<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-KSB

/x/      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1995

/ /      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 [NO FEE REQUIRED]

For the transition period from _____________to________________

Commission file Number:  0-19028

                              CCFNB BANCORP, INC.
                 (Name of small business issuer in its charter)

<TABLE>
<S>                                                                          <C>
PENNSYLVANIA                                                                 23-2254643
(State or other jurisdiction of                                              (I.R.S. Employer
incorporation or organization)                                               Identification Number)

232 East Street, Bloomsburg, Pennsylvania                                    17815
(Address of principal executive offices)                                     (Zip Code)
</TABLE>

Issuer's telephone number, including area code:  (717) 784-4400

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par
value $1.25 per share.

                 Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.  
Yes  X  No
   -----  ------

                 Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of issuer's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.  /X/

                 Issuer's revenues for its most recent fiscal year were
$12,158,585.

                 The aggregate market value of the voting stock held by
non-affiliates of the issuer based on a closing sale price of $16.88 at March
15, 1996, was $21,824,523.36.

                 As of March 15, 1996, the issuer had outstanding 1,372,658
shares of its common stock, par value $1.25 per share.

                      DOCUMENTS INCORPORATED BY REFERENCE

                 Portions of the issuer's 1996 definitive Proxy Statement are
incorporated by reference in Part III of this Annual Report.  In addition,
portions of the Annual Report to stockholders of the issuer for the year ended
December 31, 1995, are incorporated by reference in Part II of this Annual
Report.

                 Transitional Small Business Disclosure Format (check one).
Yes         No  X
    ------    ------

                                 Page 1 of ____
                            Exhibit Index on Page 25
<PAGE>   2
                              CCFNB BANCORP, INC.
                                  FORM 10-KSB

                                     Index

<TABLE>
<CAPTION>
Part I                                                                                        Page
------                                                                                        ----
<S>                                                                                           <C>
Item 1.          Description of the Business  . . . . . . . . . . . . . . . . . . . . . . .     3

Item 2.          Description of Property  . . . . . . . . . . . . . . . . . . . . . . . . .    17

Item 3.          Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18

Item 4.          Submission of Matters to a Vote of Security Holders  . . . . . . . . . . .   Not Applicable

Part II
-------

Item 5.          Market for Common Equity and Related
                   Stockholder Matters  . . . . . . . . . . . . . . . . . . . . . . . . . .    19

Item 6.          Management's Discussion and Analysis or Plan
                   of Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

Item 7.          Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

Item 8.          Changes in and Disagreements with Accountants on
                   Accounting and Financial Disclosure  . . . . . . . . . . . . . . . . . .   Not Applicable

Part III
--------

Item 9.          Directors, Executive Officers, Promoters and Control
                   Persons; Compliance with Section 16(a) of the
                   Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

Item 10.         Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . .    21

Item 11.         Security Ownership of Certain Beneficial Owners
                   and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

Item 12.         Certain Relationships and Related Transactions . . . . . . . . . . . . . .    21

Item 13.         Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . .    22


Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    23

Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    25
</TABLE>





                                       2
<PAGE>   3
                              CCFNB BANCORP, INC.
                                  FORM 10-KSB

                                     PART I


ITEM 1.  DESCRIPTION OF THE BUSINESS

                 General

                 CCFNB Bancorp, Inc. ("Bancorp"), a Pennsylvania business
corporation, is a bank holding company, registered with and supervised by the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board").
Bancorp was organized on June 20, 1983, and commenced operations on March 31,
1984.  Bancorp has one wholly-owned subsidiary, the Columbia County Farmers
National Bank (the "Bank").  Bancorp's business has consisted primarily of
managing and supervising the Bank, and its principal source of income has been
dividends paid by the Bank.  At December 31, 1995, Bancorp had total
consolidated assets, deposits and stockholders' equity of approximately $162
million, $129 million and $20 million, respectively.

                 The Bank was organized in 1917.  The Bank is a national
banking association that is a member of the Federal Reserve System and the
deposits of which are insured by the Federal Deposit Insurance Corporation (the
"FDIC") under the Bank Insurance Fund ("BIF").  As of December 31, 1995, the
Bank has 6 branch locations, including its main office in Bloomsburg,
Pennsylvania.  All of the Bank's offices are located in Columbia County,
Pennsylvania.  The Bank is a full service commercial bank providing a wide
range of services to individuals and small to medium sized businesses in its
north eastern Pennsylvania market area, including accepting time, demand, and
savings deposits and making secured and unsecured commercial, real estate and
consumer loans.  In addition, the Bank has a trust department.

                 Supervision and Regulation - Bancorp

                 Bancorp is subject to the jurisdiction of the Securities and
Exchange Commission ("SEC") and of state securities laws administrators for
matters relating to the offering and sale of its securities.  Bancorp is
currently subject to the SEC's rules and regulations relating to periodic
reporting, insider trading reports and proxy solicitation material in
accordance with the Securities Exchange Act of 1934 (the "Exchange Act").
Furthermore, Bancorp qualifies as a "small business issuer" as that term is
defined under Item 10 of Regulation S-B of the SEC, and has elected to make its
SEC filings under the disclosure requirements afforded to small business
issuers.

                 Bancorp is also subject to the provisions of the Bank Holding
Company Act of 1956, as amended ("Bank Holding Company Act"), and to
supervision by the Federal Reserve Board.  The Bank Holding Company Act will
require Bancorp to secure the prior approval of the Federal Reserve Board
before it owns or controls, directly or indirectly, more than 5% of the voting
shares of substantially all of the assets of any institution, including another
bank.  The Bank Holding Company Act prohibits acquisition by Bancorp of more
than 5% of the voting





                                       3
<PAGE>   4
shares of, or interest in, or substantially all of the assets of, any bank
located outside Pennsylvania unless such an acquisition is specifically
authorized by laws of the state in which such bank is located.

                 A bank holding company is prohibited from engaging in or
acquiring direct or indirect control of more than 5% of the voting shares of
any company engaged in non-banking activities unless the Federal Reserve Board,
by order or regulation, has found such activities to be so closely related to
banking or managing or controlling banks as to be a proper incident thereto.
In making this determination, the Federal Reserve Board considers whether the
performance of these activities by a bank holding company would offer benefits
to the public that outweigh possible adverse effects.

                 The Bank Holding Company Act also prohibits acquisitions of
control of a bank holding company, such as Bancorp, without prior notice to the
Federal Reserve Board.  Control is defined for this purpose as the power,
directly or indirectly, to direct the management or policies of a bank holding
company or to vote twenty-five percent (25%) (or ten percent (10%), if no other
person or persons acting on concert, holds a greater percentage of the Common
Stock) or more of Bancorp's Common Stock.

