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, 2011.
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to.
 No. 000-19028
 (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)
 (570) 784-4400
 þ o
 o 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
 Page NumberPart I Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010
    
    
    3Consolidated Statements of Income (unaudited) for the three months ended March 31,
2011 and 2010
    
    
    4Consolidated Statement of Changes in Stockholders Equity (unaudited) for the
three months ended March 31, 2011 and 2010
    
    
    5Consolidated Statements of Cash Flows (unaudited) for the three months ended
March 31, 2011 and 2010
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Report of Independent Registered Public Accounting Firm
    
    
    24Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4. Controls and Procedures
    
    
    35Part II Other Information
    
    
    35Item 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    35Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3. Defaults Upon Senior Securities
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    36Signatures
    
    
    37Exhibits
    
    
    38
  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)
    
    2011
    
    
    2010ASSETSCash and due from banks
    
    $
    6,696
    
    
    $
    7,263Interest-bearing deposits in other banks
    
    
    24,783
    
    
    
    18,683Federal funds sold
    
    
    1,472
    
    
    
    1,649Total cash and cash equivalents
    
    
    32,951
    
    
    
    27,595Investment securities, available for sale, at fair value
    
    
    204,238
    
    
    
    207,173Restricted securities, at cost
    
    
    2,863
    
    
    
    3,012Loans, net of unearned income
    
    
    343,381
    
    
    
    340,453Less: Allowance for loan losses
    
    
    4,858
    
    
    
    4,801Loans, net
    
    
    338,523
    
    
    
    335,652Premises and equipment, net
    
    
    12,043
    
    
    
    11,992Accrued interest receivable
    
    
    1,691
    
    
    
    1,632Cash surrender value of bank-owned life insurance
    
    
    12,075
    
    
    
    11,942Investment in limited partnerships
    
    
    1,568
    
    
    
    1,607Intangible Assets:Core deposit
    
    
    2,065
    
    
    
    2,192Goodwill
    
    
    7,937
    
    
    
    7,937Prepaid FDIC assessment
    
    
    1,352
    
    
    
    1,490Other assets
    
    
    2,800
    
    
    
    2,075TOTAL ASSETS
    
    $
    620,106
    
    
    $
    614,299LIABILITIESInterest-bearing deposits
    
    $
    416,893
    
    
    $
    410,915Noninterest-bearing deposits
    
    
    65,574
    
    
    
    62,877Total deposits
    
    
    482,467
    
    
    
    473,792Short-term borrowings
    
    
    55,060
    
    
    
    58,759Long-term borrowings
    
    
    6,122
    
    
    
    6,123Junior subordinate debentures
    
    
    4,640
    
    
    
    4,640Accrued interest payable
    
    
    592
    
    
    
    652Other liabilities
    
    
    2,682
    
    
    
    2,479TOTAL LIABILITIES
    
    
    551,563
    
    
    
    546,445STOCKHOLDERS EQUITYCommon stock, par value $1.25 per share; authorized
5,000,000 shares; issued 2,290,791 shares
in 2011 and 2,286,931 shares in 2010
    
    
    2,864
    
    
    
    2,859Surplus
    
    
    28,076
    
    
    
    27,964Retained earnings
    
    
    37,317
    
    
    
    36,397Accumulated other comprehensive income
    
    
    1,873
    
    
    
    2,221Treasury stock, at cost; 61,000 shares in 2011 and 2010
    
    
    (1,587
    )
    
    
    (1,587
    )TOTAL STOCKHOLDERS EQUITY
    
    
    68,543
    
    
    
    67,854TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    620,106
    
    
    $
    614,299
  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)
    
    2011
    
    
    2010INTEREST AND DIVIDEND INCOMEInterest and fees on loans:Taxable
    
    $
    4,448
    
    
    $
    4,677Tax-exempt
    
    
    280
    
    
    
    212Interest and dividends on investment securities:Taxable
    
    
    1,457
    
    
    
    1,861Tax-exempt
    
    
    126
    
    
    
    105Dividend and other interest income
    
    
    11
    
    
    
    10Federal funds sold
    
    
    1
    
    
    
    1Deposits in other banks
    
    
    9
    
    
    
    2TOTAL INTEREST AND DIVIDEND INCOME
    
    
    6,332
    
    
    
    6,868INTEREST EXPENSEDeposits
    
    
    1,224
    
    
    
    1,537Short-term borrowings
    
    
    84
    
    
    
    106Long-term borrowings
    
    
    39
    
    
    
    125Junior subordinate debentures
    
    
    24
    
    
    
    23TOTAL INTEREST EXPENSE
    
    
    1,371
    
    
    
    1,791NET INTEREST INCOME
    
    
    4,961
    
    
    
    5,077PROVISION FOR LOAN LOSSES
    
    
    80
    
    
    
    310NET INTEREST INCOME AFTER PROVISION 
FOR LOAN LOSSES
    
    
    4,881
    
    
    
    4,767NON-INTEREST INCOMEService charges and fees
    
    
    414
    
    
    
    426Gain on sale of loans
    
    
    161
    
    
    
    130Earnings on bank-owned life insurance
    
    
    108
    
    
    
    116Brokerage
    
    
    60
    
    
    
    89Trust
    
    
    216
    
    
    
    171Interchange fees
    
    
    219
    
    
    
    195Other
    
    
    250
    
    
    
    171TOTAL NON-INTEREST INCOME
    
    
    1,428
    
    
    
    1,298NON-INTEREST EXPENSESalaries
    
    
    1,657
    
    
    
    1,576Employee benefits
    
    
    585
    
    
    
    471Occupancy
    
    
    298
    
    
    
    293Furniture and equipment
    
    
    301
    
    
    
    311State shares tax
    
    
    143
    
    
    
    133Professional fees
    
    
    153
    
    
    
    145Directors fees
    
    
    68
    
    
    
    67FDIC assessments
    
    
    149
    
    
    
    147Telecommunications
    
    
    83
    
    
    
    96Amortization of core deposit intangible
    
    
    127
    
    
    
    151Automated teller machine and interchange
    
    
    151
    
    
    
    130Other
    
    
    429
    
    
    
    455TOTAL NON-INTEREST EXPENSE
    
    
    4,144
    
    
    
    3,975INCOME BEFORE INCOME TAX PROVISION
    
    
    2,165
    
    
    
    2,090INCOME TAX PROVISION
    
    
    555
    
    
    
    550NET INCOME
    
    $
    1,610
    
    
    $
    1,540EARNINGS PER SHARE
    
    $
    0.72
    
    
    $
    0.69CASH DIVIDENDS PER SHARE
    
    $
    0.31
    
    
    $
    0.29WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    2,226,195
    
    
    
    2,243,439
  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, 2009
    
    
    2,270,850
    
    
    $
    2,838
    
    
    $
    27,539
    
    
    $
    32,723
    
    
    $
    2,523
    
    
    $
    (537
    )
    
    $
    65,086Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,540
    
    
    
    
    
    
    
    
    
    
    
    1,540Change in net unrealized gain on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    348
    
    
    
    
    
    
    
    348Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,888Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    4,140
    
    
    
    6
    
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Purchase of treasury stock (17,500 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (474
    )
    
    
    (474
    )Cash dividends, ($0.29 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    
    
    
    
    
    
    
    
    
    (650
    )Balance, March 31, 2010
    
    
    2,274,990
    
    
    $
    2,844
    
    
    $
    27,646
    
    
    $
    33,613
    
    
    $
    2,871
    
    
    $
    (1,011
    )
    
    $
    65,963Balance, December 31, 2010
    
    
    2,286,931
    
    
    $
    2,859
    
    
    $
    27,964
    
    
    $
    36,397
    
    
    $
    2,221
    
    
    $
    (1,587
    )
    
    $
    67,854Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,610
    
    
    
    
    
    
    
    
    
    
    
    1,610Change in net unrealized gain on
investment securities available-for-sale,
net of reclassification adjustment and
tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (348
    )
    
    
    
    
    
    
    (348
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,262Common stock issuance under dividend
reinvestment and stock purchase plans
    
    
    3,860
    
    
    
    5
    
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Recognition of employee stock purchase
plan expense
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Cash dividends, ($0.31 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (690
    )
    
    
    
    
    
    
    
    
    
    
    (690
    )Balance, March 31, 2011
    
    
    2,290,791
    
    
    $
    2,864
    
    
    $
    28,076
    
    
    $
    37,317
    
    
    $
    1,873
    
    
    $
    (1,587
    )
    
    $
    68,543
  5




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##### 



CCFNB Bancorp, Inc.
 
