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 September 30, 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
    
    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
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  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 September 30, 2009 (unaudited)
and December 31, 2008
    
    
    3Consolidated Statements of Income (unaudited) for the three and
nine months ended September 30, 2009 and 2008
    
    
    4Consolidated Statement of Changes in Stockholders Equity
(unaudited) for the nine months ended September 30, 2009 and 2008
    
    
    5Consolidated Statements of Cash Flows (unaudited) for the nine
Months ended September 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)September 30,
    
    
    December 31,(In Thousands)
    
    2009
    
    
    2008ASSETSCash and due from banks
    
    $
    6,817
    
    
    $
    10,173Interest-bearing deposits in other banks
    
    
    92
    
    
    
    149Federal funds sold
    
    
    742
    
    
    
    5,163Total cash and cash equivalents
    
    
    7,651
    
    
    
    15,485Investment securities, available for sale, at fair value
    
    
    218,583
    
    
    
    196,580Loans,net of unearned income
    
    
    331,099
    
    
    
    320,068Less: Allowance for loan losses
    
    
    3,934
    
    
    
    3,758Loans, net
    
    
    327,165
    
    
    
    316,310Premises and equipment, net
    
    
    12,063
    
    
    
    12,609Accrued interest receivable
    
    
    2,089
    
    
    
    2,388Cash surrender value of bank-owned life insurance
    
    
    11,319
    
    
    
    10,943Investment in limited partnerships
    
    
    727
    
    
    
    845Intangible Assets:Core deposit
    
    
    2,919
    
    
    
    3,411Goodwill
    
    
    7,937
    
    
    
    7,937Other assets
    
    
    2,445
    
    
    
    1,811TOTAL ASSETS
    
    $
    592,898
    
    
    $
    568,319LIABILITIESInterest-bearing deposits
    
    $
    393,096
    
    
    $
    381,849Non interest-bearing deposits
    
    
    49,562
    
    
    
    52,460Total deposits
    
    
    442,658
    
    
    
    434,309Short-term borrowings
    
    
    61,995
    
    
    
    55,462Long-term borrowings
    
    
    15,129
    
    
    
    9,133Junior subordinate debentures
    
    
    4,640
    
    
    
    4,640Accrued interest payable
    
    
    907
    
    
    
    1,075Other liabilities
    
    
    2,771
    
    
    
    2,925TOTAL LIABILITIES
    
    
    528,100
    
    
    
    507,544STOCKHOLDERS EQUITYCommon stock, par value $1.25 per share; authorized
5,000,000 shares; issued 2,266,980 shares
in 2009 and 2,253,080 shares in 2008
    
    
    2,834
    
    
    
    2,816Surplus
    
    
    27,443
    
    
    
    27,173Retained earnings
    
    
    32,030
    
    
    
    29,164Accumulated other comprehensive income
    
    
    2,764
    
    
    
    1,622Treasury stock , at cost; 12,500 shares in 2009 and 0
shares in 2008
    
    
    (273
    )
    
    
    TOTAL STOCKHOLDERS EQUITY
    
    
    64,798
    
    
    
    60,775TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    592,898
    
    
    $
    568,319
  3




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##### 



CCFNB Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
 For the Three Months Ended September 30,
    
    
    For the Nine Months Ended September 30,(In Thousands, Except Per Share Data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008INTEREST AND DIVIDEND INCOMEInterest and fees on loans:Taxable
    
    $
    4,682
    
    
    $
    4,535
    
    
    $
    14,086
    
    
    $
    9,614Tax-exempt
    
    
    215
    
    
    
    197
    
    
    
    622
    
    
    
    495Interest and dividends on investment securities:Taxable
    
    
    1,968
    
    
    
    1,967
    
    
    
    6,195
    
    
    
    3,220Tax-exempt
    
    
    123
    
    
    
    80
    
    
    
    315
    
    
    
    164Dividend and other interest income
    
    
    11
    
    
    
    39
    
    
    
    48
    
    
    
    88Federal funds sold
    
    
    5
    
    
    
    45
    
    
    
    11
    
    
    
    153Deposits in other banks
    
    
    
    
    
    
    3
    
    
    
    1
    
    
    
    23TOTAL INTEREST AND DIVIDEND INCOME
    
    
    7,004
    
    
    
    6,866
    
    
    
    21,278
    
    
    
    13,757INTEREST EXPENSEDeposits
    
    
    1,842
    
    
    
    1,979
    
    
    
    5,775
    
    
    
    4,005Short-term borrowings
    
    
    95
    
    
    
    222
    
    
    
    254
    
    
    
    580Long-term borrowings
    
    
    175
    
    
    
    140
    
    
    
