<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2006

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________________ to _________________

Commission file number 0-17455

                               COMM BANCORP, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                       <C>
               PENNSYLVANIA                                     23-2242292
     (State or other jurisdiction of                         (I.R.S. Employer
      incorporation or organization)                      Identification Number)
</TABLE>

<TABLE>
<S>                                                             <C>
125 NORTH STATE STREET, CLARKS SUMMIT, PA                          18411
 (Address of principal executive offices)                       (Zip Code)
</TABLE>

                                 (570) 586-0377
              (Registrant's telephone number, including area code)

________________________________________________________________________________
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 1,853,131 at April 30, 2006


                                  Page 1 of 51
                            Exhibit Index on Page 45

<PAGE>

                               COMM BANCORP, INC.
                                    FORM 10-Q

                                 MARCH 31, 2006

                                      INDEX

<TABLE>
<CAPTION>
CONTENTS                                                                PAGE NO.
--------                                                                --------
<S>                                                                     <C>
PART I.  FINANCIAL INFORMATION:

   Item 1.  Financial Statements.

      Consolidated Statements of Income and Comprehensive Income -
         for the Three Months Ended March 31, 2006 and 2005..........       3
      Consolidated Balance Sheets - March 31, 2006, and
         December 31, 2005...........................................       4
      Consolidated Statement of Changes in Stockholders' Equity
         for the Three Months Ended March 31, 2006...................       5
      Consolidated Statements of Cash Flows for the Three Months
         Ended March 31, 2006 and 2005...............................       6
      Notes to Consolidated Financial Statements.....................       7

   Item 2.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations...................       8

   Item 3.  Quantitative and Qualitative Disclosures About Market
               Risk..................................................       *

   Item 4.  Controls and Procedures..................................      42

PART II. OTHER INFORMATION:

   Item 1.  Legal Proceedings........................................      43

   Item 1A. Risk Factors.............................................      43

   Item 2.  Unregistered Sales of Equity Securities and Use of
               Proceeds..............................................      43

   Item 3.  Defaults Upon Senior Securities..........................      43

   Item 4.  Submission of Matters to a Vote of Security Holders......      43

   Item 5.  Other Information........................................      43

   Item 6.  Exhibits and Reports on Form 8-K.........................      43

   Signatures........................................................      44
   Exhibit Index.....................................................      45
</TABLE>

*    Not Applicable


                                        2
<PAGE>

COMM BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31                                           2006         2005
-----------------------------------                                        ----------   ----------
<S>                                                                        <C>          <C>
INTEREST INCOME:
Interest and fees on loans:
   Taxable .............................................................   $    6,324   $    5,489
   Tax-exempt ..........................................................          430          330
Interest and dividends on investment securities available-for-sale:
   Taxable .............................................................          603          555
   Tax-exempt ..........................................................          379          391
   Dividends ...........................................................           11            8
Interest on federal funds sold .........................................            6
                                                                           ----------   ----------
      Total interest income ............................................        7,753        6,773
                                                                           ----------   ----------
INTEREST EXPENSE:
Interest on deposits ...................................................        2,820        2,380
Interest on short-term borrowings ......................................           84           79
                                                                           ----------   ----------
      Total interest expense ...........................................        2,904        2,459
                                                                           ----------   ----------
      Net interest income ..............................................        4,849        4,314
Provision for loan losses ..............................................          180          300
                                                                           ----------   ----------
      Net interest income after provision for loan losses ..............        4,669        4,014
                                                                           ----------   ----------
NONINTEREST INCOME:
Service charges, fees and commissions ..................................          788          837
Net gains on sale of loans .............................................           72          156
Net gains on sale of merchant services .................................                       125
                                                                           ----------   ----------
      Total noninterest income .........................................          860        1,118
                                                                           ----------   ----------
NONINTEREST EXPENSE:
Salaries and employee benefits expense .................................        1,790        1,795
Net occupancy and equipment expense ....................................          605          638
Other expenses .........................................................        1,161        1,187
                                                                           ----------   ----------
   Total noninterest expense ...........................................        3,556        3,620
                                                                           ----------   ----------
Income before income taxes .............................................        1,973        1,512
Provision for income tax expense .......................................          423          232
                                                                           ----------   ----------
      Net income .......................................................        1,550        1,280
                                                                           ----------   ----------
OTHER COMPREHENSIVE LOSS:
Unrealized holding losses on investment securities available-for-sale ..         (450)        (813)
Income tax benefit related to other comprehensive income loss ..........         (153)        (276)
                                                                           ----------   ----------
      Other comprehensive loss, net of income taxes ....................         (297)        (537)
                                                                           ----------   ----------
      Comprehensive income .............................................   $    1,253   $      743
                                                                           ==========   ==========
PER SHARE DATA:
Net income .............................................................   $     0.84   $     0.69
Cash dividends declared ................................................   $     0.25   $     0.23
Average common shares outstanding ......................................    1,851,816    1,865,848
</TABLE>

See Notes to Consolidated Financial Statements.


                                        3

<PAGE>

COMM BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                      MARCH 31,   DECEMBER 31,
                                                         2006         2005
                                                      ---------   ------------
<S>                                                   <C>         <C>
ASSETS:
Cash and due from banks ...........................    $ 12,435     $ 23,403
Federal funds sold ................................                   12,000
Investment securities available-for-sale ..........      90,924      104,965
Loans held-for-sale, net ..........................       2,513        1,934
Loans, net of unearned income .....................     423,830      388,603
   Less: allowance for loan losses ................       4,151        4,128
                                                       --------     --------
Net loans .........................................     419,679      384,475
Premises and equipment, net .......................      11,063       11,003
Accrued interest receivable .......................       2,861        2,487
Other assets ......................................       3,859        3,310
                                                       --------     --------
      Total assets ................................    $543,334     $543,577
                                                       ========     ========
LIABILITIES:
Deposits:
   Noninterest-bearing ............................    $ 66,350     $ 75,428
   Interest-bearing ...............................     413,209      415,937
                                                       --------     --------
      Total deposits ..............................     479,559      491,365
Short-term borrowings .............................      10,650
Accrued interest payable ..........................       1,032        1,024
Other liabilities .................................       1,546        1,499
                                                       --------     --------
      Total liabilities ...........................     492,787      493,888
                                                       --------     --------
STOCKHOLDERS' EQUITY:
Common stock, par value $0.33, authorized
   12,000,000 shares, issued and outstanding:
   March 31, 2006, 1,851,816 shares;
   December 31, 2005, 1,850,154 shares ............         611          611
Capital surplus ...................................       6,937        6,869
Retained earnings .................................      42,337       41,250
Accumulated other comprehensive income ............         662          959
                                                       --------     --------
      Total stockholders' equity ..................      50,547       49,689
                                                       --------     --------
      Total liabilities and stockholders' equity ..    $543,334     $543,577
                                                       ========     ========
</TABLE>

See Notes to Consolidated Financial Statements.


                                        4

<PAGE>

COMM BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                    ACCUMULATED
                                                                                       OTHER           TOTAL
                                                     COMMON   CAPITAL   RETAINED   COMPREHENSIVE   STOCKHOLDERS'
                                                      STOCK   SURPLUS   EARNINGS       INCOME          EQUITY
                                                     ------   -------   --------   -------------   -------------
<S>                                                  <C>      <C>       <C>        <C>             <C>
BALANCE, DECEMBER 31, 2005........................    $611     $6,869   $41,250        $ 959          $49,689
Net income........................................                        1,550                         1,550
Dividends declared: $0.25 per share...............                         (463)                         (463)
Dividend reinvestment plan: 1,662 shares issued...                 68                                      68
Net change in other comprehensive income..........                                      (297)            (297)
                                                      ----     ------   -------        -----          -------
BALANCE, MARCH 31, 2006...........................    $611     $6,937   $42,337        $ 662          $50,547
                                                      ====     ======   =======        =====          =======
</TABLE>

See Notes to Consolidated Financial Statements.


                                        5
<PAGE>

COMM BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31                                         2006       2005
-----------------------------------                                       --------   -------
<S>                                                                       <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................   $  1,550   $ 1,280
Adjustments:
   Provision for loan losses ..........................................        180       300
   Depreciation, amortization and accretion ...........................        298       545
   Amortization of loan costs .........................................         59        34
   Deferred income tax benefit ........................................        (14)     (138)
   Loss (gain) on sale of foreclosed assets ...........................         30       (50)
   Changes in:
      Loans held for sale, net ........................................       (579)   (1,988)
      Accrued interest receivable .....................................       (374)     (120)
      Other assets ....................................................       (494)      (73)
      Accrued interest payable ........................................          8       (42)
      Other liabilities ...............................................        169      (282)
                                                                          --------   -------
         Net cash provided by (used in) operating activities ..........        833      (534)
                                                                          --------   -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from repayments of investment securities available-for-sale ..     14,573     9,155
Purchases of investment securities available-for-sale .................     (1,031)   (1,234)
Proceeds from sale of foreclosed assets ...............................        136       304
Net increase in lending activities ....................................    (35,656)   (9,738)
Purchases of premises and equipment ...................................       (309)     (117)
                                                                          --------   -------
         Net cash used in investing activities ........................    (22,287)   (1,630)
                                                                          --------   -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net changes in:
   Money market, NOW, savings and noninterest-bearing accounts ........    (10,336)   (3,749)
   Time deposits ......................................................     (1,470)   (1,929)
   Short-term borrowings ..............................................     10,650     7,800
Proceeds from the issuance of common shares ...........................         68        60
Cash dividends paid ...................................................       (426)     (410)
                                                                          --------   -------
         Net cash provided by (used in) financing activities ..........     (1,514)    1,772
                                                                          --------   -------
         Net decrease in cash and cash equivalents ....................    (22,968)     (392)
         Cash and cash equivalents at beginning of year ...............     35,403    12,702
                                                                          --------   -------
         Cash and cash equivalents at end of period ...................   $ 12,435   $12,310
                                                                          ========   =======
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
   Interest ...........................................................   $  2,896   $ 2,501
Noncash items:
   Transfers of loans to foreclosed assets ............................        213        76
   Unrealized losses on investment securities available-for-sale ......   $    297   $   537
</TABLE>

See Notes to Consolidated Financial Statements.


                                        6

<PAGE>

COMM BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. BASIS OF PRESENTATION:

The accompanying unaudited consolidated financial statements of Comm Bancorp,
Inc. and subsidiaries: Community Bank & Trust Company, including its
subsidiaries, Community Leasing Corporation and Comm Financial Services
Corporation; and Comm Realty Corporation (collectively, the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information and with the
instructions to Form 10-Q and Article 10-01 of Regulation S-X. In the opinion of
management, all normal recurring adjustments necessary for a fair presentation
of the financial position and results of operations for the periods have been
included. All significant intercompany balances and transactions have been
eliminated in the consolidation. Prior-period amounts are reclassified when
necessary to conform with the current year's presentation.

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reported periods. Actual results could differ from those
estimates. For additional information and disclosures required under GAAP,
reference is made to the Company's Annual Report on Form 10-K for the period
ended December 31, 2005.