 Consolidated Statements of Cash Flows
 (Unaudited)
 For The Three Months Ended March 31,(In Thousands)
    
    2011
    
    
    2010OPERATING ACTIVITIESNet income
    
    $
    1,610
    
    
    $
    1,540Adjustments to reconcile net income to net cash
provided by operating activities:Provision for loan losses
    
    
    80
    
    
    
    310Depreciation and amortization of premises and equipment
    
    
    200
    
    
    
    233Amortization and accretion on investment securities
    
    
    255
    
    
    
    242Deferred income taxes (benefit) provision
    
    
    (63
    )
    
    
    44Gain on sale of loans
    
    
    (161
    )
    
    
    (130
    )Proceeds from sale of mortgage loans
    
    
    7,305
    
    
    
    4,561Originations of mortgage loans held for resale
    
    
    (8,202
    )
    
    
    (4,815
    )Amortization of intangibles and invesment in limited partnerships
    
    
    166
    
    
    
    192(Increase) Decrease in accrued interest receivable
    
    
    (59
    )
    
    
    103Increases in cash surrender value of bank-owned life insurance
    
    
    (133
    )
    
    
    (141
    )Decrease in accrued interest payable
    
    
    (60
    )
    
    
    (96
    )Other, net
    
    
    8
    
    
    
    (1,085
    )Net cash provided by operating activities
    
    
    946
    
    
    
    958INVESTING ACTIVITIESInvestment securities available for sale:Purchases
    
    
    (20,044
    )
    
    
    (5,118
    )Proceeds from sales, maturities and redemptions
    
    
    22,048
    
    
    
    29,102Proceeds from redemption of restricted securities
    
    
    149
    
    
    
    Purchase of restricted securities
    
    
    
    
    
    
    (184
    )Net increase in loans
    
    
    (1,893
    )
    
    
    (6,905
    )Acquisition of premises and equipment
    
    
    (251
    )
    
    
    (158
    )Net cash provided by investing activities
    
    
    9
    
    
    
    16,737FINANCING ACTIVITIESNet increase in deposits
    
    
    8,675
    
    
    
    5,968Net decrease in short-term borrowings
    
    
    (3,699
    )
    
    
    (2,747
    )Repayment of long-term borrowings
    
    
    (1
    )
    
    
    (5,001
    )Acquisition of treasury stock
    
    
    
    
    
    
    (474
    )Proceeds from issuance of common stock
    
    
    116
    
    
    
    112Cash dividends paid
    
    
    (690
    )
    
    
    (650
    )Net cash provided by (used for) financing activities
    
    
    4,401
    
    
    
    (2,792
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    5,356
    
    
    
    14,903CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    27,595
    
    
    
    11,459CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    32,951
    
    
    $
    26,362SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    1,431
    
    
    $
    1,887Income taxes paid
    
    
    
    
    
    
    99Loans transferred to other real estate owned
    
    
    
    
    
    
    300
  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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##### 



RESTRICTED SECURITIES
   LOANS
     ALLOWANCE FOR LOAN LOSSES
     8




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##### 



PREMISES AND EQUIPMENT
  MORTGAGE SERVICING RIGHTS
  JUNIOR SUBORDINATE DEBENTURES
  INTANGIBLE ASSETS  GOODWILL
  9




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##### 



INTANGIBLE ASSETS  CORE DEPOSIT
   For the Year Ended:Remainder of 2011
    
    $
    382,0002012
    
    
    442,0002013
    
    
    374,0002014
    
    
    308,0002015
    
    
    240,000Thereafter
    
    
    319,000Total
    
    $
    2,065,000
 OTHER REAL ESTATE OWNED
  BANK OWNED LIFE INSURANCE
  INVESTMENTS IN LIMITED PARTNERSHIPS
  INVESTMENT IN INSURANCE AGENCY
  INCOME TAXES
   10




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##### 



PER SHARE DATA
  CASH FLOW INFORMATION
  TREASURY STOCK
  TRUST ASSETS AND INCOME
  ACCUMULATED OTHER COMPREHENSIVE INCOME
  ADVERTISING COSTS
  RECENT ACCOUNTING PRONOUNCEMENTS
 FASB ASU 2010-20, Receivable (Topic 310), Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses 
 FASB ASU 2010-09  Subsequent Events (Topic 855): Amendments to Certain Recognition and
Disclosure requirements.
  FASB ASC 860 166  Accounting for Transfers of Financial Assets an amendment of
FASB Statement No. 140
 11




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##### 



FASB ASC 820-10 
 RECLASSIFICATIONS
  2. INVESTMENT SECURITIES AVAILABLE-FOR-SALE
  March 31, 2011Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    118,316
    
    
    $
    3,262
    
    
    $
    (299
    )
    
    $
    121,279Other
    
    
    65,538
    
    
    
    184
    
    
    
    (414
    )
    
    
    65,308Obligations of state and political subdivisions
    
    
    15,417
    
    
    
    144
    
    
    
    (34
    )
    
    
    15,527Total debt securities
    
    
    199,271
    
    
    
    3,590
    
    
    
    (747
    )
    
    
    202,114Marketable equity securities
    
    
    2,130
    
    
    
    183
    
    
    
    (189
    )
    
    
    2,124Total investment securities AFS
    
    $
    201,401
    
    
    $
    3,773
    
    
    $
    (936
    )
    
    $
    204,238
 December 31, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligation of U.S. Government Corporations
and Agencies:Mortgage-backed
    
    $
    129,008
    
    
    $
    3,794
    
    
    $
    (287
    )
    
    $
    132,515Other
    
    
    59,046
    
    
    
    279
    
    
    
    (422
    )
    
    
    58,903Obligations of state and political subdivisions
    
    
    13,625
    
    
    
    115
    
    
    
    (69
    )
    
    
    13,671Total debt securities
    
    
    201,679
    
    
    
    4,188
    
    
    
    (778
    )
    
    
    205,089Marketable equity securities
    
    
    2,130
    
    
    
    148
    
    
    
    (194
    )
    
    
    2,084Total investment securities AFS
    
    $
    203,809
    
    
    $
    4,336
    
    
    $
    (972
    )
    
    $
    207,173
   12




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##### 



WeightedAmortized
    
    
    Estimated
    
    
    Average(In Thousands)
    
    Cost
    
    
    Fair Value
    
    
    YieldDue in one year or less
    
    $
    2,320
    
    
    $
    2,339
    
    
    
    3.55
    %Due after one year to five years
    
    
    47,391
    
    
    
    47,301
    
    
    
    1.88
    %Due after five years to ten years
    
    
    35,487
    
    
    