    462
    
    
    
    432Junior subordinate debentures
    
    
    28
    
    
    
    44
    
    
    
    104
    
    
    
    44TOTAL INTEREST EXPENSE
    
    
    2,140
    
    
    
    2,385
    
    
    
    6,595
    
    
    
    5,061NET INTEREST INCOME
    
    
    4,864
    
    
    
    4,481
    
    
    
    14,683
    
    
    
    8,696PROVISION FOR LOAN LOSSES
    
    
    310
    
    
    
    
    
    
    
    530
    
    
    
    NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    4,554
    
    
    
    4,481
    
    
    
    14,153
    
    
    
    8,696NON-INTEREST INCOMEService charges and fees
    
    
    427
    
    
    
    317
    
    
    
    1,251
    
    
    
    797Gain on sale of loans
    
    
    201
    
    
    
    74
    
    
    
    547
    
    
    
    194Earnings on bank-owned life insurance
    
    
    107
    
    
    
    111
    
    
    
    324
    
    
    
    244Brokerage
    
    
    83
    
    
    
    82
    
    
    
    190
    
    
    
    174Trust
    
    
    150
    
    
    
    143
    
    
    
    462
    
    
    
    217Investment security losses
    
    
    (10
    )
    
    
    (283
    )
    
    
    (71
    )
    
    
    (283
    )Other
    
    
    328
    
    
    
    427
    
    
    
    1,110
    
    
    
    565TOTAL NON-INTEREST INCOME
    
    
    1,286
    
    
    
    871
    
    
    
    3,813
    
    
    
    1,908NON-INTEREST EXPENSESalaries
    
    
    1,632
    
    
    
    1,637
    
    
    
    4,776
    
    
    
    3,056Employee benefits
    
    
    398
    
    
    
    1,125
    
    
    
    1,232
    
    
    
    1,595Occupancy
    
    
    249
    
    
    
    240
    
    
    
    810
    
    
    
    496Furniture and equipment
    
    
    319
    
    
    
    361
    
    
    
    944
    
    
    
    583State shares tax
    
    
    128
    
    
    
    114
    
    
    
    400
    
    
    
    277Professional fees
    
    
    172
    
    
    
    250
    
    
    
    447
    
    
    
    382Directors fees
    
    
    74
    
    
    
    55
    
    
    
    215
    
    
    
    152FDIC assessments
    
    
    105
    
    
    
    19
    
    
    
    543
    
    
    
    29Other
    
    
    839
    
    
    
    496
    
    
    
    2,621
    
    
    
    1,111TOTAL NON-INTEREST EXPENSE
    
    
    3,916
    
    
    
    4,297
    
    
    
    11,988
    
    
    
    7,681INCOME BEFORE INCOME TAX PROVISION
    
    
    1,924
    
    
    
    1,055
    
    
    
    5,978
    
    
    
    2,923INCOME TAX PROVISION
    
    
    463
    
    
    
    183
    
    
    
    1,423
    
    
    
    653NET INCOME
    
    $
    1,461
    
    
    $
    872
    
    
    $
    4,555
    
    
    $
    2,270EARNINGS PER SHARE
    
    $
    0.65
    
    
    $
    0.43
    
    
    $
    2.02
    
    
    $
    1.51CASH DIVIDENDS PER SHARE
    
    $
    0.27
    
    
    $
    0.24
    
    
    $
    0.75
    
    
    $
    0.66WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    2,252,039
    
    
    
    2,056,686
    
    
    
    2,253,872
    
    
    
    1,503,955
  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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,270
    
    
    
    
    
    
    
    
    
    
    
    2,270Change in net unrealized gain (loss) on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,268Par value of new shares issued to acquire
Columbia Financial
    
    
    1,030,286
    
    
    
    1,288
    
    
    
    25,026
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,314Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    8,188
    
    
    
    10
    
    
    
    181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Purchase of treasury stock (16,000 shares)
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (398
    )
    
    
    (398
    )Retirement of treasury stock
    
    
    (16,000
    )
    
    
    (20
    )
    
    
    (378
    )
    
    
    
    
    
    
    
    
    
    
    398
    
    
    
    Cash dividends, ($0.66 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,053
    )
    
    
    
    
    
    
    
    
    
    
    (1,053
    )Balance, September 30, 2008
    
    
    2,249,010
    
    
    $
    2,811
    
    
    $
    27,102
    
    
    $
    28,896
    
    
    $
    142
    
    
    $
    
    
    
    $
    58,951Balance, December 31, 2008
    
    
    2,253,080
    
    
    $
    2,816
    
    
    $
    27,173
    
    
    $
    29,164
    
    
    $
    1,622
    
    
    $
    
    
    
