UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-17455
 Comm Bancorp, Inc.
 
  Pennsylvania
    
    23-2242292(State or other jurisdiction of incorporation 
or organization)
    
    (I.R.S. Employer Identification Number)
 125 North State Street, Clarks Summit, PA
    
    18411(Address of principal executive offices)
    
    (Zip Code)
 (570) 586-0377
 
  
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer
o
    
    Non-accelerated filer o
    
    Smaller reporting company
þ(Do not check if a smaller reporting company)
 o þ




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##### 



COMM BANCORP, INC.
FORM 10-Q
 March 31, 2009
 INDEX
 Contents
    
    Page No.Part I. Financial Information:Item 1. Financial StatementsConsolidated Statements of Income and Comprehensive Income -
for the Three Months Ended March 31, 2009 and 2008

    
    3Consolidated Balance Sheets  March 31, 2009, and December
31, 2008
    
    
    4Consolidated Statements of Changes in Stockholders Equity
for the Three Months Ended March 31, 2009 and 2008
    
    
    5Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market
Risk
    
    
    *Item 4. Controls and Procedures
    
    
    46Item 4T. Controls and Procedures
    
    
    *Part II. Other Information:Item 1. Legal Proceedings
    
    
    47Item 1A. Risk Factors
    
    
    *Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
    
    
    47Item 3. Defaults Upon Senior Securities
    
    
    47Item 4. Submission of Matters to a Vote of Security Holders
    
    
    47Item 5. Other Information
    
    
    47Item 6. Exhibits
    
    
    47Signatures
    
    
    48Exhibit Index
    
    
    49
 
 *
    
    Not Applicable 2




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##### 



Comm Bancorp, Inc.
 
 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollars in thousands, except per share data)
 For the Three Months Ended March 31
    
    2009
    
    
    2008Interest income:Interest and fees on loans:Taxable
    
    $
    6,448
    
    
    $
    7,568Tax-exempt
    
    
    666
    
    
    
    571Interest and dividends on investment securities available-for-sale:Taxable
    
    
    349
    
    
    
    43Tax-exempt
    
    
    537
    
    
    
    364Dividends
    
    
    11
    
    
    
    12Interest on federal funds sold
    
    
    1
    
    
    
    2Total interest income
    
    
    8,012
    
    
    
    8,560Interest expense:Interest on deposits
    
    
    2,633
    
    
    
    3,270Interest on short-term borrowings
    
    
    56
    
    
    
    128Total interest expense
    
    
    2,689
    
    
    
    3,398Net interest income
    
    
    5,323
    
    
    
    5,162Provision for loan losses
    
    
    570
    
    
    
    330Net interest income after provision for loan losses
    
    
    4,753
    
    
    
    4,832Noninterest income:Service charges, fees and commissions
    
    
    764
    
    
    
    798Mortgage banking income
    
    
    402
    
    
    
    170Net gains on sale of premises and equipment
    
    
    294Net gains on sale of investment securities available-for-sale
    
    
    114Total noninterest income
    
    
    1,574
    
    
    
    968Noninterest expense:Salaries and employee benefits expense
    
    
    2,140
    
    
    
    2,130Net occupancy and equipment expense
    
    
    675
    
    
    
    638Other expenses
    
    
    1,533
    
    
    
    1,231Total noninterest expense
    
    
    4,348
    
    
    
    3,999Income before income taxes
    
    
    1,979
    
    
    
    1,801Provision for income tax expense
    
    
    204
    
    
    
    236Net income
    
    
    1,775
    
    
    
    1,565Other comprehensive income:Unrealized holding gains on investment securities available-for-sale
    
    
    342
    
    
    
    244Reclassification adjustment for gains included in net income
    
    
    (114
    )Income tax expense related to other comprehensive income
    
    
    78
    
    
    
    83Other comprehensive income, net of income taxes
    
    
    150
    
    
    
    161Comprehensive income
    
    $
    1,925
    
    
    $
    1,726Per share data:Net income
    
    $
    1.03
    
    
    $
    0.89Cash dividends declared
    
    $
    0.28
    
    
    $
    0.27Average common shares outstanding
    
    
    1,728,371
    
    
    
    1,753,376
  3




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##### 



Comm Bancorp, Inc.
 
 CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
 March 31,
    
    
    December 31,2009
    
    
    2008Assets:Cash and due from banks
    
    $
    9,441
    
    
    $
    8,017Federal funds sold
    
    
    
    
    
    
    12,700Investment securities available-for-sale
    
    
    75,249
    
    
    
    80,574Loans held-for-sale, net
    
    
    2,243
    
    
    
    1,390Loans, net of unearned income
    
    
    507,166
    
    
    
    485,882Less: allowance for loan losses
    
    
    5,531
    
    
    
    5,255Net loans
    
    
    501,635
    
    
    
    480,627Premises and equipment, net
    
    
    11,785
    
    
    
    11,753Accrued interest receivable
    
    
    2,456
    
    
    
    2,143Other assets
    
    
    8,951
    
    
    
    6,837Total assets
    
    $
    611,760
    
    
    $
    604,041Liabilities:Deposits:Noninterest-bearing
    
    $
    77,752
    
    
    $
    79,674Interest-bearing
    
    
    443,114
    
    
    
    462,617Total deposits
    
    
    520,866
    
    
    
    542,291Short-term borrowings
    
    
    27,450Accrued interest payable
    
    
    2,124
    
    
    