    35,821
    
    
    
    3.31
    %Due after ten years
    
    
    116,203
    
    
    
    118,777
    
    
    
    3.60
    %Total
    
    $
    201,401
    
    
    $
    204,238
     March 31, 2011Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalEstimated
    
    
    Gross
    
    
    Estimated
    
    
    Gross
    
    
    Estimated
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized(In Thousands)
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesObligations of U.S. Government Corporations
and Agencies:Mortgage-backed
    
    $
    27,570
    
    
    $
    299
    
    
    $
    
    
    
    $
    
    
    
    $
    27,570
    
    
    $
    299Other
    
    
    36,587
    
    
    
    414
    
    
    
    
    
    
    
    
    
    
    
    36,587
    
    
    
    414Obligations of state and political subdivisions
    
    
    2,917
    
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    2,917
    
    
    
    34Total debt securities
    
    
    67,074
    
    
    
    747
    
    
    
    
    
    
    
    
    
    
    
    67,074
    
    
    
    747Equity securities
    
    
    45
    
    
    
    3
    
    
    
    922
    
    
    
    186
    
    
    
    967
    
    
    
    189Total
    
    $
    67,119
    
    
    $
    750
    
    
    $
    922
    
    
    $
    186
    
    
    $
    68,041
    
    
    $
    936
 13




---



##### 



December 31, 2010Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalEstimated
    
    
    Gross
    
    
    Estimated
    
    
    Gross
    
    
    Estimated
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized(In Thousands)
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesObligations of U.S. Government Corporations
and Agencies:Mortgage-backed
    
    $
    33,482
    
    
    $
    287
    
    
    $
    
    
    
    $
    
    
    
    $
    33,482
    
    
    $
    287Other
    
    
    29,578
    
    
    
    422
    
    
    
    
    
    
    
    
    
    
    
    29,578
    
    
    
    422Obligations of state and political subdivisions
    
    
    3,849
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    3,849
    
    
    
    69Total debt securities
    
    
    66,909
    
    
    
    778
    
    
    
    0
    
    
    
    0
    
    
    
    66,909
    
    
    
    778Equity securities
    
    
    45
    
    
    
    3
    
    
    
    1,005
    
    
    
    191
    
    
    
    1,050
    
    
    
    194Total
    
    $
    66,954
    
    
    $
    781
    
    
    $
    1,005
    
    
    $
    191
    
    
    $
    67,959
    
    
    $
    972
    March 31, 2011Gross
    
    Gross
    
    Estimated(In Thousands)
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    FairAsset size($)
    
    Cost
    
    Gains
    
    Losses
    
    ValueUnder $1 Billion
    
    $
    455
    
    
    $
    64
    
    
    $
    (24
    )
    
    $
    495$1 to $5 Billion
    
    
    209
    
    
    
    14
    
    
    
    (7
    )
    
    
    216$6 to $100 Billion
    
    
    780
    
    
    
    41
    
    
    
    (141
    )
    
    
    680Over $100 Billion
    
    
    686
    
    
    
    64
    
    
    
    (17
    )
    
    
    733$
    2,130
    
    
    $
    183
    
    
    $
    (189
    )
    
    $
    2,124
 March 31, 2011Gross
    
    Gross
    
    Estimated(In Thousands)
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    FairGeographic Region
    
    Cost
    
    Gains
    
    Losses
    
    ValueEastern U.S.
    
    $
    1,040
    
    
    $
    103
    
    
    $
    (97
    )
    
    $
    1,046Southeastern U.S.
    
    
    110
    
    
    
    
    
    
    
    (1
    )
    
    
    109Western U.S.
    
    
    53
    
    
    
    
    
    
    
    (3
    )
    
    
    50National
    
    
    927
    
    
    
    80
    
    
    
    (88
    )
    
    
    919$
    2,130
    
    
    $
    183
    
    
    $
    (189
    )
    
    $
    2,124
  14




---



##### 



3. LOANS
  (In Thousands)
    
    2011
    
    
    2010Commercial, financial and agricultural
    
    $
    35,836
    
    
    $
    33,819Tax-exempt
    
    
    27,194
    
    
    
    25,180Commercial real estate:Commercial mortgages
    
    
    92,737
    
    
    
    95,688Other construction and land development loans
    
    
    7,155
    
    
    
    6,284Secured by farmland
    
    
    5,635
    
    
    
    5,697Consumer real estate:Home equity loans
    
    
    20,494
    
    
    
    21,687Home equity lines of credit
    
    
    17,778
    
    
    
    17,8021-4 family residential mortgages
    
    
    124,011
    
    
    
    121,665Construction
    
    
    5,556
    
    
    
    5,405Installment loans to individuals
    
    
    6,990
    
    
    
    7,232Unearned discount
    
    
    (5
    )
    
    
    (6
    )Gross loans
    
    $
    343,381
    
    
    $
    340,453
 Loan Origination and Risk Management
     15




---



##### 



Concentrations of Credit Risk
  Non-Accrual and Past Due Loans
   (In Thousands)
    
    March 31, 2011
    
    
    December 31, 2010Commercial, financial and agricultural
    
    $
    338
    
    
    $
    224Tax-exempt
    
    
    
    
    
    
    Commercial real estate:Commercial mortgages
    
    
    1,151
    
    
    
    2,166Other construction and land development loans
    
    
    
    
    
    
    Secured by farmland
    
    
    
    
    
    
    Consumer real estate:Home equity loans
    
    
    305
    
    
    
    297Home equity lines of credit
    
    
    
    
    
    
    1-4 family residential mortgages
    
    
    1,323
    
    
    
    1,141Construction
    
    
    
    
    
    
    Installment loans to individuals
    
    
    
    
    
    
    Total
    
    $
    3,117
    
    
    $
    3,828
    16




---



##### 



March 31, 2011Loans
    
    Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accruing Loans30-89 Days
    
    90 or more days
    
    Total Past
    
    Current
    
    Total
    
    90 or more(In Thousands)
    
    Past Due
    
    Past Due
    
    Due Loans
    
    Loans
    
    Loans
    
    Days Past DueCommercial, financial and agricultural
    
    $
    309
    
    
    $
    338
    
    
    $
    647
    
    
    $
    35,189
    
    
    $
    35,836
    
    
    $
    Tax-exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,194
    
    
    
    27,194
    
    
    
    Commercial real estate:Commercial mortgages
    
    
    136
    
    
    
    1,151
    
    
    
    1,287
    
    
    
    91,450
    
    
    
    92,737
    
    
    
    Other construction and land development loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,155
    
    
    
    7,155
    
    
    
    Secured by farmland
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,635
    
    
    
    5,635
    
    
    
    Consumer real estate:Home equity loans
    
    
    292
    
    
    
    305
    
    
    
    597
    
    
    
    19,897
    
    
    
    20,494
    
    
    
    Home equity lines of credit
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    17,738
    
    
    
    17,778
    
    
    
    1-4 family residential mortgages
    
    
    1,954
    
    
    
    1,323
    
    
    
    3,277
    
    
    
    120,734
    
    
    
    124,011
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,556
    
    
    
    5,556
    
    
    
    Installment loans to individuals
    
    
    37
    
    
    
    
    
    
    
    37
    
    
    
    6,953
    
    
    
    6,990
    
    
    
    Unearned discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )Gross loans
    
    $
    2,768
    
    
    $
    3,117
    
    
    $
    5,885
    
    
    $
    337,496
    
    
    $
    343,381
    
    
    $
    
 December 31, 2010Loans
    
    Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accruing Loans30-89 Days
    
    90 or more days
    
    Total Past
    
    Current
    
    Total
    
    90 or more(In Thousands)
    