    $
    60,775Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,555
    
    
    
    
    
    
    
    
    
    
    
    4,555Change in net unrealized gain on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,142
    
    
    
    
    
    
    
    1,142Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,697Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    13,900
    
    
    
    18
    
    
    
    265
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    283Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Purchase of treasury stock (12,500 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (273
    )
    
    
    (273
    )Cash dividends, ($0.75 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,689
    )
    
    
    
    
    
    
    
    
    
    
    (1,689
    )Balance, September 30, 2009
    
    
    2,266,980
    
    
    $
    2,834
    
    
    $
    27,443
    
    
    $
    32,030
    
    
    $
    2,764
    
    
    $
    (273
    )
    
    $
    64,798
  5




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##### 



CCFNB Bancorp, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 For The Nine Months Ended September 30,(In Thousands)
    
    2009
    
    
    2008OPERATING ACTIVITIESNet Income
    
    $
    4,555
    
    
    $
    2,270Adjustments to reconcile net income to net cash
provided by operating activities:Provision for loan losses
    
    
    530
    
    
    
    Depreciation and amortization of premises and equipment
    
    
    766
    
    
    
    422Impairment loss on securities
    
    
    71
    
    
    
    283Amortization and accretion on investment securities
    
    
    404
    
    
    
    181Gain on sale of premises and equipment
    
    
    (185
    )
    
    
    Loss on sale of other real estate owned
    
    
    81
    
    
    
    Deferred income taxes benefit (provision)
    
    
    119
    
    
    
    (165
    )Gain on sale of loans
    
    
    (547
    )
    
    
    (194
    )Proceeds from sale of mortgage loans
    
    
    87,380
    
    
    
    11,194Originations of mortgage loans held for resale
    
    
    (87,633
    )
    
    
    (11,775
    )Amortization of intangibles and invesment in limited
partnerships
    
    
    610
    
    
    
    140Decrease in accrued interest receivable
    
    
    299
    
    
    
    (186
    )Increases in cash surrender value of bank-owned life insurance
    
    
    (376
    )
    
    
    (275
    )Decrease in accrued interest payable
    
    
    (168
    )
    
    
    (127
    )Other, net
    
    
    (1,482
    )
    
    
    (339
    )Net cash provided by operating activities
    
    
    4,424
    
    
    
    1,429INVESTING ACTIVITIESInvestment securities available for sale:Purchases
    
    
    (91,271
    )
    
    
    (48,283
    )Proceeds from sales, maturities and redemptions
    
    
    71,340
    
    
    
    34,380Proceeds from redemption of regulatory stock
    
    
    
    
    
    
    1,387Purchase of regulatory stock
    
    
    (817
    )
    
    
    (1,825
    )Net (increase) decrease in loans
    
    
    (11,017
    )
    
    
    (412
    )Acquisition of bank cash
    
    
    
    
    
    
    5,803Proceeds from sale of premises and equipment
    
    
    1,294
    
    
    
    Proceeds from sale of other real estate owned
    
    
    343
    
    
    
    Acquisition of premises and equipment
    
    
    (1,329
    )
    
    
    (515
    )Net cash used for investing activities
    
    
    (31,457
    )
    
    
    (9,465
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    8,349
    
    
    
    2,622Net decrease in short-term borrowings
    
    
    6,533
    
    
    
    7,444Proceeds from long-term borrowings
    
    
    6,000
    
    
    
    Repayment of long-term borrowings
    
    
    (4
    )
    
    
    (2,003
    )Acquisition of treasury stock
    
    
    (273
    )
    
    
    (398
    )Proceeds from issuance of common stock
    
    
    283
    
    
    
    191Cash dividends paid
    
    
    (1,689
    )
    
    
    (1,053
    )Net cash (used for) provided by financing activities
    
    
    19,199
    
    
    
    6,803NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (7,834
    )
    
    
    (1,233
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    15,485
    
    
    
    13,401CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    7,651
    
    
    $
    12,168SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    6,763
    
    
    $
    4,424Income taxes paid
    
    
    1,419
    
    
    
    735Loans transferred to other real estate owned
    
    
    432
    
    
    
    242
  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
    
    $
    151,0002010
    
    
    576,0002011
    
    
    509,0002012
    
    
    442,0002013
    
    
    374,000Thereafter
    
    
    867,000Total
    
    $
    2,919,000
 OTHER REAL ESTATE OWNED
  BANK OWNED LIFE INSURANCE
  INVESTMENTS IN LIMITED PARTNERSHIPS
  9




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##### 



INVESTMENT IN INSURANCE AGENCY
  INCOME TAXES
  PER SHARE DATA
  CASH FLOW INFORMATION
  TRUST ASSETS AND INCOME
  ACCUMULATED OTHER COMPREHENSIVE INCOME
  ADVERTISING COSTS
  SUBSEQUENT EVENTS
  RECENT ACCOUNTING PRONOUNCEMENTS
 FASB ASC 105-10   The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles
 10




