EXHIBIT 13
 PORTIONS OF THE ANNUAL REPORT TO STOCKHOLDERS
FOR FISCAL YEAR ENDED DECEMBER 31, 2009
  46




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##### 



Comm Bancorp, Inc.
CONSOLIDATED SELECTED FINANCIAL DATA   (Dollars in thousands, except per share data)
 Year Ended December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Condensed statements of financial performance:Interest income
    
    $
    30,490
    
    
    $
    32,901
    
    
    $
    35,654
    
    
    $
    33,040
    
    
    $
    28,359Interest expense
    
    
    10,100
    
    
    
    12,467
    
    
    
    14,449
    
    
    
    12,505
    
    
    
    10,103Net interest income
    
    
    20,390
    
    
    
    20,434
    
    
    
    21,205
    
    
    
    20,535
    
    
    
    18,256Provision for loan losses
    
    
    10,430
    
    
    
    1,760
    
    
    
    525
    
    
    
    890
    
    
    
    782Net interest income after provision for loan losses
    
    
    9,960
    
    
    
    18,674
    
    
    
    20,680
    
    
    
    19,645
    
    
    
    17,474Noninterest income
    
    
    6,517
    
    
    
    3,961
    
    
    
    3,543
    
    
    
    3,408
    
    
    
    3,884Noninterest expense
    
    
    18,968
    
    
    
    16,317
    
    
    
    15,420
    
    
    
    14,829
    
    
    
    14,897Income (loss) before income taxes
    
    
    (2,491
    )
    
    
    6,318
    
    
    
    8,803
    
    
    
    8,224
    
    
    
    6,461Provision for income tax expense (benefit)
    
    
    (2,541
    )
    
    
    618
    
    
    
    1,903
    
    
    
    1,874
    
    
    
    1,251Net income
    
    $
    50
    
    
    $
    5,700
    
    
    $
    6,900
    
    
    $
    6,350
    
    
    $
    5,210Condensed statements of financial position:Investment securities
    
    $
    108,005
    
    
    $
    80,574
    
    
    $
    39,407
    
    
    $
    91,213
    
    
    $
    104,965Net loans
    
    
    466,482
    
    
    
    480,627
    
    
    
    466,720
    
    
    
    403,639
    
    
    
    384,475Other assets
    
    
    82,286
    
    
    
    42,840
    
    
    
    42,860
    
    
    
    45,552
    
    
    
    54,137Total assets
    
    $
    656,773
    
    
    $
    604,041
    
    
    $
    548,987
    
    
    $
    540,404
    
    
    $
    543,577Deposits
    
    $
    590,783
    
    
    $
    542,291
    
    
    $
    491,357
    
    
    $
    483,442
    
    
    $
    491,365Long-term debt
    
    
    8,000Other liabilities
    
    
    3,036
    
    
    
    3,952
    
    
    
    3,257
    
    
    
    2,844
    
    
    
    2,523Stockholders equity
    
    
    54,954
    
    
    
    57,798
    
    
    
    54,373
    
    
    
    54,118
    
    
    
    49,689Total liabilities and stockholders equity
    
    $
    656,773
    
    
    $
    604,041
    
    
    $
    548,987
    
    
    $
    540,404
    
    
    $
    543,577Per share data:Net income
    
    $
    0.03
    
    
    $
    3.26
    
    
    $
    3.87
    
    
    $
    3.43
    
    
    $
    2.80Cash dividends declared
    
    
    0.98
    
    
    
    1.08
    
    
    
    1.04
    
    
    
    1.00
    
    
    
    0.92Stockholders equity
    
    $
    31.93
    
    
    $
    33.41
    
    
    $
    31.01
    
    
    $
    29.27
    
    
    $
    26.86Cash dividends declared as a percentage of net income
    
    
    *
    
    
    
    33.09
    %
    
    
    26.81
    %
    
    
    29.18
    %
    
    
    32.84
    %Average common shares outstanding
    
    
    1,722,493
    
    
    
    1,748,489
    
    
    
    1,784,495
    
    
    
    1,853,089
    
    
    
    1,860,563Selected ratios (based on average balances):Net income as a percentage of total assets
    
    
    0.01
    %
    
    
    0.98
    %
    
    
    1.24
    %
    
    
    1.17
    %
    
    
    0.97
    %Net income as a percentage of stockholders equity
    
    
    0.09
    
    
    
    10.10
    
    
    
    12.94
    
    
    
    12.18
    
    
    
    10.68Stockholders equity as a percentage of total assets
    
    
    9.37
    
    
    
    9.73
    
    
    
    9.62
    
    
    
    9.62
    
    
    
    9.13Tier I capital as a percentage of adjusted total assets
    
    
    8.64
    
    
    
    9.62
    
    
    
    9.54
    
    
    
    9.74
    
    
    
    9.04Net interest income as a percentage of earning assets
    
    
    3.80
    
    
    
    4.07
    
    
    
    4.33
    
    
    
    4.28
    
    
    
    3.88Loans, net, as a percentage of deposits
    
    
    93.80
    %
    
    
    96.39
    %
    
    
    93.75
    %
    
    
    87.58
    %
    
    
    82.59
    %Selected ratios and data (based on period end balances):Tier I capital as a percentage of risk-weighted assets
    
    
    10.56
    %
    
    
    11.12
    %
    
    
    11.17
    %
    
    
    12.50
    %
    
    
    11.99
    %Total capital as a percentage of risk-weighted assets
    
    
    13.39
    
    
    
    12.17
    
    
    
    12.15
    
    
    
    13.55
    
    
    
    13.02Allowance for loan losses as a percentage of loans, net
    
    
    2.19
    %
    
    
    1.08
    %
    
    
    0.98
    %
    
    
    1.09
    %
    
    
    1.06
    %Full-time equivalent employees
    
    
    189
    
    
    
    185
    
    
    
    197
    
    
    
    186
    
    
    
    194Locations
    
    
    16
    
    
    
    16
    
    
    
    17
    
    
    
    17
    
    
    
    16
 *
    
    Not meaningful   47




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS 
(Dollars in thousands, except per share data)
  Forward-Looking Discussion:
       48




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Critical Accounting Policies:
       49




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      50




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Operating Environment:
    51




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     52




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  December 31
    
    2009
    
    
    2008National
    
    
    10.0
    %
    
    
    7.4
    %Pennsylvania
    
    
    8.9
    
    
    
    6.4Lackawanna County
    
    
    9.2
    
    
    
    7.4Luzerne County
    
    
    10.1
    
    
    
    7.8Monroe County
    
    
    9.7
    
    
    
    8.0Susquehanna County
    
    
    8.8
    
    
    
    8.0Wayne County
    
    
    8.1
    
    
    
    7.0Wyoming County
    
    
    9.6
    %
    
    
    7.5
    %
     53




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    54




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     55




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Review of Financial Position:
     56




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      57




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    
    
    The cancellation of 2009 Board of Director and management bonuses;
    
    The elimination of paid expenses for Board of Director seminars and conventions;
    
    The suspension of 2009 annual employee salary increases; and
    
    The reduction of marketing-related expenses in 2009 and 2010.
    58




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Investment Portfolio:
      59




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    60




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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
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005December 31
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %U.S. Government-sponsored
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    39,201
    
    
    
    42.98
    %
    
    $
    42,711
    
    
    
    40.69
    %State and municipals:Taxable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,227
    
    
    
    13.26
    %
    
    
    11,912
    
    
    
    13.06
    
    
    
    15,268
    
    
    
    14.54Tax-exempt
    
    $
    26,862
    
    
    
    24.87
    %
    
    $
    47,007
    
    
    
    58.34
    %
    
    
    30,897
    
    
    
    78.41
    
    
    
    30,956
    
    
    
    33.94
    
    
    
    33,795
    
    
    
    32.20Mortgage-backed securities:U.S. Government
    
    
    78,155
    
    
    
    72.36
    
    
    
    31,957
    
    
    
    39.66
    
    
    
    1,087
    
    
    
    2.76
    
    
    
    1,458
    
    
    
    1.60
    
    
    
    1,826
    
    
    
    1.74U.S. Government-sponsored
    
    
    220
    
    
    
    0.21
    
    
    
    269
    
    
    
    0.33
    
    
    
    817
    
    
    
    2.07
    
    
    
    6,302
    
    
    
    6.91
    
    
    
    10,391
    
    
    
    9.90Equity securities:Restricted
    
    
    2,537
    
    
    
    2.35
    
    
    
    1,116
    
    
    
    1.39
    
    
    
    1,128
    
    
    
    2.86
    
    
    
    1,206
    
    
    
    1.32
    
    
    
    808
    
    
    
    0.77Other
    
    
    231
    
    
    
    0.21
    
    
    
    225
    
    
    
    0.28
    
    
    
    251
    
    
    
    0.64
    
    
    
    178
    
    
    
    0.19
    
    
    
    166
    
    
    
    0.16Total
    
    $
    108,005
    
    
    
    100.00
    %
    
    $
    80,574
    
    
    
    100.00
    %
    
    $
    39,407
    
    
    
    100.00
    %
    
    $
    91,213
    
    
    
    100.00
    %
    
    $
    104,965
    
    
    
    100.00
    %
    61




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      62




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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
    
    
    TotalDecember 31, 2009
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    YieldAmortized cost:State and municipals
    
    $
    2,024
    
    
    
    7.74
    %
    
    $
    2,825
    
    
    
    7.84
    %
    
    $
    11,293
    
    
    
    7.36
    %
    
    $
    9,201
    
    
    
    7.08
    %
    
    $
    25,343
    
    
    
    7.34
    %Mortgage-backed securities:U.S. Government
    
    
    15,504
    
    
    
    3.95
    
    
    
    35,002
    
    
    
    3.53
    
    
    
    27,798
    
    
    
    3.71
    
    
    
    233
    
    
    
    4.62
    
    
    
    78,537
    
    
    
    3.68U.S. Government-sponsored
    
    
    64
    
    
    
    6.75
    
    
    
    134
    
    
    
    6.71
    
    
    
    10
    
    
    
    6.65
    
    
    
    
    
    
    
    
    
    
    
    208
    
    
    
    6.72Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,537
    
    
    
    0.25
    
    
    
    2,537
    
    
    
    0.25Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    1.49
    
    
    
    139
    
    
    
    1.49Total
    
    $
    17,592
    
    
    
    4.40
    %
    
    $
    37,961
    
    
    
    3.86
    %
    
    $
    39,101
    
    
    
    4.76
    %
    
    $
    12,110
    
    
    
    5.54
    %
    
    $
    106,764
    
    
    
    4.47
    %Fair value:State and municipals
    
    $
    2,080
    
    
    
