
    
    
    
    (303
    )
    
    
    (3.7
    )Add (deduct): Unearned discount
    
    
    (21
    )
    
    
    (24
    )
    
    
    3
    
    
    
    (12.5
    )Unamortized loan costs, net of fees
    
    
    88
    
    
    
    117
    
    
    
    (29
    )
    
    
    (24.8
    )Gross loans
    
    $
    325,050
    
    
    $
    320,068
    
    
    $
    4,982
    
    
    
    1.6
    %
  3/31/2009
    
    
    12/31/2008Commercial, financial and agricultural
    
    
    8.0
    %
    
    
    8.5
    %Tax-exempt
    
    
    6.0
    
    
    
    5.2Real estate
    
    
    81.2
    
    
    
    82.1Real estate construction
    
    
    2.3
    
    
    
    1.7Installment loans to individuals
    
    
    2.4
    
    
    
    2.5Gross loans
    
    
    100.0
    %
    
    
    100.0
    %
 ALLOWANCE FOR LOAN LOSSES
  24




---



##### 



For the Three Months Ended March 31,(In Thousands)
    
    2009
    
    
    2008Average Loans Outstanding during
the period
    
    $
    323,746
    
    
    $
    160,707Balance, beginning of year
    
    $
    3,758
    
    
    $
    1,437Provision charged to operations
    
    
    60
    
    
    
    Allowance acquired
    
    
    
    
    
    
    Loans charged off:Commercial, financial, and agricultural
    
    
    (67
    )
    
    
    Real estate mortgages
    
    
    
    
    
    
    (1
    )Installment loans to indiviuals
    
    
    (10
    )
    
    
    (10
    )Recoveries:Commercial, financial, and agricultural
    
    
    
    
    
    
    Real estate mortgages
    
    
    7
    
    
    
    Installment loans to indiviuals
    
    
    5
    
    
    
    12Balance, March 31,
    
    $
    3,753
    
    
    $
    1,438Net charge-offs to Average loans
outstanding during the period
    
    
    -0.02
    %
    
    
    0.00
    %
 NON-PERFORMING LOANS
   (In Thousands)
    
    March 31, 2009
    

    December 31, 2008Commercial, financial and agriculturalDays 30-89
    
    $
    769
    
    
    $
    61Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    529
    
    
    
    581Real estateDays 30-89
    
    
    1,789
    
    
    
    1,528Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    3,860
    
    
    
    3,780Installment loans to individualsDays 30-89
    
    
    17
    
    
    
    9Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    74
    
    
    
    92$
    7,038
    
    
    $
    6,051Days 30-89
    
    $
    2,575
    
    
    $
    1,598Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    4,463
    
    
    
    4,453$
    7,038
    
    
    $
    6,051Restructured loans still accruing
    
    $
    57
    
    
    $
    58Other real estate owned
    
    $
    670
    
    
    $
    373
 25




---



##### 



DEPOSITS
 .
  March 31, 2009
    
    December 31, 2008Average
    
    
    
    
    
    Average
    
    Change(In Thousands)
    
    Balance
    
    Rate
    
    Balance
    
    Rate
    
    Amount
    
    %Non-interest bearing
    
    $
    50,857
    
    
    
    
    %
    
    $
    52,460
    
    
    
    
    %
    
    $
    (1,603
    )
    
    
    (3.1)
    %Savings
    
    
    56,673
    
    
    
    0.40
    
    
    
    54,717
    
    
    
    0.40
    
    
    
    1,956
    
    
    
    3.6Now deposits
    
    
    66,286
    
    
    
    0.15
    
    
    
    63,776
    
    
    
    0.27
    
    
    
    2,510
    
    
    
    3.9Money market deposits
    
    
    47,090
    
    
    
    1.22
    
    
    
    37,120
    
    
    
    1.66
    
    
    
    9,970
    
    
    
    26.9Time deposits
    
    
    226,342
    
    
    
    3.22
    
    
    
    226,236
    
    
    
    3.53
    
    
    
    106
    
    
    
    Total deposits
    
    $
    447,248
    
    
    
    1.83
    %
    
    $
    434,309
    
    
    
    2.07
    %
    
    $
    12,939
    
    
    
    3.0
    %
 BORROWED FUNDS
  (In Thousands)
    
    March 31, 2009
    
    December 31, 2008
    
    ChangeAmount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Short-term borrowings:FHLB repurchase agreements
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %Short-term borrowings, FHLB
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Securities sold under agreement to repurchase
    
    
    41,939
    
    
    
    75.3
    
    
    
    55,462
    
    
    
    80.1
    
    
    
    (13,523
    )
    
    
    (24.4
    )Total short-term borrowings
    
    
    41,939
    
    
    
    75.3
    %
    
    
    55,462
    
    
    
    80.1
    %
    
    
    (13,523
    )
    
    
    (24.4
    )Junior subordinate debentures
    
    
    4,640
    
    
    
    8.3
    
    
    
    4,640
    
    
    
    6.7
    
    
    
    
    
    
    
    Long-term borrowings, FHLB
    
    
    9,131
    
    
    
    16.4
    
    
    
    9,133
    
    
    
    13.2
    
    
    
    (2
    )
    
    
    (0.0
    )Total borrowed funds
    
    $
    55,710
    
    
    
    100.0
    %
    
    $
    69,235
    
    
    
    100.0
    %
    
    $
    (13,525
    )
    
    
    (19.5)
    %
 LIQUIDITY
   CAPITAL RESOURCES
    26




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##### 



2009
    
    2008(In Thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal Capital(to Risk-weighted Assets)Actual
    
    $
    56,463
    
    
    
    17.4
    %
    
    $
    55,851
    
    
    
    16.5
    %For Capital Adequacy Purposes
    
    
    26,024
    
    
    
    8.0
    
    
    
    27,112
    
    
    
    8.0To Be Well-Capitalized
    
    
    32,529
    
    
    
    10.0
    
    
    
    33,890
    
    
    
    10.0Tier I Capital(to Risk-weighted Assets)Actual
    
    $
    52,700
    
    
    
    16.2
    %
    
    $
    52,083
    
    
    
    15.4
    %For Capital Adequacy Purposes
    
    
    13,012
    
    
    
    4.0
    
    
    
    13,556
    
    
    
    4.0To Be Well-Capitalized
    
    
    19,518
    
    
    
    6.0
    
    
    
    20,334
    
    
    
    6.0Tier I Capital(to Average Assets)Actual
    
    $
    52,700
    
    
    
    9.4
    %
    
    $
    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




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##### 



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




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##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 CCFNB BANCORP, INC.
ISSUER PURCHASES OF EQUITY SECURITIES
 NUMBER OF SHARES
    
    NUMBER OF SHARESPURCHASED AS PART OF
    
    THAT MAY YET BENUMBER OF SHARES
    
    
    
    
    
    PUBLICLY ANNOUNCED
    
    PURCHASED UNDER THEPERIOD
    
    PURCHASED
    
    PRICE PAID PER SHARE
    
    PROGRAM (1)
    
    PROGRAM01/01/09 - 01/31/09
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    002/01/09 - 02/28/09
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    003/01/09 - 03/31/09
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    0TOTAL
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    0
 
 (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
   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




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##### 



SIGNATURES
  CCFNB BANCORP, INC.
(Registrant)By
    /s/ Lance O. DiehlLance O. DiehlPresident and CEODate: May 12, 2009  By
    /s/ Jeffrey T. ArnoldJeffrey T. Arnold, CPA, CIAChief Financial OfficerDate: May 12, 2009 30