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##### 



FASB ASC 805 Business Combinations
  FASB ASC 810-10 Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB 51
 FASB ASC 815-10 Disclosures about Derivative Instruments and Hedging Activities an amendment
of FASB Statement No. 133
 FASB ASC 855 Subsequent Events)
 FASB ASC 860 Accounting for Transfers of Financial Assets an amendment
of FASB Statement No. 140
 FASB ASC 810-10 Amendments to FASB Interpretation No. 46 (R
 FASB ASC 715-20-50 Employers Disclosures about Postretirement Benefit Plan Assets
 11




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##### 



FASB ASC 825-10-50  Interim
Disclosures about Fair Value of Financial Instruments
 FASB ASC 320-10 Recognition and Presentation of Other-Than-Temporary Impairments
 FASB ASC 820 , Determining Fair Value When the
Volume and Level of Activity for the Asset or iability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly
 SAB 111 Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities Recognition and Presentation of
Other-Than-Temporary Impairments
 SAB 112
 FASB ASC 323 Equity Method
Investment Accounting Considerations
 FASB ASC 350 Accounting for Defensive
Intangible Assets
 12




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##### 



FASB ASC 260-10 Determining Whether Instruments Granted in Share-Based
Payment Transactions are Participating Securities
 FASB ASC 820-10
 FASB ASC 820-10
 RECLASSIFICATIONS
  2. ALLOWANCE FOR LOAN LOSSES
  (In Thousands)
    
    2009
    
    
    2008Balance, beginning of year
    
    $
    3,758
    
    
    $
    1,437Provision charged to operations
    
    
    530
    
    
    
    Allowance acquired
    
    
    
    
    
    
    1,683Loans charged off
    
    
    (375
    )
    
    
    (94
    )Recoveries
    
    
    21
    
    
    
    29Balance, September 30,
    
    $
    3,934
    
    
    $
    3,055
  3. SHORT-TERM BORROWINGS
  13




---



##### 



4. LONG-TERM BORROWINGS
  5. DEFERRED COMPENSATION PLANS
   6. ACQUISITION
   (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
  14




---



##### 



(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
   (In Thousands)
    
    2009
    
    
    2008Financial instruments whose contract amounts represent credit risk:Commitments to extend credit
    
    $
    82,474
    
    
    $
    68,412Standby letters of credit
    
    
    2,938
    
    
    
    3,064Dealer floor plans
    
    
    1,389
    
    
    
    1,129Loans held for sale
    
    
    1,420
    
    
    
    72
   15




---



##### 



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.
  September 30, 2009(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets:Investment Securities, available-for-sale
    
    $
    1,903
    
    
    $
    216,680
    
    
    $
    
    
    
    $
    218,583
  (In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAvailable for sale securitiesObligation of US Government AgenciesMortgage-backed
    
    $
    
    
    
    $
    141,578
    
    
    $
    
    
    
    $
    141,578Other
    
    
    
    
    
    
    59,062
    
    
    
    
    
    
    
    59,062Obligations of state and political subdivisions
    
    
    
    
    
    
    13,056
    
    
    
    
    
    
    
    13,056Equity securities
    
    
    1,903
    
    
    
    
    
    
    
    
    
    
    
    1,903Restricted equity securities
    
    
    
    
    
    
    2,984
    
    
    
    
    
    
    
    2,984$
    1,903
    
    
    $
    216,680
    
    
    $
    
    
    
    $
    218,583
  16




---



##### 



NOTE 9  MANAGEMENTS ASSERTIONS AND COMMENTS REQUIRED TO BE PROVIDED WITH FORM 10Q FILING
   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      /s/ J. H. Williams & Co., LLPJ.H. Williams & Co., LLPKingston, PennsylvaniaNovember 10, 2009 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  NINE MONTHS ENDED SEPTEMBER 30,
 2009
    
    
    2008Average Balance
    
    
    Interest
    
    
    Average Rate
    
    
    Average Balance
    
    
    Interest
    
    
    Average Rate(In Thousands)
    
    (1)
    
    
    
    
    
    
    
    
    
    
    (1)ASSETS:Tax-exempt loans
    
    $
    19,684
    
    
    $
    834
    
    
    
    5.66
    %
    
    $
    14,994
    
    
    $
    750
    
    
    
    6.69
    %All other loans
    
    
    306,078
    
    
    