2. SERVICING OF FINANCIAL ASSETS:

On March 17, 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 156, "Accounting for Servicing of
Financial Assets." This Statement, which amends SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
addresses the recognition and measurement of separately recognized servicing
assets and liabilities and provides an approach to simplify efforts to obtain
hedge-like accounting. SFAS No. 156 (i) clarifies when an obligation to service
financial assets should be separately recognized as a servicing asset or a
servicing liability; (ii) requires that separately recognized servicing assets
or liabilities be measured at fair value; and (iii) permits an entity to choose
either the amortization method or the fair value method in order to subsequently
measure the separately recognized servicing asset or liability. SFAS No. 156 is
effective for all separately recognized servicing assets and liabilities
acquired or issued subsequent to fiscal years beginning after September 15,
2006. Early adoption of this Statement is permitted. The adoption of this
Statement on January 1, 2007, is not expected to have a material effect on the
operating results or financial position of the Company.


                                        7

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

FORWARD-LOOKING DISCUSSION:

Certain statements in this Form 10-Q are forward-looking statements that involve
numerous risks and uncertainties. The following factors, among others, may cause
actual results to differ materially from projected results:

Local, domestic and international economic and political conditions, and
government monetary and fiscal policies affect banking both directly and
indirectly. Inflation, recession, unemployment, volatile interest rates, tight
money supply, real estate values, international conflicts, and other factors
beyond our control may also adversely affect our future results of operations.
Our management team, consisting of the Board of Directors and executive
officers, expects that no particular factor will affect the results of
operations. Downward trends in areas such as real estate, construction and
consumer spending, may adversely impact our ability to maintain or increase
profitability. Therefore, we cannot assure the continuation of our current rates
of income and growth.

Our earnings depend largely upon net interest income. The relationship between
our cost of funds, deposits and borrowings, and the yield on our
interest-earning assets, loans and investments, all influence net interest
income levels. This relationship, defined as the net interest spread, fluctuates
and is affected by regulatory, economic and competitive factors that influence
interest rates, the volume, rate and mix of interest-earning assets and
interest-bearing liabilities, and the level of nonperforming assets. As part of
our interest rate risk ("IRR") strategy, we monitor the maturity and repricing
characteristics of interest-earning assets and interest-bearing liabilities to
control our exposure to interest rate changes.

To a certain extent, our success depends upon the general economic conditions in
the geographic market that we serve. Although we expect economic conditions in
our market area to remain stable, assurance cannot be given that this
improvement will occur. Adverse changes to economic conditions would likely
impair loan collections and may have a materially adverse effect on the
consolidated results of operations and financial position.

The banking industry is highly competitive, with rapid changes in product
delivery systems and in consolidation of service providers. We compete with many
larger institutions in terms of asset size. These competitors also have
substantially greater technical, marketing and financial resources.


                                       8

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The larger size of these companies affords them the opportunity to offer some
specialized products and services not offered by us. We are constantly striving
to meet the convenience and needs of our customers and to enlarge our customer
base, however, we cannot assure that these efforts will be successful.

CRITICAL ACCOUNTING POLICIES:

Our financial statements are prepared in accordance with United States generally
accepted accounting principles ("GAAP"). The preparation of financial statements
in conformity with GAAP requires us to establish critical accounting policies
and make accounting estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during those reporting periods.

An accounting estimate requires assumptions about uncertain matters that could
have a material effect on the financial statements if a different amount within
a range of estimates were used or if estimates changed from period to period.
Readers of this report should understand that estimates are made considering
facts and circumstances at a point in time, and changes in those facts and
circumstances could produce results that differ from when those estimates were
made. Significant estimates that are particularly susceptible to material change
in the next year relate to the allowance for loan losses, fair value of
financial instruments and the valuations of real estate acquired through
foreclosure and intangible assets. Actual amounts could differ from those
estimates.

We maintain the allowance for loan losses at a level we believe adequate to
absorb probable credit losses related to specifically identified loans, as well
as probable incurred losses inherent in the remainder of the loan portfolio as
of the balance sheet date. The balance in the allowance for loan losses account
is based on past events and current economic conditions.

The allowance for loan losses account consists of an allocated element and an
unallocated element. The allocated element consists of a specific portion for
the impairment of loans individually evaluated and a formula portion for the
impairment of those loans collectively evaluated. The unallocated element is
used to cover inherent losses that exist as of the evaluation date, but which
have not been identified as part of the allocated allowance using our impairment
evaluation methodology due to limitations in the process.


                                       9

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

We monitor the adequacy of the allocated portion of the allowance quarterly and
adjusts the allowance for any deficiencies through normal operations. This
self-correcting mechanism reduces potential differences between estimates and
actual observed losses. In addition, the unallocated portion of the allowance is
examined quarterly to ensure that it remains relatively constant in relation to
the total allowance unless there are changes in the related criteria that would
indicate a need to either increase or decrease it. The determination of the
allowance for loan loss level is inherently subjective as it requires estimates
that are susceptible to significant revision as more information becomes
available. Accordingly, we cannot ensure that charge-offs in future periods will
not exceed the allowance for loan losses or that additional increases in the
allowance for loan losses will not be required resulting in an adverse impact on
operating results.

Fair values of financial instruments, in cases where quoted market prices are
not available, are based on estimates using present value or other valuation
techniques which are subject to change.

Real estate acquired in connection with foreclosures or in satisfaction of loans
is written-down to the lower of the related loan balance or 80.0 percent of fair
market value for residential properties or 75.0 percent of fair market value for
commercial properties based upon estimates derived through independent
appraisals. However, proceeds realized from sales may ultimately be higher or
lower than those estimates.

Intangible assets include goodwill, which is evaluated for impairment at least
annually in order to determine if it should be adjusted.

For a further discussion of our significant account policies, refer to the note
entitled, "Summary of significant accounting policies," in the Notes to
Consolidated Financial Statements to our Annual Report on Form 10-K for the year
ended December 31, 2005. This note lists the significant accounting policies
used by management in the development and presentation of our financial
statements. The section entitled "Risk Factors" located in Part I, Item 1A. of
our Annual Report on Form 10-K for the year ended December 31, 2005, this
Management's Discussion and Analysis, The Notes to the Consolidated Financial
Statements, and other financial statement disclosures identify and address key
variables and other qualitative and quantitative factors that are necessary for
the understanding and valuation of our financial position, results of operations
and cash flows.


                                       10

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

OPERATING ENVIRONMENT:

Strong consumer and business spending led to a rebound in economic growth for
the first quarter of 2006. The gross domestic product, the value of all goods
and services produced nationally, rose at an annual rate of 4.8 percent after
growing 1.7 percent in the fourth quarter of 2005. Consumer spending rose 5.5
percent, while business spending grew 6.5 percent. Inflationary pressures
persisted, as rising gas prices forced consumer prices up 0.4 percent in March
2006. In addition, core consumer prices, excluding food and energy prices, rose
0.3 percent. For the first quarter of 2006, consumer prices advanced at an
annual rate of 4.3 percent, compared to 3.4 percent for all of 2005. In order to
combat these pressures, the Federal Open Market Committee ("FOMC") tightened
monetary policy by raising the federal funds rate 50 basis points, in two 25
basis point increments, during the first quarter.

REVIEW OF FINANCIAL POSITION:

Total assets equaled $543.3 million at March 31, 2006 and $543.6 million at
year-end 2005. Although relatively unchanged in total, the composition of our
balance sheet changed amid cyclical deposit trends and intensified competition.
Total deposits decreased $11.8 million from $491.4 million at year-end 2005 to
$479.6 million at the close of the first quarter. However, demand for commercial
loans remained strong, which primarily led to growth of $35.2 million in loans,
net of unearned income. Loan growth was primarily funded by repayments of
investment securities, short-term borrowing arrangements with the Federal Home
Loan Bank of Pittsburgh ("FHLB-Pgh") and utilizing excess federal funds at year
end 2005. Investment securities decreased $14.0 million, while short-term
borrowings outstanding at the end of the first quarter amounted to $10.6
million. Stockholders' equity grew $0.8 million to $50.5 million at March 31,
2006, from $49.7 million at December 31, 2005. Net income of $1.5 million was
partially offset by net cash dividends declared of $0.4 million and an other
comprehensive loss of $0.3 million.

INVESTMENT PORTFOLIO:

Our investments are predominantly comprised of short-term obligations of U.S.
Government agencies and intermediate-term, tax-exempt obligations of states and
municipalities. We utilize the cash flows from maturities of U.S. Government
agencies to fund future loan demand. Tax-exempt obligations of states and
municipalities assist us in lowering our tax burden. U.S. Government agency
securities totaled $30.8 million at March 31, 2006, while tax-exempt state and
municipal obligations totaled $32.6 million. These investment classifications
constituted 69.7 percent of the investment portfolio at March 31, 2006.


                                       11

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The carrying values of the major classifications of available-for-sale
securities as they relate to the total investment portfolio at March 31, 2006,
and December 31, 2005, are summarized as follows:

DISTRIBUTION OF INVESTMENT SECURITIES AVAILABLE-FOR-SALE

<TABLE>
<CAPTION>
                                  MARCH 31, 2006       DECEMBER 31, 2005
                                ------------------   ---------------------
                                  AMOUNT       %        AMOUNT         %
                                ---------   ------   ------------   ------
<S>                             <C>         <C>      <C>            <C>
U.S. Government agencies ....    $30,762     33.83%    $ 42,711      40.69%
State and municipals:
   Taxable ..................     15,071     16.58       15,268      14.54
   Tax-exempt ...............     32,579     35.83       33,795      32.20
Mortgage-backed securities ..     10,916     12.01       12,217      11.64
Equity securities:
   Restricted ...............      1,423      1.56          808       0.77
   Other ....................        173      0.19          166       0.16
                                 -------    ------     --------     ------
      Total .................    $90,924    100.00%    $104,965     100.00%
                                 =======    ======     ========     ======
</TABLE>

Investment securities totaled $90.9 million at March 31, 2006, a decrease of
$14.1 million from $105.0 million at December 31, 2005. We received $14.6
million in maturities and repayments from investment securities during the first
quarter of 2006. These funds were primarily used to fund loan demand. Securities
purchased during the three months ended March 31, 2006, totaled $1.0 million and
were primarily comprised of restricted equity securities of the FHLB-Pgh in
order to satisfy collateral requirements for short-term borrowings outstanding.

We had an unrealized holding gain of $662, net of income taxes of $341 at March
31, 2006, compared to a gain of $959, net of income taxes of $494 at the end of
2005. The decline was predominantly related to depreciation in the market values
of our holdings of tax-exempt state and municipal obligations caused by
increases in general market rates.

For the three months ended March 31, 2006, the investment portfolio averaged
$99.9 million, a decrease of $11.5 million or 10.3 percent compared to an
average of $111.4 million for the same three months of 2005. The tax-equivalent
yield on our investment portfolio rose 62 basis points to 4.82 percent for the
first quarter of 2006 compared to 4.20 percent for the same quarter last year.
In addition to yield analysis, we utilize a total return approach to measure the
investment portfolio's performance since it takes into consideration both market
value and reinvestment income from repayments. The investment portfolio's total
return is the sum of all interest income, reinvestment income on all proceeds
from repayments and capital gains and losses, whether realized or unrealized.
Due to the depreciation in market value of our investment portfolio, the total
return


                                       12
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

for the investment portfolio weakened to 2.9 percent for the 12 months ended
March 31, 2006, from 3.6 percent for the 12 months ended December 31, 2005.