    Past Due
    
    Past Due
    
    Due Loans
    
    Loans
    
    Loans
    
    Days Past DueCommercial, financial and agricultural
    
    $
    244
    
    
    $
    224
    
    
    $
    468
    
    
    $
    33,351
    
    
    $
    33,819
    
    
    $
    Tax-exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,180
    
    
    
    25,180
    
    
    
    Commercial real estate:Commercial mortgages
    
    
    511
    
    
    
    2,166
    
    
    
    2,677
    
    
    
    93,011
    
    
    
    95,688
    
    
    
    Other construction and land development loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,284
    
    
    
    6,284
    
    
    
    Secured by farmland
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,697
    
    
    
    5,697
    
    
    
    Consumer real estate:Home equity loans
    
    
    136
    
    
    
    297
    
    
    
    433
    
    
    
    21,254
    
    
    
    21,687
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,802
    
    
    
    17,802
    
    
    
    1-4 family residential mortgages
    
    
    2,233
    
    
    
    1,141
    
    
    
    3,374
    
    
    
    118,291
    
    
    
    121,665
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,405
    
    
    
    5,405
    
    
    
    Installment loans to individuals
    
    
    32
    
    
    
    
    
    
    
    32
    
    
    
    7,200
    
    
    
    7,232
    
    
    
    Unearned discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )Gross loans
    
    $
    3,156
    
    
    $
    3,828
    
    
    $
    6,984
    
    
    $
    333,469
    
    
    $
    340,453
    
    
    $
    
  Impaired Loans
    17




---



##### 



March 31, 2011Unpaid
    
    Recorded
    
    RecordedContractual
    
    Investment
    
    Investment
    
    TotalPrincipal
    
    With No
    
    With
    
    Recorded
    
    Related(In Thousands)
    
    Balance
    
    Allowance
    
    Allowance
    
    Investment
    
    AllowanceCommercial, financial and agricultural
    
    $
    612
    
    
    $
    448
    
    
    $
    164
    
    
    $
    612
    
    
    $
    133Tax-exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial real estate:Commercial mortgages
    
    
    1,263
    
    
    
    198
    
    
    
    1,065
    
    
    
    1,263
    
    
    
    376Other construction and land development loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Secured by farmland
    
    
    318
    
    
    
    318
    
    
    
    
    
    
    
    318
    
    
    
    Consumer real estate:Home equity loans
    
    
    448
    
    
    
    80
    
    
    
    368
    
    
    
    448
    
    
    
    210Home equity lines of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1-4 family residential mortgages
    
    
    1,293
    
    
    
    880
    
    
    
    413
    
    
    
    1,293
    
    
    
    71Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Installment loans to individuals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross loans
    
    $
    3,934
    
    
    $
    1,924
    
    
    $
    2,010
    
    
    $
    3,934
    
    
    $
    790
 December 31, 2010Unpaid
    
    Recorded
    
    RecordedContractual
    
    Investment
    
    Investment
    
    TotalPrincipal
    
    With No
    
    With
    
    Recorded
    
    Related(In Thousands)
    
    Balance
    
    Allowance
    
    Allowance
    
    Investment
    
    AllowanceCommercial, financial and agricultural
    
    $
    498
    
    
    $
    463
    
    
    $
    35
    
    
    $
    498
    
    
    $
    15Tax-exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial real estate:Commercial mortgages
    
    
    2,325
    
    
    
    484
    
    
    
    1,841
    
    
    
    2,325
    
    
    
    499Other construction and land development loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Secured by farmland
    
    
    319
    
    
    
    319
    
    
    
    
    
    
    
    319
    
    
    
    Consumer real estate:Home equity loans
    
    
    411
    
    
    
    112
    
    
    
    299
    
    
    
    411
    
    
    
    209Home equity lines of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1-4 family residential mortgages
    
    
    1,211
    
    
    
    716
    
    
    
    495
    
    
    
    1,211
    
    
    
    90Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Installment loans to individuals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross loans
    
    $
    4,764
    
    
    $
    2,094
    
    
    $
    2,670
    
    
    $
    4,764
    
    
    $
    813
 Allowance for Possible Loan Losses
   18




---



##### 



March 31, 2011Commercial
    
    Commercial
    
    Consumer
    
    InstallmentFinancial &
    
    Real
    
    Real
    
    Loans(In Thousands)
    
    Agricultural
    
    Estate
    
    Estate
    
    Individuals
    
    Unallocated
    
    TotalBalance, beginning of year
    
    $
    752
    
    
    $
    2,286
    
    
    $
    1,243
    
    
    $
    106
    
    
    $
    414
    
    
    $
    4,801Provision charged to operations
    
    
    167
    
    
    
    (117
    )
    
    
    60
    
    
    
    9
    
    
    
    (39
    )
    
    
    80Loans charged off
    
    
    
    
    
    
    (9
    )
    
    
    (4
    )
    
    
    (15
    )
    
    
    
    
    
    
    (28
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    3
    
    
    
    
    
    
    
    5Ending balance
    
    $
    919
    
    
    $
    2,160
    
    
    $
    1,301
    
    
    $
    103
    
    
    $
    375
    
    
    
    4,858Ending balance individually
evaluated for impairment
    
    $
    133
    
    
    $
    567
    
    
    $
    76
    
    
    $
    
    
    
    $
    
    
    
    $
    776Ending balance collectively
evaluated for impairment
    
    $
    786
    
    
    $
    1,593
    
    
    $
    1,225
    
    
    $
    103
    
    
    $
    375
    
    
    $
    4,082
 March 31, 2010Commercial
    
    Commercial
    
    Consumer
    
    InstallmentFinancial &
    
    Real
    
    Real
    
    Loans(In Thousands)
    
    Agricultural
    
    Estate
    
    Estate
    
    Individuals
    
    Unallocated
    
    TotalBalance, beginning of year
    
    $
    567
    
    
    $
    1,793
    
    
    $
    1,339
    
    
    $
    149
    
    
    $
    362
    
    
    $
    4,210Provision charged to operations
    
    
    37
    
    
    
    577
    
    
    
    (21
    )
    
    
    (14
    )
    
    
    (269
    )
    
    
    310Loans charged off
    
    
    
    
    
    
    (518
    )
    
    
    (18
    )
    
    
    (4
    )
    
    
    
    
    
    
    (540
    )Recoveries
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    6Ending balance
    
    $
    605
    
    
    $
    1,852
    
    
    $
    1,301
    
    
    $
    135
    
    
    $
    93
    
    
    
    3,986Ending balance individually
evaluated for impairment
    
    $
    
    
    
    $
    411
    
    
    $
    86
    
    
    $
    
    
    
    $
    
    
    
    $
    497Ending balance collectively
evaluated for impairment
    
    $
    605
    
    
    $
    1,441
    
    
    $
    1,215
    
    
    $
    135
    
    
    $
    93
    
    
    $
    3,489
  March 31, 2011Commercial
    
    Commercial
    
    Consumer
    
    InstallmentFinancial &
    
    Real
    
    Real
    
    Loans(In Thousands)
    
    Agricultural
    
    Estate
    
    Estate
    
    Individuals
    
    TotalEnding balance individually
evaluated for impairment
    
    $
    612
    
    
    $
    1,581
    
    
    $
    1,741
    
    
    $
    
    
    
    $
    3,934Ending balance collectively
evaluated for impairment
    
    
    62,418
    
    
    
    103,946
    
    
    
    166,098
    
    
    