    14,086
    
    
    
    6.15
    %
    
    
    190,492
    
    
    
    9,614
    
    
    
    6.75
    %Total loans (2)(3)(4)
    
    
    325,762
    
    
    
    14,920
    
    
    
    6.12
    %
    
    
    205,486
    
    
    
    10,364
    
    
    
    6.74
    %Taxable securities
    
    
    184,914
    
    
    
    6,243
    
    
    
    4.50
    %
    
    
    93,239
    
    
    
    3,309
    
    
    
    4.73
    %Tax-exempt securitites (3)
    
    
    10,745
    
    
    
    422
    
    
    
    5.24
    %
    
    
    5,205
    
    
    
    248
    
    
    
    6.35
    %Total securities
    
    
    195,659
    
    
    
    6,665
    
    
    
    4.54
    %
    
    
    98,444
    
    
    
    3,557
    
    
    
    4.82
    %Federal funds sold
    
    
    9,883
    
    
    
    11
    
    
    
    0.15
    %
    
    
    
    
    
    
    
    
    
    
    0.00
    %Interest-bearing deposits
    
    
    551
    
    
    
    1
    
    
    
    0.24
    %
    
    
    9,870
    
    
    
    176
    
    
    
    2.38
    %Total interest-earning assets
    
    
    531,855
    
    
    
    21,597
    
    
    
    5.42
    %
    
    
    313,800
    
    
    
    14,097
    
    
    
    6.00
    %Other assets
    
    
    44,599
    
    
    
    
    
    
    
    
    
    
    
    25,220TOTAL ASSETS
    
    $
    576,454
    
    
    
    
    
    
    
    
    
    
    $
    339,020LIABILITIES:Savings
    
    $
    56,307
    
    
    
    168
    
    
    
    0.40
    %
    
    $
    33,760
    
    
    
    101
    
    
    
    0.40
    %Now deposits
    
    
    68,789
    
    
    
    75
    
    
    
    0.15
    %
    
    
    41,056
    
    
    
    86
    
    
    
    0.28
    %Money market deposits
    
    
    44,278
    
    
    
    353
    
    
    
    1.07
    %
    
    
    16,570
    
    
    
    190
    
    
    
    1.53
    %Time deposits
    
    
    226,875
    
    
    
    5,179
    
    
    
    3.05
    %
    
    
    130,352
    
    
    
    3,628
    
    
    
    3.72
    %Total deposits
    
    
    396,249
    
    
    
    5,775
    
    
    
    1.95
    %
    
    
    221,738
    
    
    
    4,005
    
    
    
    2.41
    %Short-term borrowings
    
    
    46,535
    
    
    
    254
    
    
    
    0.73
    %
    
    
    35,684
    
    
    
    580
    
    
    
    2.17
    %Long-term borrowings
    
    
    11,603
    
    
    
    462
    
    
    
    5.32
    %
    
    
    9,508
    
    
    
    432
    
    
    
    6.07
    %Junior subordinate debentures
    
    
    4,640
    
    
    
    104
    
    
    
    3.00
    %
    
    
    1,087
    
    
    
    44
    
    
    
    5.41
    %Total borrowings
    
    
    62,778
    
    
    
    820
    
    
    
    1.75
    %
    
    
    46,279
    
    
    
    1,056
    
    
    
    3.05
    %Total interest-bearing liabilities
    
    
    459,027
    
    
    
    6,595
    
    
    
    1.92
    %
    
    
    268,017
    
    
    
    5,061
    
    
    
    2.52
    %Demand deposits
    
    
    51,004
    
    
    
    
    
    
    
    
    
    
    
    29,061Other liabilities
    
    
    3,656
    
    
    
    
    
    
    
    
    
    
    
    2,340Stockholders equity
    
    
    62,767
    
    
    
    
    
    
    
    
    
    
    
    39,602TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    576,454
    
    
    
    
    
    
    
    
    
    
    $
    339,020Interest rate spread (6)
    
    
    
    
    
    
    
    
    
    
    3.50
    %
    
    
    
    
    
    
    
    
    
    
    3.48
    %Net interest income/margin (5)
    
    
    
    
    
    $
    15,002
    
    
    
    3.77
    %
    
    
    
    
    
    $
    9,036
    
    
    
    3.85
    %
 
 (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 Nine Months Ended September 30,
 (In Thousands)
    
    2009
    
    
    2008Total interest income
    
    $
    21,278
    
    
    $
    13,757Total interest expense
    
    
    6,595
    
    
    
    5,061Net interest income
    
    
    14,683
    
    
    
    8,696Tax equivalent adjustment
    
    
    319
    
    
    