    1,815Other liabilities
    
    
    2,397
    
    
    
    2,137Total liabilities
    
    
    552,837
    
    
    
    546,243Stockholders equity:Common stock, par value $0.33, authorized 12,000,000 shares, issued
and outstanding:March 31, 2009, 1,721,845 shares; December 31, 2008, 1,730,062 shares
    
    
    568
    
    
    
    571Capital surplus
    
    
    7,741
    
    
    
    7,694Retained earnings
    
    
    48,793
    
    
    
    47,862Accumulated other comprehensive income
    
    
    1,821
    
    
    
    1,671Total stockholders equity
    
    
    58,923
    
    
    
    57,798Total liabilities and stockholders equity
    
    $
    611,760
    
    
    $
    604,041
  4




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##### 



Comm Bancorp, Inc.
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Dollars in thousands, except per share data)
 AccumulatedOther
    
    
    TotalCommon
    
    
    Capital
    
    
    Retained
    
    
    Comprehensive
    
    
    StockholdersStock
    
    
    Surplus
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance, December 31, 2008
    
    $
    571
    
    
    $
    7,694
    
    
    $
    47,862
    
    
    $
    1,671
    
    
    $
    57,798Net income
    
    
    
    
    
    
    
    
    
    
    1,775
    
    
    
    
    
    
    
    1,775Dividends declared: $0.28 per share
    
    
    
    
    
    
    
    
    
    
    (483
    )
    
    
    
    
    
    
    (483
    )Dividend reinvestment plan: 2,135 shares issued
    
    
    1
    
    
    
    78
    
    
    
    
    
    
    
    
    
    
    
    79Repurchase and retirement: 10,352 shares
    
    
    (4
    )
    
    
    (31
    )
    
    
    (361
    )
    
    
    
    
    
    
    (396
    )Other comprehensive income, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    150Balance, March 31, 2009
    
    $
    568
    
    
    $
    7,741
    
    
    $
    48,793
    
    
    $
    1,821
    
    
    $
    58,923Balance, December 31, 2007
    
    $
    579
    
    
    $
    7,326
    
    
    $
    45,353
    
    
    $
    1,115
    
    
    $
    54,373Net income
    
    
    
    
    
    
    
    
    
    
    1,565
    
    
    
    
    
    
    
    1,565Dividends declared: $0.27 per share
    
    
    
    
    
    
    
    
    
    
    (473
    )
    
    
    
    
    
    
    (473
    )Dividend reinvestment plan: 2,621 shares issued
    
    
    1
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    126Repurchase and retirement: 3,786 shares
    
    
    (2
    )
    
    
    (11
    )
    
    
    (161
    )
    
    
    
    
    
    
    (174
    )Other comprehensive income, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    161Balance, March 31, 2008
    
    $
    578
    
    
    $
    7,440
    
    
    $
    46,284
    
    
    $
    1,276
    
    
    $
    55,578
  5




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##### 



Comm Bancorp, Inc.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands, except per share data)
 For the Three Months Ended March 31
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    1,775
    
    
    $
    1,565Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    570
    
    
    
    330Depreciation and amortization of premises and equipment
    
    
    232
    
    
    
    237Net amortization of investment securities
    
    
    81
    
    
    
    24Amortization of net loan costs
    
    
    86
    
    
    
    98Amortization of mortgage servicing rights
    
    
    111
    
    
    
    58Deferred income tax expense (benefit)
    
    
    (79
    )
    
    
    174Net gains on sale of investment securities available-for-sale
    
    
    (114
    )Net gains on sale of loans
    
    
    (424
    )
    
    
    (141
    )Net gains on sale of premises and equipment
    
    
    (294
    )Losses on foreclosed assets
    
    
    
    
    
    
    6Changes in:Loans held for sale, net
    
    
    (429
    )
    
    
    (645
    )Accrued interest receivable
    
    
    (313
    )
    
    
    (76
    )Other assets
    
    
    (628
    )
    
    
    (662
    )Accrued interest payable
    
    
    309
    
    
    
    115Other liabilities
    
    
    169
    
    
    
    420Net cash provided by operating activities
    
    
    1,052
    
    
    
    1,503Cash flows from investing activities:Proceeds from repayments of investment securities available-for-sale
    
    
    2,666
    
    
    
    3,084Proceeds from sales of investment securities available-for-sale
    
    
    4,341Purchases of investment securities available-for-sale
    
    
    (1,421
    )
    
    
    (1,372
    )Proceeds from sale of foreclosed assets
    
    
    
    
    
    
    74Net increase in lending activities
    
    
    (23,182
    )
    
    
    (26,442
    )Proceeds from sale of premises and equipment
    
    
    509Purchases of premises and equipment
    
    
    (479
    )
    
    
    (130
    )Net cash used in investing activities
    
    
    (17,566
    )
    
    
    (24,786
    )Cash flows from financing activities:Net changes in:Money market, NOW, savings and noninterest-bearing accounts
    
    
    (9,513
    )
    
    
    (15,372
    )Time deposits
    
    
    (11,912
    )
    
    
    12,054Short-term borrowings
    
    
    27,450
    
    
    
    18,100Proceeds from the issuance of common shares
    
    
    79
    
    
    
    126Repurchase and retirement of common shares
    
    
    (396
    )
    
    
    (174
    )Cash dividends paid
    
    
    (470
    )
    