    
    
    
    $
    2,930
    
    
    
    
    
    
    $
    12,223
    
    
    
    
    
    
    $
    9,629
    
    
    
    
    
    
    $
    26,862Mortgage-backed securities:U.S. Government
    
    
    15,403
    
    
    
    
    
    
    
    34,739
    
    
    
    
    
    
    
    27,780
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    78,155U.S. Government-sponsored
    
    
    68
    
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,537
    
    
    
    
    
    
    
    2,537Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    231
    
    
    
    
    
    
    
    231Total
    
    $
    17,551
    
    
    
    
    
    
    $
    37,811
    
    
    
    
    
    
    $
    40,013
    
    
    
    
    
    
    $
    12,630
    
    
    
    
    
    
    $
    108,005
 Loan Portfolio:
    63




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     64




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##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of loan portfolio
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005December 31
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial, financial and others
    
    $
    160,945
    
    
    
    33.75
    %
    
    $
    170,305
    
    
    
    35.05
    %
    
    $
    181,417
    
    
    
    38.49
    %
    
    $
    141,868
    
    
    
    34.77
    %
    
    $
    137,034
    
    
    
    35.27
    %Real estate:Construction
    
    
    23,195
    
    
    
    4.86
    
    
    
    25,332
    
    
    
    5.21
    
    
    
    12,810
    
    
    
    2.72
    
    
    
    5,513
    
    
    
    1.35
    
    
    
    2,575
    
    
    
    0.66Residential
    
    
    104,925
    
    
    
    22.00
    
    
    
    112,053
    
    
    
    23.06
    
    
    
    110,633
    
    
    
    23.47
    
    
    
    98,262
    
    
    
    24.08
    
    
    
    92,717
    
    
    
    23.86Commercial
    
    
    155,269
    
    
    
    32.55
    
    
    
    142,641
    
    
    
    29.36
    
    
    
    128,852
    
    
    
    27.33
    
    
    
    129,411
    
    
    
    31.71
    
    
    
    125,438
    
    
    
    32.28Consumer, net
    
    
    29,447
    
    
    
    6.18
    
    
    
    32,812
    
    
    
    6.76
    
    
    
    35,149
    
    
    
    7.46
    
    
    
    31,500
    
    
    
    7.72
    
    
    
    29,157
    
    
    
    7.50Lease financing, net
    
    
    3,163
    
    
    
    0.66
    
    
    
    2,739
    
    
    
    0.56
    
    
    
    2,483
    
    
    
    0.53
    
    
    
    1,520
    
    
    
    0.37
    
    
    
    1,682
    
    
    
    0.43Loans, net of unearned income
    
    
    476,944
    
    
    
    100.00
    %
    
    
    485,882
    
    
    
    100.00
    %
    
    
    471,344
    
    
    
    100.00
    %
    
    
    408,074
    
    
    
    100.00
    %
    
    
    388,603
    
    
    
    100.00
    %Less: allowance for loan losses
    
    
    10,462
    
    
    
    
    
    
    
    5,255
    
    
    
    
    
    
    
    4,624
    
    
    
    
    
    
    
    4,435
    
    
    
    
    
    
    
    4,128Net loans
    
    $
    466,482
    
    
    
    
    
    
    $
    480,627
    
    
    
    
    
    
    $
    466,720
    
    
    
    
    
    
    $
    403,639
    
    
    
    
    
    
    $
    384,475
     65




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##### 



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
    
    
    AfterDecember 31, 2009
    
    one year
    
    
    five years
    
    
    five years
    
    
    TotalMaturity schedule:Commercial, financial and others
    
    $
    68,546
    
    
    $
    45,957
    
    
    $
    46,442
    
    
    $
    160,945Real estate:Construction
    
    
    18,001
    
    
    
    2,458
    
    
    
    2,736
    
    
    
    23,195Residential
    
    
    13,846
    
    
    
    48,346
    
    
    
    42,733
    
    
    
    104,925Commercial
    
    
    21,661
    
    
    
    58,345
    
    
    
    75,263
    
    
    
    155,269Consumer, net
    
    
    3,937
    
    
    
    20,889
    
    
    
    4,621
    
    
    
    29,447Lease financing, net
    
    
    632
    
    
    
    2,531
    
    
    
    
    
    
    
    3,163Total
    
    $
    126,623
    
    
    $
    178,526
    
    
    $
    171,795
    
    
    $
    476,944Predetermined interest rates
    
    $
    45,551
    
    
    $
    99,760
    
    
    $
    63,657
    
    
    $
    208,968Floating or adjustable interest rates
    
    
    81,072
    
    
    
    78,766
    
    
    
    108,138
    
    
    
    267,976Total
    
    $
    126,623
    
    
    $
    178,526
    
    
    $
    171,795
    
    
    $
    476,944
    66




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      67




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Distribution of off-balance sheet commitments
 December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Commitments to extend credit
    
    $
    81,945
    
    
    $
    69,235
    
    
    $
    80,675
    
    
    $
    60,878
    
    
    $
    59,135Unused portions of lines of credit
    
    
    24,723
    
    
    
    19,855
    
    
    
    17,901
    
    
    
    21,091
    
    
    
    20,257Commercial letters of credit
    
    
    20,982
    
    
    
    15,447
    
    
    
    19,634
    
    
    
    21,405
    
    
    
    18,565Total
    
    $
    127,650
    
    
    $
    104,537
    
    
    $
    118,210
    
    
    $
    103,374
    
    
    $
    97,957
   68




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Asset Quality:
     69




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      70




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     71




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of nonperforming assets
 December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Nonaccrual loans:Commercial, financial and others
    
    $
    7,438
    
    
    $
    7,608
    
    
    $
    2,444
    
    
    $
    1,060
    
    
    $
    1,574Real estate:Construction
    
    
    4,532
    
    
    
    8,775Residential
    
    
    1,797
    
    
    
    1,070
    
    
    
    755
    
    
    
    414
    
    
    
    1,088Commercial
    
    
    5,196
    
    
    
    5,498
    
    
    
    2,057
    
    
    
    442
    
    
    
    626Consumer, net
    
    
    52
    
    
    
    117
    
    
    
    77
    
    
    
    94
    
    
    
    98Lease financing, netTotal nonaccrual loans
    
    
    19,015
    
    
    
    23,068
    
    
    
    5,333
    
    
    
    2,010
    
    
    
    3,386Restructured loans:Commercial, financial and others
    
    
    1,777Real estate:ConstructionResidentialCommercial
    
    
    2,525Consumer, netLease financing, netTotal restructured loans
    
    
    4,302Accruing loans past due 90 days or more:Commercial, financial and others
    
    
    263
    
    
    
    170
    
    
    
    80
    
    
    
    13
    
    
    
    62Real estate:ConstructionResidential
    
    
    603
    
    
    
    75
    
    
    
    295
    
    
    
    217
    
    
    
    230Commercial
    
    
    469
    
    
    
    417
    
    
    
    1,757
    
    
    
    
    
    
    
    103Consumer, net
    
    
    134
    
    
    
    104
    
    
    
    85
    
    
    
    60
    
    
    
    118Lease financing, net
    
    
    165
    
    
    
    69
    
    
    
    17
    
    
    
    2
    
    
    
    33Total accruing loans past due 90 days or more
    
    
    1,634
    
    
    
    835
    
    
    
    2,234
    
    
    
    292
    
    
    
    546Total nonperforming loans
    
    
    24,951
    
    
    
    23,903
    
    
    
    7,567
    
    
    
    2,302
    
    
    
    3,932Foreclosed assets
    
    
    3,209
    
    
    
    336
    
    
    
    125
    
    
    
    352
    
    
    
    363Total nonperforming assets
    
    $
    28,160
    
    
    $
    24,239
    
    
    $
    7,692
    
    
    $
    2,654
    
    
    $
    4,295Ratios:Nonperforming loans as a percentage of loans, net
    
    
    5.23
    %
    
    
    4.92
    %
    
    
    1.61
    %
    
    
    0.56
    %
    
    
    1.01
    %Nonperforming assets as a percentage of loans, net, and foreclosed
assets
    
    
    5.86
    %
    
    
    4.99
    %
    
    
    1.63
    %
    
    
    0.65
    %
    
    
    1.10
    %
   72




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   
    
    Hiring an independent loan review company to assist and advise us with our credit
risk management practices, including the review of and recommendations for enhancing the
allowance for loan loss policy, loan review function and credit related processes such
as underwriting, approval and monitoring of loans;
    
    Enhancing the oversight and workout of classified assets by hiring an internal
attorney to expedite the process of loan foreclosures and redeploying existing staff to
the workout and loan review functions;
    
    Initiating the formation of a problem loan committee for the purpose of
monitoring the status of problem assets and devising action plans for the timely workout
or liquidation of these assets;
    
    Overhauling the appraisal process by requiring new appraisals on all impaired
loans subject to evaluation under FASB ASC 310, Receivables, and any loan that is
delinquent over 60 days; and
    
    Tightening underwriting standards to ensure a more rigorous review of potential
loans and more conservative lending standards.
   73




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
     74




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of impaired loans
 December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Nonaccrual loans:Commercial, financial and others
    
    $
    7,438
    
    
    $
    7,608
    
    
    $
    2,444
    
    
    $
    1,060
    
    
    $
    1,574Real estate:Construction
    
    
    4,532
    
    
    
    8,775Residential
    
    
    1,797
    
    
    
    1,070
    
    
    
    755
    
    
    
    414
    
    
    
    1,088Commercial
    
    
    5,196
    
    
    
    5,498
    
    
    
    2,057
    
    
    
    442
    
    
    
    626Consumer, net
    
    
    52
    
    
    
    117
    
    
    
    77
    
    
    
    94
    
    
    
    98Lease financing, netTotal nonaccrual loans
    
    
    19,015
    
    
    
    23,068
    
    
    
    5,333
    
    
    
    2,010
    
    
    
    3,386Accruing loans:Commercial, financial and others
    
    
    3,400
    
    
    
    1,920
    
    
    
    2,338
    
    
    
    1,312
    
    
    
    638Real estate:Construction
    
    
    
    
    
    
    1,512Residential
    
    
    55
    
    
    
    486
    
    
    
    
    
    
    
    
    
    
    
    158Commercial
    
    
    5,198
    
    
    
    6,904
    
    
    
    7,247
    
    
    
    6,334
    
    
    
    1,464Consumer, net
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    44
    
    
    
    61Lease financing, netTotal accruing loans
    
    
    8,653
    
    
    
    10,831
    
    
    
    9,585
    
    
    
    7,690
    
    
    