The maturity distribution of the amortized cost, fair value and weighted-average
tax-equivalent yield of the available-for-sale portfolio at March 31, 2006, is
summarized as follows. The weighted-average yield, based on amortized cost, has
been computed for tax-exempt state and municipals on a tax-equivalent basis
using the federal statutory tax rate of 34.0 percent. The distributions are
based on contractual maturity with the exception of mortgage-backed securities
and equity securities. Mortgage-backed securities have been presented based upon
estimated cash flows, assuming no change in the current interest rate
environment. Equity securities with no stated contractual maturities are
included in the "After ten years" maturity distribution. Expected maturities may
differ from contracted maturities, or estimated maturities for mortgage-backed
securities, because borrowers have the right to call or prepay obligations with
or without call or prepayment penalties.

MATURITY DISTRIBUTION OF AVAILABLE-FOR-SALE PORTFOLIO

<TABLE>
<CAPTION>
                                                     AFTER ONE         AFTER FIVE
                                     WITHIN          BUT WITHIN        BUT WITHIN          AFTER
                                    ONE YEAR         FIVE YEARS        TEN YEARS         TEN YEARS            TOTAL
                                ---------------   ---------------   ---------------   ---------------   ----------------
MARCH 31, 2006                   AMOUNT   YIELD    AMOUNT   YIELD    AMOUNT   YIELD    AMOUNT   YIELD    AMOUNT    YIELD
--------------                  -------   -----   -------   -----   -------   -----   -------   -----   -------   ------
<S>                             <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>
Amortized cost:
U.S. Government agencies.....   $24,931   3.67%   $ 6,024   3.99%                                       $30,955     3.73%
State and municipals:
   Taxable...................     3,360   2.14     12,154   2.99                                         15,514     2.81
   Tax-exempt................     1,707   3.65      3,862   7.69    $12,212   7.80%   $13,245    7.34%   31,026     7.36
Mortgage-backed securities...     4,615   5.57      6,145   4.91        203   6.26          2    7.47    10,965     5.21
Equity securities:
   Restricted................                                                           1,423    2.67     1,423     2.67
   Other.....................                                                              38   19.12        38    19.12
                                -------           -------           -------           -------           -------
      Total..................   $34,613   3.77%   $28,185   4.27%   $12,415   7.77%   $14,708    6.92%  $89,921     4.99%
                                =======           =======           =======           =======           =======
Fair value:
U.S. Government agencies.....   $24,834           $ 5,928                                               $30,762
State and municipals:
   Taxable...................     3,320            11,751                                                15,071
   Tax-exempt................     1,703             4,049           $12,819           $14,008            32,579
Mortgage-backed securities...     4,610             6,098               206                 2            10,916
Equity securities:
   Restricted................                                                           1,423             1,423
   Other.....................                                                             173               173
                                -------           -------           -------           -------           -------
      Total..................   $34,467           $27,826           $13,025           $15,606           $90,924
                                =======           =======           =======           =======           =======
</TABLE>


                                       13

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

LOAN PORTFOLIO:

The housing market appears to be headed for a slowdown as mortgage rates began
to climb. The rate for a 30-year conventional mortgage was 6.32 percent at March
31, 2006, only 5 basis points higher than year-end 2005, but 39 basis points
higher than 5.93 percent at March 31, 2005. Although both new and existing sales
rose in March, annual sales rates are down from where they were one year ago. In
addition, median prices of new homes were down 2.2 percent from last year, and
the inventory of existing homes rose 7.0 percent to a 5.5 month supply, the
highest level of homes on the market in eight years. Activity in our secondary
mortgage department continued to moderate. Residential mortgage loans serviced
for the Federal National Mortgage Association ("FNMA") grew $1.5 million or at
an annual rate of 5.5 percent to $111.6 million at the end of the first quarter
of 2006 from $110.1 million at the end of 2005. In comparison, for the first
quarter of 2005, residential mortgage loans serviced for the FNMA grew at an
annualized rate of 10.8 percent. For the three months ended March 31,
residential mortgages sold to the FNMA totaled $4.1 million in 2006 compared to
$5.4 million in 2005. Net gains realized on the sale of residential mortgages
totaled $72 for the first quarter of 2006, compared to $156 for the same quarter
last year. In addition, our total residential mortgage portfolio decreased $2.5
million or 2.7 percent to $91.8 million at March 31, 2006, from $94.3 million at
the end of 2005.

Business spending increased considerably in the first quarter of 2006. Spending
for equipment and software rose by a significant 16.4 percent, while
nonresidential construction increased 8.6 percent, the highest pace since the
second quarter of 2004. Strong business spending led to growth of 3.6 percent in
commercial and industrial loans at all commercial banks from the end of 2005.
Similarly, we experienced strong demand for our commercial loan products.
Commercial loans grew $33.0 million or 24.0 percent to $170.3 million at March
31, 2006, from $137.3 million at year-end 2005. In addition, commercial mortgage
loans increased $4.8 million or 3.8 percent from the end of 2005. Commercial
leases declined 11.9 percent.

During the first quarter of 2006, we hired new commercial relationship officers
to further develop our commercial loan portfolio in two specific areas. We hired
an officer with extensive experience in commercial lease financing. We
anticipate significant growth in our commercial lease portfolio over the next
year. We also hired an officer with a strong local government and business
relations background in Luzerne County in order to develop a greater presence in
this market area.


                                       14

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Our consumer portfolio, after gradually declining in recent years, grew a
moderate $97 or 0.3 percent from the end of 2005. It has been very difficult to
attract consumers loans, as most individuals are opting to use home equity loans
to finance large purchases and consolidate higher-interest personal loans. In
addition, automobile manufacturers and durable goods retailers continue to offer
attractive financing alternatives.

For the first quarter of 2006, average loans grew $17.6 million or 4.4 percent
to $418.0 million from $400.4 million for the same quarter of 2005. Rising
interest rates had a considerable effect on the tax-equivalent yield on the loan
portfolio, which rose 70 basis points to 6.77 percent for the three months ended
March 31, 2006, from 6.07 percent for the same three months of 2005. We
anticipate loan yields to increase over the remainder of 2006, as
adjustable-rate loans continue to reprice at higher rates.

The composition of the loan portfolio at March 31, 2006, and December 31, 2005,
is summarized as follows:

DISTRIBUTION OF LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                           MARCH 31,         DECEMBER 31,
                                             2006                2005
                                      -----------------   -----------------
                                       AMOUNT       %      AMOUNT       %
                                      --------   ------   --------   ------
<S>                                   <C>        <C>      <C>        <C>
Commercial, financial and others...   $170,318    40.18%  $137,302    35.33%
Real estate:
   Construction....................      3,503     0.83      2,575     0.66
Mortgage...........................    219,213    51.72    217,827    56.06
Consumer, net......................     29,314     6.92     29,217     7.52
Lease financing, net...............      1,482     0.35      1,682     0.43
                                      --------   ------   --------   ------
   Loans, net of unearned income...    423,830   100.00%   388,603   100.00%
                                                 ======              ======
Less: allowance for loan losses....      4,151               4,128
                                      --------            --------
      Net loans....................   $419,679            $384,475
                                      ========            ========
</TABLE>

In an attempt to limit IRR and liquidity strains, we continually examine the
maturity distribution and interest rate sensitivity of the loan portfolio. As
part of our asset/liability management strategy to reduce the amount of IRR in
the loan portfolio, we price loan products to increase our holdings of
adjustable-rate loans and reduce the average term of fixed-rate loans.
Approximately 51.2 percent of the lending portfolio is expected to reprice
within the next 12 months.


                                       15

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The maturity and repricing information of the loan portfolio by major
classification at March 31, 2006, is summarized as follows:

MATURITY DISTRIBUTION AND INTEREST SENSITIVITY OF LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                                       AFTER ONE
                                            WITHIN    BUT WITHIN     AFTER
MARCH 31, 2006                             ONE YEAR   FIVE YEARS   FIVE YEARS     TOTAL
--------------                             --------   ----------   ----------   --------
<S>                                        <C>        <C>          <C>          <C>
Maturity schedule:
Commercial, financial and others .......   $ 69,174    $ 46,705     $ 54,439    $170,318
Real estate:
   Construction ........................      3,503                                3,503
   Mortgage ............................     27,226      74,246      117,741     219,213
Consumer, net ..........................      4,714      20,036        4,564      29,314
Lease financing, net ...................        696         786                    1,482
                                           --------    --------     --------    --------
      Total ............................   $105,313    $141,773     $176,744    $423,830
                                           ========    ========     ========    ========
Repricing schedule:
Predetermined interest rates ...........   $ 49,894    $ 70,544     $ 64,219    $184,657
Floating or adjustable interest rates ..    167,095      71,826          252     239,173
                                           --------    --------     --------    --------
      Total ............................   $216,989    $142,370     $ 64,471    $423,830
                                           ========    ========     ========    ========
</TABLE>

In the normal course of business, we are also a party to financial instruments
with off-balance sheet risk to meet the financing needs of our customers. These
instruments include legally binding commitments to extend credit, unused
portions of home equity and credit card lines and commercial letters of credit,
and involve, to varying degrees, elements of credit risk and IRR in excess of
the amount recognized in the financial statements.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Commercial letters of credit are conditional
commitments issued by us to support customers in the purchase of commercial
goods. These letters of credit are guarantees of funding and do not obligate us
to make payments to the guaranteed party. These letters of credit are
automatically renewable upon their anniversary date unless canceled by us prior
to that date.


                                       16
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

DISTRIBUTION OF OFF-BALANCE SHEET COMMITMENTS

The contractual amounts of off-balance sheet commitments at March 31, 2006 and
December 31, 2005, are summarized as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,   DECEMBER 31,
                                                                  2006         2005
                                                               ---------   ------------
<S>                                                            <C>         <C>
Commitments to extend credit................................    $ 75,557      $64,816
Unused portions of home equity and credit card lines........      14,587       14,576
Commercial letters of credit................................      19,293       18,565
                                                                --------      -------
   Total....................................................    $109,437      $97,957
                                                                ========      =======
</TABLE>

These commitments are generally issued for one year or less and often expire
unused in whole or in part by the customer. We record an allowance for credit
losses, if deemed necessary, separately as a liability. No allowance was deemed
necessary at March 31, 2006 and December 31, 2005. We do not anticipate that
losses, if any, that may occur as a result of funding off-balance sheet
commitments, would have a material adverse effect on our operating results or
financial position.

ASSET QUALITY:

Our nonperforming asset levels improved $210 to $4,085 at March 31, 2006, from
$4,295 at year-end 2005. The ratio of nonperforming assets to loans, net of
unearned income, equaled 0.96 percent at March 31, 2006 and 1.11 percent at
December 31, 2005. The improvement resulted from a reduction of $505 in
nonaccrual loans, partially offset by increases in accruing loans past due 90
days or more and foreclosed assets of $248 and $47.

During the first quarter of 2006, we transferred four loans with an aggregate
carrying value of $213 to foreclosed assets. Four properties with an aggregate
carrying value of $120 were sold for $136, resulting in a realized gain of $16.
In addition, we wrote down one property $46 to 75.0 percent of its appraised
value.

We anticipate economic conditions in our local market area to stabilize for the
remainder of 2006. However, should economic conditions weaken, borrowers'
ability to make timely loan payments could be hindered. The possibility exists
that these levels could deteriorate should this occur. In addition, rising
interest rates could pose credit risk, as borrowers with adjustable-rate loans
may not be able to meet higher debt service requirements.


                                       17

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Information concerning nonperforming assets at March 31, 2006, and December 31,
2005, is summarized as follows. The table includes loans or other extensions of
credit classified for regulatory purposes and all material loans or other
extensions of credit that cause management to have serious doubts as to the
borrowers' ability to comply with present loan repayment terms.