                 Bancorp is required to file an annual report with the Federal
Reserve Board and any additional information that the Federal Reserve Board may
require pursuant to the Bank Holding Company Act.  The Federal Reserve Board
may also make examinations of Bancorp and any or all of its subsidiaries.
Further, under Section 106 of the 1970 amendments to the Bank Holding Company
Act and the Federal Reserve Board's regulations, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit or provision of credit or provision of
any property or services.  The so-called "Anti-tie-in" provisions state
generally that a bank may not extend credit, lease, sell property or furnish
any service to a customer on the condition that the customer provide additional
credit or service to the bank, to its bank holding company or to any other
subsidiary of its bank holding company or on the condition that the customer
not obtain other credit or service from a competitor of the bank, its bank
holding company or any subsidiary of its bank holding company.

                 Subsidiary banks of a bank holding company are subject to
certain restrictions imposed by the Federal Reserve Act on any extensions of
credit to the bank holding company or any of its subsidiaries, on investments
in the stock or other securities of the bank holding company and on taking of
such stock or securities as collateral for loans to any borrower.

                 Permitted Non-Banking Activities

                 The Federal Reserve Board permits bank holding companies to
engage in non-banking activities so closely related to banking, managing or
controlling banks as to be a proper incident thereto.  While the types of
permissible activities are subject to change by the Federal Reserve Board, the
principal non-banking activities that presently may be conducted by a bank
holding company are:





                                       4
<PAGE>   5
                 1.       Making, acquiring or servicing loans and other
extensions of credit for its own account or for the account of others, such as
would be made by the following types of companies:  consumer finance, credit
card, mortgage, commercial finance and factoring.

                 2.       Operating as an industrial bank, Morris Plan bank or
industrial loan company in the manner authorized by state law so long as the
institution does not accept demand deposits or make commercial loans.

                 3.       Operating as a trust company in the manner authorized
by federal or state law so long as the institution does not make certain types
of loans or investments or accept deposits, except as may be permitted by the
Federal Reserve Board.

                 4.       Subject to certain limitations, acting as an
investment or financial advisor to investment companies and other persons.

                 5.       Leasing personal and real property or acting as
agent, broker, or advisor in leasing property, provided that it is reasonably
anticipated that the transaction will compensate the lessor for not less than
the lessor's full investment in the property and provided further that the
lessor may rely on estimated residual values of up to 100% of the acquisition
cost of the leased property.

                 6.       Making equity and debt investments in corporations or
projects designed primarily to promote community welfare, such as the economic
rehabilitation and development of low-income areas by providing housing,
services or jobs for residents.

                 7.       Providing to others financially oriented data
processing or bookkeeping services.

                 8.       Subject to certain limitations, acting as an
insurance principal, agent or broker in relation to insurance for itself and
its subsidiaries or for insurance directly related to extensions of credit by
the bank holding company system.

                 9.       Owning, controlling or operating a savings
association, if the savings association engages only in deposit taking
activities and lending, and other activities permissible for bank holding
companies.

                 10.      Providing courier services of a limited character.

                 11.      Subject to certain limitations, providing management
consulting advice to nonaffiliated banks and nonbank depository institutions.

                 12.      Selling money orders having a face value of $1,000 or
less, travelers' checks and United States savings bonds.

                 13.      Performing appraisals of real estate and personal
property, including securities.





                                       5
<PAGE>   6
                 14.      Subject to certain conditions, acting as intermediary
for the financing of commercial or industrial income-producing real estate by
arranging for the transfer of the title, control and risk of such a real estate
project to one or more investors.

                 15.      Subject to certain limitations, providing
full-service brokerage and financial advisory activities; and selling, solely
as an agent or broker for customers, shares of investment companies advised by
an affiliate of the bank holding company or providing investment advice to
customers about the purchase and sale of shares of investment companies advised
by an affiliate of the bank holding company.

                 16.      Underwriting and dealing in obligations of the United
States, general obligations of states and their political subdivisions and
other obligations such as bankers' acceptances and certificates of deposits.

                 17.      Subject to certain limitations, providing by any
means, general information and statistical forecasting with respect to foreign
exchange markets; advisory services designed to assist customers in monitoring,
evaluating and managing their foreign exchange exposures; and certain
transactional services with respect to foreign exchange.

                 18.      Subject to certain limitations, acting as a futures
commission merchant in the execution and clearance on major commodity exchanges
of futures contracts and options on futures contracts for bullion, foreign
exchange, government securities, certificates of deposit and other money market
instruments.

                 19.      Subject to certain limitations, providing commodity
trading and futures commission merchant advice, including counsel,
publications, written analysis and reports.

                 20.      Providing consumer financial counseling that involves
counseling, educational courses and distribution of instructional materials to
individuals on consumer-oriented financial management matters, including debt
consolidation, mortgage applications, bankruptcy, budget management, real
estate tax shelters, tax planning, retirement and estate planning, insurance
and general investment management, so long as this activity does not include
the sale of specific products or investments.

                 21.      Providing tax planning and preparation advice such as
strategies designed to minimize tax liabilities and includes, for individuals,
analysis of the tax implications of retirement plans, estate planning and
family trusts.  For a corporation, tax planning includes the analysis of the
tax implications of mergers and acquisitions, portfolio mix, specific
investments, previous tax payments and year-end tax planning.  Tax preparation
involves the preparation of tax forms and advice concerning liability based on
records and receipts supplied by the client.

                 22.      Providing check guaranty services to subscribing
merchants.

                 23.      Subject to certain limitations, operating a
collection agency.

                 24.      Operating a credit bureau that maintains files on the
past credit history of consumers and providing such information to a lender
that is considering a borrower's application





                                       6
<PAGE>   7
for credit, provided that the credit bureau does not grant preferential
treatment to an affiliated bank in the bank holding company system.

                 Pennsylvania Banking Law

                 Under the Pennsylvania Banking Code of 1965, as amended (the
"Code"), Bancorp is permitted to control an unlimited number of banks.
However, Bancorp would be required, under the Bank Holding Company Act, to
obtain the prior approval of the Federal Reserve Board before it could acquire
all or substantially all of the assets of any bank, or acquire ownership or
control of any voting shares of any bank other than the Bank, if, after such
acquisition, it would own or control more than five percent (5%) of the voting
shares of such bank.

                 Interstate Banking and Branching

                 On September 29, 1994, the President signed into law the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act").  The following discussion describes those provisions
of the Interstate Banking Act that would pertain to Bancorp.  It is not an
exhaustive description of all provisions of the Interstate Banking Act.