    
    (457
    )Net cash provided by financing activities
    
    
    5,238
    
    
    
    14,277Net decrease in cash and cash equivalents
    
    
    (11,276
    )
    
    
    (9,006
    )Cash and cash equivalents at beginning of year
    
    
    20,717
    
    
    
    21,876Cash and cash equivalents at end of period
    
    $
    9,441
    
    
    $
    12,870Supplemental disclosures:Cash paid during the period for:Interest
    
    $
    2,380
    
    
    $
    3,283Income taxes
    
    
    11
    
    
    
    420Noncash items:Transfers of loans to foreclosed assets
    
    
    1,518Unrealized gains on investment securities available-for-sale, net
    
    $
    (150
    )
    
    $
    (161
    )
  6




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##### 



Comm Bancorp, Inc.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Basis of presentation:
   2. Earnings per common share:
  3. Fair value measurements and impairments:
  
    
    FSP Financial Accounting Standard (FAS) 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly. FSP FAS 157-4 provides
 7




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Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
 guidelines for making fair value measurements more consistent with the principles
presented in Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements.
    
    FSP FAS 107-1 and Accounting Principles Bulletin 28-1, Interim Disclosures about
Fair Value of Financial Instruments. FSP FAS 107-1 and ABP 28-1 enhances consistency in
financial reporting by increasing the frequency of fair value disclosures.
    
    FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary
Impairments. FSP FAS 115-2 and FAS 124-2 provides additional guidance designed to create
greater clarity and consistency in accounting for and presenting other than temporary
impairment losses on securities.
  4. Fair values of financial instruments:
  
    
    Level 1: Unadjusted quoted prices or identical assets or liabilities in active
markets that the entity has the ability to access as of the measurement date.
    
    Level 2: Significant other observable inputs other than Level 1 prices such as
quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable market
data.
    
    Level 3: Significant unobservable inputs that reflect a reporting entitys own
assumptions about the assumptions that market participants would use in pricing an asset
or liability.
 8




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##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
  Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable InputsMarch 31, 2009
    
    Amount
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Investment securities available-for-sale
    
    $
    72,712
    
    
    $
    210
    
    
    $
    72,502
 Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable InputsDecember 31, 2008
    
    Amount
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Investment securities available-for-sale
    
    $
    79,458
    
    
    $
    225
    
    
    $
    79,233
  9




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##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
  Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable InputsMarch 31, 2009
    
    Amount
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Impaired loans
    
    $
    14,045
    
    
    
    
    
    
    
    
    
    
    $
    14,045Foreclosed assets
    
    $
    1,854
    
    
    
    
    
    
    
    
    
    
    $
    1,854
 Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable InputsDecember 31, 2008
    
    Amount
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Impaired loans
    
    $
    16,135
    
    
    
    
    
    
    
    
    
    
    $
    16,135Foreclosed assets
    
    $
    336
    
    
    
    
    
    
    
    
    
    
    $
    336
  10




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS  (Dollars in thousands, except per share data)
 Forward-Looking Discussion:
      11




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 Critical Accounting Policies:
      12




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
       13




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 Operating Environment:
  Review of Financial Position:
  Investment Portfolio:
  14




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Distribution of investment securities available-for-sale
 March 31,
    
    December 31,2009
    
    2008Amount
    
    %
    
    Amount
    
    %State and municipals
    
    $
    40,840
    
    
    
    54.27
    %
    
    $
    47,007
    
    
    
    58.34
    %Mortgage-backed securities
    
    
    31,662
    
    
    
    42.08
    
    
    
    32,226
    
    
    
    40.00Equity securities:Restricted
    
    
    2,537
    
    
    
    3.37
    
    
    
    1,116
    
    
    
    1.38Other
    
    
    210
    
    
    
    0.28
    
    
    
    225
    
    
    
    0.28Total
    
    $
    75,249
    
    
    
    100.00
    %
    
    $
    80,574
    
    
    
    100.00
    %
     15




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Maturity distribution of available-for-sale portfolio
 After one
    
    After fiveWithin
    
    but within
    
    but within
    
    Afterone year
    
    five years
    
    ten years
    
    ten years
    
    TotalMarch 31, 2009
    
    Amount
    
    Yield
    
    Amount
    
    Yield
    
    Amount
    
    Yield
    
    Amount
    
    Yield
    
    Amount
    
    YieldAmortized cost:State and municipals
    
    $
    1,058
    
    
    
    7.85
    %
    
    $
    4,809
    
    
    
    7.81
    %
    
    $
    19,270
    
    
    
    7.42
    %
    
    $
    13,783
    
    
    
    7.34
    %
    
    $
    38,920
    
    
    
    7.45
    %Mortgage-backed securities
    
    
    6,964
    
    
    
    4.15
    
    
    
    22,705
    
    
    
    4.09
    
    
    
    1,079
    
    
    
    4.25
    
    
    
    148
    
    
    
    3.85
    
    
    
    30,896
    
    
    
    4.11Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,537
    
    
    
    1.46
    
    
    
    2,537
    
    
    
    1.46Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136
    
    
    
    4.08
    
    
    
    136
    
    
    
    4.08Total
    
    $
    8,022
    
    
    
    4.64
    %
    
    $
    27,514
    
    
    
    4.74
    %
    
    $
    20,349
    
    
    
    7.25
    %
    
    $
    16,604
    
    
    