    340Net interest income
(fully taxable equivalent)
    
    $
    15,002
    
    
    $
    9,036
 Rate/Volume Analysis
  Nine Months Ended September 30,2009 vs 2008Increase (Decrease)Due to(In Thousands)
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Loans, tax-exempt
    
    $
    199
    
    
    $
    (115
    )
    
    $
    84Loans
    
    
    5,319
    
    
    
    (847
    )
    
    
    4,472Taxable investment securities
    
    
    3,095
    
    
    
    (161
    )
    
    
    2,934Tax-exempt investment securities
    
    
    218
    
    
    
    (44
    )
    
    
    174Federal funds sold
    
    
    11
    
    
    
    
    
    
    
    11Interest bearing deposits
    
    
    (17
    )
    
    
    (158
    )
    
    
    (175
    )Total interest-earning assets
    
    
    8,825
    
    
    
    (1,325
    )
    
    
    7,500Interest expense:Savings
    
    
    67
    
    
    
    
    
    
    
    67NOW deposits
    
    
    30
    
    
    
    (41
    )
    
    
    (11
    )Money market deposits
    
    
    221
    
    
    
    (58
    )
    
    
    163Time deposits
    
    
    2,203
    
    
    
    (652
    )
    
    
    1,551Short-term borrowings
    
    
    59
    
    
    
    (385
    )
    
    
    (326
    )Long-term borrowings, FHLB
    
    
    83
    
    
    
    (53
    )
    
    
    30Junior subordinate debentures
    
    
    80
    
    
    
    (20
    )
    
    
    60Total interest-bearing liabilities
    
    
    2,743
    
    
    
    (1,209
    )
    
    
    1,534Change in net interest income
    
    $
    6,082
    
    
    $
    (116
    )
    
    $
    5,966
 21




---



##### 



PROVISION FOR LOAN LOSSES
 2009 vs. 2008
    NON-INTEREST INCOME
 2009 vs. 2008
  For The Nine Months EndedSeptember 30, 2009
    
    September 30, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Service charges and fees
    
    $
    1,251
    
    
    
    32.8
    %
    
    $
    797
    
    
    
    41.8
    %
    
    $
    454
    
    
    
    57.0
    %Gain on sale of loans
    
    
    547
    
    
    
    14.3
    
    
    
    194
    
    
    
    10.2
    
    
    
    353
    
    
    
    182.0Earnings on bank-owned life insurance
    
    
    324
    
    
    
    8.5
    
    
    
    244
    
    
    
    12.8
    
    
    
    80
    
    
    
    32.8Brokerage and insurance
    
    
    190
    
    
    
    5.0
    
    
    
    174
    
    
    
    9.1
    
    
    
    16
    
    
    
    9.2Trust
    
    
    462
    
    
    
    12.1
    
    
    
    217
    
    
    
    11.4
    
    
    
    245
    
    
    
    112.9Investment security losses
    
    
    (71
    )
    
    
    (1.9
    )
    
    
    (283
    )
    
    
    (14.8
    )
    
    
    212
    
    
    
    (74.9
    )Other
    
    
    1,110
    
    
    
    29.2
    
    
    
    565
    
    
    
    29.5
    
    
    
    545
    
    
    
    96.5Total non-interest income
    
    $
    3,813
    
    
    
    100.0
    %
    
    $
    1,908
    
    
    
    100.0
    %
    
    $
    1,905
    
    
    
    99.8
    %
 NON-INTEREST EXPENSE
 2009 vs. 2008
  22




---



##### 



For The Nine Months EndedSeptember 30, 2009
    
    September 30, 2008
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Salaries
    
    $
    4,776
    
    
    
    39.8
    %
    
    $
    3,056
    
    
    
    39.8
    %
    
    $
    1,720
    
    
    
    56.3
    %Employee benefits
    
    
    1,232
    
    
    
    10.3
    
    
    
    1,595
    
    
    
    20.8
    
    
    
    (363
    )
    
    
    (22.8
    )Occupancy
    
    
    810
    
    
    
    6.8
    
    
    
    496
    
    
    
    6.5
    
    
    
    314
    
    
    
    63.3Furniture and equipment
    
    
    944
    
    
    
    7.9
    
    
    
    583
    
    
    
    7.6
    
    
    
    361
    
    
    
    61.9State shares tax
    
    
    400
    
    
    
    3.3
    
    
    
    277
    
    
    
    3.6
    
    
    
    123
    
    
    
    44.4Professional fees
    
    
    447
    
    
    
    3.7
    
    
    
    382
    
    
    
    5.0
    
    
    
    65
    
    
    
    17.0Directors fees
    
    
    215
    
    
    