                 In general, the Federal Reserve Board may approve an
application by Bancorp to acquire control of, or acquire all or substantially
all of the assets of, a bank located outside of the Commonwealth of
Pennsylvania without regard to whether such acquisition is prohibited under the
law of any state.  The Federal Reserve Board may approve such application if it
finds, among other things, that Bancorp is "adequately capitalized" and
"adequately managed."  Moreover, the Federal Reserve Board may not approve such
acquisition if the target bank has not been in existence for the minimum period
of time, if any, required by such target bank's "host" state.  The Federal
Reserve Board may, however, approve the acquisition of the target bank that has
been in existence for at least five years without regard to any longer minimum
period of time required under the law of the "host" state of the target bank.
These above provisions took effect on September 30, 1995.

                 Furthermore, the Interstate Banking Law provides that,
beginning June 1, 1997, appropriate federal supervisory agencies may approve a
merger of the Bank with another bank located in a different state or the
establishment by the Bank of a new branch office either by acquisition or de
novo, unless the Commonwealth of Pennsylvania enacts a law prior to June 1,
1997, allowing an interstate merger or expressly prohibiting merger with an
out-of-state bank.  The Commonwealth of Pennsylvania has enacted a law to
"opt-in" early of interstate mergers.

                 Moreover, the Interstate Banking Law provides that the Bank
may establish and operate a de novo branch in any state that "opts-in" to de
novo branching.  A "de novo branch" is a branch office that is originally
established as a branch and does not become a branch as a result of an
acquisition or merger.  The Commonwealth of Pennsylvania has enacted a law to
"opt-in" early to de novo interstate branching.

                 On December 13, 1995, the Banking Commissioners of the states
of Delaware, Maryland, Pennsylvania and Virginia executed a Cooperative
Agreement which governs the manner in which state-chartered banks with branches
in multiple states will be supervised.  This





                                       7
<PAGE>   8
Cooperative Agreement was necessitated by the Interstate Banking Law and was
drafted to create a level playing field for state-chartered banks with respect
to supervision and regulation of branch offices in a multiple state setting.
Specifically, this agreement outlines general principles for determining
whether  home or host state law applies, including the following:  (1) host
state law applies to operational issues relating to a branch located in a host
state, including antitrust, community reinvestment, consumer protection, usury
and fair lending laws; (2) the state law of the home state will apply to
corporate structure issues, such as, charter, by-laws, incorporation,
liquidation, stockholders and directors, capital and investments; and (3) bank
powers issues will be resolved with reference to both home and host state laws.
The Bank is a national association and is governed by, among other laws and
regulations, the National Bank Act and regulations promulgated by the
Comptroller of the Currency.  Therefore, the Cooperative Agreement does not
apply to the Bank.

                 As of the filing date of this report, Bancorp and the Bank
have no plans to engage in interstate banking or branching.

                 Legislation and Regulatory Changes

                 From time to time, legislation is enacted which has the effect
of increasing the cost of doing business, limiting or expanding permissible
activities or affecting the competitive balance between banks and other
financial institutions.  Proposals to change the laws and regulations governing
the operations and taxation of banks, bank holding companies and other
financial institutions are frequently made in Congress, and before various bank
regulatory agencies.  No prediction can be made as to the likelihood of any
major changes or the impact such changes might have on Bancorp and its
subsidiary bank.  Certain changes of potential significance to Bancorp which
have been enacted or promulgated, as the case may be, by Congress or various
regulatory agencies, respectively, are discussed below.

                 Financial Institutions Reform, Recovery and Enforcement Act of
                 1989 ("FIRREA")

                 On August 9, 1989, major reform and financing legislation,
i.e., FIRREA, was enacted into law in order to restructure the regulation of
the thrift industry, to address the financial condition of the Federal Savings
and Loan Insurance Corporation and to enhance the supervisory and enforcement
powers of the Federal bank and thrift regulatory agencies.  The Office of the
Comptroller of the Currency ("OCC"), as the primary Federal regulator of the
Bank, is primarily responsible for supervision of the Bank.  The OCC and FDIC
have far greater flexibility to impose supervisory agreements on an institution
that fails to comply with its regulatory requirements, particularly with
respect to the capital requirements.  Possible enforcement actions include the
imposition of a capital plan, termination of deposit insurance and removal or
temporary suspension of an officer, director or other institution-affiliated
party.

                 Under FIRREA, civil penalties are classified into three
levels, with amounts increasing with the severity of the violation.  The first
tier provides for civil penalties of up to $5,000 per day for any violation of
law or regulation.  A civil penalty of up to $25,000 per day may be assessed if
more than a minimal loss or a pattern of misconduct is involved.  Finally, a
civil penalty of up to $1.0 million per day may be assessed for knowingly or
recklessly causing





                                       8
<PAGE>   9
a substantial loss to an institution or taking action that results in a
substantial pecuniary gain or other benefit.  Criminal penalties are increased
to $1.0 million per violation, up to $5.0 million for continuing violations or
for the actual amount of gain or loss.  These monetary penalties may be
combined with prison sentences for up to five years.

                 Federal Deposit Insurance Corporation Improvement Act of 1991
                 ("FDICIA")

                 General.  The FDICIA was enacted in December, 1991, and
reformed a variety of bank regulatory laws.  Some of these reforms have a
direct impact on the Bank.  Certain of these provisions are discussed below.

                 Examinations and Audits.  Annual full-scope, on-site
examinations are required for all FDIC-insured institutions with assets of $500
million or more.  For bank holding companies with $500 million or more in
assets, the independent accountants of such companies shall attest to the
accuracy of management's report.  Such accountants shall also monitor
management's compliance with governing laws and regulations.  Such companies
are also required to select an independent audit committee composed of outside
directors who are independent of management, to review with management and the
independent accountants the reports that must be submitted to the appropriate
bank regulatory agencies.  If the independent accountants resign or are
dismissed, written notification must be given to the FDIC and to the
appropriate federal and state bank regulatory agency.

                 Prompt Corrective Action.  In order to reduce losses to the
deposit insurance funds, the FDICIA established a format to more closely
monitor FDIC-insured institutions and to enable prompt corrective action by the
appropriate federal supervisory agency if an institution begins to experience
any difficulty.  The FDICIA established five "Capital" categories.  They are:
(1) well-capitalized; (2) adequately capitalized; (3) undercapitalized; (4)
significantly undercapitalized; and (5) critically undercapitalized.  The
overall goal of these new capital measures is to impose more scrutiny and
operational restrictions on depository institutions as they descend the capital
categories from well capitalized to critically undercapitalized.

                 The FDIC, the OCC, the Federal Reserve Board and the Office of
Thrift Supervision have issued jointly final regulations relating to these
capital categories and prompt corrective action.  These capital measures for
prompt corrective action are defined as follows:

                 A "well-capitalized" institution would be one that has at
least a 10% total risk-based capital ratio, a 6% or greater Tier I risk-based
capital ratio, a 5% or greater Tier I leverage capital ratio, and is not
subject to any written order or final directive by the FDIC to meet and
maintain a specific capital level.