    6,985
    
    
    
    339,447Ending balance
    
    $
    63,030
    
    
    $
    105,527
    
    
    $
    167,839
    
    
    $
    6,985
    
    
    $
    343,381
 December 31, 2010Commercial
    
    Commercial
    
    Consumer
    
    InstallmentFinancial &
    
    Real
    
    Real
    
    Loans(In Thousands)
    
    Agricultural
    
    Estate
    
    Estate
    
    Individuals
    
    TotalEnding balance individually
evaluated for impairment
    
    $
    498
    
    
    $
    2,644
    
    
    $
    1,622
    
    
    $
    
    
    
    $
    4,764Ending balance collectively
evaluated for impairment
    
    
    58,501
    
    
    
    105,025
    
    
    
    164,937
    
    
    
    7,226
    
    
    
    335,689Ending balance
    
    $
    58,999
    
    
    $
    107,669
    
    
    $
    166,559
    
    
    $
    7,226
    
    
    $
    340,453
 19




---



##### 



Loan Modifications
  4. SHORT-TERM BORROWINGS
  5. LONG-TERM BORROWINGS
  6. DEFERRED COMPENSATION PLANS
  7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF
CREDIT RISK
   (In Thousands)
    
    2011
    
    2010Financial instruments whose contract amounts represent credit risk:Commitments to extend credit
    
    $
    65,357
    
    
    $
    65,926Standby letters of credit
    
    
    5,135
    
    
    
    2,674Dealer floor plans
    
    
    1,926
    
    
    
    966Loans held for sale
    
    
    3,063
    
    
    
    2,005
     20




---



##### 



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
observable 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, 2011(In Thousands)
    
    Level I
    
    Level II
    
    Level III
    
    TotalAssets Measured on a Recurring Basis:Investment Securities, available-for-sale
    
    $
    2,124
    
    
    $
    202,114
    
    
    $
    
    
    
    $
    204,238
 December 31, 2010(In Thousands)
    
    Level I
    
    Level II
    
    Level III
    
    TotalAssets Measured on a Recurring Basis:Investment Securities, available-for-sale
    
    $
    2,084
    
    
    $
    205,089
    
    
    $
    
    
    
    $
    207,173
  March 31, 2011(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAvailable for sale securitiesObligation of US Government AgenciesMortgage-backed
    
    $
    
    
    
    $
    121,280
    
    
    $
    
    
    
    $
    121,280Other
    
    
    
    
    
    
    65,308
    
    
    
    
    
    
    
    65,308Obligations of state and political subdivisions
    
    
    
    
    
    
    15,526
    
    
    
    
    
    
    
    15,526Equity securities
    
    
    2,124
    
    
    
    
    
    
    
    
    
    
    
    2,124$
    2,124
    
    
    $
    202,114
    
    
    $
    
    
    
    $
    204,238
 December 31, 2010(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAvailable for sale securitiesObligation of US Government AgenciesMortgage-backed
    
    $
    
    
    
    $
    132,515
    
    
    $
    
    
    
    $
    132,515Other
    
    
    
    
    
    
    58,903
    
    
    
    
    
    
    
    58,903Obligations of state and political subdivisions
    
    
    
    
    
    
    13,671
    
    
    
    
    
    
    
    13,671Equity securities
    
    
    2,084
    
    
    
    
    
    
    
    
    
    
    
    2,084$
    2,084
    
    
    $
    205,089
    
    
    $
    
    
    
    $
    207,173
 21




---



##### 



March 31, 2011(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Non-recurring Basis:Impaired Loans
    
    $
    
    
    
    $
    3,934
    
    
    $
    
    
    
    $
    3,934Loans Held for Sale
    
    
    
    
    
    
    3,063
    
    
    
    
    
    
    
    3,063Mortgage Servicing Rights
    
    
    
    
    
    
    528
    
    
    
    
    
    
    
    528$
    
    
    
    $
    7,525
    
    
    $
    
    
    
    $
    7,525
 December 31, 2010(In Thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Non-recurring Basis:Impaired Loans
    
    $
    
    
    
    $
    4,764
    
    
    $
    
    
    
    $
    4,764Loans Held for Sale
    
    
    
    
    
    
    2,005
    
    
    
    
    
    
    
    2,005Mortgage Servicing Rights
    
    
    
    
    
    
    491
    
    
    
    
    
    
    
    491$
    
    
    
    $
    7,260
    
    
    $
    
    
    
    $
    7,260
 9. ESTIMATED FAIR VALUES OF FINANCIAL INSTRUMENTS
   22




---



##### 



March 31, 2011
    
    December 31, 2010Carrying
    
    Estimated
    
    Carrying
    
    Estimated(In Thousands)
    
    Amount
    
    Fair Value
    
    Amount
    
    Fair ValueFinancial Assets:Cash and short-term instruments
    
    $
    32,951
    
    
    $
    32,951
    
    
    $
    27,595
    
    
    $
    27,595Investment securities
    
    
    204,238
    
    
    
    204,238
    
    
    
    207,173
    
    
    
    207,173Restricted securities
    
    
    2,863
    
    
    
    2,863
    
    
    
    3,012
    
    
    
    3,012Loans, net
    
    
    338,523
    
    
    
    345,485
    
    
    
    335,652
    
    
    
    341,814Cash surrender value of bank owned life insurance
    
    
    12,075
    
    
    
    12,075
    
    
    
    11,942
    
    
    
    11,942Accrued interest receivable
    
    
    1,691
    
    
    
    1,691
    
    
    
    1,632
    
    
    
    1,632Financial Liabilities:Interest-bearing deposits
    
    
    416,893
    
    
    
    420,049
    
    
    
    410,915
    
    
    
    414,706Noninterest- bearing deposits
    
    
    65,574
    
    
    
    65,574
    
    
    
    62,877
    
    
    
    62,877Short-term borrowings
    
    
    55,060
    
    
    
    55,060
    
    
    
    58,759
    
    
    
    58,759Long-term borrowings
    
    
    6,122
    
    
    
    6,289
    
    
    
    6,123
    
    
    
    6,303Junior subordinate debentures
    
    
    4,640
    
    
    
    4,640
    
    
    
    4,640
    
    
    
    4,640Accrued interest payable
    
    
    592
    
    
    
    592
    
    
    
    652
    
    
    
    652Off-Balance Sheet Assets (Liabilities):Commitments to extend credit
    
    
    
    
    
    $
    65,357
    
    
    
    
    
    
    $
    65,926Standby letters of credit
    
    
    
    
    
    
    5,135
    
    
    
    
    
    
    
    2,674Dealer floor plans
    
    
    
    
    
    
    1,926
    
    
    
    
    
    
    
    966
                    23




---



##### 



10. MANAGEMENTS ASSERTIONS AND COMMENTS REQUIRED TO BE PROVIDED WITH FORM 10-Q
FILING
   
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 24




---



##### 



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.
    
    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 Dodd-Frank Wall Street Reform and
Consumer Protection Act.
    
    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
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 throughout most of 2011
with consistent credit spreads and our view that national economic trends currently
point to improving economic conditions into 2011 and 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.
    