DISTRIBUTION OF NONPERFORMING ASSETS

<TABLE>
<CAPTION>
                                                         MARCH 31,   DECEMBER 31,
                                                            2006         2005
                                                         ---------   ------------
<S>                                                      <C>         <C>
NONACCRUAL LOANS:
Commercial, financial and others .....................    $1,464        $1,574
Real estate:
   Construction ......................................
   Mortgage ..........................................     1,325         1,714
Consumer, net ........................................        92            98
Lease financing, net .................................
                                                          ------        ------
      Total nonaccrual loans .........................     2,881         3,386
                                                          ------        ------
ACCRUING LOANS PAST DUE 90 DAYS OR MORE:
Commercial, financial and others .....................        25            62
Real estate:
   Construction ......................................
   Mortgage ..........................................       677           333
Consumer, net ........................................        91           118
Lease financing, net .................................         1            33
                                                          ------        ------
      Total accruing loans past due 90 days or more ..       794           546
                                                          ------        ------
      Total nonperforming loans ......................     3,675         3,932
                                                          ------        ------
Foreclosed assets ....................................       410           363
                                                          ------        ------
      Total nonperforming assets .....................    $4,085        $4,295
                                                          ======        ======
Ratios:
Nonperforming loans as a percentage of loans, net ....      0.87%         1.01%
Nonperforming assets as a percentage of loans, net ...      0.96%         1.11%
</TABLE>

We maintain the allowance for loan losses at a level we believe adequate to
absorb probable credit losses related to specifically identified loans, as well
as probable incurred loan losses inherent in the remainder of the loan portfolio
as of the balance sheet date. The balance in the allowance for loan losses
account is based on past events and current economic conditions. We employ the
Federal Financial Institutions Examination Council Interagency Policy Statement
and GAAP in assessing the adequacy of the allowance account. Under GAAP, the
adequacy of the allowance account is determined based on the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by
Creditors for Impairment of a Loan," for loans specifically identified to be
individually evaluated for impairment and the requirements of SFAS No. 5,
"Accounting for Contingencies," for large groups of smaller-balance homogeneous
loans to be collectively evaluated for impairment.


                                       18

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

We follow our systematic methodology in accordance with procedural discipline by
applying it in the same manner regardless of whether the allowance is being
determined at a high point or a low point in the economic cycle. Each quarter,
our loan review department identifies those loans to be individually evaluated
for impairment and those loans collectively evaluated for impairment utilizing a
standard criteria. Internal loan review grades are assigned quarterly to loans
identified to be individually evaluated. A loan's grade may differ from period
to period based on current conditions and events, however, we consistently
utilize the same grading system each quarter. We consistently use loss
experience from the latest eight quarters in determining the historical loss
factor for each pool collectively evaluated for impairment. Qualitative factors
are evaluated in the same manner each quarter and are adjusted within a relevant
range of values based on current conditions.

Information concerning impaired loans at March 31, 2006, and December 31, 2005,
is summarized as follows. The table includes credits classified for regulatory
purposes and all material credits that cause management to have serious doubts
as to the borrower's ability to comply with present loan repayment terms.

DISTRIBUTION OF IMPAIRED LOANS

<TABLE>
<CAPTION>
                                                      MARCH 31,   DECEMBER 31,
                                                         2006         2005
                                                      ---------   ------------
<S>                                                   <C>         <C>
NONACCRUAL LOANS:
Commercial, financial and others...................    $1,464        $1,574
Real estate:
   Construction....................................
   Mortgage........................................     1,325         1,714
Consumer, net......................................        92            98
Lease financing, net...............................
                                                       ------        ------
      Total nonaccrual loans.......................     2,881         3,386
                                                       ------        ------
ACCRUING LOANS:
Commercial, financial and others...................       861           638
Real estate:
   Construction....................................
   Mortgage........................................     3,526         1,622
Consumer, net......................................        59            61
Lease financing, net...............................
                                                       ------        ------
      Total accruing loans.........................     4,446         2,321
                                                       ------        ------
      Total impaired loans.........................    $7,327        $5,707
                                                       ======        ======
Ratio:
Impaired loans as a percentage of loans, net.......      1.73%         1.47%
</TABLE>


                                       19

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Information relating to the recorded investment in impaired loans at March 31,
2006 and December 31, 2005, is summarized as follows:

<TABLE>
<CAPTION>
                                        MARCH 31,   DECEMBER 31,
                                           2006         2005
                                        ---------   ------------
<S>                                     <C>         <C>
Impaired loans:
With a related allowance.............     $6,358       $3,844
With no related allowance............        969        1,863
                                          ------       ------
   Total.............................     $7,327       $5,707
                                          ======       ======
</TABLE>

The analysis of changes affecting the allowance for loan losses related to
impaired loans for the quarter ended March 31, 2006, is summarized as follows:

<TABLE>
<CAPTION>
                                        MARCH 31,
                                           2006
                                        ---------
<S>                                     <C>
Balance at January 1.................     $2,206
Provision for loan losses............        247
Loans charged-off....................         92
Loans recovered......................
                                          ------
Balance at period-end................     $2,361
                                          ======
</TABLE>

Interest income on impaired loans that would have been recognized had the loans
been current, the aggregate amount of interest income recognized and the amount
recognized using the cash-basis method and the average recorded investment in
impaired loans for the three months ended March 31, 2006 and 2005, are
summarized as follows:

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31                                        2006     2005
---------------------------                                       ------   ------
<S>                                                               <C>      <C>
Gross interest due under terms.................................   $  106   $  108
Interest income recognized.....................................      142       67
                                                                  ------   ------
Interest income not recognized (recognized in excess of due)...   $  (36)  $   41
                                                                  ======   ======
Interest income recognized (cash-basis)........................   $  142   $   67
Average recorded investment in impaired loans..................   $5,589   $6,736
</TABLE>

For the three months ended March 31, cash received on impaired loans applied as
a reduction of principal totaled $362 in 2006 and $3.9 million in 2005. There
were no commitments to extend additional funds to parties having impaired loans
at March 31, 2006.


                                       20
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The allocation of the allowance for loan losses at March 31, 2006 and December
31, 2005, is summarized as follows:

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                             MARCH 31, 2006    DECEMBER 31, 2005
                                           -----------------   -----------------
                                                    CATEGORY            CATEGORY
                                                      AS A                AS A
                                                      % OF                % OF
                                           AMOUNT     LOANS    AMOUNT    LOANS
                                           ------   --------   ------   --------
<S>                                        <C>      <C>        <C>      <C>
Allocated allowance:
Specific:
Commercial, financial and others........   $1,334      0.55%   $1,549      0.57%
Real estate:
   Construction.........................
   Mortgage.............................      876      1.14       532      0.86
Consumer, net...........................      151      0.04       125      0.04
Lease financing, net....................
                                           ------    ------    ------    ------
      Total specific....................    2,361      1.73     2,206      1.47
                                           ------    ------    ------    ------
Formula:
Commercial, financial and others........      145     39.63       123     34.76
Real estate:
   Construction.........................               0.83                0.66
   Mortgage.............................      624     50.58       472     55.20
Consumer, net...........................      356      6.88       360      7.48
Lease financing, net....................               0.35                0.43
                                           ------    ------    ------    ------
       Total formula....................    1,125     98.27       955     98.53
                                           ------    ------    ------    ------
       Total allocated allowance........    3,486    100.00%    3,161    100.00%
                                                     ======              ======
Unallocated allowance...................      665                 967
                                           ------              ------
       Total allowance for loan losses..   $4,151              $4,128
                                           ======              ======
</TABLE>

The allocated element of the allowance for loan losses account was $3,486 at
March 31, 2006, an increase of $325 from $3,161 at December 31, 2005. The change
from year-end primarily resulted from a $155 increase in the specific portion of
the allowance for impairment of loans individually evaluated under SFAS No. 114,
coupled with a $170 increase in the formula portion of the allowance for
impairment of loans collectively evaluated under SFAS No. 5. The increase in the
specific portion primarily resulted from an increase in commercial loans which
are still accruing loans but have been identified as impaired with a recorded
investment in excess of fair value.

The unallocated portion of the allowance for loan losses was $665 at the end of
the first quarter of 2006 compared to $967 at year-end 2005. We believe the
unallocated portion of the allowance for loan losses account is


                                       21

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

sufficient to cover any inherent losses in the loan portfolio that have not been
identified as part of the allocated allowance using our impairment methodology.

A reconciliation of the allowance for loan losses and illustration of
charge-offs and recoveries by major loan category for the quarter ended March
31, 2006, is summarized as follows:

RECONCILIATION OF ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                                           2006
                                                                        ---------
<S>                                                                     <C>
Allowance for loan losses at beginning of period ....................    $4,128
Loans charged-off:
Commercial, financial and others ....................................
Real estate:
   Construction .....................................................
   Mortgage .........................................................        92
Consumer, net .......................................................        89
Lease financing, net ................................................
                                                                         ------
      Total .........................................................       181
                                                                         ------
Loans recovered:
Commercial, financial and others ....................................         5
Real estate:
   Construction .....................................................
   Mortgage .........................................................
Consumer, net .......................................................        19
Lease financing, net ................................................
                                                                         ------
      Total .........................................................        24
                                                                         ------
Net loans charged-off ...............................................       157
                                                                         ------
Provision charged to operating expense ..............................       180
                                                                         ------
Allowance for loan losses at end of period ..........................    $4,151
                                                                         ======
Ratios:
Net loans charged-off as a percentage of average loans outstanding ..      0.15%
Allowance for loan losses as a percentage of period end loans .......      0.98%
</TABLE>

The allowance for loan losses account equaled $4,151 or 0.98 percent of loans,
net of unearned income, at March 31, 2006, compared to $4,128 or 1.06 percent at
year-end 2005. The provision for loan losses of $180 exceeded net charge-offs of
$157, which resulted in the $23 increase in the allowance for loan losses
account. At March 31, 2006, the allowance for loan losses covered 101.6 percent
of nonperforming assets, compared to 96.6 percent of nonperforming assets at
December 31, 2005.

Past due loans not satisfied through repossession, foreclosure or related
actions, are evaluated individually to determine if all or part of the


                                       22

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

outstanding balance should be charged against the allowance for loan losses
account. Any subsequent recoveries are credited to the allowance account. Net
charge-offs were $157 and $141 for the first three months of 2006 and 2005. As a
percentage of average loans outstanding, net charge-offs equaled 0.15 percent
and 0.14 percent for the first quarters of 2006 and 2005.

DEPOSITS:

Despite a 5.8 percent increase in disposable personal income in the first
quarter of 2006, the personal savings rate fell 0.5 percent, the fourth
consecutive quarter of negative growth. The declining savings rate has created
intense price competition for deposits. Despite this pressure, we chose not to
aggressively compete for deposits as a result of a favorable anticipated
liquidity position. In addition, cyclical trends of certain business and
not-for-profit customers impacted our deposits. The balances for these accounts
vary cyclically due to timing of tax receipts and disbursements and government
contracts. As a result of these factors, total deposits decreased $11.8 million
to $479.6 million at March 31, 2006, from $491.4 million at December 31, 2005.
Noninterest-bearing accounts decreased $9.1 million, while interest-bearing
accounts fell $2.7 million. The decline in interest-bearing accounts was
primarily caused by decreases of $3.4 million in large denomination time
deposits and $1.4 million in savings accounts, partially offset by an increase
of $1.9 million in time deposits less than $100.