                 An "adequately capitalized" institution would be one that
meets the required minimum capital levels, but does not meet the definition of
a "well-capitalized" institution.  The existing capital rules generally require
banks to maintain a Tier I leverage capital ratio of at least 4% and an 8% or
greater total risk-based capital ratio.  Since the risk-based standards also
require at least half of the total risk-based capital requirement to be in the
form of Tier I capital, this also will mean that an institution would need to
maintain at least a 4% Tier I risk-based capital ratio.





                                       9
<PAGE>   10
Thus, an institution would need to meet each of the required minimum capital
levels in order to be deemed "adequately capitalized."

                 An "undercapitalized" institution would fail to meet one or
more of the required minimum capital levels for an "adequately capitalized"
institution.  An "undercapitalized" institution must file a capital restoration
plan and is automatically subject to restrictions on dividends, management fees
and asset growth.  In addition, the institution is prohibited from making
acquisitions, opening new branches or engaging in new lines of business without
the prior approval of its primary federal regulator.  A number of other
discretionary restrictions also may be imposed on a case-by-case basis, and
harsher restrictions that otherwise would apply to "significantly
undercapitalized" institutions may be imposed on an "undercapitalized"
institution that fails to file or implement an acceptable capital restoration
plan.

                 A "significantly undercapitalized" institution would have a
total risk-based capital ratio of less than 6%, a Tier I risk-based capital
ratio of less than 3%, or a Tier I leverage capital ratio of less than 3%, as
the case may be.  Institutions in this category would be subject to all the
restrictions that apply to "undercapitalized" institutions.  Certain other
mandatory prohibitions also would apply, such as restrictions against the
payment of bonuses or raises to senior executive officers without the prior
approval of the institution's primary federal regulator.  A number of other
restrictions may be imposed.

                 A "critically undercapitalized" institution would be one with
a tangible equity (Tier I capital) ratio of 2% or less.  In addition to the
same restrictions and prohibitions that apply to "undercapitalized" and
"significantly undercapitalized" institutions, the FDIC's rule implementing
this provision of FDICIA also addresses certain other provisions for which the
FDIC has been accorded responsibility as the insurer of depository
institutions.


At a minimum, any institution that becomes "critically undercapitalized" is
prohibited from taking the following actions without the prior written approval
of its primary federal supervisory agency:  engaging in any material
transactions other than in the usual course of business; extending credit for
highly leveraged transactions ("HLTs"); amending its charter or bylaws; making
any material changes in accounting methods; engaging in certain transactions
with affiliates; paying excessive compensation or bonuses; and paying interest
on liabilities exceeding the prevailing rates in the institution's market area.
In addition, a "critically undercapitalized" institution is prohibited from
paying interest or principal on its subordinated debt and is subject to being
placed in conservatorship or receivership if its tangible equity capital level
is not increased within certain mandated time frames.

                 At any time, an institution's primary federal supervisory
agency may reclassify it into a lower capital category.  All institutions are
prohibited from declaring any dividends, making any other capital distribution,
or paying a management fee if it would result in downward movement into any of
the three undercapitalized categories.  The FDICIA provides an exception to
this requirement for stock redemptions that do not lower an institution's
capital and would improve its financial condition, if the appropriate federal
supervisory agency has consulted with the FDIC and approved the redemption.





                                       10
<PAGE>   11
                 The regulation requires institutions to notify the FDIC
following any material event that would cause such institution to be placed in
a lower category.  Additionally, the FDIC monitors capital levels through call
reports and examination reports.

                 Deposit Insurance.  On January 1, 1994, the FDIC implemented
the permanent Risk Related Premium System (the "RRPS") with respect to the
assessments and payment of deposit insurance premiums.

                 Under the RRPS, the FDIC, on a semiannual basis, will assign
each institution to one of three capital groups (well-capitalized, adequately
capitalized or undercapitalized, in each case as these terms are defined for
purposes of prompt corrective action rules described above) and further assign
such institution to one of three subgroups within a capital group corresponding
to the FDIC's judgment of its strength based on supervisory evaluations,
including examination reports, statistical analysis and other information
relevant to gauging the risk posed by the institution.  Only institutions with
a total capital to risk-adjusted assets ratio of 10.00% or greater, a Tier I
capital to risk-adjusted assets ratio of 5% or a greater and a Tier I leverage
ratio of 5% or greater, are assigned to the well-capitalized group.

                 Effective January 1, 1996, the FDIC board of directors has
further reduced BIF premiums.  Highly-rated institutions will pay only the
statutory minimum of $2,000 annually for FDIC insurance.  The remaining
institutions will pay on a scale ranging from 3 to 30 cents per every $100 of
insured deposits, which is down from the scale in the latter half of 1995 of 4
to 31 cents.  If such lower FDIC insurance premium rates were to have been in
effect for all of 1995, then the Bank would have paid $24,039 less in such
premiums based upon current deposit levels.

                 Real Estate Lending Standards.  Pursuant to the FDICIA, the
OCC and other federal banking agencies adopted real estate lending guidelines
which would set loan-to-value ("LTV") ratios for different types of real estate
loans.  A LTV ratio is generally defined as the total loan amount divided by
the appraised value of the property at the time the loan is originated.  If the
institution does not hold a first lien position, the total loan amount would be
combined with the amount of all senior liens when calculating the ratio.  In
addition to establishing the LTV ratios, the guidelines require all real estate
loans to be based upon proper loan documentation and a recent appraisal of the
property.

                 Bank Enterprise Act of 1991.  Within the overall FDICIA is a
separate subtitle called the "Bank Enterprise Act of 1991."  The purpose of
this Act is to encourage banking institutions to establish "basic transaction
services for consumers" or so-called "lifeline accounts."  The FDIC assessment
rate is reduced for all lifeline depository accounts.  This Act establishes ten
(10) factors which are the minimum requirements to qualify as a lifeline
depository account.  Some of these factors relate to minimum opening and
balance amounts, minimum number of monthly withdrawals, the absence of
discriminatory practices against low-income individuals and minimum service
charges and fees.  Moreover, the Housing and Community Development Act of 1972
requires that the FDIC's risk-based assessment system include provisions
regarding life-line accounts.  Assessment rates applicable to life-line
accounts are to be established by FDIC rule.





                                       11
<PAGE>   12
                 Truth in Savings Act.  The FDICIA also contains the Truth in
Savings Act ("TSA").  The Federal Reserve Board has adopted regulations
("Regulation DD") under the TSA.  The purpose of TSA is to require the clear
and uniform disclosure of the rates of interest which are payable on deposit
accounts by depository institutions and the fees that are assessable against
deposit accounts, so that consumers can make a meaningful comparison between
the competing claims of banks with regard to deposit accounts and products.  In
addition to disclosures to be provided when a customer establishes a deposit
account, TSA requires the depository institution to include, in a clear and
conspicuous manner, the following information with each periodic statement of a
deposit account:  (1) the annual percentage yield earned; (2) the amount of
interest earned; (3) the amount of any fees and charges imposed; and (4) the
number of days in the reporting period.  TSA allows for civil lawsuits to be
initiated by customers if the depository institution violates any provision or
regulation under TSA.