    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.
 25




---



##### 




    
    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
 2011 vs. 2010
    26




---



##### 



AVERAGE BALANCE SHEET AND RATE ANALYSIS
THREE MONTHS ENDED MARCH 31,
 2011
    
    
    2010(In Thousands)
    
    Average Balance
    
    
    Interest
    
    
    Average Rate
    
    
    Average Balance
    
    
    Interest
    
    
    Average RateASSETS:
    
    
    
    
    (1)
    

    
    
    
    
    
    
    
    
    
    
    (1)Tax-exempt loans
    
    $
    27,442
    
    
    $
    425
    
    
    
    6.28
    %
    
    $
    20,251
    
    
    $
    321
    
    
    
    6.43
    %All other loans
    
    
    315,552
    
    
    
    4,448
    
    
    
    5.72
    %
    
    
    314,504
    
    
    
    4,678
    
    
    
    6.03
    %Total loans (2)(3)(4)
    
    
    342,994
    
    
    
    4,873
    
    
    
    5.76
    %
    
    
    334,755
    
    
    
    4,999
    
    
    
    6.06
    %Taxable securities
    
    
    195,024
    
    
    
    1,468
    
    
    
    3.01
    %
    
    
    204,375
    
    
    
    1,871
    
    
    
    3.66
    %Tax-exempt securitites (3)
    
    
    14,199
    
    
    
    191
    
    
    
    5.38
    %
    
    
    10,965
    
    
    
    159
    
    
    
    5.80
    %Total securities
    
    
    209,223
    
    
    
    1,659
    
    
    
    3.17
    %
    
    
    215,340
    
    
    
    2,030
    
    
    
    3.77
    %Federal funds sold
    
    
    1,590
    
    
    
    1
    
    
    
    0.26
    %
    
    
    857
    
    
    
    
    
    
    
    0.00
    %Interest-bearing deposits
    
    
    13,750
    
    
    
    8
    
    
    
    0.24
    %
    
    
    5,799
    
    
    
    2
    
    
    
    0.14
    %Total interest-earning assets
    
    
    567,557
    
    
    
    6,541
    
    
    
    4.66
    %
    
    
    556,751
    
    
    
    7,031
    
    
    
    5.10
    %Other assets
    
    
    49,925
    
    
    
    
    
    
    
    
    
    
    
    46,202TOTAL ASSETS
    
    $
    617,482
    
    
    
    
    
    
    
    
    
    
    $
    602,953LIABILITIES:Savings
    
    $
    66,645
    
    
    
    57
    
    
    
    0.35
    %
    
    $
    58,920
    
    
    
    58
    
    
    
    0.40
    %Now deposits
    
    
    73,843
    
    
    
    24
    
    
    
    0.13
    %
    
    
    72,100
    
    
    
    26
    
    
    
    0.15
    %Money market deposits
    
    
    45,533
    
    
    
    64
    
    
    
    0.57
    %
    
    
    42,609
    
    
    
    81
    
    
    
    0.77
    %Time deposits
    
    
    229,899
    
    
    
    1,079
    
    
    
    1.90
    %
    
    
    234,970
    
    
    
    1,372
    
    
    
    2.37
    %Total deposits
    
    
    415,920
    
    
    
    1,224
    
    
    
    1.19
    %
    
    
    408,599
    
    
    
    1,537
    
    
    
    1.53
    %Short-term borrowings
    
    
    55,280
    
    
    
    84
    
    
    
    0.62
    %
    
    
    52,727
    
    
    
    106
    
    
    
    0.82
    %Long-term borrowings
    
    
    6,122
    
    
    
    39
    
    
    
    2.58
    %
    
    
    11,850
    
    
    
    125
    
    
    
    4.28
    %Junior subordinate debentures
    
    
    4,640
    
    
    
    24
    
    
    
    2.10
    %
    
    
    4,640
    
    
    
    23
    
    
    
    2.01
    %Total borrowings
    
    
    66,042
    
    
    
    147
    
    
    
    0.90
    %
    
    
    69,217
    
    
    
    254
    
    
    
    1.49
    %Total interest-bearing liabilities
    
    
    481,962
    
    
    
    1,371
    
    
    
    1.15
    %
    
    
    477,816
    
    
    
    1,791
    
    
    
    1.52
    %Demand deposits
    
    
    64,534
    
    
    
    
    
    
    
    
    
    
    
    54,948Other liabilities
    
    
    2,780
    
    
    
    
    
    
    
    
    
    
    
    3,956Stockholders equity
    
    
    68,206
    
    
    
    
    
    
    
    
    
    
    
    66,233TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    617,482
    
    
    
    
    
    
    
    
    
    
    $
    602,953Interest rate spread (6)
    
    
    
    
    
    
    
    
    
    
    3.50
    %
    
    
    
    
    
    
    
    
    
    
    3.58
    %Net interest income/margin (5)
    
    
    
    
    
    $
    5,170
    
    
    
    3.68
    %
    
    
    
    
    
    $
    5,240
    
    
    
    3.80
    %
 
 (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 2011 and 2010.(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. 27




---



##### 



Reconcilement of Taxable Equivalent Net Interest Income
For the Three Months Ended March 31,
 (In Thousands)
    
    2011
    
    
    2010Total interest income
    
    $
    6,332
    
    
    $
    6,868Total interest expense
    
    
    1,371
    
    
    
    1,791Net interest income
    
    
    4,961
    
    
    
    5,077Tax equivalent adjustment
    
    
    209
    
    
    
    163Net interest income
(fully taxable equivalent)
    
    $
    5,170
    
    
    $
    5,240
 Rate/Volume Analysis
  Three Months Ended March 31,2011 vs 2010Increase (Decrease)Due to(In Thousands)
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Loans, tax-exempt
    
    $
    111
    
    
    $
    (7
    )
    
    $
    104Loans
    
    
    15
    
    
    
    (245
    )
    
    
    (230
    )Taxable investment securities
    
    
    (70
    )
    
    
    (333
    )
    
    
    (403
    )Tax-exempt investment securities
    
    
    44
    
    
    
    (12
    )
    
    
    32Federal funds sold
    
    
    1
    
    
    
    
    
    
    
    1Interest bearing deposits
    
    
    5
    
    
    
    1
    
    
    
    6Total interest-earning assets
    
    
    106
    
    
    
    (596
    )
    
    
    (490
    )Interest expense:Savings
    
    
    7
    
    
    
    (8
    )
    
    
    (1
    )NOW deposits
    
    
    1
    
    
    
    (3
    )
    
    
    (2
    )Money market deposits
    
    
    4
    
    
    
    (21
    )
    
    
    (17
    )Time deposits
    
    
    (24
    )
    
    
    (269
    )
    
    
    (293
    )Short-term borrowings
    
    
    4
    
    
    
    (26
    )
    
    
    (22
    )Long-term borrowings, FHLB
    
    
    (36
    )
    
    
    (50
    )
    
    
    (86
    )Junior subordinate debentures
    
    
    
    
    
    
    1
    
    
    
    1Total interest-bearing liabilities
    
    
    (44
    )
    
    
    (376
    )
    
    
    (420
    )Change in net interest income
    
    $
    150
    
    
    $
    (220
    )
    
    $
    (70
    )
 PROVISION FOR LOAN LOSSES
 2011 vs. 2010
  28




---



##### 



NON-INTEREST INCOME
 2011 vs. 2010
  For The Three Months EndedMarch 31, 2011
    
    March 31, 2010
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Service charges and fees
    
    $
    414
    
    
    
    29.0
    %
    
    $
    426
    
    
    
    32.8
    %
    
    $
    (12
    )
    
    
    (2.8
    )%Gain on sale of loans
    
    
    161
    
    
    
    11.3
    
    
    
    130
    
    
    
    10.0
    
    
    
    31
    
    
    
    23.8Earnings on bank-owned life insurance
    
    
    108
    
    
    
    7.6
    
    
    
    116
    
    
    
    8.9
    
    
    
    (8
    )
    
    
    (6.9
    )Brokerage
    
    
    60
    
    
    