    1.8
    
    
    
    152
    
    
    
    2.0
    
    
    
    63
    
    
    
    41.4FDIC assessments
    
    
    543
    
    
    
    4.5
    
    
    
    29
    
    
    
    0.4
    
    
    
    514
    
    
    
    1,772.4Other
    
    
    2,621
    
    
    
    21.9
    
    
    
    1,111
    
    
    
    14.3
    
    
    
    1,510
    
    
    
    135.9Total non-interest expense
    
    $
    11,988
    
    
    
    100.0
    %
    
    $
    7,681
    
    
    
    100.0
    %
    
    $
    4,307
    
    
    
    56.1
    %
 FINANCIAL CONDITION
    INVESTMENTS
  September 30, 2009EstimatedAmortized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    137,500
    
    
    $
    141,578Other
    
    
    58,521
    
    
    
    59,062Obligations of state and political subdivisions
    
    
    12,839
    
    
    
    13,056Total debt securities
    
    
    208,860
    
    
    
    213,696Marketable equity securities
    
    
    2,551
    
    
    
    1,903Restricted equity securities
    
    
    2,984
    
    
    
    2,984Total investment securities AFS
    
    $
    214,395
    
    
    $
    218,583
 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)
    
    September 30, 2009
    
    
    December 31, 2008
    
    
    Amount
    
    
    %Commercial, financial and agricultural
    
    $
    31,305
    
    
    $
    27,165
    
    
    $
    4,140
    
    
    
    15.2
    %Tax-exempt
    
    
    19,558
    
    
    
    16,762
    
    
    
    2,796
    
    
    
    16.7Real estate
    
    
    267,172
    
    
    
    262,539
    
    
    
    4,633
    
    
    
    1.8Real estate construction
    
    
    5,087
    
    
    
    5,307
    
    
    
    (220
    )
    
    
    (4.1
    )Installment loans to individuals
    
    
    7,893
    
    
    
    8,202
    
    
    
    (309
    )
    
    
    (3.8
    )Add (deduct): Unearned discount
    
    
    (18
    )
    
    
    (24
    )
    
    
    6
    
    
    
    (25.0
    )Unamortized loan costs, net of fees
    
    
    102
    
    
    
    117
    
    
    
    (15
    )
    
    
    (12.8
    )Gross loans
    
    $
    331,099
    
    
    $
    320,068
    
    
    $
    11,031
    
    
    
    3.4
    %
  September 30, 2009
    
    
    December 31, 2008Commercial, financial and agricultural
    
    
    9.5
    %
    
    
    8.5
    %Tax-exempt
    
    
    5.9
    
    
    
    5.2Real estate
    
    
    80.7
    
    
    
    82.1Real estate construction
    
    
    1.5
    
    
    
    1.7Installment loans to individuals
    
    
    2.4
    
    
    
    2.5Gross loans
    
    
    100.0
    %
    
    
    100.0
    %
 ALLOWANCE FOR LOAN LOSSES
   24




---



##### 



For the Nine Months Ended September 30,(In Thousands)
    
    2009
    
    
    2008Average Loans Outstanding during
the period
    
    $
    325,762
    
    
    $
    205,486Balance, beginning of year
    
    $
    3,758
    
    
    $
    1,437Provision charged to operations
    
    
    530
    
    
    
    Allowance acquired
    
    
    
    
    
    
    1,683Loans charged off:Commercial, financial, and agricultural
    
    
    (114
    )
    
    
    Real estate mortgages
    
    
    (233
    )
    
    
    Installment loans to indiviuals
    
    
    (28
    )
    
    
    (94
    )Recoveries:Commercial, financial, and agricultural
    
    
    1
    
    
    
    Real estate mortgages
    
    
    9
    
    
    
    2Installment loans to indiviuals
    
    
    11
    
    
    
    27Balance, end of period
    
    $
    3,934
    
    
    $
    3,055Net charge-offs to Average loans
outstanding during the period
    
    
    -0.11
    %
    
    
    -0.03
    %
 NON-PERFORMING LOANS
   (In Thousands)
    
    September 30, 2009
    
    
    December 31, 2008Commercial, financial and agriculturalDays 30-89
    
    $
    410
    
    
    $
    61Days 90 plus
    
    
    126
    
    
    
    Non-accrual
    
    
    414
    
    
    
    581Real estateDays 30-89
    
    
    1,330
    
    
    
    1,528Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    5,358
    
    
    
    3,780Installment loans to individualsDays 30-89
    
    
    50
    
    
    
    9Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    63
    
    
    
    92$
    7,751
    
    
    $
    6,051Days 30-89
    
    $
    1,790
    
    
    $
    1,598Days 90 plus
    
    
    126
    
    
    