    6.38
    %
    
    $
    72,489
    
    
    
    5.81
    %Fair value:State and municipals
    
    $
    1,078
    
    
    
    
    
    
    $
    5,023
    
    
    
    
    
    
    $
    20,659
    
    
    
    
    
    
    $
    14,080
    
    
    
    
    
    
    $
    40,840Mortgage-backed securities
    
    
    7,140
    
    
    
    
    
    
    
    23,250
    
    
    
    
    
    
    
    1,120
    
    
    
    
    
    
    
    152
    
    
    
    
    
    
    
    31,662Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,537
    
    
    
    
    
    
    
    2,537Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210
    
    
    
    
    
    
    
    210Total
    
    $
    8,218
    
    
    
    
    
    
    $
    28,273
    
    
    
    
    
    
    $
    21,779
    
    
    
    
    
    
    $
    16,979
    
    
    
    
    
    
    $
    75,249
 Loan Portfolio:
  16




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##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     17




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of loan portfolio
 March 31,
    
    
    December 31,2009
    
    
    2008Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial, financial and others
    
    $
    198,993
    
    
    
    39.24
    %
    
    $
    170,305
    
    
    
    35.05
    %Real estate:Construction
    
    
    23,697
    
    
    
    4.67
    
    
    
    25,332
    
    
    
    5.21Residential
    
    
    108,107
    
    
    
    21.32
    
    
    
    112,053
    
    
    
    23.06Commercial
    
    
    141,914
    
    
    
    27.98
    
    
    
    142,641
    
    
    
    29.36Consumer, net
    
    
    31,864
    
    
    
    6.28
    
    
    
    32,812
    
    
    
    6.76Lease financing, net
    
    
    2,591
    
    
    
    0.51
    
    
    
    2,739
    
    
    
    0.56Loans, net of unearned income
    
    
    507,166
    
    
    
    100.00
    %
    
    
    485,882
    
    
    
    100.00
    %Less: allowance for loan losses
    
    
    5,531
    
    
    
    
    
    
    
    5,255Net loans
    
    $
    501,635
    
    
    
    
    
    
    $
    480,627
  18




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Maturity distribution and interest sensitivity of loan portfolio
 After oneWithin
    
    
    but within
    
    
    AfterMarch 31, 2009
    
    one year
    
    
    five years
    
    
    five years
    
    
    TotalMaturity schedule:Commercial, financial and others
    
    $
    100,580
    
    
    $
    44,248
    
    
    $
    54,165
    
    
    $
    198,993Real estate:Construction
    
    
    14,314
    
    
    
    3,460
    
    
    
    5,923
    
    
    
    23,697Residential
    
    
    15,800
    
    
    
    49,000
    
    
    
    43,307
    
    
    
    108,107Commercial
    
    
    20,072
    
    
    
    56,373
    
    
    
    65,469
    
    
    
    141,914Consumer, net
    
    
    4,555
    
    
    
    22,374
    
    
    
    4,935
    
    
    
    31,864Lease financing, net
    
    
    512
    
    
    
    2,079
    
    
    
    
    
    
    
    2,591Total
    
    $
    155,833
    
    
    $
    177,534
    
    
    $
    173,799
    
    
    $
    507,166Sensitivity schedule:Predetermined interest rates
    
    $
    83,448
    
    
    $
    103,918
    
    
    $
    73,737
    
    
    $
    261,103Floating or adjustable interest rates
    
    
    72,385
    
    
    
    73,616
    
    
    
    100,062
    
    
    
    246,063Total
    
    $
    155,833
    
    
    $
    177,534
    
    
    $
    173,799
    
    
    $
    507,166
    19




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Distribution of off-balance sheet commitments
 March 31,
    
    
    December 31,2009
    
    
    2008Commitments to extend credit
    
    $
    65,640
    
    
    $
    69,235Unused portions of lines of credit
    
    
    20,743
    
    
    
    19,855Commercial letters of credit
    
    
    14,922
    
    
    
    15,447Total
    
    $
    101,305
    
    
    $
    104,537
  Asset Quality:
  20




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Distribution of nonperforming assets
 March 31,
    
    
    December 31,2009
    
    
    2008Nonaccrual loans:Commercial, financial and others
    
    $
    7,456
    
    
    $
    7,608Real estate:Construction
    
    
    7,255
    
    
    
    8,775Residential
    
    
    1,026
    
    
    
    1,070Commercial
    
    
    4,333
    
    
    
    5,498Consumer, net
    
    
    84
    
    
    
    117Lease financing, netTotal nonaccrual loans
    
    
    20,154
    
    
    
    23,068Accruing loans past due 90 days or more:Commercial, financial and others
    
    
    221
    
    
    
    170Real estate:Construction
    
    
    481Residential
    
    
    253
    
    
    
    75Commercial
    
    
    220
    
    
    
    417Consumer, net
    
    
    119
    
    
    
    104Lease financing, net
    
    
    108
    
    
    
    69Total accruing loans past due 90 days or more
    
    
    1,402
    
    
    
    835Total nonperforming loans
    
    
    21,556
    
    
    
    23,903Foreclosed assets
    
    
    1,854
    
    
    
    336Total nonperforming assets
    
    $
    23,410
    
    
    $
    24,239Ratios:Nonperforming loans as a percentage of loans, net
    
    
    4.25
    %
    
    
    4.92
    %Nonperforming assets as a percentage of loans, net, and
foreclosed assets
    