    4.2
    
    
    
    89
    
    
    
    6.9
    
    
    
    (29
    )
    
    
    (32.6
    )Trust
    
    
    216
    
    
    
    15.1
    
    
    
    171
    
    
    
    13.2
    
    
    
    45
    
    
    
    26.3Interchange fees
    
    
    219
    
    
    
    15.3
    
    
    
    195
    
    
    
    15.0
    
    
    
    24
    
    
    
    12.3Other
    
    
    250
    
    
    
    17.5
    
    
    
    171
    
    
    
    13.2
    
    
    
    79
    
    
    
    46.2Total non-interest income
    
    $
    1,428
    
    
    
    100.0
    %
    
    $
    1,298
    
    
    
    100.0
    %
    
    $
    130
    
    
    
    10.0
    %
 NON-INTEREST EXPENSE
 2011 vs. 2010
   29




---



##### 



For The Three Months EndedMarch 31, 2011
    
    March 31, 2010
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Salaries
    
    $
    1,657
    
    
    
    39.9
    %
    
    $
    1,576
    
    
    
    39.7
    %
    
    $
    81
    
    
    
    5.1
    %Employee benefits
    
    
    585
    
    
    
    14.1
    
    
    
    471
    
    
    
    11.8
    
    
    
    114
    
    
    
    24.2Occupancy
    
    
    298
    
    
    
    7.2
    
    
    
    293
    
    
    
    7.4
    
    
    
    5
    
    
    
    1.7Furniture and equipment
    
    
    301
    
    
    
    7.3
    
    
    
    311
    
    
    
    7.8
    
    
    
    (10
    )
    
    
    (3.2
    )State shares tax
    
    
    143
    
    
    
    3.5
    
    
    
    133
    
    
    
    3.3
    
    
    
    10
    
    
    
    7.5Professional fees
    
    
    153
    
    
    
    3.7
    
    
    
    145
    
    
    
    3.6
    
    
    
    8
    
    
    
    5.5Directors fees
    
    
    68
    
    
    
    1.6
    
    
    
    67
    
    
    
    1.7
    
    
    
    1
    
    
    
    1.5FDIC assessments
    
    
    149
    
    
    
    3.6
    
    
    
    147
    
    
    
    3.7
    
    
    
    2
    
    
    
    1.4Telecommunications
    
    
    83
    
    
    
    2.0
    
    
    
    96
    
    
    
    2.4
    
    
    
    (13
    )
    
    
    (13.5
    )Amortization of core deposit intangible
    
    
    127
    
    
    
    3.1
    
    
    
    151
    
    
    
    3.8
    
    
    
    (24
    )
    
    
    (15.9
    )Automated teller machine and interchange
    
    
    151
    
    
    
    3.6
    
    
    
    130
    
    
    
    3.3
    
    
    
    21
    
    
    
    16.2Other
    
    
    429
    
    
    
    10.4
    
    
    
    455
    
    
    
    11.5
    
    
    
    (26
    )
    
    
    (5.7
    )Total non-interest expense
    
    $
    4,144
    
    
    
    100.0
    %
    
    $
    3,975
    
    
    
    100.0
    %
    
    $
    169
    
    
    
    4.3
    %
 FINANCIAL CONDITION
    INVESTMENTS
  March 31, 2011Amortized
    
    
    Estimated(In Thousands)
    
    Cost
    
    
    Fair ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    118,316
    
    
    $
    121,279Other
    
    
    65,538
    
    
    
    65,308Obligations of state and political subdivisions
    
    
    15,417
    
    
    
    15,527Total debt securities
    
    
    199,271
    
    
    
    202,114Marketable equity securities
    
    
    2,130
    
    
    
    2,124Total investment securities AFS
    
    $
    201,401
    
    
    $
    204,238
 30




---



##### 



December 31, 2010Amortized
    
    
    Estimated(In Thousands)
    
    Cost
    
    
    Fair ValueObligation of U.S.Government Corporations
and Agencies:Mortgage-backed
    
    $
    129,008
    
    
    $
    132,515Other
    
    
    59,046
    
    
    
    58,903Obligations of state and political subdivisions
    
    
    13,625
    
    
    
    13,671Total debt securities
    
    
    201,679
    
    
    
    205,089Marketable equity securities
    
    
    2,130
    
    
    
    2,084Total investment securities AFS
    
    $
    203,809
    
    
    $
    207,173
 LOANS
   Change(In Thousands)
    
    March 31, 2011
    
    
    December 31, 2010
    
    
    Amount
    
    
    %Commercial, financial and agricultural
    
    $
    35,836
    
    
    $
    33,819
    
    
    $
    2,017
    
    
    
    6.0
    %Tax-exempt
    
    
    27,194
    
    
    
    25,180
    
    
    
    2,014
    
    
    
    8.0Real estate
    
    
    254,835
    
    
    
    262,355
    
    
    
    (7,520
    )
    
    
    (2.9
    )Real estate construction
    
    
    18,346
    
    
    
    11,689
    
    
    
    6,657
    
    
    
    57.0Installment loans to individuals
    
    
    6,990
    
    
    
    7,232
    
    
    
    (242
    )
    
    
    (3.3
    )Add (deduct): Unearned discount
    
    
    (5
    )
    
    
    (6
    )
    
    
    1
    
    
    
    (16.7
    )Unamortized loan costs, net of fees
    
    
    185
    
    
    
    184
    
    
    
    1
    
    
    
    0.5Gross loans
    
    $
    343,381
    
    
    $
    340,453
    
    
    $
    2,928
    
    
    
    0.9
    %
  March 31, 2011
    
    December 31, 2010Commercial, financial and agricultural
    
    
    10.4
    %
    
    
    9.9
    %Tax-exempt
    
    
    7.9
    
    
    
    7.4Real estate
    
    
    74.4
    
    
    
    77.2Real estate construction
    
    
    5.3
    
    
    
    3.4Installment loans to individuals
    
    
    2.0
    
    
    
    2.1Gross loans
    
    
    100.0
    %
    
    
    100.0
    %
 ALLOWANCE FOR LOAN LOSSES
   31




---



##### 



For the Three Months Ended March 31,(In Thousands)
    
    2011
    
    
    2010Average Loans Outstanding during
the period
    
    $
    342,994
    
    
    $
    334,755Balance, beginning of year
    
    $
    4,801
    
    
    $
    4,210Provision charged to operations
    
    
    80
    
    
    
    310Loans charged off:Commercial, financial, and agricultural
    
    
    
    
    
    
    Real estate mortgages
    
    
    (13
    )
    
    
    (536
    )Installment loans to indiviuals
    
    
    (15
    )
    
    
    (4
    )Recoveries:Commercial, financial, and agricultural
    
    
    
    
    
    
    1Real estate mortgages
    
    
    2
    
    
    
    1Installment loans to indiviuals
    
    
    3
    
    
    
    4Balance, end of period
    
    $
    4,858
    
    
    $
    3,986Ratio of net charge-offs to average loans
outstanding during the period
    
    
    0.01
    %
    
    
    0.16
    %
 NON-PERFORMING LOANS
   (In Thousands)
    
    March 31, 2011
    
    
    December 31, 2010Commercial, financial and agriculturalDays 30-89
    
    $
    309
    
    
    $
    244Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    338
    
    
    
    224Real estateDays 30-89
    
    
    2,422
    
    
    
    2,880Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    2,779
    
    
    
    3,604Installment loans to individualsDays 30-89
    
    
    37
    
    
    
    32Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    
    
    
    
    $
    5,885
    
    
    $
    6,984Days 30-89
    
    $
    2,768
    
    
    $
    3,156Days 90 plus
    
    
    