    2,321Total impaired loans
    
    $
    27,668
    
    
    $
    33,899
    
    
    $
    14,918
    
    
    $
    9,700
    
    
    $
    5,707Ratio:Impaired loans as a percentage of loans, net
    
    
    5.80
    %
    
    
    6.98
    %
    
    
    3.16
    %
    
    
    2.38
    %
    
    
    1.47
    %
    75




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
   Reconciliation of allowance for loan losses
 December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Allowance for loan losses at beginning of period
    
    $
    5,255
    
    
    $
    4,624
    
    
    $
    4,435
    
    
    $
    4,128
    
    
    $
    3,859Loans charged-off:Commercial, financial and others
    
    
    1,396
    
    
    
    172
    
    
    
    177
    
    
    
    199
    
    
    
    45Real estate:Construction
    
    
    3,048Residential
    
    
    42
    
    
    
    58
    
    
    
    15
    
    
    
    187
    
    
    
    116Commercial
    
    
    745
    
    
    
    749
    
    
    
    24
    
    
    
    33
    
    
    
    128Consumer, net
    
    
    187
    
    
    
    241
    
    
    
    225
    
    
    
    298
    
    
    
    297Lease financing, net
    
    
    
    
    
    
    16Total
    
    
    5,418
    
    
    
    1,236
    
    
    
    441
    
    
    
    717
    
    
    
    586Loans recovered:Commercial, financial and others
    
    
    131
    
    
    
    12
    
    
    
    32
    
    
    
    12
    
    
    
    1Real estate:ConstructionResidential
    
    
    5
    
    
    
    3
    
    
    
    3
    
    
    
    4
    
    
    
    13CommercialConsumer, net
    
    
    59
    
    
    
    92
    
    
    
    70
    
    
    
    118
    
    
    
    59Lease financing, netTotal
    
    
    195
    
    
    
    107
    
    
    
    105
    
    
    
    134
    
    
    
    73Net loans charged-off
    
    
    5,223
    
    
    
    1,129
    
    
    
    336
    
    
    
    583
    
    
    
    513Provision for loan losses
    
    
    10,430
    
    
    
    1,760
    
    
    
    525
    
    
    
    890
    
    
    
    782Allowance for loan losses at end of period
    
    $
    10,462
    
    
    $
    5,255
    
    
    $
    4,624
    
    
    $
    4,435
    
    
    $
    4,128Ratios:Net loans charged-off as a percentage of average loans outstanding
    
    
    1.02
    %
    
    
    0.23
    %
    
    
    0.07
    %
    
    
    0.14
    %
    
    
    0.13
    %Allowance for loan losses as a percentage of period end loans
    
    
    2.19
    %
    
    
    1.08
    %
    
    
    0.98
    %
    
    
    1.09
    %
    
    
    1.06
    %
   76




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
   Allocation of the allowance for loan losses
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Category
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Categoryas a
    
    
    
    
    
    
    as a
    
    
    
    
    
    
    as a
    
    
    
    
    
    
    as a
    
    
    
    
    
    
    as a% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofDecember 31
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loansAllocated allowance:Specific:Commercial, financial and others
    
    $
    3,679
    
    
    
    2.27
    %
    
    $
    1,533
    
    
    
    1.96
    %
    
    $
    2,216
    
    
    
    1.01
    %
    
    $
    1,000
    
    
    
    0.58
    %
    
    $
    1,549
    
    
    
    0.57
    %Real estate:Construction
    
    
    1,002
    
    
    
    0.95
    
    
    
    1,516
    
    
    
    2.12Residential
    
    
    265
    
    
    
    0.39
    
    
    
    169
    
    
    
    0.32
    
    
    
    63
    
    
    
    0.16
    
    
    
    4
    
    
    
    0.10
    
    
    
    298
    
    
    
    0.32Commercial
    
    
    812
    
    
    
    2.18
    
    
    
    253
    
    
    
    2.55
    
    
    
    860
    
    
    
    1.97
    
    
    
    1,292
    
    
    
    1.66
    
    
    
    234
    
    
    
    0.54Consumer, net
    
    
    4
    
    
    
    0.01
    
    
    
    101
    
    
    
    0.03
    
    
    
    77
    
    
    
    0.02
    
    
    
    114
    
    
    
    0.03
    
    
    
    125
    
    
    
    0.04Lease financing, netTotal specific
    
    
    5,762
    
    
    
    5.80
    
    
    
    3,572
    
    
    
    6.98
    
    
    
    3,216
    
    
    
    3.16
    
    
    
    2,410
    
    
    
    2.37
    
    
    
    2,206
    
    
    
    1.47Formula:Commercial, financial and others
    
    
    1,024
    
    
    
    31.48
    
    
    
    253
    
    
    
    33.09
    
    
    
    247
    
    
    
    37.48
    
    
    
    120
    
    
    
    34.19
    
    
    
    123
    
    
    
    34.70Real estate:Construction
    
    
    1,645
    
    
    
    3.91
    
    
    
    37
    
    
    
    3.09
    
    
    
    
    
    
    
    2.72
    
    
    
    
    
    
    
    1.35
    
    
    
    
    
    
    
    0.66Residential
    
    
    103
    
    
    
    21.61
    
    
    
    246
    
    
    
    22.74
    
    
    
    108
    
    
    
    23.31
    
    
    
    231
    
    
    
    23.98
    
    
    
    201
    
    
    
    23.54Commercial
    
    
    1,413
    
    
    
    30.37
    
    
    
    522
    
    
    
    26.81
    
    
    
    118
    
    
    
    25.36
    
    
    
    289
    
    
    
    30.05
    
    
    
    271
    
    
    
    31.74Consumer, net
    
    
    184
    
    
    
    6.17
    
    
    
    511
    
    
    
    6.73
    
    
    
    344
    
    
    
    7.44
    
    
    
    374
    
    
    
    7.69
    
    
    
    360
    
    
    
    7.46Lease financing, net
    
    
    12
    
    
    
    0.66
    
    
    
    7
    
    
    
    0.56
    
    
    
    
    
    
    
    0.53
    
    
    
    
    
    
    
    0.37
    
    
    
    
    
    
    
    0.43Total formula
    
    
    4,381
    
    
    
    94.20
    
    
    
    1,576
    
    
    
    93.02
    
    
    
    817
    
    
    
    96.84
    
    
    
    1,014
    
    
    
    97.63
    
    
    
    955
    
    
    
    98.53Total allocated allowance
    
    
    10,143
    
    
    
    100.00
    %
    
    
    5,148
    
    
    
    100.00
    %
    
    
    4,033
    
    
    
    100.00
    %
    
    
    3,424
    
    
    
    100.00
    %
    
    
    3,161
    
    
    
    100.00
    %Unallocated allowance
    
    
    319
    
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    591
    
    
    
    
    
    
    
    1,011
    
    
    
    
    
    
    
    967Total
    
    $
    10,462
    
    
    
    
    
    
    $
    5,255
    
    
    
    
    
    
    $
    4,624
    
    
    
    
    
    
    $
    4,435
    
    
    
    
    
    
    $
    4,128
   77




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    
    
    A review of the methodology for compliance with Bank policies and accounting and
regulatory guidance;
 
    
    An evaluation to determine that qualitative and environmental factors were
supported in accordance with FASB ASC 450;
  78




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 
    
    An assessment that loans evaluated in accordance with FASB ASC 310 were
appropriately documented and were within the intentions of the accounting guidance; and
 
    
    A determination to provide reasonable assurance that our internal loan review had identified
those loans which should have been considered for evaluation and measurement under FASB ASC
310 and the resulting impairment measurement was generally complete and reasonable in the
current environment.
  Deposits:
    79




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Deposit distribution
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    AverageYear Ended December 31
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateInterest-bearing:Money market accounts
    
    $
    28,384
    
    
    
    0.93
    %
    
    $
    25,871
    
    
    
    1.74
    %
    
    $
    27,466
    
    
    
    2.84
    %
    
    $
    30,220
    
    
    
    2.58
    %
    
    $
    24,694
    
    
    
    1.56
    %NOW accounts
    
    
    80,096
    
    
    
    1.43
    
    
    
    71,820
    
    
    
    2.16
    
    
    
    67,612
    
    
    
    3.07
    
    
    
    60,814
    
    
    
    2.40
    
    
    
    54,354
    
    
    
    1.66Savings accounts
    
    
    107,367
    
    
    
    0.53
    
    
    
    103,237
    
    
    
    0.99
    
    
    
    102,767
    
    
    
    1.46
    
    
    
    109,588
    
    
    
    1.32
    
    
    
    120,550
    
    
    
    0.93Time deposits less than $100
    
    
    163,383
    
    
    
    3.30
    
    
    
    171,337
    
    
    
    3.96
    
    
    
    177,372
    
    
    
    4.40
    
    
    
    187,385
    
    
    
    4.05
    
    
    
    180,457
    
    
    
    3.65Time deposits $100 or more
    
    
    84,988
    
    
    
    3.11
    
    
    
    60,161
    
    
    
    4.14
    
    
    
    40,888
    
    
    
    4.76
    
    
    
    24,599
    
    
    
    4.38
    
    
    
    28,484
    
    
    
    3.52Total interest-bearing
    
    
    464,218
    
    
    
    2.16
    %
    
    
    432,426
    
    
    
    2.84
    %
    
    
    416,105
    
    
    
    3.39
    %
    
    
    412,606
    
    
    
    2.99
    %
    
    
    408,539
    
    
    
    2.45
    %Noninterest-bearing
    
    
    81,860
    
    
    
    
    
    
    
    81,521
    
    
    
    
    
    
    
    75,779
    
    
    
    
    
    
    
    71,853
    
    
    
    
    
    
    
    71,606Total deposits
    
    $
    546,078
    
    
    
    
    
    
    $
    513,947
    
    
    
    
    
    
    $
    491,884
    
    
    
    
    
    
    $
    484,459
    
    
    
    
    
    
    $
    480,145
    80




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    81




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    Maturity distribution of time deposits $100 or more
 December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Within three months
    
    $
    13,860
    
    
    $
    19,271
    
    
    $
    11,336
    
    
    $
    5,307
    
    
    $
    3,964After three months but within six months
    
    
    31,501
    
    
    
    20,470
    
    
    
    8,040
    
    
    
    6,923
    
    
    
    2,547After six months but within twelve months
    
    
    22,289
    
    
    
    25,522
    
    
    
    12,702
    
    
    
    13,136
    
    
    
    4,238After twelve months
    
    
    21,287
    
    
    
    16,272
    
    
    
    11,148
    
    
    
    10,554
    
    
    