    
    4.60
    %
    
    
    4.99
    %
 21




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   22




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of impaired loans
 March 31,
    
    
    December 31,2009
    
    
    2008Nonaccrual loans:Commercial, financial and others
    
    $
    7,456
    
    
    $
    7,608Real estate:Construction
    
    
    7,255
    
    
    
    8,775Residential
    
    
    1,026
    
    
    
    1,070Commercial
    
    
    4,333
    
    
    
    5,498Consumer, net
    
    
    84
    
    
    
    117Lease financing, netTotal nonaccrual loans
    
    
    20,154
    
    
    
    23,068Accruing loans:Commercial, financial and others
    
    
    1,454
    
    
    
    1,920Real estate:Construction
    
    
    1,503
    
    
    
    1,512Residential
    
    
    483
    
    
    
    486Commercial
    
    
    6,178
    
    
    
    6,904Consumer, net
    
    
    16
    
    
    
    9Lease financing, netTotal accruing loans
    
    
    9,634
    
    
    
    10,831Total impaired loans
    
    $
    29,788
    
    
    $
    33,899Ratio:Impaired loans as a percentage of
loans, net
    
    
    5.87
    %
    
    
    6.98
    %
  23




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  March 31, 2009
    
    
    December 31, 2008Recorded
    
    
    Related
    
    
    Recorded
    
    
    RelatedInvestment
    
    
    Allowance
    
    
    Investment
    
    
    AllowanceImpaired loans:With a related allowance
    
    $
    17,609
    
    
    $
    3,564
    
    
    $
    19,707
    
    
    $
    3,572With no related allowance
    
    
    12,179
    
    
    
    
    
    
    
    14,192Total
    
    $
    29,788
    
    
    $
    3,564
    
    
    $
    33,899
    
    
    $
    3,572
  Three Months Ended March 31
    
    2009
    
    
    2008Gross interest due under terms
    
    $
    537
    
    
    $
    563Interest income recognized
    
    
    260
    
    
    
    478Interest income not recognized
    
    $
    277
    
    
    $
    85Interest income recognized (cash-basis)
    
    $
    192
    
    
    $
    257Average recorded investment in impaired loans
    
    $
    32,662
    
    
    $
    30,200
  24




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Allocation of the allowance for loan losses
 March 31,
    
    
    December 31,2009
    
    
    2008Category
    
    
    
    
    
    
    Categoryas a
    
    
    
    
    
    
    as a% of
    
    
    
    
    
    
    % ofAmount
    
    
    loans
    
    
    Amount
    
    
    loansAllocated allowance:Specific:Commercial, financial and others
    
    $
    1,528
    
    
    
    1.76
    %
    
    $
    1,533
    
    
    
    1.96
    %Real estate:Construction
    
    
    1,442
    
    
    
    1.73
    
    
    
    1,516
    
    
    
    2.12Residential
    
    
    166
    
    
    
    0.30
    
    
    
    169
    
    
    
    0.32Commercial
    
    
    361
    
    
    
    2.07
    
    
    
    253
    
    
    
    2.55Consumer, net
    
    
    67
    
    
    
    0.01
    
    
    
    101
    
    
    
    0.03Lease financing, netTotal specific
    
    
    3,564
    
    
    
    5.87
    
    
    
    3,572
    
    
    
    6.98Formula:Commercial, financial and others
    
    
    433
    
    
    
    37.48
    
    
    
    253
    
    
    
    33.09Real estate:Construction
    
    
    34
    
    
    
    2.94
    
    
    
    37
    
    
    
    3.09Residential
    
    
    270
    
    
    
    21.02
    
    
    
    246
    
    
    
    22.74Commercial
    
    
    504
    
    
    
    25.91
    
    
    
    522
    
    
    
    26.81Consumer, net
    
    
    418
    
    
    
    6.27
    
    
    
    511
    
    
    
    6.73Lease financing, net
    
    
    7
    
    
    
    0.51
    
    
    
    7
    
    
    
    0.56Total formula
    
    
    1,666
    
    
    
    94.13
    
    
    
    1,576
    
    
    
    93.02Total allocated allowance
    
    
    5,230
    
    
    
    100.00
    %
    
    
    5,148
    
    
    
    100.00
    %Unallocated allowance
    
    
    301
    
    
    
    
    
    
    
    107Total allowance for loan losses
    
    $
    5,531
    
    
    
    
    
    
    $
    5,255
  25




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Reconciliation of allowance for loan losses
 March 31,2009Allowance for loan losses at beginning of period
    
    $
    5,255Loans charged-off:Commercial, financial and others
    
    
    265Real estate:ConstructionResidential
    
    
    35CommercialConsumer, net
    
    
    24Lease financing, netTotal
    
    
    324Loans recovered:Commercial, financial and others
    
    
    1Real estate:ConstructionResidential
    
    
    1CommercialConsumer, net
    
    
    28Lease financing, netTotal
    
    
    30Net loans charged-off
    
    
    294Provision charged to operating expense
    
    
    570Allowance for loan losses at end of period
    
    $
    5,531Ratios:Net loans charged-off as a percentage of average loans outstanding
    
    
    0.23
    %Allowance for loan losses as a percentage of period end loans
    
    
    1.09
    %
 26




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Deposits:
  27




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Deposit distribution
 March 31,
    