                 Regulatory Capital Requirements

                 The following table presents Bancorp's consolidated capital
ratios at December 31, 1995.

<TABLE>
<CAPTION>
                                                                                                (In Thousands)
<S>                                                                                                <C>
Tier I Capital  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . .           $19,227
Tier II Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             20,080
Total Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           19,512

Adjusted Total Average Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Adjusted Risk-Weighted Assets(1)  . . . . . . . . . . . . . . . . . . . . . . . . .           68,147

Tier I Risk-Based Capital Ratio(2)  . . . . . . . . . . . . . . . . . . . . . . . .                 28.21%
Required Tier I Risk-Based Capital Ratio  . . . . . . . . . . . . . . . . . . . . . . . .            4.00%
Excess Tier I Risk-Based Capital Ratio  . . . . . . . . . . . . . . . . . . . . . . . . .           24.21%

Total Risk-Based Capital Ratio(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . .           29.46%
Required Total Risk-Based Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . .            8.00%
Excess Total Risk-Based Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . . .           21.46%

Tier I Leverage Ratio(4)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           11.88%
Required Tier I Leverage Ratio  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            3.00%
Excess Tier I Leverage Ratio  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8.88%
------------------------------                                                                            
</TABLE>
(1)      Includes off-balance sheet items at credit-equivalent values less
         intangible assets.  
(2)      Tier I Risk-Based Capital Ratio is defined as the ratio of Tier I
         Capital to Total Adjusted Risk-Weighted Assets.  
(3)      Total Risk-Based Capital Ratio is defined as the ratio of Tier I and
         Tier II Capital to Total Adjusted Risk-Weighted Assets.  
(4)      Tier I Leverage Ratio is defined as the ratio of Tier I Capital to
         Adjusted Total Average Assets.


                 Bancorp was required to implement, on January 1, 1994,
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity





                                       12
<PAGE>   13
Securities" ("FASB 115").  For regulatory capital reporting purposes, FASB 115
changed the composition of stockholders' equity in financial statements
prepared in accordance with generally accepted accounting principles by
including as a separate component of equity the amount of net unrealized
holding gains or losses on debt and equity securities that are deemed to be
available-for-sale.  The implementation of FASB 115 did not have a material
effect during 1995 on the regulatory capital ratios of Bancorp.

                 Effective January 27, 1995, the FDIC has issued a final rule
with respect to the implementation of FASB 115 for regulatory capital reporting
purposes.  Under this final rule, net unrealized holding losses on
available-for-sale equity securities (but not debt securities) with readily
determinable fair values will be included (i.e., deducted) when calculating
Bancorp's consolidated Tier 1 capital.  All other unrealized holding gains and
losses on available-for-sale securities will be excluded (i.e., not deducted)
from Bancorp's consolidated Tier 1 capital.  Such final rule had no material
effect on Bancorp's consolidated Tier 1 capital.

                 Bancorp's ability to maintain the required levels of capital
is substantially dependent upon the success of Bancorp's capital and business
plans; the impact of future economic events on Bancorp's loan customers; and
Bancorp's ability to manage its interest rate risk and investment portfolio and
control its growth and other operating expenses.

                 Effect of Government Monetary Policies

                 The earnings of Bancorp are and will be affected by domestic
economic conditions and the monetary and fiscal policies of the United States
government and its agencies.

                 The monetary policies of the Federal Reserve Board have had,
and will likely continue to have, an important impact on the operating results
of commercial banks through its power to implement national monetary policy in
order, among other things, to curb inflation or combat a recession.  The
Federal Reserve Board has a major effect upon the levels of bank loans,
investments and deposits through its open market operations in United States
government securities and through its regulations of, among other things, the
discount rate on borrowings of member banks and the reserve requirements
against member bank deposits.  It is not possible to predict the nature and
impact of future changes in monetary and fiscal policies.

                 History and Business - Bank

                 The Bank's legal headquarters are located at 232 East Street,
Bloomsburg, Pennsylvania.

                 As of December 31, 1995, the Bank had total assets of $162
million, total shareholders' equity of $19 million and total deposits and other
liabilities of $143 million.

                 The Bank is a community bank which seeks to provide personal
attention and professional financial assistance to its customers.  The Bank is
a locally managed and locally oriented financial institution established to
serve the needs of individuals and small and medium-sized businesses.  The
Bank's business philosophy includes offering direct access to its President and
other officers and providing friendly, informed and courteous service, local
and timely





                                       13
<PAGE>   14
decision making, flexible and reasonable operating procedures, and
consistently-applied credit policies.

                 The Bank is a full-service commercial bank offering a range of
commercial and retail banking services to its clients.  These include personal
and business checking and savings accounts, certificates of deposit, and
mortgage, home equity and commercial loans.  In addition, the Bank provides
safe deposit boxes, traveler's checks, wire transfers of funds, and certain
personal, corporate and pension trust services.  The Bank is a member of the
MAC system and provides clients with access to this automated teller machine
network.  The Bank also makes credit cards available to its customers.  In
addition, the Bank has a trust department that provides traditional fiduciary
services to its clients.

                 The Bank solicits small and medium-sized businesses located
primarily within the Bank's market area that typically borrow in the $25,000 to
$1.0 million range.  In the event that certain loan requests may exceed the
Bank's lending limit to any one customer, the Bank seeks to arrange such loans
on a participation basis with other financial institutions.

                 Market Area

                 The Bank's primary market area is Columbia County, a 484
square mile area located in north eastern Pennsylvania with a population of
approximately 63,200 based on 1990 census data.  The Town of Bloomsburg is the
County's largest municipality and its center of industry and commerce.
Bloomsburg has a population of approximately 12,400 based on 1990 census data,
and is the county seat.  Berwick, located on the eastern boundary of the
County, is the second largest municipality, with a 1990 population of
approximately 11,000.  The Bank currently serves its market area through six
branch offices located in Bloomsburg, Benton, Lightstreet, Millville,
Orangeville and South Centre, Columbia County.

                 The Bank competes with six other commercial banks and two
thrift institutions in Columbia County.  The Bank's major competitors are:
First National Bank of Berwick, First Eastern Bank, N.A., which has been
acquired by PNC Bank, N.A., the largest commercial bank in Pennsylvania, and
First Columbia Bank and Trust Company of Bloomsburg, Pennsylvania.  Both PNC
Bank, N.A. and First National Bank of Berwick have greater financial resources
than the Bank.