The average amount of, and the rate paid on, the major classifications of
deposits for the quarters ended March 31, 2006 and 2005, are summarized as
follows:

DEPOSIT DISTRIBUTION

<TABLE>
<CAPTION>
                                   MARCH 31, 2006       MARCH 31, 2005
                                 ------------------   -----------------
                                  AVERAGE   AVERAGE    AVERAGE   AVERAGE
                                  BALANCE     RATE     BALANCE     RATE
                                 --------   -------   --------   -------
<S>                              <C>        <C>       <C>        <C>
Interest-bearing:
Money market accounts.........   $ 32,688    2.37%    $ 22,011    1.33%
NOW accounts..................     59,142    2.05       51,367    1.48
Savings accounts..............    114,254    1.20      122,484    0.81
Time deposits less than $100..    187,179    3.84      177,879    3.65
Time deposits $100 or more....     22,293    4.02       33,603    3.31
                                 --------             --------
   Total interest-bearing.....    415,556    2.75%     407,344    2.37%
Noninterest-bearing...........     66,601               68,322
                                 --------             --------
   Total deposits.............   $482,157             $475,666
                                 ========             ========
</TABLE>


                                       23
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

For the three months ended March 31, 2006, total deposits averaged $482.2
million, an increase of $6.5 million or 1.4 percent, from $475.7 million for the
same three months of last year. Average interest-bearing deposits grew $8.2
million or 2.0 percent, while average noninterest-bearing deposits decreased
$1.7 million or 2.5 percent when comparing the first quarters of 2006 and 2005.
The growth in our interest-bearing accounts was concentrated in money market and
NOW accounts which increased $10.7 million and $7.7 million. Although we did not
aggressively compete for deposits, we did offer preferential rates on two
special-term non-renewable certificates of deposit. One certificate carried a
short-term maturity, while the other a longer term. We experienced
disintermediation of our savings accounts into the higher-yielding, short-term
certificate of deposit. Average savings accounts decreased $8.2 million from
$122.5 million in 2005 to $114.3 million in 2006, while time deposits less than
$100 rose $9.3 million from $177.9 million in 2005 to $187.2 million in 2006.
Rising short-term interest rate continued to impact our cost of funds, which
rose 40 basis points to 2.78 percent for the first quarter of 2006 from 2.38
percent one year ago. We anticipate higher funding costs for the remainder of
2006, with further possible monetary policy tightening and intense competitive
pressures in our market area.

Volatile deposits, time deposits in denominations of $100 or more, decreased
$3.4 million to $20.2 million at March 31, 2006, from $23.6 million at December
31, 2005. These deposits averaged $22.3 million in 2006, a decrease of $11.3
million or 33.6 percent from $33.6 million in 2005. The average cost of large
denomination time deposits rose 71 basis points to 4.02 percent for the first
three months of 2006 from 3.31 percent for the same three months of last year.

Maturities of time deposits $100 or more at March 31, 2006, and December 31,
2005, are summarized as follows:

MATURITY DISTRIBUTION OF TIME DEPOSITS OF $100 OR MORE

<TABLE>
<CAPTION>
                                               MARCH 31,   DECEMBER 31,
                                                  2006         2005
                                               ---------   ------------
<S>                                            <C>         <C>
Within three months ........................    $ 3,077       $ 3,964
After three months but within six months ...      2,077         2,547
After six months but within twelve months ..      2,625         4,238
After twelve months ........................     12,387        12,830
                                                -------       -------
   Total ...................................    $20,166       $23,579
                                                =======       =======
</TABLE>

MARKET RISK SENSITIVITY:

Market risk is the risk to our earnings or financial position resulting from
adverse changes in market rates or prices, such as interest rates,


                                       24

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

foreign exchange rates or equity prices. Our exposure to market risk is
primarily IRR associated with our lending, investing and deposit-gathering
activities. During the normal course of business, we are not exposed to foreign
exchange risk or commodity price risk. Our exposure to IRR can be explained as
the potential for change in our reported earnings and/or the market value of our
net worth. Variations in interest rates affect earnings by changing net interest
income and the level of other interest-sensitive income and operating expenses.
Interest rate changes also affect the underlying economic value of our assets,
liabilities and off-balance sheet items. These changes arise because the present
value of future cash flows, and often the cash flows themselves, change with
interest rates. The effects of the changes in these present values reflect the
change in our underlying economic value and provide a basis for the expected
change in future earnings related to interest rates. IRR is inherent in the role
of banks as financial intermediaries. However, a bank with a high degree of IRR
may experience lower earnings, impaired liquidity and capital positions, and
most likely, a greater risk of insolvency. Therefore, banks must carefully
evaluate IRR to promote safety and soundness in their activities.

Short-term interest rates, which were at historically low levels for a
considerable period, began rising steadily since mid-2004. Due to these recent
changes in the interest rate environment, IRR and effectively managing it have
become very important to both bank management and regulators. Bank regulations
require us to develop and maintain an IRR management program, overseen by the
Board of Directors and senior management, that involves a comprehensive risk
management process in order to effectively identify, measure, monitor and
control risk. Should we have material weaknesses in our risk management process
or high exposure relative to our capital, bank regulatory agencies will take
action to remedy these shortcomings. Moreover, the level of IRR exposure and the
quality of our risk management process is a determining factor when evaluating
capital adequacy.

The Asset/Liability Committee ("ALCO"), comprised of members of our Board of
Directors, senior management and other appropriate officers, oversees our IRR
management program. Specifically, ALCO analyzes economic data and market
interest rate trends, as well as competitive pressures, and utilizes several
computerized modeling techniques to reveal potential exposure to IRR. This
allows us to monitor and attempt to control the influence these factors may have
on our rate sensitive assets ("RSA") and rate sensitive liabilities ("RSL"), and
overall operating results and financial position. One such technique utilizes a
static gap model that considers repricing frequencies of RSA and RSL in order to
monitor IRR. Gap analysis attempts to measure our interest rate exposure by
calculating the net amount of RSA


                                       25

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

and RSL that reprice within specific time intervals. A positive gap occurs when
the amount of RSA repricing in a specific period is greater than the amount of
RSL repricing within that same time frame and is indicated by a RSA/RSL ratio
greater than 1.0. A negative gap occurs when the amount of RSL repricing is
greater than the amount of RSA and is indicated by a RSA/RSL ratio less than
1.0. A positive gap implies that earnings will be impacted favorably if interest
rates rise and adversely if interest rates fall during the period. A negative
gap tends to indicate that earnings will be affected inversely to interest rate
changes.

Our interest rate sensitivity gap position, illustrating RSA and RSL at their
related carrying values, is summarized as follows. The distributions in the
table are based on a combination of maturities, call provisions, repricing
frequencies and prepayment patterns. Variable-rate assets and liabilities are
distributed based on the repricing frequency of the instrument. Mortgage
instruments are distributed in accordance with estimated cash flows, assuming
there is no change in the current interest rate environment.

INTEREST RATE SENSITIVITY

<TABLE>
<CAPTION>
                                                    DUE AFTER      DUE AFTER
                                                   THREE MONTHS    ONE YEAR
                                    DUE WITHIN      BUT WITHIN    BUT WITHIN    DUE AFTER
MARCH 31, 2006                     THREE MONTHS   TWELVE MONTHS   FIVE YEARS   FIVE YEARS     TOTAL
--------------                     ------------   -------------   ----------   ----------   --------
<S>                                <C>            <C>             <C>          <C>          <C>
Rate sensitive assets:
Investment securities ..........     $ 15,188        $ 19,279      $ 27,826      $28,631    $ 90,924
Loans held for sale, net .......        2,513                                                  2,513
Loans, net of unearned income ..      132,331          84,658       142,370       64,471     423,830
                                     --------        --------      --------      -------    --------
   Total .......................     $150,032        $103,937      $170,196      $93,102    $517,267
                                     ========        ========      ========      =======    ========
Rate sensitive liabilities:
Money market accounts ..........     $ 21,047        $ 10,080                               $ 31,127
NOW accounts ...................       46,002          13,993                                 59,995
Savings accounts ...............       11,759                      $102,755                  114,514
Time deposits less than $100 ...       26,773          59,668        83,082      $17,884     187,407
Time deposits $100 or more .....        3,077           4,702         9,659        2,728      20,166
Short-term borrowings ..........       10,650                                                 10,650
                                     --------        --------      --------      -------    --------
   Total .......................     $119,308        $ 88,443      $195,496      $20,612    $423,859
                                     ========        ========      ========      =======    ========
Rate sensitivity gap:
   Period ......................     $ 30,724        $ 15,494      $(25,300)     $72,490
   Cumulative ..................     $ 30,724        $ 46,218      $ 20,918      $93,408    $ 93,408
RSA/RSL ratio:
   Period ......................         1.26            1.18          0.87         4.52
   Cumulative ..................         1.26            1.22          1.05         1.22        1.22
</TABLE>

At March 31, 2006 we had a positive gap position with a cumulative one-year
RSA/RSL ratio of 1.22. As previously mentioned, this indicated that if interest
rates increase our earnings would likely be favorably impacted. Given the
current rising interest rate environment, ALCO continued to focus on maintaining
this advantageous position by monitoring and making certain the gap position
between RSA and RSL remained positive. Specifically, we


                                       26

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

predominantly offer commercial loans with adjustable-rate terms that either
reprice immediately or within one year. RSL were more difficult to manage given
the current rate environment characterized by rising short-term interest rates
and a relatively flat yield curve. We did try to mitigate these characteristics
by not aggressively competing for deposits and strategically using
promotional-term, non-renewable certificates of deposit rather than raising
interest rates over all maturity terms. Given our current gap position, should
interest rates increase, a greater amount of RSA would reprice upward in the
near term and at a faster pace than RSL, thereby positively affecting net
interest income. However, these forward-looking statements are qualified in the
aforementioned section entitled "Forward-Looking Discussion" in this
Management's Discussion and Analysis.

Our RSA/RSL ratio declined in comparison to 1.31 at the end of the first quarter
of 2005. The decrease resulted from a $35.2 million or 20.4 percent increase in
RSL, partially offset by a $28.4 million or 12.6 percent increase in RSL
maturing or repricing within one year. We experienced a higher amount of RSL
maturing or repricing within one-year in all major liability categories except
for large denomination time deposits, with an increase in interest-bearing
transaction accounts of $27.4 million accounting for the majority of the
increase. We typically categorize savings accounts in the "Due after one year
but within five years" category. However, a significant balance of commercial
savings accounts carry rates that reprice with the three-month U.S. Treasury. As
a result of their sensitivity to movements in interest rates, we categorize
these savings account in the "Due within three-months" category. At the end of
the first quarter, there were $11.8 million in savings accounts which matured or
repriced within 12 months. In addition, the balances of money market and NOW
accounts at March 31, 2006, increased $9.0 million and $6.3 million in
comparison to one year earlier. The majority of the growth in these accounts
resulted from an increase in the deposit balances of local school districts,
municipalities and certain not-for-profit educational agencies. Money market and
NOW accounts that are tied to the U.S. Treasury are also included in the "Due
after three months" category. The remaining balances in these accounts, which
are not tied to a specific market rate, are included in the "Due after three but
within twelve months" category due to their cyclical nature and sensitivity to
movements in interest rates.