    
    March 31,2009
    
    
    2008Average
    
    
    Average
    
    
    Average
    
    
    AverageBalance
    
    
    Rate
    
    
    Balance
    
    
    RateInterest-bearing:Money market accounts
    
    $
    28,352
    
    
    
    0.83
    %
    
    $
    28,650
    
    
    
    2.23
    %NOW accounts
    
    
    76,743
    
    
    
    1.62
    
    
    
    71,707
    
    
    
    2.89Savings accounts
    
    
    100,659
    
    
    
    0.49
    
    
    
    98,602
    
    
    
    1.24Time deposits less than $100
    
    
    168,255
    
    
    
    3.48
    
    
    
    167,407
    
    
    
    4.29Time deposits $100 or more
    
    
    75,233
    
    
    
    3.78
    
    
    
    44,561
    
    
    
    4.57Total interest-bearing
    
    
    449,242
    
    
    
    2.38
    %
    
    
    410,927
    
    
    
    3.20
    %Noninterest-bearing
    
    
    79,997
    
    
    
    
    
    
    
    72,666Total deposits
    
    $
    529,239
    
    
    
    
    
    
    $
    483,593
  .
 28




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Maturity distribution of time deposits of $100 or more
 March 31,
    
    
    December 31,2009
    
    
    2008Within three months
    
    $
    22,330
    
    
    $
    19,271After three months but within six months
    
    
    25,414
    
    
    
    20,470After six months but within twelve months
    
    
    7,356
    
    
    
    25,522After twelve months
    
    
    18,381
    
    
    
    16,272Total
    
    $
    73,481
    
    
    $
    81,535
 Market Risk Sensitivity:
   29




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   30




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Interest rate sensitivity
 Due after
    
    
    Due afterthree months
    
    
    one yearDue within
    
    
    but within
    
    
    but within
    
    
    Due afterMarch 31, 2009
    
    three months
    
    
    twelve months
    
    
    five years
    
    
    five years
    
    
    TotalRate sensitive assets:Investment securities
    
    $
    1,927
    
    
    $
    6,291
    
    
    $
    28,273
    
    
    $
    38,758
    
    
    $
    75,249Loans held for sale, net
    
    
    2,243
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,243Loans, net of unearned income
    
    
    125,710
    
    
    
    92,933
    
    
    
    211,865
    
    
    
    76,658
    
    
    
    507,166Total
    
    $
    129,880
    
    
    $
    99,224
    
    
    $
    240,138
    
    
    $
    115,416
    
    
    $
    584,658Rate sensitive liabilities:Money market accounts
    
    $
    19,617
    
    
    $
    6,432
    
    
    
    
    
    
    
    
    
    
    $
    26,049NOW accounts
    
    
    56,959
    
    
    
    16,957
    
    
    
    
    
    
    
    
    
    
    
    73,916Savings accounts
    
    
    10,532
    
    
    
    
    
    
    $
    92,778
    
    
    
    
    
    
    
    103,310Time deposits less than $100
    
    
    35,982
    
    
    
    40,501
    
    
    
    78,841
    
    
    $
    11,034
    
    
    
    166,358Time deposits $100 or more
    
    
    22,330
    
    
    
    32,770
    
    
    
    17,402
    
    
    
    979
    
    
    
    73,481Short-term borrowings
    
    
    27,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,450Total
    
    $
    172,870
    
    
    $
    96,660
    
    
    $
    189,021
    
    
    $
    12,013
    
    
    $
    470,564Rate sensitivity gap:Period
    
    $
    (42,990
    )
    
    $
    2,564
    
    
    $
    51,117
    
    
    $
    103,403Cumulative
    
    $
    (42,990
    )
    
    $
    (40,426
    )
    
    $
    10,691
    
    
    $
    114,094
    
    
    $
    114,094RSA/RSL ratio:Period
    
    
    0.75
    
    
    
    1.03
    
    
    
    1.27
    
    
    
    9.61Cumulative
    
    
    0.75
    
    
    
    0.85
    
    
    
    1.02
    
    
    
    1.24
    
    
    
    1.24
  31




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     32




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Liquidity:
  
    
    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.
  33




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      34




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Capital Adequacy:
     35




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Regulatory capital
 Minimum to be WellCapitalized underMinimum for Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsMarch 31
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Basis for ratios:Tier I capital to risk-weighted assets:Consolidated
    
    $
    56,686
    
    
    $
    53,897
    
    
    $
    20,935
    
    
    $
    19,925Community Bank
    
    
    51,379
    
    
    
    48,859
    
    
    
    20,798
    
    
    
    19,781
    
    
    $
    31,197
    
    
    $
    29,671Total capital to risk-weighted assets:Consolidated
    
    
    62,217
    
    
    
    58,831
    
    
    
    41,871
    
    
    
    39,851Community Bank
    
    
    56,910
    
    
    
    53,793
    
    
    
    41,596
    
    
    
    39,562
    
    
    
    51,995
    
    
    
    49,452Tier I capital to total average assets
less intangibles assets:Consolidated
    
    
    56,686
    
    
    
    53,897
    
    
    
    24,917
    
    
    
    22,317Community Bank
    
    
    51,379
    
    
    
    48,859
    
    
    $
    24,771
    
    
    $
    22,163
    
    
    $
    30,963
    
    
    $
    27,704Risk-weighted assets:Consolidated
    
    
    509,637
    
    
    