    
    
    
    Non-accrual
    
    
    3,117
    
    
    
    3,828$
    5,885
    
    
    $
    6,984Restructured loans still accruing
    
    $
    318
    
    
    $
    319Other real estate owned
    
    $
    
    
    
    $
    
 DEPOSITS
 .
 32




---



##### 



March 31, 2011
    
    December 31, 2010Average
    
    
    
    
    
    Average
    
    Change(In Thousands)
    
    Balance
    
    Rate
    
    Balance
    
    Rate
    
    Amount
    
    %Non-interest bearing
    
    $
    64,534
    
    
    
    
    %
    
    $
    59,013
    
    
    
    
    %
    
    $
    5,521
    
    
    
    9.4
    %Savings
    
    
    66,645
    
    
    
    0.35
    
    
    
    63,223
    
    
    
    0.37
    
    
    
    3,422
    
    
    
    5.4Now deposits
    
    
    73,843
    
    
    
    0.13
    
    
    
    71,374
    
    
    
    0.14
    
    
    
    2,469
    
    
    
    3.5Money market deposits
    
    
    45,533
    
    
    
    0.57
    
    
    
    42,460
    
    
    
    0.75
    
    
    
    3,073
    
    
    
    7.2Time deposits
    
    
    229,899
    
    
    
    1.90
    
    
    
    234,812
    
    
    
    2.19
    
    
    
    (4,913
    )
    
    
    (2.1
    )Total deposits
    
    $
    480,454
    
    
    
    1.03
    %
    
    $
    470,882
    
    
    
    1.23
    %
    
    $
    9,572
    
    
    
    2.0
    %
 BORROWED FUNDS
   March 31, 2011
    
    December 31, 2010
    
    Change(In Thousands)
    
    Amount
    
    % Total
    
    Amount
    
    % Total
    
    Amount
    
    %Short-term borrowings:Securities sold under agreement to repurchase
    
    $
    54,610
    
    
    
    82.7
    %
    
    $
    52,315
    
    
    
    77.4
    %
    
    $
    2,295
    
    
    
    4.4
    %Short-term borrowings, FHLB
    
    
    
    
    
    
    
    
    
    
    603
    
    
    
    0.9
    
    
    
    (603
    )
    
    
    (100.0
    )U.S. Treasury tax and loan notes
    
    
    670
    
    
    
    1.0
    
    
    
    773
    
    
    
    1.1
    
    
    
    (103
    )
    
    
    (13.3
    )Total short-term borrowings
    
    
    55,280
    
    
    
    83.7
    %
    
    
    53,691
    
    
    
    79.4
    %
    
    
    1,589
    
    
    
    3.0Long-term borrowings, FHLB
    
    
    6,122
    
    
    
    9.3
    
    
    
    9,252
    
    
    
    13.8
    
    
    
    (3,130
    )
    
    
    (33.8
    )Junior subordinate debentures
    
    
    4,640
    
    
    
    7.1
    
    
    
    4,640
    
    
    
    6.9
    
    
    
    
    
    
    
    Total borrowed funds
    
    $
    66,042
    
    
    
    100.0
    %
    
    $
    67,583
    
    
    
    100.0
    %
    
    $
    (1,541
    )
    
    
    (2.3
    )%
  March 31, 2011Weighted
    
    MaximumEnding
    
    Average
    
    Month End
    
    Average(In Thousands)
    
    Balance
    
    Balance
    
    Balance
    
    RateSecurities sold under agreements
to repurchase
    
    $
    54,195
    
    
    $
    54,610
    
    
    $
    56,844
    
    
    
    0.63
    %Other short-term borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.00
    %U.S. Treasury tax and loan notes
    
    
    865
    
    
    
    670
    
    
    
    1,000
    
    
    
    0.00
    %Total
    
    $
    55,060
    
    
    $
    55,280
    
    
    $
    57,844
    
    
    
    0.62
    %
 March 31, 2010Weighted
    
    MaximumEnding
    
    Average
    
    Month End
    
    Average(In Thousands)
    
    Balance
    
    Balance
    
    Balance
    
    RateSecurities sold under agreementsto repurchase
    
    $
    48,681
    
    
    $
    49,042
    
    
    $
    50,832
    
    
    
    0.83
    %Other short-term borrowings
    
    
    
    
    
    
    3,135
    
    
    
    4,075
    
    
    
    0.73
    %U.S. Treasury tax and loan notes
    
    
    569
    
    
    
    550
    
    
    
    569
    
    
    
    0.00
    %Total
    
    $
    49,250
    
    
    $
    52,727
    
    
    $
    55,476
    
    
    
    0.82
    %
 LIQUIDITY
  33




---



##### 



CAPITAL RESOURCES
    2011
    
    2010(In Thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal Capital
(to Risk-weighted Assets)Actual
    
    $
    65,705
    
    
    
    18.7
    %
    
    $
    64,476
    
    
    
    18.5
    %For Capital Adequacy Purposes
    
    
    28,168
    
    
    
    8.0
    
    
    
    27,884
    
    
    
    8.0To Be Well-Capitalized
    
    
    35,210
    
    
    
    10.0
    
    
    
    34,855
    
    
    
    10.0Tier I Capital
(to Risk-weighted Assets)Actual
    
    $
    61,303
    
    
    
    17.4
    %
    
    $
    60,114
    
    
    
    17.3
    %For Capital Adequacy Purposes
    
    
    14,084
    
    
    
    4.0
    
    
    
    13,942
    
    
    
    4.0To Be Well-Capitalized
    
    
    21,126
    
    
    
    6.0
    
    
    
    20,913
    
    
    
    6.0Tier I Capital
(to Average Assets)Actual
    
    $
    61,303
    
    
    
    10.1
    %
    
    $
    60,114
    
    
    
    10.0
    %For Capital Adequacy Purposes
    
    
    24,299
    
    
    
    4.0
    
    
    
    24,034
    
    
    
    4.0To Be Well-Capitalized
    
    
    30,374
    
    
    
    5.0
    
    
    
    30,043
    
    
    
    5.0
  INTEREST RATE RISK MANAGEMENT
     34




---



##### 



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
    35




---



##### 



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 (January 1  January 31, 2011)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139,000Month #2 (February 1  February 28, 2011)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139,000Month #3 (March 1  March 31, 2011)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139,000
 
 (1)
    
    This program was announced in 2009 and represents the third buy-back program. The
Board of Directors approved the purchase of 200,000 shares. There was no expiration date
associated with this program. The Corporation did not sell any unregistered securities during the quarter ended March 31,
2011.
 
 Item 3. Defaults Upon Senior Securities
  
 Item 5. Other Information
  
 Item 6. Exhibits
 3.1.1
    
    Amended and Restated Articles of Incorporation-incorporated by reference to Registrants
Current Report on Form 10-K, dated May 9, 2005, filed with the Commission on May 10, 2005.3.2
    
    Amended Bylaws-incorporated by reference to Registrants Annual Report on Form 10-K, filed
with the commission on March 26, 2010.31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer32
    
    Section 906 Certification of Principal Executive Officer and Principal Financial Officer
 36




---



##### 



SIGNATURES
  CCFNB BANCORP, INC.(Registrant)By
    
    /s/ Lance O. DiehlLance O. DiehlPresident and CEO(Principal Executive Officer)Date: May 10, 2011By
    
    /s/ Jeffrey T. ArnoldJeffrey T. Arnold, CPA, CIAChief Financial Officer and Treasurer(Principal Financial Officer)Date: May 10, 2011
 37