                                       27

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

With respect to RSA maturing or repricing within 12 months, the increase
primarily resulted from a $37.3 million increase in loans, net of unearned
income, partially offset by declines of $7.5 million in investment securities
and $1.4 million in loans held for sale. The increase in loans, net of unearned
income, was predominately caused by our focus on commercial lending, which
involved loans with adjustable interest rates that reprice in the near term.
During the first quarter of 2006, maturities of investment securities were used
to supplement deposit growth in funding loan demand and were not reinvested back
into the portfolio, which caused the decline in investments maturing or
repricing within one year.

Our three-month ratio at March 31, 2006, decreased as compared to one year
earlier. At the end of the first quarter of 2006 this ratio equaled 1.26 as
compared to 3.14 at March 31, 2005. The change in the three-month ratio can be
explained by reasons similar to those for the one-year ratio.

Static gap analysis, although a credible measuring tool, does not fully
illustrate the impact of interest rate changes on future earnings. First, market
rate changes normally do not equally or simultaneously affect all categories of
assets and liabilities. Second, assets and liabilities that can contractually
reprice within the same period may not do so at the same time or to the same
magnitude. Third, the interest rate sensitivity table presents a one-day
position, variations occur daily as we adjust our rate sensitivity throughout
the year. Finally, assumptions must be made in constructing such a table. For
example, the conservative nature of our Asset/Liability Management Policy
assigns money market and NOW accounts to the "Due after three but within twelve
months" repricing interval. In reality, these items may reprice less frequently
and in different magnitudes than changes in general interest rate levels.

As the static gap report fails to address the dynamic changes in the balance
sheet composition or prevailing interest rates, we utilize a simulation model to
enhance our asset/liability management. This model is used to create pro forma
net interest income scenarios under various interest rate shocks. Model results
at March 31, 2006, produced results that were similar to those indicated by the
one-year static gap position. Specifically, given instantaneous and parallel
shifts in general market rates of plus 100 basis points, net interest income
should increase 1.7 percent. Conversely, given instantaneous and parallel shifts
in general market rates of minus 100 basis points, net interest income should
decrease by 1.6 percent. We will continue to monitor our IRR position in 2006
and employ deposit and loan pricing strategies and direct the reinvestment of
loan and investment repayments in order to maintain a favorable IRR position.

Financial institutions are affected differently by inflation than commercial and
industrial companies that have significant investments in fixed assets and
inventories. Most of our assets are monetary in nature and change
correspondingly with variations in the inflation rate. It is difficult to
precisely measure the impact inflation has on us. However, we believe that our
exposure to inflation can be mitigated through asset/liability management.


                                       28

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

LIQUIDITY:

Liquidity management is essential to our continuing operations as it gives us
the ability to meet our financial obligations as they come due, as well as to
take advantage of new business opportunities as they arise. Our financial
obligations include, but are not limited to, the following:

     -    Funding new and existing loan commitments;

     -    Payment of deposits on demand or at their contractual maturity;

     -    Repayment of borrowings as they mature;

     -    Payment of lease obligations; and

     -    Payment of operating expenses.

With the exception of $10.6 million in short-term borrowings outstanding with
the FHLB-Pgh at March 31, 2006, our contractual obligations did not change
significantly from the amounts reported in our Annual Report on Form 10-K for
the period ended December 31, 2005. We believe our liquidity position will be
adequate to support our contractual obligations as they come due.

We employ a number of analytical techniques in assessing the adequacy of our
liquidity position. One such technique is the use of ratio analysis related to
our reliance on noncore funds to fund our investments and loans maturing after
2006. Our noncore funds at March 31, 2006, consisted of short-term borrowings
with the FHLB-Pgh and time deposits in denominations of $100 or more. Time
deposits in denominations of $100 or more are not considered to be a strong
source of liquidity since they are very interest rate sensitive and are
considered to be highly volatile. At March 31, 2006, our net noncore funding
dependence ratio, the difference between noncore funds and short-investments to
long-term assets, was negative 0.8 percent. Similarly, our net short-term
noncore funding dependence ratio, noncore funds maturing within one year, less
short-term investments to long-term assets equaled negative 3.4 percent at the
end of the first quarter of 2006. Despite having short-term borrowings
outstanding, negative ratios indicated that at March 31, 2006, we did not rely
on noncore sources to fund our long-term assets.

The Consolidated Statements of Cash Flows present the changes in cash and cash
equivalents from operating, investing and financing activities. Cash and cash
equivalents consist of cash on hand, cash items in the process of collection,
noninterest-bearing deposits with other banks, balances with the Federal Reserve
Bank of Philadelphia and the FHLB-Pgh, and federal funds sold. Cash and cash
equivalents decreased $23.0 million in the first quarter of 2006. In comparison,
cash and cash equivalents decreased $0.4 million in the same period last year.
For the three months ended March 31, 2006, investing and financing activities
resulted in net cash outflows,


                                       29

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

while operating activities resulted in a net cash inflow. In comparison to the
same three months of 2005, operating and investing activities resulted in net
outflows, while financing activities provided us with net cash.

Deposit gathering is our predominant financing activity. Cyclical deposit trends
usually result in a decrease in deposits during the first quarter. In addition,
competition for deposits continues to intensify due to rising short-term
interest rates. As a result, total deposits declined $11.8 million. Due to this
decline, we utilized short-term borrowings of $10.6 million from the FHLB-Pgh as
a source of liquidity. Similarly, for the first quarter of 2005, deposits
declined $5.7 million, while short-term borrowings increased $7.8 million.

Primary investing activities involve transactions related to our investment
securities and lending activities. Proceeds received from repayments of
investment securities, net of purchases, increased for the three months ended
March 31, to $13.5 million in 2006 compared to $7.9 million in 2005, while cash
used for lending activities increased from $9.7 million in 2005 to $35.7 million
in 2006.

Operating activities provided net cash of $0.8 million for the first three
months of 2006, compared to using net cash of $0.5 million for the same period
of 2005. Net income, adjusted for the effects of noncash transactions such as
depreciation and the provision for loan losses, and net changes in current
assets, is the primary source of funds from operations.

CAPITAL ADEQUACY:

Our stockholders' equity increased $0.8 million to $50.5 million or $27.30 per
share at March 31, 2006, compared to $49.7 million or $26.86 per share at
December 31, 2005. Net income of $1,550 was the primary factor leading to the
improvement. Partially offsetting net income were net cash dividends declared of
$395 and an increase in the other comprehensive loss resulting from market value
fluctuations of the investment portfolio of $297.

We declared dividends of $463 or $0.25 per share for the quarter ended March 31,
2006. The dividend payout ratio was 29.9 percent and 33.5 percent for the first
quarters of 2006 and 2005. It is the intention of the Board of Directors to
continue to pay cash dividends in the future. However, these decisions are
affected by operating results, financial and economic conditions, capital and
growth objectives, appropriate dividend restrictions and other relevant factors.
Stockholders may automatically reinvest their dividends in shares of our common
stock through our dividend reinvestment plan. During the first quarter of 2006,
1,662 shares were issued under this plan.


                                       30

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

We attempt to assure capital adequacy by monitoring our current and projected
capital positions to support future growth, while providing stockholders with an
attractive long-term appreciation of their investments. According to bank
regulation, at a minimum, banks must maintain a Tier I capital to risk-weighted
assets ratio of 4.0 percent and a total capital to risk-weighted assets ratio of
8.0 percent. Additionally, banks must maintain a Leverage ratio, defined as Tier
I capital to total average assets less intangibles, of 3.0 percent. The minimum
Leverage ratio of 3.0 percent only applies to institutions with a composite
rating of one under the Uniform Interagency Bank Rating System, that are not
anticipating or experiencing significant growth and have well-diversified risk.
An additional 100 to 200 basis points are required for all but these most
highly-rated institutions. Our minimum Leverage ratio was 4.0 percent at March
31, 2006 and 2005. If an institution is deemed to be undercapitalized under
these standards, banking law prescribes an increasing amount of regulatory
intervention, including the required institution of a capital restoration plan
and restrictions on the growth of assets, branches or lines of business. Further
restrictions are applied to significantly or critically undercapitalized
institutions, including restrictions on interest payable on accounts, dismissal
of management and appointment of a receiver. For well capitalized institutions,
banking law provides authority for regulatory intervention where the institution
is deemed to be engaging in unsafe and unsound practices or receives a less than
satisfactory examination report rating.

Our and Community Bank's capital ratios at March 31, 2006 and 2005, as well as
the required minimum ratios for capital adequacy purposes and to be well
capitalized under the prompt corrective action provisions as defined by the
Federal Deposit Insurance Corporation Act of 1991 are summarized as follows:


                                       31

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

REGULATORY CAPITAL

<TABLE>
<CAPTION>
                                                                                            MINIMUM TO BE WELL
                                                                                             CAPITALIZED UNDER
                                                                      MINIMUM FOR CAPITAL    PROMPT CORRECTIVE
                                                       ACTUAL          ADEQUACY PURPOSES     ACTION PROVISIONS
                                                -------------------   -------------------   ------------------
MARCH 31                                          2006       2005       2006      2005         2006      2005
--------                                        --------   --------   --------   --------    -------   -------
<S>                                             <C>        <C>        <C>        <C>        <C>        <C>
Basis for ratios:
Tier I capital to risk-weighted assets:
   Consolidated .............................   $ 49,465   $ 46,072    $17,696   $16,212
   Community Bank ...........................     47,421     43,914     17,662    16,196     $26,493   $24,294
Total capital to risk-weighted assets:
   Consolidated .............................     53,616     50,090     35,392    32,423
   Community Bank ...........................     51,572     47,932     35,324    32,392      44,155    40,490
Tier I capital to total average assets
   less intangibles assets:
   Consolidated .............................     49,465     46,072     21,668    21,498
   Community Bank ...........................     47,421     43,914    $21,626   $21,472     $27,032   $26,840

Risk-weighted assets:
   Consolidated .............................    422,572    394,572
   Community Bank ...........................    421,719    394,176
Risk-weighted off-balance sheet items:
   Consolidated .............................     19,831     10,719
   Community Bank ...........................     19,831     10,719
Average assets for Leverage ratio:
   Consolidated .............................    541,705    537,439
   Community Bank ...........................   $540,650   $536,806

Ratios:
Tier I capital as a percentage of risk-
   weighted assets and off-balance sheet
   items:
   Consolidated .............................       11.2%      11.4%       4.0%      4.0%
   Community Bank ...........................       10.7       10.8        4.0       4.0         6.0%      6.0%
Total of Tier I and Tier II capital as a
   percentage of risk-weighted assets and
   off-balance sheet items:
   Consolidated .............................       12.1       12.4        8.0       8.0
   Community Bank ...........................       11.7       11.8        8.0       8.0        10.0      10.0
Tier I capital as a percentage of total
   average assets less intangibles assets:
   Consolidated .............................        9.1        8.6        4.0       4.0
   Community Bank ...........................        8.8%       8.2%       4.0%      4.0%        5.0%      5.0%
</TABLE>

We and Community Bank have consistently maintain regulatory capital ratios well
above the minimum levels of 4.0 percent and 8.0 percent required for adequately
capitalized institutions. Regulatory agencies define institutions, not under a
written directive to maintain certain capital levels, as well capitalized if
they exceed the following: (i) a Tier I risk-based ratio of at least 6.0
percent; (ii) a total risk-based ratio of at least 10.0 percent; and (iii) a
Leverage ratio of at least 5.0 percent. Based on the most recent notification
from the Federal Deposit Insurance Corporation ("FDIC"), Community Bank was
categorized as well capitalized under the regulatory framework for prompt
corrective action at March 31, 2006. There are no conditions or events since
this notification that we believe have changed Community Bank's category.