    12,830Total
    
    $
    88,937
    
    
    $
    81,535
    
    
    $
    43,226
    
    
    $
    35,920
    
    
    $
    23,579
   82




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Market Risk Sensitivity:
    83




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
   Changes in fair value of financial instruments
 Fair ValueDecember 31, 2009
    
    +100 BPS
    
    
    Level
    
    
    -100 BPSFinancial assets:Cash and due from banks
    
    $
    23,978
    
    
    $
    23,978
    
    
    $
    23,978Federal funds sold
    
    
    25,300
    
    
    
    25,300
    
    
    
    25,300Investment securities
    
    
    103,762
    
    
    
    108,005
    
    
    
    112,107Loans held for sale, net
    
    
    2,016
    
    
    
    2,016
    
    
    
    2,016Net loans
    
    
    467,680
    
    
    
    474,018
    
    
    
    480,820Mortgage servicing rights
    
    
    893
    
    
    
    893
    
    
    
    893Accrued interest receivable
    
    
    2,122
    
    
    
    2,122
    
    
    
    2,122Total
    
    $
    625,751
    
    
    $
    636,332
    
    
    $
    647,236Financial liabilities:Noninterest-bearing deposits
    
    $
    88,335
    
    
    $
    88,335
    
    
    $
    88,335Money market, NOW and savings accounts
    
    
    250,597
    
    
    
    250,597
    
    
    
    250,597Time deposits
    
    
    252,696
    
    
    
    256,749
    
    
    
    260,849Long-term debt
    
    
    7,612
    
    
    
    8,066
    
    
    
    8,557Accrued interest payable
    
    
    1,296
    
    
    
    1,296
    
    
    
    1,296Total
    
    $
    600,536
    
    
    $
    605,043
    
    
    $
    609,634
  84




---



##### 



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 afterDecember 31, 2009
    
    three months
    
    
    twelve months
    
    
    five years
    
    
    five years
    
    
    TotalRate-sensitive assets:Investment securities
    
    $
    4,446
    
    
    $
    13,105
    
    
    $
    37,811
    
    
    $
    52,643
    
    
    $
    108,005Loans held for sale, net
    
    
    2,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,016Loans, net of unearned income
    
    
    127,283
    
    
    
    69,642
    
    
    
    214,635
    
    
    
    65,384
    
    
    
    476,944Federal funds sold
    
    
    25,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,300Total
    
    $
    159,045
    
    
    $
    82,747
    
    
    $
    252,446
    
    
    $
    118,027
    
    
    $
    612,265Rate-sensitive liabilities:Money market accounts
    
    $
    29,201
    
    
    $
    9,013
    
    
    
    
    
    
    
    
    
    
    $
    38,214NOW accounts
    
    
    82,909
    
    
    
    19,818
    
    
    
    
    
    
    
    
    
    
    
    102,727Savings accounts
    
    
    6,119
    
    
    
    
    
    
    $
    103,537
    
    
    
    
    
    
    
    109,656Time deposits less than $100
    
    
    24,430
    
    
    
    56,552
    
    
    
    71,006
    
    
    $
    10,926
    
    
    
    162,914Time deposits $100 or more
    
    
    13,860
    
    
    
    53,790
    
    
    
    20,450
    
    
    
    837
    
    
    
    88,937Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    8,000Total
    
    $
    156,519
    
    
    $
    139,173
    
    
    $
    194,993
    
    
    $
    19,763
    
    
    $
    510,448Rate-sensitivity gap:Period
    
    $
    2,526
    
    
    $
    (56,426
    )
    
    $
    57,453
    
    
    $
    98,264Cumulative
    
    $
    2,526
    
    
    $
    (53,900
    )
    
    $
    3,553
    
    
    $
    101,817
    
    
    $
    101,817RSA/RSL ratio:Period
    
    
    1.02
    
    
    
    0.59
    
    
    
    1.29
    
    
    
    5.97Cumulative
    
    
    1.02
    
    
    
    0.82
    
    
    
    1.01
    
    
    
    1.20
    
    
    
    1.20
  85




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     86




---



##### 



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.
   87




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
   
    
    FHLB-Pgh liquidity contingency line of credit;
 
    
    Federal Reserve Bank discount window;
 
    
    Internet certificates of deposit;
 
    
    Brokered deposits;
 
    
    Institutional Deposit Corporation deposits;
 
    
    Repurchase agreements; and
 
    
    Federal funds purchased.
    88




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
      89




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Capital Adequacy:
   
    
    The current and expected capital requirements, including the maintenance of
capital ratios in excess of minimum regulatory guidelines;
 
    
    The market value of our securities and the resulting effect on capital;
 
    
    Nonperforming asset levels and the effect deterioration in asset quality will
have on capital;
 
    
    Any planned asset growth;
 
    
    The anticipated level of net earnings and capital position, taking into account the
projected asset/liability position and exposure to changes in interest rates; and
 
    
    The source and timing of additional funds to fulfill future capital requirements.
  90




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  
    
    Provide an appropriate capital cushion for the possible realization of unexpected
credit losses over the next 12 to 18 months;
 
    
    Ensure that we and Community Bank remain well capitalized under the regulatory
framework for prompt corrective action;
 
    
    Identify realistic and readily available alternative sources for augmenting
capital if higher capital levels are required; and
 
    
    Incorporate periodic stress testing in accordance with the Federal Reserve
Boards Supervisory Capital Assessment Program (SCAP).
   91




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    92




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     Review of Financial Performance:
   93




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    Net Interest Income:
  
    
    Variations in the volume, rate and composition of earning assets and
interest-bearing liabilities;
 
    
    Changes in general market interest rates; and
 
    
    The level of nonperforming assets.
  94




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     95




---



##### 



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
 2009 vs. 2008Increase (decrease)attributable toTotalChange
    
    
    Rate
    
    
    VolumeInterest income:Loans:Taxable
    
    $
    (3,174
    )
    
    $
    (3,532
    )
    
    $
    358Tax-exempt
    
    
    314
    
    
    
    (367
    )
    
    
    681Investments:Taxable
    
    
    462
    
    
    
    (63
    )
    
    
    525Tax-exempt
    
    
    345
    
    
    
    (76
    )
    
    
    421Federal funds sold
    
    
    (134
    )
    
    
    (189
    )
    
    
    55Total interest income
    
    
    (2,187
    )
    
    
    (4,227
    )
    
    
    2,040Interest expense:Money market accounts
    
    
    (185
    )
    
    
    (225
    )
    
    
    40NOW accounts
    
    
    (406
    )
    
    
    (569
    )
    
    
    163Savings accounts
    
    
    (450
    )
    
    
    (489
    )
    
    
    39Time deposits less than $100
    
    
    (1,398
    )
    
    
    (1,095
    )
    
    
    (303
    )Time deposits $100 or more
    
    
    154
    
    
    
    (714
    )
    
    
    868Short-term borrowings
    
    
    (82
    )
    
    
    (200
    )
    
    
    118Total interest expense
    
    
    (2,367
    )
    
    
    (3,292
    )
    
    
    925Net interest income
    
    $
    180
    
    
    $
    (935
    )
    
    $
    1,115
    96




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     97




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Summary of net interest income
 2009
    
    
    2008Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Interest
    
    
    Average
    
    
    Income/
    
    
    InterestBalance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateASSETS:Earning assets:Loans:Taxable
    
    $
    448,062
    
    
    $
    25,247
    
    
    
    5.63
    %
    
    $
    442,430
    
    
    $
    28,421
    
    
    
    6.42
    %Tax-exempt
    
    
    64,164
    
    
    
    3,765
    
    
    
    5.87
    
    
    
    52,943
    
    
    
    3,451
    
    
    
    6.52Investments:Taxable
    
    
    28,995
    
    
    
    996
    
    
    
    3.44
    
    
    
    13,876
    
    
    
    534
    
    
    
    3.85Tax-exempt
    
    
    35,969
    
    
    
    2,641
    
    
    
    7.34
    
    
    
    30,267
    
    
    
    2,296
    
    
    
    7.59Federal funds sold
    
    
    16,955
    
    
    
    19
    
    
    
    0.11
    
    
    
    10,934
    
    
    
    153
    
    
    
    1.40Total earning assets
    
    
    594,145
    
    
    
    32,668
    
    
    
    5.50
    %
    
    
    550,450
    
    
    
    34,855
    
    
    
    6.33
    %Less: allowance for loan losses
    
    
    7,295
    
    
    
    
    
    
    
    
    
    
    
    4,981Other assets
    
    
    35,070
    
    
    
    
    
    
    
    
    
    
    
    34,220Total assets
    
    $
    621,920
    
    
    
    
    
    
    
    
    
    
    $
    579,689LIABILITIES AND STOCKHOLDERS EQUITY:Interest-bearing liabilities:Money market accounts
    
    $
    28,384
    
    
    
    265
    
    
    
    0.93
    %
    
    $
    25,871
    
    
    
    450
    
    
    
    1.74
    %NOW accounts
    
    
    80,096
    
    
    
    1,142
    
    
    
    1.43
    
    
    
    71,820
    
    
    
    1,548
    
    
    
    2.16Savings accounts
    
    
    107,367
    
    
    
    570
    
    
    
    0.53
    
    
    
    103,237
    
    
    
    1,020
    
    
    
    0.99Time deposits less than $100
    
    
    163,383
    
    
    
    5,384
    
    
    
    3.30
    
    
    
    171,337
    
    
    
    6,782
    
    
    
    3.96Time deposits $100 or more
    
    
    84,988
    
    
    
    2,642
    
    
    
    3.11
    
    
    
    60,161
    
    
    
    2,488
    
    
    
    4.14Short-term borrowings
    
    
    13,908
    
    
    
    97
    
    
    
    0.70
    
    
    
    6,230
    
    
    
    179
    
    
    
    2.87Long-term debt
    
    
    22Total interest-bearing liabilities
    
    
    478,148
    
    
    
    10,100
    
    
    
    2.11
    %
    
    
    438,656
    
    
    
    12,467
    
    
    
    2.84
    %Noninterest-bearing deposits
    
    
    81,860
    
    
    
    
    
    
    
    
    
    
    
    81,521Other liabilities
    
    
    3,623
    
    
    
    
    
    
    
    
    
    
    
    3,080Stockholders equity
    
    
    58,289
    
    
    
    
    
    
    
    
    
    
    
    56,432Total liabilities and stockholders equity
    
    $
    621,920
    
    
    
    
    
    
    
    
    
    
    $
    579,689Net interest income/spread
    
    
    
    
    
    $
    22,568
    
    
    
    3.39
    %
    
    
    
    
    
    $
    22,388
    
    
    