    484,269Community Bank
    
    
    506,201
    
    
    
    480,653Risk-weighted off-balance sheet items:Consolidated
    
    
    13,749
    
    
    
    13,866Community Bank
    
    
    13,749
    
    
    
    13,866Average assets for Leverage ratio:Consolidated
    
    
    622,935
    
    
    
    557,927Community Bank
    
    $
    619,267
    
    
    $
    554,076Ratios:Tier I capital as a percentage of risk-
weighted assets and off-balance sheet
items:Consolidated
    
    
    10.8
    %
    
    
    10.8
    %
    
    
    4.0
    %
    
    
    4.0
    %Community Bank
    
    
    9.9
    
    
    
    9.9
    
    
    
    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
    
    
    11.9
    
    
    
    11.8
    
    
    
    8.0
    
    
    
    8.0Community Bank
    
    
    10.9
    
    
    
    10.9
    
    
    
    8.0
    
    
    
    8.0
    
    
    
    10.0
    
    
    
    10.0Tier I capital as a percentage of total
average assets less intangibles assets:Consolidated
    
    
    9.1
    
    
    
    9.7
    
    
    
    4.0
    
    
    
    4.0Community Bank
    
    
    8.3
    %
    
    
    8.8
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    5.0
    %
    
    
    5.0
    %
 36




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Review of Financial Performance:
  Net Interest Income:
  
    
    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.
  37




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Net interest income changes due to rate and volume
 March 31,2009 vs. 2008Increase (decrease)attributable toTotalChange
    
    
    Rate
    
    
    VolumeInterest income:Loans:Taxable
    
    $
    (1,120
    )
    
    $
    (1,215
    )
    
    $
    95Tax-exempt
    
    
    144
    
    
    
    (115
    )
    
    
    259Investments:Taxable
    
    
    305
    
    
    
    32
    
    
    
    273Tax-exempt
    
    
    263
    
    
    
    (10
    )
    
    
    273Federal funds sold
    
    
    (1
    )
    
    
    (3
    )
    
    
    2Total interest income
    
    
    (409
    )
    
    
    (1,311
    )
    
    
    902Interest expense:Money market accounts
    
    
    (101
    )
    
    
    (99
    )
    
    
    (2
    )NOW accounts
    
    
    (209
    )
    
    
    (243
    )
    
    
    34Savings accounts
    
    
    (182
    )
    
    
    (188
    )
    
    
    6Time deposits less than $100
    
    
    (341
    )
    
    
    (350
    )
    
    
    9Time deposits $100 or more
    
    
    196
    
    
    
    (103
    )
    
    
    299Short-term borrowings
    
    
    (72
    )
    
    
    (143
    )
    
    
    71Total interest expense
    
    
    (709
    )
    
    
    (1,126
    )
    
    
    417Net interest income
    
    $
    300
    
    
    $
    (185
    )
    
    $
    485
 38




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     39




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   40




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Summary of net interest income
 March 31, 2009
    
    
    March 31, 2008Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Interest
    
    
    Average
    
    
    Income/
    
    
    InterestBalance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateASSETS:Earning assets:Loans:Taxable
    
    $
    447,922
    
    
    $
    6,448
    
    
    
    5.84
    %
    
    $
    442,334
    
    
    $
    7,568
    
    
    
    6.88
    %Tax-exempt
    
    
    68,567
    
    
    
    1,009
    
    
    
    5.97
    
    
    
    51,601
    
    
    
    865
    
    
    
    6.74Investments:Taxable
    
    
    34,068
    
    
    
    360
    
    
    
    4.29
    
    
    
    7,423
    
    
    
    55
    
    
    
    2.98Tax-exempt
    
    
    44,051
    
    
    
    814
    
    
    
    7.49
    
    
    
    29,270
    
    
    
    551
    
    
    
    7.57Federal funds sold
    
    
    833
    
    
    
    1
    
    
    
    0.49
    
    
    
    247
    
    
    
    2
    
    
    
    3.26Total earning assets
    
    
    595,441
    
    
    
    8,632
    
    
    
    5.88
    %
    
    
    530,875
    
    
    
    9,041
    
    
    
    6.85
    %Less: allowance for loan losses
    
    
    5,503
    
    
    
    
    
    
    
    
    
    
    
    4,777Other assets
    
    
    33,413
    
    
    
    
    
    
    
    
    
    
    
    32,234Total assets
    
    $
    623,351
    
    
    
    
    
    
    
    
    
    
    $
    558,332LIABILITIES AND STOCKHOLDERS EQUITY:Interest-bearing liabilities:Money market accounts
    
    $
    28,352
    
    
    
    58
    
    
    
    0.83
    %
    
    $
    28,650
    
    
    
    159
    
    
    
    2.23
    %NOW accounts
    
    
    76,743
    
    
    
    306
    
    
    
    1.62
    
    
    
    71,707
    
    
    
    515
    
    
    
    2.89Savings accounts
    
    
    100,659
    
    
    
    122
    
    
    
    0.49
    
    
    
    98,602
    
    
    
    304
    
    
    
    1.24Time deposits less than $100
    
    
    168,255
    
    
    
    1,445
    
    
    
    3.48
    
    
    
    167,407
    
    
    
    1,786
    
    
    
    4.29Time deposits $100 or more
    
    
    75,233
    
    
    
    702
    
    
    
    3.78
    
    
    
    44,561
    
    
    
    506
    
    
    