                                       32

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

REVIEW OF FINANCIAL PERFORMANCE:

We reported net income of $1,550 or $0.84 per share for the first quarter of
2006, an increase of $270 or 21.1 percent compared to $1,280 or $0.69 per share
for the same quarter of 2005. An improvement in net interest income of $535 or
12.4 percent was the predominant factor leading to the increase in earnings.
Return on average assets and return on average equity for the quarter ended
March 31, 2006, equaled 1.16 percent and 12.47 percent, compared to 0.96 percent
and 10.82 percent for the same quarter of 2005. In addition, improved efficiency
led to a 1.8 percent reduction in noninterest expense. These positive factors
were partially offset by a decrease in noninterest revenue of $258.

NET INTEREST INCOME:

Net interest income is still the fundamental source of earnings for commercial
banks. Moreover, fluctuations in the level of noninterest income can have the
greatest impact on net profits. Net interest income is defined as the difference
between interest revenue, interest and fees earned on interest-earning assets,
and interest expense, the cost of interest-bearing liabilities supporting those
assets. The primary sources of earnings assets are loans and investment
securities, while interest-bearing deposits, short-term borrowings and long-term
debt comprise interest-bearing liabilities. Net interest income is impacted by:

     -    Variations in the volume, rate and composition of earning assets and
          interest-bearing liabilities;

     -    Changes in general market rates; and

     -    The level of nonperforming assets.

Changes in net interest income are measured by the net interest spread and net
interest margin. Net interest spread, the difference between the average yield
earned on earning assets and the average rate incurred on interest-bearing
liabilities, illustrates the effects changing interest rates have on
profitability. Net interest margin, net interest income as a percentage of
earning assets, is a more comprehensive ratio, as it reflects not only the
spread, but also the change in the composition of interest-earning assets and
interest-bearing liabilities. Tax-exempt loans and investments carry pre-tax
yields lower than their taxable counterparts. Therefore, in order to make the
analysis of net interest income more comparable, tax-exempt income and yields
are reported on a tax-equivalent basis using the prevailing federal statutory
tax rate of 34.0 percent.


                                       33
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

We analyze interest income and interest expense by segregating rate and volume
components of earning assets and interest-bearing liabilities. The impact
changes in the interest rates earned and paid on assets and liabilities, along
with changes in the volume of earning assets and interest-bearing liabilities
have on net interest income are summarized as follows. The net change
attributable to the combined impact of rate and volume has been allocated
proportionately to the change due to rate and the change due to volume.

NET INTEREST INCOME CHANGES DUE TO RATE AND VOLUME

<TABLE>
<CAPTION>
                                         MARCH 31,
                                       2006 VS. 2005
                                  ----------------------
                                    INCREASE (DECREASE)
                                      ATTRIBUTABLE TO
                                  ----------------------
                                   TOTAL
                                  CHANGE   RATE   VOLUME
                                  ------   ----   ------
<S>                               <C>      <C>    <C>
INTEREST INCOME:
Loans:
   Taxable ....................   $  835   $583   $ 252
   Tax-exempt .................      151    130      21
Investments:
   Taxable ....................       51    140     (89)
   Tax-exempt .................      (18)   (19)      1
Federal funds sold ............        6      4       2
                                  ------   ----   -----
      Total interest income ...    1,025    838     187
                                  ------   ----   -----
INTEREST EXPENSE:
Money market accounts .........      119     74      45
NOW accounts ..................      112     81      31
Savings accounts ..............       95    112     (17)
Time deposits less than $100 ..      167     81      86
Time deposits $100 or more ....      (53)    51    (104)
Short-term borrowings .........        5     44     (39)
                                  ------   ----   -----
      Total interest expense ..      445    443       2
                                  ------   ----   -----
      Net interest income .....   $  580   $395   $ 185
                                  ======   ====   =====
</TABLE>

For the three months ended March 31, tax-equivalent net interest income rose
$580 or 12.4 percent to $5,265 in 2006 from $4,685 in 2005. A positive rate
variance, coupled with growth in average earning assets over that of
interest-bearing liabilities, factored into the improvement.

The positive rate variance resulted in additional net interest income of $395.
The tax-equivalent yield on earning assets for the first quarter rose 73 basis
points to 6.39 percent in 2006 from 5.66 percent in 2005 and resulted in an
increase in interest revenue of $838. Specifically, the tax-equivalent yield on
the loan portfolio increased 70 basis points to 6.77 percent for the first
quarter of 2006 from 6.07 percent for the same quarter of 2005. The continual
rise in the prime rate impacted loan yields, as a


                                       34

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

significant portion of our loan portfolio carries adjustable interest rates. The
yield on taxable loans rose 64 basis points, while the yield on tax-exempt loans
increased 122 basis points. These combined yield increases resulted in
additional interest revenue of $713. Similarly, the tax-equivalent yield on the
investment portfolio increased 62 basis points. The yield on taxable investments
rose 79 basis points, however, the yield on tax-exempt investments decreased 24
basis points, which combined had an net effect on interest revenue of $121.

Partially mitigating the increase in interest revenue due to changes in rates
was an increase in interest expense of $443 caused by a 40 basis point rise in
our cost of funds to 2.78 percent for the first quarter of 2006 from 2.38
percent for the same period of 2005. Specifically, rates paid for
interest-bearing transaction accounts rose significantly, as certain
larger-balance, money market, NOW and savings accounts of local school districts
and municipalities are priced in accordance with changes in the three-month U.S.
Treasury. This rate was 4.63 percent at March 31, 2006, 184 basis points higher
than 2.79 percent at March 31, 2005. As a result, the cost of money market, NOW
and savings accounts rose 104 basis points, 57 basis points and 39 basis points
when comparing the first quarters of 2006 and 2005, which combined resulted in
additional interest expense of $267. Rising short-term rates and increasing
competition for deposits within our market area began to impact our time deposit
costs. With regard to time deposits, although we did not aggressively compete
for deposits, we did offer preferential rates for special-term, non-renewable
certificates in an effort to retain customers. As a result, the average rates
paid for time deposits less than $100 and time deposits $100 or more rose 19
basis points and 71 basis points, which together negatively impacted interest
expense by $132. Short-term borrowing costs increased 200 basis points, which
resulted in additional interest expense of $44.

We also experienced a positive volume variance of $185. Average earning assets
grew $6.7 million, which resulted in additional interest revenue of $187, while
interest-bearing liabilities averaged $3.3 million higher, which caused an
increase in interest expense of $2. The increase in average earning assets
resulted from growth of $17.6 million in loans, partially offset by a reduction
of $10.9 million in investments and federal funds sold. Loan growth resulted in
additional interest revenue of $273, while the net decrease in investments and
federal funds sold caused a reduction in interest revenue of $86. With regard to
interest-bearing liabilities, growth in money market accounts, NOW accounts and
time deposits less than $100 was partially offset by decreases in savings
accounts, large denomination time deposits and short-term borrowings. Money
market and NOW accounts grew $10.7 million and $7.7 million and together
resulted in additional interest expense of $76. Savings accounts averaged $8.2
million lower comparing the first quarters of 2006 and 2005. The reduction, for
the most part, was caused by customers moving funds into time deposits less than
$100 to take


                                       35

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

advantage of short-term promotional rates. These time deposits averaged $9.3
million higher. The reduction in savings accounts caused a decrease to interest
expense of $17, which was more than offset by $86 in additional expense from
growth in time deposits less than $100. Large denomination time deposits and
short-term borrowings averaged $11.3 million and $4.9 million lower, causing
decreases in interest expense of $104 and $39.

Maintenance of an adequate net interest margin is one of our primary concerns.
Our net interest margin improved a significant 41 basis points to 4.12 percent
in 2006 from 3.71 percent in 2005. In addition, the net interest margin improved
9 basis points from 4.03 percent in the fourth quarter of 2005. Short-term
market rates may increase further in 2006 should inflationary pressure persist.
Should this occur, competition in our market area could intensify and put
further pressure on deposit rates. No assurance can be given that net interest
income will not be adversely affected by changes in general market rates or
increased competition. We believe following prudent pricing practices coupled
with careful investing, will keep our net interest margin favorable.


                                       36

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The average balances of assets and liabilities, corresponding interest income
and expense and resulting average yields or rates paid for the quarters ended
March 31, 2006 and 2005, are summarized as follows. Earning assets averages
include nonaccrual loans. Investment averages include available-for-sale
securities at amortized cost. Income on investment securities and loans are
adjusted to a tax-equivalent basis using the prevailing statutory tax rate of
34.0 percent.

SUMMARY OF NET INTEREST INCOME

<TABLE>
<CAPTION>
                                                              MARCH 31, 2006                   MARCH 31, 2005
                                                      ------------------------------   ------------------------------
                                                                 INTEREST    AVERAGE              INTEREST    AVERAGE
                                                       AVERAGE    INCOME/   INTEREST    AVERAGE    INCOME/   INTEREST
                                                       BALANCE    EXPENSE     RATE      BALANCE    EXPENSE     RATE
                                                      --------   --------   --------   --------   --------   --------
<S>                                                   <C>        <C>        <C>        <C>        <C>        <C>
ASSETS:
Earning assets:
Loans:
   Taxable.........................................   $374,452    $6,324      6.85%    $358,544    $5,489      6.21%
   Tax-exempt......................................     43,507       651      6.07       41,828       500      4.85
Investments:
   Taxable.........................................     68,482       614      3.64       80,009       563      2.85
   Tax-exempt......................................     31,413       574      7.41       31,389       592      7.65
Federal funds sold.................................        670         6      3.63           57                2.62
                                                      --------    ------               --------    ------
      Total earning assets.........................    518,524     8,169      6.39%     511,827     7,144      5.66%
Less: allowance for loan losses....................      4,181                            3,903
Other assets.......................................     27,782                           30,138
                                                      --------                         --------
      Total assets.................................   $542,125                         $538,062
                                                      ========                         ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Money market accounts..............................   $ 32,688       191      2.37%    $ 22,011        72      1.33%
NOW accounts.......................................     59,142       299      2.05       51,367       187      1.48
Savings accounts...................................    114,254       339      1.20      122,484       244      0.81
Time deposits less than $100.......................    187,179     1,770      3.84      177,879     1,603      3.65
Time deposits $100 or more.........................     22,293       221      4.02       33,603       274      3.31
Short-term borrowings..............................      7,374        84      4.62       12,234        79      2.62
                                                      --------    ------               --------    ------
      Total interest-bearing liabilities...........    422,930     2,904      2.78%     419,578     2,459      2.38%
Noninterest-bearing deposits.......................     66,601                           68,322
Other liabilities..................................      2,189                            2,192
Stockholders' equity...............................     50,405                           47,970
                                                      --------                         --------
      Total liabilities and stockholders' equity...   $542,125                         $538,062
                                                      ========    ------               ========    ------
      Net interest/income spread...................               $5,265      3.61%                $4,685      3.28%
                                                                  ======                           ======
      Net interest margin..........................                           4.12%                            3.71%
Tax equivalent adjustments:
Loans..............................................               $  221                           $  170
Investments........................................                  195                              201
                                                                  ------                           ------
      Total adjustments............................               $  416                           $  371
                                                                  ======                           ======
</TABLE>

Note: Average balances were calculated using average daily balances. Average
     balances for loans include nonaccrual loans. Available-for-sale securities,
     included in investment securities, are stated at amortized cost with the
     related average unrealized holding gains of $1,400 and $2,452 for the first
     quarter of 2006 and 2005 included in other assets. Tax-equivalent
     adjustments were calculated using the prevailing statutory tax rate of 34.0
     percent.