                 The Bank's extended market area includes the adjacent
Pennsylvania counties of Luzerne, Montour, Northumberland, Schuylkill and
Sullivan.

                 Supervision and Regulation - Bank

                 The operations of the Bank are subject to federal and state
statutes applicable to banks chartered under the banking laws of the United
States, to members of the Federal Reserve System and to banks whose deposits
are insured by the FDIC.  Bank operations are also subject to regulations of
the OCC, the Federal Reserve Board and the FDIC.





                                       14
<PAGE>   15
                 The primary supervisory authority of the Bank is the OCC, that
regularly examines the Bank.  The OCC has the authority under the Financial
Institutions Supervisory Act to prevent a national bank from engaging in an
unsafe or unsound practice in conducting its business.

                 Federal and state banking laws and regulations govern, among
other things, the scope of a bank's business, the investments a bank may make,
the reserves against deposits a bank must maintain, loans a bank makes and
collateral it takes, the activities of a bank with respect to mergers and
consolidations and the establishment of branches.  All banks in Pennsylvania
are permitted to maintain branch offices in any county of the state.  Branches
of national banks may be established only after approval by the OCC.  The OCC
is required to grant approval only if it finds that there is a need for banking
services or facilities such as are contemplated by the proposed branch.  The
OCC may disapprove the application if the bank does not have the capital and
surplus deemed necessary by the OCC, or if the application relates to the
establishment of a branch in a county contiguous to the county in which the
applicant's principal place of business is located, and another banking
institution that has its principal place of business in the county in which the
proposed branch would be located, has in good faith, notified the OCC of its
intention to establish a branch in the same municipal location in which the
proposed branch would be located.

                 Multi-bank holding companies are permitted in Pennsylvania
within certain limitations.  See sections entitled "Pennsylvania Banking Law"
and "Interstate Banking and Branching."

                 A subsidiary bank of a bank holding company is subject to
certain restrictions imposed by the Federal Reserve Act on any extensions of
credit to the bank holding company or its subsidiaries, on investments in the
stock or other securities of the bank holding company or its subsidiaries and
on taking such stock or securities as collateral for loans.  The Federal
Reserve Act and Federal Reserve Board regulations also place certain
limitations and reporting requirements on extensions of credit by a bank to
principal shareholders of its parent holding company, among others, and to
related interests of such principal shareholders.  In addition, such
legislation and regulations may affect the terms upon which any person becoming
a principal shareholder of a holding company may obtain credit from banks with
which the subsidiary bank maintains a correspondent relationship.

                 Federal law also prohibits acquisitions of control of a bank
holding company without prior notice to certain federal bank regulators.
Control is defined for this purpose as the power, directly or indirectly, to
influence the management or policies of the bank or bank holding company or to
vote twenty-five percent (25%) or more of any class of voting securities of the
bank holding company.

                 From time to time, various types of federal and state
legislation have been proposed that could result in additional regulations of,
and restrictions on, the business of the Bank.  It cannot be predicted whether
any such legislation will be adopted or how such legislation would affect the
business of the Bank.  As a consequence of the extensive regulation of
commercial banking activities in the United States, the Bank's business is
particularly susceptible to being affected by federal legislation and
regulations that may increase the costs of doing business.





                                       15
<PAGE>   16
                 Under the Federal Deposit Insurance Act, the OCC possesses the
power to prohibit institutions regulated by it (such as the Bank) from engaging
in any activity that would be an unsafe and unsound banking practice and in
violation of the law.  Moreover, the Financial Institutions and Interest Rate
Control Act of 1987 ("FIRA") generally expands the circumstances under which
officers or directors of a bank may be removed by the institution's federal
supervisory agency; restricts lending by a bank to its executive officers,
directors, principal shareholders or related interests thereof; restricts
management personnel of a bank from serving as directors in other management
positions with certain depository institutions whose assets exceed a specified
amount or which have an office within a specified geographic area; and
restricts management personnel from borrowing from another institution that has
a correspondent relationship with their bank.  Additionally, FIRA requires that
no person may acquire control of a bank unless the appropriate federal
supervisory agency has been given 60-days prior written notice and within that
time has not disapproved the acquisition or extended the period for
disapproval.

                 Under the Bank Secrecy Act ("BSA"), the Bank is required to
report to the Internal Revenue Service currency transactions of more than
$10,000 or multiple transactions of which the Bank is aware in any one day that
aggregate in excess of $10,000.  Civil and criminal penalties are provided
under the BSA for failure to file a required report, for failure to supply
information required by the BSA or for filing a false or fraudulent report.

                 The Garn-St Germain Depository Institutions Act of 1982 ("1982
Act"), removes certain restrictions on the lending powers and liberalizes the
depository abilities of the Bank.  The 1982 Act also amends FIRA (see above) by
eliminating certain statutory limits on lending of a bank to its executive
officers, directors, principal shareholders or related interests thereof and by
relaxing certain reporting requirements.  However, the 1982 Act strengthened
FIRA provisions respecting management interlocks and correspondent bank
relationships by management personnel.

                 Community Reinvestment Act

                 The Community Reinvestment Act of 1977, as amended (the
"CRA"), and the regulations promulgated to implement the CRA are designed to
create a system for bank regulatory agencies to evaluate a depository
institution's record in meeting the credit needs of its community.  Until May
1995, a depository institution was evaluated for CRA compliance based upon 12
assessment factors.

                 The CRA regulations were completely revised as of May 4, 1995,
to establish new performance-based standards for use in examining a depository
institution's compliance with the CRA (the "revised CRA regulations").  The
revised CRA regulations establish new tests for evaluating both small and large
depository institutions' investment in the community.  A "small bank" is
defined as a bank which has total assets of less than $250 million and is
independent or is an affiliate of a holding company with less than $1 billion
in assets.  Pursuant to the revised CRA regulations, a depository institution
which qualifies as a "small bank" will be examined under a streamlined
procedure which emphasizes lending activities.  The streamlined examination
procedures for a small bank became effective on January 1, 1996.





                                       16
<PAGE>   17
                 A large retail institution is one which does not meet the
"small bank" definition, above.  A large retail institution can be evaluated
under one of two tests:  (1) a three-part test evaluating the institution's
lending, service and investment performance; or (2) a "strategic plan" designed
by the institution with community involvement and approved by the appropriate
federal bank regulator.  A large institution must choose one of these options
prior to July 1997, but may opt to be examined under one of these two options
prior to that time.  Effective January 1, 1996, a large retail institution that
opts to be examined pursuant to a strategic plan may submit its strategic plan
to the bank regulators for approval.

                 In addition, the revised CRA regulations include separate
rules regarding the manner in which "wholesale banks" and "limited purpose
banks" will be evaluated for compliance.