    4.57Short-term borrowings
    
    
    31,773
    
    
    
    56
    
    
    
    0.71
    
    
    
    16,085
    
    
    
    128
    
    
    
    3.20Total interest-bearing liabilities
    
    
    481,015
    
    
    
    2,689
    
    
    
    2.27
    %
    
    
    427,012
    
    
    
    3,398
    
    
    
    3.20
    %Noninterest-bearing deposits
    
    
    79,997
    
    
    
    
    
    
    
    
    
    
    
    72,666Other liabilities
    
    
    3,821
    
    
    
    
    
    
    
    
    
    
    
    3,353Stockholders equity
    
    
    58,518
    
    
    
    
    
    
    
    
    
    
    
    55,301Total liabilities and stockholders equity
    
    $
    623,351
    
    
    
    
    
    
    
    
    
    
    $
    558,332Net interest income/spread
    
    
    
    
    
    $
    5,943
    
    
    
    3.61
    %
    
    
    
    
    
    $
    5,643
    
    
    
    3.65
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    4.05
    %
    
    
    
    
    
    
    
    
    
    
    4.28
    %Tax equivalent adjustments:Loans
    
    
    
    
    
    $
    343
    
    
    
    
    
    
    
    
    
    
    $
    294Investments
    
    
    
    
    
    
    277
    
    
    
    
    
    
    
    
    
    
    
    187Total adjustments
    
    
    
    
    
    $
    620
    
    
    
    
    
    
    
    
    
    
    $
    481
 Note:
    
    Average balances were calculated using average daily balances. Interest income on loans
include fees of $206 in 2009 and $88 in 2008. Available-for-sale securities, included in
investment securities, are stated at amortized cost with the related average unrealized
holding gains of $2,531 and $1,999 for the first quarter of 2009 and 2008 included in other
assets. Tax-equivalent adjustments were calculated using the prevailing statutory tax rate of
34.0 percent.
 41




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Provision for Loan Losses:
  Noninterest Income:
  Noninterest Expense:
  42




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Noninterest expenses
 Three Months EndedMarch 31,2009
    
    
    2008Salaries and employee benefits expense:Salaries and payroll taxes
    
    $
    1,694
    
    
    $
    1,671Employee benefits
    
    
    446
    
    
    
    459Salaries and employee benefits expense
    
    
    2,140
    
    
    
    2,130Net occupancy and equipment expense:Net occupancy expense
    
    
    354
    
    
    
    330Equipment expense
    
    
    321
    
    
    
    308Net occupancy and equipment expense
    
    
    675
    
    
    
    638Other expenses:Marketing expense
    
    
    186
    
    
    
    174Other taxes
    
    
    186
    
    
    
    124Stationery and supplies
    
    
    69
    
    
    
    72Contractual services
    
    
    537
    
    
    
    431Insurance including FDIC assessment
    
    
    170
    
    
    
    80Other
    
    
    385
    
    
    
    350Other expenses
    
    
    1,533
    
    
    
    1,231Total noninterest expense
    
    $
    4,348
    
    
    $
    3,999
  43




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    44




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Income Taxes:
   45




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##### 



Comm
Bancorp, Inc.
 
 CONTROLS AND PROCEDURES
 Evaluation of Controls and Procedures
  Internal Control Over Financial Reporting
  46




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##### 



Comm Bancorp, Inc.
OTHER INFORMATION
 
 Part II. Other Information
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number of
    
    
    Maximum NumberTotal Number
    
    
    Average
    
    
    Shares Purchased
    
    
    of Shares that mayof Shares
    
    
    Price Paid
    
    
    as Part of Publicly
    
    
    yet be PurchasedMonth Ending
    
    Purchased
    
    
    Per Share
    
    
    Announced Programs
    
    
    Under the ProgramsJanuary 31, 2009
    
    
    1,500
    
    
    $
    38.69
    
    
    
    1,500
    
    
    
    41,785February 28, 2009
    
    
    4,752
    
    
    
    38.05
    
    
    
    4,752
    
    
    
    37,033March 31, 2009
    
    
    4,100
    
    
    
    38.46
    
    
    
    4,100
    
    
    
    32,933Total
    
    
    10,352
    
    
    $
    38.30
    
    
    
    10,352
 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 31(i)
    
    CEO and CFO certifications pursuant to Rule 13a-14(a)/15d-14(a).32
    
    CEO and CFO certifications pursuant to Section 1350.
 47




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##### 



COMM BANCORP, INC.
FORM 10-Q
 
 SIGNATURE PAGE
  Registrant, Comm Bancorp, Inc.Date: May 13, 2009
    /s/ William F. Farber, Sr.William F. Farber, Sr.President and Chief Executive Officer
Chairman of the Board/Director
(Principal Executive Officer)Date:   May 13, 2009
    /s/ Scott A. SeasockScott A. SeasockExecutive Vice President and
Chief Financial Officer
(Principal Financial Officer)Date:   May 13, 2009
    /s/ Stephanie A. WestingtonStephanie A. Westington, CPAVice President of Finance
(Principal Accounting Officer) 48




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##### 



EXHIBIT INDEX
 Item Number
    
    Description
    
    Page31(i)
    
    CEO and CFO Certifications Pursuant to Rule 13a-14(a)/15d-14(a)
    
    5032
    
    CEO and CFO Certifications Pursuant to Section 1350
    
    54
 49