    3.49
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.80
    %
    
    
    
    
    
    
    
    
    
    
    4.07
    %Tax-equivalent adjustments:Loans
    
    
    
    
    
    $
    1,280
    
    
    
    
    
    
    
    
    
    
    $
    1,173Investments
    
    
    
    
    
    
    898
    
    
    
    
    
    
    
    
    
    
    
    781Total adjustments
    
    
    
    
    
    $
    2,178
    
    
    
    
    
    
    
    
    
    
    $
    1,954
   98




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 Summary of net interest income (continued)
 2007
    
    
    
    
    2006
    
    
    2005Interest
    
    
    Average
    
    
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Interest
    
    
    
    
    Average
    
    
    Income/
    
    
    Interest
    
    
    Average
    
    
    Income/
    
    
    InterestBalance
    
    
    Expense
    
    
    Rate
    
    
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate$
    420,067
    
    
    $
    30,730
    
    
    
    7.32
    %
    
    
    
    $
    386,268
    
    
    $
    27,457
    
    
    
    7.11
    %
    
    $
    358,326
    
    
    $
    22,985
    
    
    
    6.41
    %41,095
    
    
    
    2,796
    
    
    
    6.80
    
    
    
    
    
    38,036
    
    
    
    2,358
    
    
    
    6.20
    
    
    
    38,246
    
    
    
    2,014
    
    
    
    5.2735,323
    
    
    
    1,445
    
    
    
    4.09
    
    
    
    
    
    56,578
    
    
    
    2,276
    
    
    
    4.02
    
    
    
    72,155
    
    
    
    2,201
    
    
    
    3.0529,636
    
    
    
    2,235
    
    
    
    7.54
    
    
    
    
    
    30,374
    
    
    
    2,258
    
    
    
    7.43
    
    
    
    31,792
    
    
    
    2,359
    
    
    
    7.423,381
    
    
    
    159
    
    
    
    4.70
    
    
    
    
    
    5,064
    
    
    
    261
    
    
    
    5.15
    
    
    
    7,943
    
    
    
    287
    
    
    
    3.61529,502
    
    
    
    37,365
    
    
    
    7.06
    %
    
    
    
    
    516,320
    
    
    
    34,610
    
    
    
    6.70
    %
    
    
    508,462
    
    
    
    29,846
    
    
    
    5.87
    %4,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,363
    
    
    
    
    
    
    
    
    
    
    
    4,02529,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,219
    
    
    
    
    
    
    
    
    
    
    
    30,299$
    554,405
    
    
    
    
    
    
    
    
    
    
    
    
    $
    542,176
    
    
    
    
    
    
    
    
    
    
    $
    534,736$
    27,466
    
    
    
    780
    
    
    
    2.84
    %
    
    
    
    $
    30,220
    
    
    
    780
    
    
    
    2.58
    %
    
    $
    24,694
    
    
    
    385
    
    
    
    1.56
    %67,612
    
    
    
    2,073
    
    
    
    3.07
    
    
    
    
    
    60,814
    
    
    
    1,459
    
    
    
    2.40
    
    
    
    54,354
    
    
    
    901
    
    
    
    1.66102,767
    
    
    
    1,503
    
    
    
    1.46
    
    
    
    
    
    109,588
    
    
    
    1,452
    
    
    
    1.32
    
    
    
    120,550
    
    
    
    1,121
    
    
    
    0.93177,372
    
    
    
    7,806
    
    
    
    4.40
    
    
    
    
    
    187,385
    
    
    
    7,587
    
    
    
    4.05
    
    
    
    180,457
    
    
    
    6,586
    
    
    
    3.6540,888
    
    
    
    1,945
    
    
    
    4.76
    
    
    
    
    
    24,599
    
    
    
    1,078
    
    
    
    4.38
    
    
    
    28,484
    
    
    
    1,004
    
    
    
    3.526,354
    
    
    
    342
    
    
    
    5.38
    
    
    
    
    
    3,102
    
    
    
    149
    
    
    
    4.80
    
    
    
    3,894
    
    
    
    106
    
    
    
    2.72422,459
    
    
    
    14,449
    
    
    
    3.42
    %
    
    
    
    
    415,708
    
    
    
    12,505
    
    
    
    3.01
    %
    
    
    412,433
    
    
    
    10,103
    
    
    
    2.45
    %75,779
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,853
    
    
    
    
    
    
    
    
    
    
    
    71,6062,833
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,476
    
    
    
    
    
    
    
    
    
    
    
    1,89753,334
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,139
    
    
    
    
    
    
    
    
    
    
    
    48,800$
    554,405
    
    
    
    
    
    
    
    
    
    
    
    
    $
    542,176
    
    
    
    
    
    
    
    
    
    
    $
    534,736$
    22,916
    
    
    
    3.64
    %
    
    
    
    
    
    
    
    $
    22,105
    
    
    
    3.69
    %
    
    
    
    
    
    $
    19,743
    
    
    
    3.42
    %4.33
    %
    
    
    
    
    
    
    
    
    
    
    
    
    4.28
    %
    
    
    
    
    
    
    
    
    
    
    3.88
    %$
    951
    
    
    
    
    
    
    
    
    
    
    
    
    $
    802
    
    
    
    
    
    
    
    
    
    
    $
    685760
    
    
    
    
    
    
    
    
    
    
    
    
    
    768
    
    
    
    
    
    
    
    
    
    
    
    802$
    1,711
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,570
    
    
    
    
    
    
    
    
    
    
    $
    1,487
  99




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 Provision for Loan Losses:
   Noninterest Income:
   100




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Noninterest Expense:
     101




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Noninterest expense
 Year Ended December 31
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Salaries and employee benefits expense:Salaries and payroll taxes
    
    $
    6,879
    
    
    $
    6,788
    
    
    $
    6,210
    
    
    $
    6,122
    
    
    $
    5,880Employee benefits
    
    
    1,634
    
    
    
    1,743
    
    
    
    1,794
    
    
    
    1,526
    
    
    
    1,354Salaries and employee benefits expense
    
    
    8,513
    
    
    
    8,531
    
    
    
    8,004
    
    
    
    7,648
    
    
    
    7,234Net occupancy and equipment expense:Net occupancy expense
    
    
    1,182
    
    
    
    1,189
    
    
    
    1,140
    
    
    
    1,158
    
    
    
    1,183Equipment expense
    
    
    1,256
    
    
    
    1,273
    
    
    
    1,256
    
    
    
    1,195
    
    
    
    1,179Net occupancy and equipment expense
    
    
    2,438
    
    
    
    2,462
    
    
    
    2,396
    
    
    
    2,353
    
    
    
    2,362Other expenses:Marketing expense
    
    
    723
    
    
    
    807
    
    
    
    714
    
    
    
    569
    
    
    
    634Other taxes
    
    
    609
    
    
    
    513
    
    
    
    470
    
    
    
    503
    
    
    
    449Stationery and supplies
    
    
    243
    
    
    
    303
    
    
    
    401
    
    
    
    330
    
    
    
    367Contractual services
    
    
    2,203
    
    
    
    1,738
    
    
    
    1,800
    
    
    
    1,777
    
    
    
    1,982Insurance, including FDIC assessment
    
    
    1,705
    
    
    
    311
    
    
    
    247
    
    
    
    278
    
    
    
    277Loan collection expense
    
    
    528
    
    
    
    260
    
    
    
    133
    
    
    
    169
    
    
    
    68Other
    
    
    2,006
    
    
    
    1,392
    
    
    
    1,255
    
    
    
    1,202
    
    
    
    1,524Other expenses
    
    
    . 8,017
    
    
    
    5,324
    
    
    
    5,020
    
    
    
    4,828
    
    
    
    5,301Total noninterest expense
    
    $
    18,968
    
    
    $
    16,317
    
    
    $
    15,420
    
    
    $
    14,829
    
    
    $
    14,897
  
    
    There were no management bonuses awarded in 2009;
 
    
    There were no annual employee pay increases distributed in 2009; and
 
    
    There was no annual discretionary contribution to the profit sharing plan in
2009.
   102




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     103




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    Income Taxes:
      104




---



##### 



Comm Bancorp, Inc.  REPORT OF MANAGEMENT
      105




---



##### 



Comm Bancorp, Inc.  REPORT OF MANAGEMENT (CONTINUED)
      106




---



##### 



Comm Bancorp, Inc.  REPORT OF MANAGEMENT (CONTINUED)
  /s/ William F. Farber, Sr.William F. Farber, Sr.President and Chief Executive Officer
(Principal Executive Officer)/s/ Scott A. SeasockScott A. SeasockExecutive Vice President and
Chief Financial Officer
(Principal Financial Officer)   107




---



##### 



Comm Bancorp, Inc.  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ ParenteBeard LLC 
  108




---



##### 



Comm Bancorp, Inc.
 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
 (Dollars in thousands, except per share data)
 Year Ended December 31
    
    2009
    
    
    2008Interest income:Interest and fees on loans:Taxable
    
    $
    25,247
    
    
    $
    28,421Tax-exempt
    
    
    2,485
    
    
    
    2,278Interest and dividends on investment securities available-for-sale:Taxable
    
    
    987
    
    
    
    489Tax-exempt
    
    
    1,743
    
    
    
    1,515Dividends
    
    
    9
    
    
    
    45Interest on federal funds sold
    
    
    19
    
    
    
    153Total interest income
    
    
    30,490
    
    
    
    32,901Interest expense:Interest on deposits
    
    
    10,003
    
    
    
    12,288Interest on short-term borrowings
    
    
    97
    
    
    
    179Total interest expense
    
    
    10,100
    
    
    
    12,467Net interest income
    
    
    20,390
    
    
    
    20,434Provision for loan losses
    
    
    10,430
    
    
    
    1,760Net interest income after provision for loan losses
    
    
    9,960
    
    
    
    18,674Noninterest income:Service charges, fees and commissions
    
    
    3,269
    
    
    
    3,357Mortgage banking income
    
    
    1,364
    
    
    
    604Net gain on sale of premises and equipment
    
    
    294Net gain on sale of investment securities available-for-sale
    
    
    1,590Total noninterest income
    
    
    6,517
    
    
    
    3,961Noninterest expense:Salaries and employee benefits expense
    
    
    8,513
    
    
    
    8,531Net occupancy and equipment expense
    
    
    2,438
    
    
    
    2,462Other expenses
    
    
    8,017
    
    
    
    5,324Total noninterest expense
    
    
    18,968
    
    
    
    16,317Income (loss) before income taxes
    
    
    (2,491
    )
    
    
    6,318Provision for income tax expense (benefit)
    