                 The new CRA regulations will be phased in over a two-year
period, beginning July 1, 1995, with a final effective date of July 1, 1997.
Until the applicable test is phased in, institutions may be examined under the
prior CRA regulations.

                 On December 27, 1995, the federal banking regulators issued a
joint final rule containing technical amendments to the revised CRA
regulations.  Specifically, the recent technical amendments clarify the various
effective dates in the revised CRA regulations, correct certain cross
references and state that once an institution becomes subject to the
requirements of the revised CRA regulations, it must comply with all aspects of
the revised CRA regulations, regardless of the effective date of certain
provisions.  Similarly, once an institution is subject to the revised CRA
regulations, the prior CRA regulations do not apply to that institution.

                 For the purposes of the revised CRA regulations, the Bank is
deemed to be a small depository institution, based upon financial information
as of December 31, 1995.  In the future, the Bank will be evaluated for CRA
compliance using the streamlined procedures for a small bank.  Under the 12
assessment factors contained in the prior CRA regulations, the Bank received a
"satisfactory" rating in 1995.  The Bank expects to receive a rating under the
revised CRA regulations which is consistent with its rating last year.

                 Concentration

                 Bancorp and the Bank are not dependent for deposits nor
exposed by loan concentrations to a single customer or to a small group of
customers the loss of any one or more of which would have a materially adverse
effect on the financial condition of Bancorp or the Bank.


ITEM 2.          DESCRIPTION OF PROPERTY

                 Bancorp owns no property other than through the Bank as
follows:





                                       17
<PAGE>   18
<TABLE>
<CAPTION>
                                             Type of         Square
Property         Location                  Ownership        Footage          Use
--------         --------                  ---------        -------          ---
     <S>         <C>                         <C>              <C>            <C>
     1           Orangeville, PA             Owned             2,259         Banking services.
     2           Benton, PA                  Owned             4,672         Banking services.
     3           South Centre, PA            Owned             3,868         Banking services.
     4           Bloomsburg, PA              Owned             7,493         Banking services.
     5           Bloomsburg, PA              Owned             8,186         Held for expansion.
     6           Scott Township, PA          Owned            16,500         Banking services, corporate,
                                                                             credit and operations.
     7           Millville, PA               Owned             1,325         Banking services.
</TABLE>


                 It is management's opinion that the facilities currently
utilized are suitable and adequate for current and immediate future purposes.


ITEM 3.  LEGAL PROCEEDINGS

                 General

                 The nature of Bancorp's and the Bank's business generates a
certain amount of litigation involving matters arising in the ordinary course
of business.  However, in the opinion of management of Bancorp and the Bank,
there are no proceedings pending to which Bancorp and the Bank is a party or to
which their property is subject, which, if determined adversely to Bancorp and
the Bank, would be material in relation to Bancorp's and the Bank's undivided
profits or financial condition, nor are there any proceedings pending other
than ordinary routine litigation incident to the business of Bancorp and the
Bank.  In addition, no material proceedings are pending or are known to be
threatened or contemplated against Bancorp and the Bank by government
authorities or others.

                 Environmental Issues

                 There are several federal and state statutes that govern the
obligations of financial institutions with respect to environmental issues.
Besides being responsible under such statutes for its own conduct, a bank also
may be held liable under certain circumstances for actions of borrowers or
other third parties on properties that collateralize loans held by the bank.
Such potential liability may far exceed the original amount of the loan made by
the bank.  Currently, the Bank is not a party to any pending legal proceedings
under any environmental statue nor is the Bank aware of any circumstances that
may give rise to liability of the Bank under any such statute.





                                       18
<PAGE>   19
                                    PART II


ITEM 5.  MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


                 Shares of Bancorp's Common Stock are traded in the
over-the-counter market and "bid" and "asked" quotations regularly appear on
the Over-the-Counter Bulletin Board system under the symbol "CCFN."  As of
March 15, 1996, eight firms were listed on the Over-the-Counter Bulletin Board
system as market makers for Bancorp's Common Stock.  The following table sets
forth:  (1) the quarterly average bid and asked prices for a share of Bancorp's
Common Stock during the periods indicated as reported by Hopper Soliday & Co.,
Inc. of Lancaster, Pennsylvania, one of the market makers of Bancorp's Common
Stock, and (2) quarterly dividends on a share of the Common Stock with respect
to each quarter since January 1, 1994.  The following quotations represent
prices between buyers and sellers and do not include retail markup, markdown or
commission.  They may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
                                                           Average Stock Prices                 
                                                           --------------------               Dividends         
                                                           Bid            Asked               Declared 
                                                           ---            -----               ---------
<S>      <C>                                             <C>             <C>                     <C>
1994:
         First quarter  . . . . . . . . . . . . . .      $15.50          $15.00                  $.10
         Second quarter . . . . . . . . . . . . . .      $15.50          $15.50                  $.10
         Third quarter  . . . . . . . . . . . . . .      $15.50          $15.00                  $.10
         Fourth quarter . . . . . . . . . . . . . .      $15.50          $14.50                  $.12

1995:
         First quarter  . . . . . . . . . . . . . .      $14.25          $15.00                  $.10
         Second quarter . . . . . . . . . . . . . .      $14.25          $14.75                  $.10
         Third quarter  . . . . . . . . . . . . . .      $14.50          $15.00                  $.10
         Fourth quarter . . . . . . . . . . . . . .      $15.50          $16.50                  $.15
</TABLE>


                 As of March 15, 1996, Bancorp had approximately 759
shareholders of record.

                 Since its formation in 1983 as the parent holding company of
the Bank, Bancorp has paid cash dividends.  It is the present intention of
Bancorp's Board of Directors to continue the dividend payment policy, although
the payment of future dividends must necessarily depend upon earnings,
financial condition, appropriate restrictions under applicable law and other
factors relevant at the time the Board of Directors considers any declaration
of dividends.  Cash available for the payment of dividends must initially come
from dividends paid by the Bank to Bancorp.  Therefore, the restrictions on the
Bank's dividend payments are directly applicable to Bancorp.

Dividend Restrictions on the Bank

                 The OCC has issued rules governing the payment of dividends by
national banks.  Consequently, the Bank (which is subject to these rules) may
not pay dividends from capital





                                       19
<PAGE>   20
(unimpaired common and preferred stock outstanding) but only from retained
earnings after deducting losses and bad debts therefrom.  "Bad debts" are
defined as matured obligations in which interest is past due and unpaid for
ninety (90) days, but do not include well-secured obligations that are in the
process of collection.

                 Previously, the Bank was permitted to add the balances in its
allowance for possible credit and lease losses in determining retained
earnings, but the OCC's new regulations prohibit that practice.  However, to
the extent that (1) the Bank has capital surplus in an amount in excess of
common capital and (2) if the Bank can prove that such surplus resulted from
prior period earnings, the Bank, upon approval of the OCC, may transfer earned
surplus to retained earnings and thereby increase its dividend paying capacity.