    Non-accrual
    
    
    5,835
    
    
    
    4,453$
    7,751
    
    
    $
    6,051Restructured loans still accruing
    
    $
    380
    
    
    $
    58Other real estate owned
    
    $
    380
    
    
    $
    373
 25




---



##### 



DEPOSITS
   September 30, 2009
    
    
    December 31, 2008Average
    
    
    
    
    
    
    Average
    
    
    Change(In Thousands)
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Amount
    
    
    %Non-interest bearing
    
    $
    49,562
    
    
    
    
    %
    
    $
    52,460
    
    
    
    
    %
    
    $
    (2,898
    )
    
    
    (5.5
    )%Savings
    
    
    55,431
    
    
    
    0.40
    
    
    
    54,717
    
    
    
    0.40
    
    
    
    714
    
    
    
    1.3Now deposits
    
    
    64,846
    
    
    
    0.15
    
    
    
    63,776
    
    
    
    0.27
    
    
    
    1,070
    
    
    
    1.7Money market deposits
    
    
    41,743
    
    
    
    1.12
    
    
    
    37,120
    
    
    
    1.66
    
    
    
    4,623
    
    
    
    12.5Time deposits
    
    
    231,076
    
    
    
    3.15
    
    
    
    226,236
    
    
    
    3.53
    
    
    
    4,840
    
    
    
    Total deposits
    
    $
    442,658
    
    
    
    1.82
    %
    
    $
    434,309
    
    
    
    2.07
    %
    
    $
    8,349
    
    
    
    1.9
    %
 BORROWED FUNDS
  September 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
    
    
    61,995
    
    
    
    75.8
    
    
    
    55,462
    
    
    
    80.1
    
    
    
    6,533
    
    
    
    11.8Total short-term borrowings
    
    
    61,995
    
    
    
    75.8
    %
    
    
    55,462
    
    
    
    80.1
    %
    
    
    6,533
    
    
    
    11.8Junior subordinate debentures
    
    
    4,640
    
    
    
    5.7
    
    
    
    4,640
    
    
    
    6.7
    
    
    
    
    
    
    
    Long-term borrowings, FHLB
    
    
    15,129
    
    
    
    18.5
    
    
    
    9,133
    
    
    
    13.2
    
    
    
    5,996
    
    
    
    65.7Total borrowed funds
    
    $
    81,764
    
    
    
    100.0
    %
    
    $
    69,235
    
    
    
    100.0
    %
    
    $
    12,529
    
    
    
    18.1
    %
 LIQUIDITY
   CAPITAL RESOURCES
    26




---



##### 



2009
    
    2008(In Thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal Capital (to Risk-weighted Assets)Actual
    
    $
    58,896
    
    
    
    17.8
    %
    
    $
    55,851
    
    
    
    16.5
    %For Capital Adequacy Purposes
    
    
    26,404
    
    
    
    8.0
    
    
    
    27,112
    
    
    
    8.0To Be Well-Capitalized
    
    
    33,005
    
    
    
    10.0
    
    
    
    33,890
    
    
    
    10.0Tier I Capital (to Risk-weighted Assets)Actual
    
    $
    54,962
    
    
    
    16.7
    %
    
    $
    52,083
    
    
    
    15.4
    %For Capital Adequacy Purposes
    
    
    13,202
    
    
    
    4.0
    
    
    
    13,556
    
    
    
    4.0To Be Well-Capitalized
    
    
    19,803
    
    
    
    6.0
    
    
    
    20,334
    
    
    
    6.0Tier I Capital (to Average Assets)Actual
    
    $
    54,962
    
    
    
    9.7
    %
    
    $
    52,083
    
    
    
    9.3
    %For Capital Adequacy Purposes
    
    
    22,624
    
    
    
    4.0
    
    
    
    22,476
    
    
    
    4.0To Be Well-Capitalized
    
    
    28,280
    
    
    
    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 (July 1 - July 31, 2009)
    
    
    3,500
    
    
    $
    21.75
    
    
    
    3,500
    
    
    
    189,500Month #2 (August 1 - August 31, 2009)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,500Month #3 (September 1 - September 30, 2009)
    
    
    2,000
    
    
    
    22.50
    
    
    
    2,000
    
    
    
    187,500
 
 (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




---



##### 



SIGNATURES
  CCFNB BANCORP, INC.
(Registrant)By
    /s/ Lance O. DiehlLance O. DiehlPresident and CEODate: November 10, 2009By
    /s/ Jeffrey T. ArnoldJeffrey T. Arnold, CPA, CIAChief Financial OfficerDate: November  10, 2009 30