    
    (2,541
    )
    
    
    618Net income
    
    
    50
    
    
    
    5,700Other comprehensive income (loss):Unrealized holding gains on investment securities available-for-sale
    
    
    299
    
    
    
    843Reclassification adjustment for gains included in net income
    
    
    (1,590
    )Income tax expense (benefit) related to other comprehensive income (loss)
    
    
    (439
    )
    
    
    287Other comprehensive income (loss), net of income taxes
    
    
    (852
    )
    
    
    556Comprehensive income (loss)
    
    $
    (802
    )
    
    $
    6,256Per share data:Net income
    
    $
    0.03
    
    
    $
    3.26Cash dividends declared
    
    $
    0.98
    
    
    $
    1.08Average common shares outstanding
    
    
    1,722,493
    
    
    
    1,748,489
   109




---



##### 



Comm Bancorp, Inc.
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except per share data)
 December 31
    
    2009
    
    
    2008Assets:Cash and due from banks
    
    $
    23,978
    
    
    $
    8,017Federal funds sold
    
    
    25,300
    
    
    
    12,700Investment securities available-for-sale
    
    
    108,005
    
    
    
    80,574Loans held for sale, net
    
    
    2,016
    
    
    
    1,390Loans, net of unearned income
    
    
    476,944
    
    
    
    485,882Less: allowance for loan losses
    
    
    10,462
    
    
    
    5,255Net loans
    
    
    466,482
    
    
    
    480,627Premises and equipment, net
    
    
    11,616
    
    
    
    11,753Accrued interest receivable
    
    
    2,122
    
    
    
    2,143Other assets
    
    
    17,254
    
    
    
    6,837Total assets
    
    $
    656,773
    
    
    $
    604,041Liabilities:Deposits:Noninterest-bearing
    
    $
    88,335
    
    
    $
    79,674Interest-bearing
    
    
    502,448
    
    
    
    462,617Total deposits
    
    
    590,783
    
    
    
    542,291Long-term debt
    
    
    8,000Accrued interest payable
    
    
    1,296
    
    
    
    1,815Other liabilities
    
    
    1,740
    
    
    
    2,137Total liabilities
    
    
    601,819
    
    
    
    546,243Stockholders equity:Common stock, par value $0.33, authorized 12,000,000 shares, issued and outstanding: 2009, 1,721,007 shares; 2008, 1,730,062 shares
    
    
    568
    
    
    
    571Capital surplus
    
    
    7,966
    
    
    
    7,694Retained earnings
    
    
    45,601
    
    
    
    47,862Accumulated other comprehensive income
    
    
    819
    
    
    
    1,671Total stockholders equity
    
    
    54,954
    
    
    
    57,798Total liabilities and stockholders equity
    
    $
    656,773
    
    
    $
    604,041
   110




---



##### 



Comm Bancorp, Inc.
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (Dollars in thousands, except per share data)
 AccumulatedOther
    
    
    TotalCommon
    
    
    Capital
    
    
    Retained
    
    
    Comprehensive
    
    
    StockholdersFor the Two Years Ended December 31, 2009
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance, December 31, 2007
    
    $
    579
    
    
    $
    7,326
    
    
    $
    45,353
    
    
    $
    1,115
    
    
    $
    54,373Net income
    
    
    
    
    
    
    
    
    
    
    5,700
    
    
    
    
    
    
    
    5,700Dividends declared: $1.08 per share
    
    
    
    
    
    
    
    
    
    
    (1,886
    )
    
    
    
    
    
    
    (1,886
    )Dividend reinvestment plan: 10,629 shares issued
    
    
    3
    
    
    
    470
    
    
    
    
    
    
    
    
    
    
    
    473Repurchase and retirement: 34,189 shares
    
    
    (11
    )
    
    
    (102
    )
    
    
    (1,305
    )
    
    
    
    
    
    
    (1,418
    )Other comprehensive income, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    556
    
    
    
    556Balance, December 31, 2008
    
    
    571
    
    
    
    7,694
    
    
    
    47,862
    
    
    
    1,671
    
    
    
    57,798Net income
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    50Dividends declared: $0.98 per share
    
    
    
    
    
    
    
    
    
    
    (1,687
    )
    
    
    
    
    
    
    (1,687
    )Dividend reinvestment plan: 9,062 shares issued
    
    
    3
    
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    329Repurchase and retirement: 18,117 shares
    
    
    (6
    )
    
    
    (54
    )
    
    
    (624
    )
    
    
    
    
    
    
    (684
    )Other comprehensive loss, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (852
    )
    
    
    (852
    )Balance, December 31, 2009
    
    $
    568
    
    
    $
    7,966
    
    
    $
    45,601
    
    
    $
    819
    
    
    $
    54,954
   111




---



##### 



Comm Bancorp, Inc.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands, except per share data)
 Year Ended December 31
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    50
    
    
    $
    5,700Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    10,430
    
    
    
    1,760Depreciation and amortization of premises and equipment
    
    
    882
    
    
    
    941Net amortization of investment securities
    
    
    365
    
    
    
    159Amortization of net loan costs
    
    
    386
    
    
    
    360Amortization of mortgage servicing rights
    
    
    376
    
    
    
    217Deferred income tax benefit
    
    
    (1,623
    )
    
    
    (376
    )Net gain on sale of investment securities
    
    
    (1,590
    )Net gain on sale of loans
    
    
    (1,350
    )
    
    
    (467
    )Net gain on sale of premises and equipment
    
    
    (294
    )Net loss (gain) on sale of foreclosed assets
    
    
    467
    
    
    
    (12
    )Changes in:Loans held for sale, net
    
    
    724
    
    
    
    325Accrued interest receivable
    
    
    21
    
    
    
    491Other assets
    
    
    (5,480
    )
    
    
    (255
    )Accrued interest payable
    
    
    (519
    )
    
    
    507Other liabilities
    
    
    272
    
    
    
    (114
    )Net cash provided by operating activities
    
    
    3,117
    
    
    
    9,236Cash flows from investing activities:Proceeds from repayments of investment securities available-for-sale
    
    
    10,117
    
    
    
    70,495Proceeds from sale of investment securities available-for-sale
    
    
    56,839Purchases of investment securities available-for-sale
    
    
    (94,453
    )
    
    
    (110,978
    )Purchases of investment in residential housing program
    
    
    (818
    )Proceeds from sale of premises and equipment
    
    
    509Purchases of premises and equipment
    
    
    (960
    )
    
    
    (1,803
    )Proceeds from sale of foreclosed assets
    
    
    1,531
    
    
    
    137Net increase in lending activities
    
    
    (1,542
    )
    
    
    (16,363
    )Net cash used in investing activities
    
    
    (28,777
    )
    
    
    (58,512
    )Cash flows from financing activities:Net changes in:Money market, NOW, savings and noninterest-bearing accounts
    
    
    48,392
    
    
    
    5,666Time deposits
    
    
    100
    
    
    
    45,268Proceeds from the issuance of long-term debt
    
    
    8,000Proceeds from the issuance of common shares
    
    
    329
    
    
    
    473Repurchase and retirement of common shares
    
    
    (684
    )
    
    
    (1,418
    )Cash dividends paid
    
    
    (1,916
    )
    
    
    (1,872
    )Net cash provided by financing activities
    
    
    54,221
    
    
    
    48,117Net increase (decrease) in cash and cash equivalents
    
    
    28,561
    
    
    
    (1,159
    )Cash and cash equivalents at beginning of year
    
    
    20,717
    
    
    
    21,876Cash and cash equivalents at end of year
    
    $
    49,278
    
    
    $
    20,717Supplemental disclosures:Cash paid during the period for:Interest
    
    $
    10,619
    
    
    $
    11,960Income taxes
    
    
    691
    
    
    
    1,320Noncash items:Transfers of loans to foreclosed assets
    
    
    4,871
    
    
    
    336Unrealized losses (gains) on investment securities available-for-sale, net
    
    $
    852
    
    
    $
    (556
    )
   112




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies:
 Nature of operations:
       113




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Basis of presentation:
   Use of estimates and change in accounting estimate:
    114




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
     115




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   116




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
    117




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
      118




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
  Investment securities:
       119




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   Loans held for sale, net:
   120




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Loans:
  Nonperforming assets:
   121




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
    Allowance for loan losses:
   122




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
  Off-balance sheet financial instruments:
  Premises and equipment, net:
  Premises
    
    15-45 yearsEquipment
    
    3-10 yearsLeasehold improvements
    
    15 years
  123




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Mortgage servicing rights:
  Intangible assets:
  Trust and wealth management assets:
  Statements of Cash Flows:
   124




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Fair value of financial instruments:
      125




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
  
    
    Level 1: Unadjusted quoted prices of 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.
   Cash and cash equivalents:
 Investment securities available-for-sale:
 Loans held for sale, net:
  126




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Net loans:
 Mortgage servicing rights:
 Accrued interest receivable:
 Deposits without stated maturities:
 Deposits with stated maturities:
 Long-term debt:
 Accrued interest payable:
 Off-balance sheet financial instruments:
  127




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Comprehensive income (loss):
  Advertising costs:
  Other expenses:
  For the year ended December 31,
    
    2009
    
    
    2008Appraisal fees
    
    $
    433
    
    
    $
    247Deposit insurance
    
    
    1,445
    
    
    
    72Loan collection expense
    
    $
    528
    
    
    $
    260
 Income taxes:
     128




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Earnings per common share:
  Recent accounting standards:
  Ô Ô
   129




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
     130




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
    131




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   132




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   2. Cash and due from banks:
   133




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities:
  Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2009
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueState and municipals
    
    $
    25,343
    
    
    $
    1,520
    
    
    $
    1
    
    
    $
    26,862Mortgage-backed securities:U.S. Government agencies
    
    
    78,537
    
    
    
    17
    
    
    
    399
    
    
    
    78,155U.S. Government-sponsored enterprises
    
    
    208
    
    
    
    12
    
    
    
    
    
    
    
    220Equity securities:Restricted
    
    
    2,537
    
    
    
    
    
    
    
    
    
    
    
    2,537Other
    
    
    139
    
    
    
    94
    
    
    
    2
    
    
    
    231Total
    
    $
    106,764
    
    
    $
    1,643
    
    
    $
    402
    
    
    $
    108,005
 Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2008
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueState and municipals
    
    $
    44,873
    
    
    $
    2,288
    
    
    $
    154
    
    
    $
    47,007Mortgage-backed securities:U.S. Government agencies
    
    
    31,654
    
    
    
    359
    
    
    
    56
    
    
    
    31,957U.S. Government-sponsored enterprises
    
    
    262
    
    
    