                 If, however, the Bank has insufficient retained earnings to
pay a dividend, the OCC's regulations allow the Bank to reduce its capital to a
specified level and to pay dividends upon receipt of the approval of the OCC as
well as that of the holders of two thirds of the outstanding shares of the
Common Stock.

                 The Bank is allowed to pay dividends no more frequently than
quarterly.  Moreover, the Bank must obtain the OCC's approval before paying a
dividend if the total of all dividends declared by the Bank in any calendar
year would exceed the total of (1) the Bank's net profits for that year plus
(2) its retained net profits for the immediately preceding two years less (3)
any required transfers to surplus or a fund for the retirement of preferred
stock.

                 The Bank may not pay any dividends on its capital stock during
the period in which it may be in default in the payment of its assessment for
deposit insurance premium due to the FDIC, nor may it pay dividends on Common
Stock until any cumulative dividends on the Bank's preferred stock (if any)
have been paid in full.  The Bank has never been in default in the payments of
its assessments to the FDIC; and, moreover, the Bank has no outstanding
preferred stock.  In addition, under the Federal Deposit Insurance Act,
dividends cannot be declared and paid if the OCC obtains a cease and desist
order because such payment would constitute an unsafe and unsound banking
practice.  As of December 31, 1995, there was $2 million in unrestricted
retained earnings and net income available at the Bank that could be paid as a
dividend to Bancorp under the current OCC regulations.

Dividend Restrictions on Bancorp

                 Under the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), Bancorp may not pay a dividend if, after giving effect
thereto, either (a) Bancorp would be unable to pay its debts as they become due
in the usual course of business or (b) Bancorp's total assets would be less
than its total liabilities.  The determination of total assets and liabilities
may be based upon: (i) financial statements prepared on the basis of generally
accepted accounting principles, (ii) financial statements that are prepared on
the basis of other accounting practices and principles that are reasonable
under the circumstances, or (iii) a fair valuation or other method that is
reasonable under the circumstances.





                                       20
<PAGE>   21
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in Bancorp's Annual Report (at
page 20 thereto) filed at Exhibit 13 hereto is incorporated in its entirety by
reference under this Item 6.


ITEM 7.  FINANCIAL STATEMENTS

         Bancorp's Consolidated Financial Statements and notes thereto
contained in the Annual Report (beginning at page 4 thereto) filed at Exhibit
13 hereto are incorporated in their entirety by reference under this Item 7.


                                    PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The captions "Information As To Nominees, Directors and
Executive Officers," "Principal Officers of the Corporation," "Principal
Officers of the Bank" and "Compliance with Section 16(a) of the Securities Act
of 1934" contained in Bancorp's Proxy Statement (at pages 5, 11, 12 and 4
thereto, respectively) filed at Exhibit 99A hereto is incorporated in their
entirety by reference under this Item 9.


ITEM 10. EXECUTIVE COMPENSATION

         The captions "Executive Compensation" and "Directors
Compensation" contained in Bancorp's Proxy Statement (at pages 8 and 10
thereto) filed at Exhibit 99A hereto is incorporated in its entirety by
reference under this Item 10.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The caption "Principal Beneficial Owners of the Corporation's
Stock" contained in Bancorp's Proxy Statement (at page 3 thereto) filed at
Exhibit 99A hereto is incorporated in its entirety by reference under this Item
11.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information under the caption "Certain Transactions and
Related Transactions" contained in Bancorp's Proxy Statement (at page 11
thereto) filed at Exhibit 99A hereto is incorporated in its entirety by
reference under this Item 12.





                                       21
<PAGE>   22
ITEM 13.         EXHIBITS AND REPORTS ON FORM 8-K

                 (a)      Exhibits required by Item 601 of Regulation S-B:

<TABLE>
<CAPTION>
Exhibit Number Referred to
Item 601 of Regulation S-B                                        Description of Exhibit
--------------------------                                        ----------------------
               <S>                                 <C>
               2                                   None.
               3                                   None.
               4                                   None.
               9                                   None.
               10                                  None.
               11                                  None.
               13                                  Annual Report to Shareholders for Fiscal Year Ended December 31, 1995.
               16                                  None.
               18                                  None.
               21                                  List of Subsidiaries of Bancorp.
               22                                  None.
               23                                  None.
               24                                  None.
               27                                  None.
               28                                  None.
               99A                                 Proxy Statement, Notice of Annual Meeting and Form of Proxy for the Annual 
                                                   Meeting of Shareholders to be held April 22, 1996.
</TABLE>


                 (b)      Reports on Form 8-K.

                 Bancorp filed no reports on Form 8-K for the quarter ended
December 31, 1995.





                                       22
<PAGE>   23
                                   SIGNATURES


                 In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

CCFNB BANCORP, INC.
         (Bancorp)


By:      /s/ Paul E. Reichart        
         ----------------------------
         Paul E. Reichart
         President

Date:    March 27, 1996


                 In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.



By:      /s/ Don E. Bangs          
         --------------------------
         Don E. Bangs
         Director and Secretary

Date:    March 27, 1996



By:      /s/ Elwood R. Harding, Jr.  
         ----------------------------
         Elwood R. Harding, Jr.
         Director

Date:    March 27, 1996



By:      /s/ William F. Hess          
         -----------------------------
         William F. Hess
         Director

Date:    March 27, 1996





                                       23
<PAGE>   24


By:      /s/ John I. Mather            
         ------------------------------
         John I. Mather
         Director and Vice Chairman
          of the Board

Date:    March 27, 1996



By:      /s/ Paul E. Reichart         
         -----------------------------
         Paul E. Reichart
         Director, President and
          Chief Executive Officer
         (Chief Executive Officer)

Date:    March 27, 1996



By:      /s/ Virginia D. Kocher     
         ---------------------------
         Virginia D. Kocher
         Treasurer
         (Principal Financial and
          Accounting Officer)

Date:    March 27, 1996





                                       24
<PAGE>   25
                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
Item Number                       Description                                                 Page
-----------                       -----------                                                 ----
      <S>                         <C>
      13                          Annual Report to Shareholders
                                    for the Fiscal Year Ended
                                    December 31, 1995 . . . . . . . . . . . . . . . . . .

      21                          List of Subsidiaries of Bancorp . . . . . . . . . . . .

      27                          Financial Data Schedule . . . . . . . . . . . . . . . .

      99A                         Proxy Statement, Notice of Annual
                                    Meeting and Form of Proxy for
                                    the Annual Meeting of Shareholders
                                    to be held April 22, 1996 . . . . . . . . . . . . . .
</TABLE>





                                       25