                                       37

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

PROVISION FOR LOAN LOSSES:

We evaluate the adequacy of the allowance for loan losses account on a quarterly
basis utilizing our systematic analysis in accordance with procedural
discipline. We take into consideration certain factors such as composition of
the loan portfolio, volumes of nonperforming loans, volumes of net charge-offs,
prevailing economic conditions and other relevant factors when determining the
adequacy of the allowance for loan losses account. We make monthly provisions to
the allowance for loan losses account in order to maintain the allowance at the
appropriate level indicated by our evaluations. For the three months ended March
31, the provision for loan loses was $180 in 2006 and $300 in 2005. Based on our
most current evaluation, we believe that the allowance is adequate to absorb any
known and inherent losses in the portfolio.

NONINTEREST INCOME:

Noninterest income for the first quarter decreased $258 or 23.1 percent to $860
in 2006 from $1,118 in 2005. Included in noninterest income in 2005 was an
initial gain of $125 on the sale of our merchant services portfolio to a third
party. The total gain on this transaction amounted to $235 in 2005. There were
no such gains in 2006.

A slowing in the mortgage market caused by rising mortgage rates resulted in a
decrease of $84 or 53.8 percent in gains on the sale of residential mortgages in
the first quarter from $156 in 2005 to $72 in 2006.

Service charges, fees and commissions declined $49 or 5.9 percent to $788 for
the three months ended March 31, 2006, from $837 for the same period of 2005. A
reduction in commissions from merchant servicing due to the sale of the
portfolio was the primary factor leading to the decline. Partially offsetting
the reduction in commissions, was a 24.7 percent increase in service charges on
deposit accounts and a 35.7 percent increase in fees from fiduciary services.
The increase in services charges resulted from new overdraft protection
alternatives offered to our customers, which include an automatic transfer from
a savings account for a daily fee and the implementation of an automated
overdraft privilege program for certain individual and sole proprietor
customers. We began offering these alternatives at the end of the first quarter
of 2005. With regard to fiduciary services, in the third quarter of 2005, we
restructured our Trust Division and financial services subsidiary. The
restructuring involved implementing sales goals, revising the fee structure and
expanding products and services to include wealth management offerings.


                                       38

<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NONINTEREST EXPENSE:

In general, noninterest expense is categorized into three main groups, including
employee-related expenses, occupancy and equipment expenses and other expenses.
Employee-related expenses are costs associated with providing salaries,
including payroll taxes and benefits, to our employees. Occupancy and equipment
expenses, the costs related to the maintenance of facilities and equipment,
include depreciation, general maintenance and repairs, real estate taxes, rental
expense offset by any rental income, and utility costs. Other expenses include
general operating expenses such as advertising, contractual services, insurance,
including FDIC assessment, other taxes and supplies. Several of these costs and
expenses are variable while the remainder are fixed. We utilize budgets and
other related strategies in an effort to control the variable expenses.

Noninterest expense for the first quarter declined $64 or 1.8 percent to $3,556
in 2006 from $3,620 in 2005. The decline resulted from decreases in all major
expense categories. As a result, we achieved greater efficiency as evidenced by
an improvement in the operating efficiency ratio, an industry ratios used to
measure productivity. The operating efficiency ratio, noninterest expenses
divided by net interest income and noninterest income, improved to 62.3 percent
for the first quarter of 2006 compared to 66.6 percent for the same quarter last
year. Another productivity measure, the overhead ratio defined as noninterest
expense as a percentage of total average assets, was constant at 2.7 percent for
the three months ended March 31, 2006 and 2005.


                                       39
<PAGE>

COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Major components of noninterest expense for the quarters ended March 31, 2006
and 2005, are summarized as follows:

NONINTEREST EXPENSES

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED
                                                        MARCH 31,
                                                   ------------------
                                                      2006     2005
                                                     ------   ------
<S>                                                <C>        <C>
SALARIES AND EMPLOYEE BENEFITS EXPENSE:
Salaries and payroll taxes......................     $1,448   $1,456
Employee benefits...............................        342      339
                                                     ------   ------
   Salaries and employee benefits expense.......      1,790    1,795
                                                     ------   ------
NET OCCUPANCY AND EQUIPMENT EXPENSE:
Net occupancy expense...........................        317      333
Equipment expense...............................        288      305
                                                     ------   ------
   Net occupancy and equipment expense..........        605      638
                                                     ------   ------
OTHER EXPENSES:
Marketing expense...............................        113      144
Other taxes.....................................        131      122
Stationery and supplies.........................         82       88
Contractual services............................        426      452
Insurance including FDIC assessment.............         62       69
Other...........................................        347      312
                                                     ------   ------
   Other expenses...............................      1,161    1,187
                                                     ------   ------
      Total noninterest expense.................     $3,556   $3,620
                                                     ======   ======
</TABLE>

Salaries and employee benefits expense comprise the majority of our noninterest
expense. Employee related expenses remained relatively constant for the first
quarter, decreasing $5 to $1,790 for the three months ended March 31, 2006, from
$1,795 for the same period of the previous year. A decline in salaries and
payroll taxes was partially offset by an increase in employee benefits expense.

Net occupancy and equipment expenses decreased $33 or 5.2 percent to $605 for
the first three months of 2006, from $638 for the same period of 2005. Occupancy
costs declined $16 due to lower maintenance costs for snowplowing due to an
unseasonably mild winter. Similarly, equipment expense declined $17 as a result
of reductions in computer software-related expenses.

Other expenses decreased $26 or 2.2 percent to $1,161 for the first quarter of
2006 compared to $1,187 for the same quarter of last year.

Our deposits are insured by the FDIC and are subject to deposit assessments to
maintain the Bank Insurance Fund ("BIF") administered by the FDIC. The


                                       40

<PAGE>
COMM BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

FDIC places each insured bank into one of nine risk categories based on the
bank's capitalization and supervisory evaluations provided to the FDIC by the
bank's primary federal regulator. An insured bank's assessment rate is then
determined by the risk category into which it is classified. Recently, the FDIC
decided to retain the existing BIF assessment schedules of $0.00 per 100 dollars
of deposits for banks classified in the highest capital and supervisory
evaluation category and $0.27 per 100 dollars of deposits for banks classified
in the lowest category. We were classified in the highest capital and
supervisory evaluation category at March 31, 2006, and will be exempt from
paying a BIF assessment in the second quarter of 2006.

There is a separate levy assessed on all FDIC-insured institutions to cover the
cost of Finance Corporation ("FICO") funding. The FDIC established the annual
FICO assessment rates effective for the first quarter of 2006 at $0.0132 per 100
dollars of BIF-assessable deposits. Our FICO assessments were $16 and $17 for
the first quarters of 2006 and 2005.

INCOME TAXES:

Income tax expense increased $191 or 82.3 percent to $423 for the three months
ended March 31, 2006, from $232 for the same three months of last year. For the
first quarter, our effective tax rate increased to 21.4 percent in 2006 from
15.3 percent in 2005. We attempt to mitigate the our tax burden by utilizing
loans and investments from tax-exempt organizations.

The difference between the amount of income tax currently payable and the
provision for income tax expense reflected in the income statements arises from
temporary differences. Temporary differences are differences between the tax
bases of assets and liabilities and their reported amounts in the financial
statements, which result in deferred tax assets or liabilities. We perform
quarterly reviews on the tax criteria related to the recognition of deferred tax
assets. We decided not to establish a valuation reserve for the deferred tax
assets since it is likely that these assets will be realized through carry-back
to taxable income in prior years and by future reversals of existing taxable
temporary differences or, to a lesser extent, through future taxable income.


                                       41

<PAGE>

COMM BANCORP, INC.
CONTROLS AND PROCEDURES

EVALUATION OF CONTROLS AND PROCEDURES

As of March 31, 2006, the end of the period covered by this Quarterly Report on
Form 10-Q, our Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO"), evaluated the effectiveness of our disclosure controls and procedures
as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934 (the, "Exchange Act"). Based upon that evaluation, the CEO and CFO
concluded that as of the period covered by this Quarterly Report on Form 10-Q,
we maintained effective disclosure controls and procedures.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during the
fiscal quarter ended March 31, 2006, that materially affected, or is reasonably
likely to materially effect, our internal control over financial reporting.


                                       42

<PAGE>

COMM BANCORP, INC.
OTHER INFORMATION

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     NONE

ITEM 1A. RISK FACTORS

There were no material changes during the three months ended March 31, 2006, to
the risk factors disclosed in Part I, Item 1A. "Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2005.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information with respect to purchases made by or on
behalf of us or any "affiliated purchaser," as defined in the Exchange Act Rule
10b-18(a)(3), of our common stock during each of the three months ended March
31, 2006:

<TABLE>
<CAPTION>
                                                                 TOTAL NUMBER OF        MAXIMUM NUMBER
                                   TOTAL NUMBER     AVERAGE      SHARES PURCHASED    OF SHARES THAT MAY
                                     OF SHARES    PRICE PAID   AS PART OF PUBLICLY     YET BE PURCHASED
MONTH ENDING                         PURCHASED     PER SHARE    ANNOUNCED PROGRAMS    UNDER THE PROGRAMS
------------                       ------------   ----------   -------------------   -------------------
<S>                                <C>            <C>          <C>                   <C>
January 31, 2006................                                                            47,214
February 28, 2006...............                                                            47,214
March 31, 2006..................                                                            47,214
                                        ---           ---              ---
   Total........................          0             0                0
                                        ===           ===              ===
</TABLE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     NONE

ITEM 5. OTHER INFORMATION

     NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          31(i) CEO and CFO certifications pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

          32   CEO and CFO certifications pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

     (b)  Reports on Form 8-K

          On January 26, 2006, we filed a current report on Form 8-K, to
          disclose our results of operations for the three months and year ended
          December 31, 2005 under Item 2.02.


                                       43

<PAGE>

                               COMM BANCORP, INC.
                                    FORM 10-Q

                                 SIGNATURE PAGE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto, duly authorized.

                                        Registrant, Comm Bancorp, Inc.


Date: May 12, 2006                      /s/ William F. Farber, Sr.
                                        ----------------------------------------
                                        William F. Farber, Sr.
                                        President and Chief Executive Officer
                                        Chairman of the Board/Director
                                        (Principal Executive Officer)


Date: May 12, 2006                      /s/ Scott A. Seasock
                                        ----------------------------------------
                                        Scott A. Seasock
                                        Executive Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer)


Date: May 12, 2006                      /s/ Stephanie A. Westington
                                        ----------------------------------------
                                        Stephanie A. Westington, CPA
                                        Vice President of Finance
                                        (Principal Accounting Officer)


                                       44

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
ITEM NUMBER   DESCRIPTION                                                   PAGE
-----------   -----------                                                   ----
<S>           <C>                                                           <C>
   31(i)      CEO and CFO Certifications Pursuant to Section 302 of the      46
              Sarbanes-Oxley Act of 2002

   32         CEO and CFO Certifications Pursuant to Section 906 of the      50
              Sarbanes-Oxley Act of 2002
</TABLE>


                                       45