    7
    
    
    
    
    
    
    
    269Equity securities:Restricted
    
    
    1,116
    
    
    
    
    
    
    
    
    
    
    
    1,116Other
    
    
    137
    
    
    
    90
    
    
    
    2
    
    
    
    225Total
    
    $
    78,042
    
    
    $
    2,744
    
    
    $
    212
    
    
    $
    80,574
   134




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities (continued):
  Less than 12 months
    
    
    12 months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDecember 31, 2009
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipals
    
    $
    686
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    $
    686
    
    
    $
    1Mortgage-backed securities:U.S. Government agencies
    
    
    30,651
    
    
    
    399
    
    
    
    
    
    
    
    
    
    
    
    30,651
    
    
    
    399U.S. Government-sponsored enterprisesEquity securities:RestrictedOther
    
    
    
    
    
    
    
    
    
    $
    7
    
    
    $
    2
    
    
    
    7
    
    
    
    2Total
    
    $
    31,337
    
    
    $
    400
    
    
    $
    7
    
    
    $
    2
    
    
    $
    31,344
    
    
    $
    402
 Less than 12 months
    
    
    12 months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDecember 31, 2008
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipals
    
    $
    4,102
    
    
    $
    154
    
    
    
    
    
    
    
    
    
    
    $
    4,102
    
    
    $
    154Mortgage-backed securities:U.S. Government agencies
    
    
    6,071
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    6,071
    
    
    
    56U.S. Government-sponsored enterprisesEquity securities:RestrictedOther
    
    
    7
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    2Total
    
    $
    10,180
    
    
    $
    212
    
    
    
    
    
    
    
    
    
    
    $
    10,180
    
    
    $
    212
   135




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities (continued):
     136




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities (continued):
   After one
    
    
    After fiveWithin
    
    
    but within
    
    
    but within
    
    
    AfterDecember 31, 2009
    
    one year
    
    
    five years
    
    
    ten years
    
    
    ten years
    
    
    TotalState and municipals
    
    $
    2,080
    
    
    $
    2,930
    
    
    $
    12,223
    
    
    $
    9,629
    
    
    $
    26,862Mortgage-backed securities:U.S. Government agencies
    
    
    15,403
    
    
    
    34,739
    
    
    
    27,780
    
    
    
    233
    
    
    
    78,155U.S. Government-sponsored enterprises
    
    
    68
    
    
    
    142
    
    
    
    10
    
    
    
    
    
    
    
    220Total
    
    $
    17,551
    
    
    $
    37,811
    
    
    $
    40,013
    
    
    $
    9,862
    
    
    $
    105,237
   137




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 4. Loans, nonperforming assets and allowance for loan losses:
  December 31
    
    2009
    
    
    2008Commercial, financial and others
    
    $
    160,945
    
    
    $
    170,305Real estate:Construction
    
    
    23,195
    
    
    
    25,332Residential
    
    
    104,925
    
    
    
    112,053Commercial
    
    
    155,269
    
    
    
    142,641Consumer, net
    
    
    29,447
    
    
    
    32,812Lease financing, net
    
    
    3,163
    
    
    
    2,739Total
    
    $
    476,944
    
    
    $
    485,882
     2009
    
    
    2008Balance, January 1
    
    $
    5,255
    
    
    $
    4,624Provision for loan losses
    
    
    10,430
    
    
    
    1,760Loans charged-off
    
    
    (5,418
    )
    
    
    (1,236
    )Loans recovered
    
    
    195
    
    
    
    107Balance, December 31
    
    $
    10,462
    
    
    $
    5,255
  138




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 4. Loans, nonperforming assets and allowance for loan losses (continued):
  December 31
    
    2009
    
    
    2008Nonaccrual loans:Commercial, financial and others
    
    $
    7,438
    
    
    $
    7,608Real estate:Construction
    
    
    4,532
    
    
    
    8,775Residential
    
    
    1,797
    
    
    
    1,070Commercial
    
    
    5,196
    
    
    
    5,498Consumer, net
    
    
    52
    
    
    
    117Lease financing, netTotal nonaccrual loans
    
    
    19,015
    
    
    
    23,068Restructured loans:Commercial, financial and others
    
    
    1,777Real estate:ConstructionResidentialCommercial
    
    
    2,525Consumer, netLease financing, netTotal restructured loans
    
    
    4,302Accruing loans past due 90 days or more:Commercial, financial and others
    
    
    263
    
    
    
    170Real estate:ConstructionResidential
    
    
    603
    
    
    
    75Commercial
    
    
    469
    
    
    
    417Consumer, net
    
    
    134
    
    
    
    104Lease financing, net
    
    
    165
    
    
    
    69Total accruing loans past due 90 days or more
    
    
    1,634
    
    
    
    835Total nonperforming loans
    
    
    24,951
    
    
    
    23,903Foreclosed assets
    
    
    3,209
    
    
    
    336Total nonperforming assets
    
    $
    28,160
    
    
    $
    24,239
  139




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 4. Loans, nonperforming assets and allowance for loan losses (continued):
  2009
    
    
    2008Recorded
    
    
    Related
    
    
    Recorded
    
    
    RelatedDecember 31
    
    Investment
    
    
    Allowance
    
    
    Investment
    
    
    AllowanceImpaired loans:With a related allowance
    
    $
    13,481
    
    
    $
    5,762
    
    
    $
    19,707
    
    
    $
    3,572With no related allowance
    
    
    14,187
    
    
    
    
    
    
    
    14,192Total
    
    $
    27,668
    
    
    $
    5,762
    
    
    $
    33,899
    
    
    $
    3,572
  Year Ended December 31
    
    2009
    
    
    2008Gross interest due under terms
    
    $
    1,789
    
    
    $
    2,349Interest income recognized
    
    
    956
    
    
    
    1,621Interest income not recognized
    
    $
    833
    
    
    $
    728Interest income recognized (cash-basis)
    
    $
    785
    
    
    $
    1,400Average recorded investment in impaired loans
    
    $
    31,779
    
    
    $
    32,817
  5. Commitments, concentrations and contingent liabilities:
   140




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 5. Commitments, concentrations and contingent liabilities (continued):
  December 31
    
    2009
    
    
    2008Commitments to extend credit
    
    $
    81,945
    
    
    $
    69,235Unused portions of lines of credit
    
    
    24,723
    
    
    
    19,855Commercial letters of credit
    
    
    20,982
    
    
    
    15,447Total
    
    $
    127,650
    
    
    $
    104,537
      141




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 5. Commitments, concentrations and contingent liabilities (continued):
     142




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 6. Premises and equipment, net:
  December 31
    
    2009
    
    
    2008Land
    
    $
    4,309
    
    
    $
    3,993Premises
    
    
    9,573
    
    
    
    10,038Leasehold improvements
    
    
    112
    
    
    
    291Furniture and equipment
    
    
    11,058
    
    
    
    11,079Total premises and equipment
    
    
    25,052
    
    
    
    25,401Less: accumulated depreciation and amortization
    
    
    13,436
    
    
    
    13,648Premises and equipment, net
    
    $
    11,616
    
    
    $
    11,753
    2010
    
    $
    1072011
    
    
    1072012
    
    
    1062013
    
    
    772014
    
    
    112015 and thereafterTotal
    
    $
    408
  143




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 7. Other assets:
  December 31
    
    2009
    
    
    2008Goodwill
    
    $
    349
    
    
    $
    349Deferred income taxes
    
    
    2,541
    
    
    
    479Foreclosed assets
    
    
    3,209
    
    
    
    336Prepaid deposit insurance
    
    
    3,481
    
    
    
    97Mortgage servicing rights
    
    
    893
    
    
    
    578Investment in residential housing program
    
    
    3,641
    
    
    
    3,094Other
    
    
    3,140
    
    
    
    1,904Total
    
    $
    17,254
    
    
    $
    6,837
    2009
    
    
    2008Balance, January 1
    
    $
    578
    
    
    $
    580Additions
    
    
    691
    
    
    
    215Amortization
    
    
    (376
    )
    
    
    (217
    )Balance, December 31
    
    $
    893
    
    
    $
    578
   144




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 8. Deposits:
  December 31
    
    2009
    
    
    2008Interest-bearing deposits:Money market accounts
    
    $
    38,214
    
    
    $
    28,207NOW accounts
    
    
    102,727
    
    
    
    81,709Savings accounts
    
    
    109,656
    
    
    
    100,951Time deposits less than $100
    
    
    162,914
    
    
    
    170,215Time deposits $100 or more
    
    
    88,937
    
    
    
    81,535Total interest-bearing deposits
    
    
    502,448
    
    
    
    462,617Noninterest-bearing deposits
    
    
    88,335
    
    
    
    79,674Total deposits
    
    $
    590,783
    
    
    $
    542,291
   2010
    
    $
    148,6322011
    
    
    19,2012012
    
    
    26,6042013
    
    
    24,7252014
    
    
    20,9262015 and thereafter
    
    
    11,763Total
    
    $
    251,851
    145




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 9. Short-term borrowings:
   10. Long-term debt
   146




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 11. Fair value of financial instruments:
  Fair Value Measurements UsingQuoted Prices inActive Marketsfor Identical
    
    
    Significant Other
    
    
    SignificantAssets
    
    
    Observable Inputs
    
    
    Unobservable InputsDecember 31, 2009
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Investment securities available-for-sale:State and municipals
    
    $
    26,862
    
    
    
    
    
    
    $
    26,862Mortgage-backed securities:U.S. Government agencies
    
    
    78,155
    
    
    
    
    
    
    
    78,155U.S. Government-sponsored enterprises
    
    
    220
    
    
    
    
    
    
    
    220Equity securities:RestrictedOther
    
    
    231
    
    
    $
    231Total
    
    $
    105,468
    
    
    $
    231
    
    
    $
    105,237
 Fair Value Measurements UsingQuoted Prices inActive Marketsfor Identical
    
    
    Significant Other
    
    
    SignificantAssets
    
    
    Observable Inputs
    
    
    Unobservable InputsDecember 31, 2008
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Investment securities available-for-sale:State and municipals
    
    $
    47,007
    
    
    
    
    
    
    $
    47,007Mortgage-backed securities:U.S. Government agencies
    
    
    31,957
    
    
    
    
    
    
    
    31,957U.S. Government-sponsored enterprises
    
    
    269
    
    
    
    
    
    
    
    269Equity securities:RestrictedOther
    
    
    225
    
    
    $
    225Total
    
    $
    79,458
    
    
    $
    225
    
    
    $
    79,233
   147




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 11. Fair value of financial instruments (continued):
  Fair Value Measurements UsingQuoted Prices inActive Marketsfor Identical
    
    
    Significant Other
    
    
    SignificantAssets
    
    
    Observable Inputs
    
    
    Unobservable InputsDecember 31, 2009
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Impaired loans
    
    $
    7,719
    
    
    
    
    
    
    
    
    
    
    $
    7,719
 Fair Value Measurements UsingQuoted Prices inActive Marketsfor Identical
    
    
    Significant Other
    
    
    SignificantAssets
    
    
    Observable Inputs
    
    
    Unobservable InputsDecember 31, 2008
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Impaired loans
    
    $
    16,135
    
    
    
    
    
    
    
    
    
    
    $
    16,135
   148




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 11. Fair value of financial instruments (continued):
  2009
    
    
    2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairDecember 31
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    49,278
    
    
    $
    49,278
    
    
    $
    20,717
    
    
    $
    20,717Investment securities available-for-sale
    
    
    108,005
    
    
    
    108,005
    
    
    
    80,574
    
    
    
    80,574Loans held for sale, net
    
    
    2,016
    
    
    
    2,016
    
    
    
    1,390
    
    
    
    1,390Net loans
    
    
    466,482
    
    
    
    474,018
    
    
    
    480,627
    
    
    
    487,917Mortgage servicing rights
    
    
    893
    
    
    
    893
    
    
    
    578
    
    
    
    578Accrued interest receivable
    
    
    2,122
    
    
    
    2,122
    
    
    
    2,143
    
    
    
    2,143Total
    
    $
    628,796
    
    
    $
    636,332
    
    
    $
    586,029
    
    
    $
    593,319Financial liabilities:Deposits without stated maturities
    
    $
    338,932
    
    
    $
    338,932
    
    
    $
    290,541
    
    
    $
    290,541Deposits with stated maturities
    
    
    251,851
    
    
    
    256,749
    
    
    
    251,750
    
    
    
    260,019Long-term debt
    
    
    8,000
    
    
    
    8,066Accrued interest payable
    
    
    1,296
    
    
    
    1,296
    
    
    
    1,815
    
    
    
    1,815Total
    
    $
    600,079
    
    
    $
    605,043
    
    
    $
    544,106
    
    
    $
    552,375
 12. Employee benefit plan:
   149




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 12. Employee benefit plan (continued):
  13. Income taxes:
  Year Ended December 31
    
    2009
    
    
    2008Current
    
    $
    (918
    )
    
    $
    994Deferred
    
    
    (1,623
    )
    
    
    (376
    )Total
    
    $
    (2,541
    )
    
    $
    618
  Year Ended December 31
    
    2009
    
    
    2008Federal income tax (benefit) at statutory rate
    
    $
    (847
    )
    
    $
    2,148Differences resulting from:Tax-exempt interest, net
    
    
    (1,329
    )
    
    
    (1,167
    )Residential housing program tax credit
    
    
    (372
    )
    
    
    (372
    )Other
    
    
    7
    
    
    
    9Federal income tax (benefit) on income (loss) before income taxes
    
    $
    (2,541
    )
    
    $
    618
  150




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 13. Income taxes (continued):
  December 31
    
    2009
    
    
    2008Deferred tax assets:Allowance for loan losses
    
    $
    3,054
    
    
    $
    1,555Accrued interest receivable
    
    
    580
    
    
    
    392Contribution carryover
    
    
    33Vacation salaries payable
    
    
    26
    
    
    
    21Core deposit intangible
    
    
    144
    
    
    
    193Total
    
    
    3,837
    
    
    
    2,161Deferred tax liabilities:Investment securities available-for-sale
    
    
    422
    
    
    
    861Loans, net of unearned income
    
    
    196
    
    
    
    195Prepaid expenses
    
    
    151
    
    
    
    160Premises and equipment, net
    
    
    457
    
    
    
    396Other
    
    
    70
    
    
    
    70Total
    
    
    1,296
    
    
    
    1,682Net deferred tax assets
    
    $
    2,541
    
    
    $
    479
     151




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Parent Company financial statements:
 CONDENSED STATEMENTS OF INCOME
 Year Ended December 31
    
    2009
    
    
    2008Income:Dividends from subsidiaries
    
    $
    2,076
    
    
    $
    2,880Management fees from subsidiaries
    
    
    400
    
    
    
    240Other income
    
    
    2
    
    
    
    6Total income
    
    
    2,478
    
    
    
    3,126Expense:Other expenses
    
    
    555
    
    
    
    660Total expenses
    
    
    555
    
    
    
    660Income before income taxes and undistributed income of subsidiaries
    
    
    1,923
    
    
    
    2,466Income tax benefit
    
    
    (425
    )
    
    
    (514
    )Income before undistributed income of subsidiaries
    
    
    2,348
    
    
    
    2,980Equity in (excess of) undistributed income (loss) of subsidiaries
    
    
    (2,298
    )
    
    
    2,720Net income
    
    $
    50
    
    
    $
    5,700
 CONDENSED BALANCE SHEETS
 December 31
    
    2009
    
    
    2008Assets:Cash
    
    $
    76
    
    
    $
    95Investment in bank subsidiary
    
    
    49,433
    
    
    
    52,586Investment securities available-for-sale
    
    
    231
    
    
    
    225Other assets
    
    
    5,570
    
    
    
    5,476Total assets
    
    $
    55,310
    
    
    $
    58,382Liabilities:Dividends payable
    
    $
    241
    
    
    $
    470Other liabilities
    
    
    115
    
    
    
    114Total liabilities
    
    
    356
    
    
    
    584Stockholders equity
    
    
    54,954
    
    
    
    57,798Total liabilities and stockholders equity
    
    $
    55,310
    
    
    $
    58,382
  152




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Parent Company financial statements (continued):
 CONDENSED STATEMENTS OF CASH FLOWS
 Year Ended December 31
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    50
    
    
    $
    5,700Adjustments:Excess of (equity in) undistributed income (loss) of subsidiaries
    
    
    2,298
    
    
    
    (2,720
    )Changes in other assets
    
    
    (94
    )
    
    
    (144
    )Net cash provided by operating activities
    
    
    2,254
    
    
    
    2,836Cash flows from investing activities:Proceeds from repayments of investment securities
    
    
    
    
    
    
    1Purchases of investment securities
    
    
    (2
    )Net cash provided by (used in) investing activities
    
    
    (2
    )
    
    
    1Cash flows from financing activities:Issuance of common shares
    
    
    329
    
    
    
    473Repurchase and retirement of common shares
    
    
    (684
    )
    
    
    (1,418
    )Cash dividends paid
    
    
    (1,916
    )
    
    
    (1,872
    )Net cash used in financing activities
    
    
    (2,271
    )
    
    
    (2,817
    )Net increase (decrease) in cash
    
    
    (19
    )
    
    
    20Cash at beginning of year
    
    
    95
    
    
    
    75Cash at end of year
    
    $
    76
    
    
    $
    95
 15. Regulatory matters:
    153




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##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 15. Regulatory matters (continued):
      154




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##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 15. Regulatory matters (continued):
    155




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 15. Regulatory matters (continued):
  Minimum to be WellCapitalized underMinimum for Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsDecember 31, 2009
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier I capital to risk-weighted assets:Consolidated
    
    $
    53,698
    
    
    
    10.6
    %
    
    $
    20,340
    
    
    
    4.0
    %Community Bank
    
    
    48,238
    
    
    
    9.6
    
    
    
    20,155
    
    
    
    4.0
    
    
    $
    30,233
    
    
    
    6.0
    %Total capital to risk-weighted assets:Consolidated
    
    
    68,106
    
    
    
    13.4
    
    
    
    40,680
    
    
    
    8.0Community Bank
    
    
    62,589
    
    
    
    12.4
    
    
    
    40,310
    
    
    
    8.0
    
    
    
    50,388
    
    
    
    10.0Tier I capital to total average assets
less intangible assets:Consolidated
    
    
    53,698
    
    
    
    8.6
    
    
    
    24,859
    
    
    
    4.0Community Bank
    
    $
    48,238
    
    
    
    7.8
    %
    
    $
    24,712
    
    
    
    4.0
    %
    
    $
    30,890
    
    
    
    5.0
    %Risk-weighted assets:Consolidated
    
    $
    491,151Community Bank
    
    
    486,529Risk-weighted off-balance sheet items:Consolidated
    
    
    17,346Community Bank
    
    
    17,346Average assets for Leverage ratio:Consolidated
    
    
    621,483Community Bank
    
    $
    617,793
 Minimum to be WellCapitalized underMinimum for Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsDecember 31, 2008
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier I capital to risk-weighted assets:Consolidated
    
    $
    55,721
    
    
    
    11.1
    %
    
    $
    20,049
    
    
    
    4.0
    %Community Bank
    
    
    50,567
    
    
    
    10.2
    
    
    
    19,907
    
    
    
    4.0
    
    
    $
    29,861
    
    
    
    6.0
    %Total capital to risk-weighted assets:Consolidated
    
    
    60,976
    
    
    
    12.2
    
    
    
    40,097
    
    
    
    8.0Community Bank
    
    
    55,822
    
    
    
    11.2
    
    
    
    39,814
    
    
    
    8.0
    
    
    
    49,768
    
    
    
    10.0Tier I capital to total average assets
less intangible assets:Consolidated
    
    
    55,721
    
    
    
    9.6
    
    
    
    23,171
    
    
    
    4.0Community Bank
    
    $
    50,567
    
    
    
    8.8
    %
    
    $
    23,019
    
    
    
    4.0
    %
    
    $
    28,774
    
    
    
    5.0
    %Risk-weighted assets:Consolidated
    
    $
    487,531Community Bank
    
    
    483,993Risk-weighted off-balance sheet items:Consolidated
    
    
    13,687Community Bank
    
    
    13,687Average assets for Leverage ratio:Consolidated
    
    
    579,283Community Bank
    
    $
    575,474
  156




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##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 15. Regulatory matters (continued):
    157




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##### 



Comm Bancorp, Inc.
DIRECTORS AND OFFICERS
  BOARD OF DIRECTORSComm Bancorp, Inc.
DAVID L. BAKER
 WILLIAM F. FARBER, SR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CHAIRMAN OF THE BOARD
 JUDD B. FITZE
 DEAN L. HESSER
 JOHN P. KAMEEN
SECRETARY  The Forest City News
 ERWIN T. KOST
 SUSAN F. MANCUSO
 JOSEPH P. MOORE, III
 CORPORATE OFFICERSComm Bancorp, Inc.
WILLIAM R. BOYLE
 WILLIAM F. FARBER, SR.
 JOHN P. KAMEEN
 SCOTT A. SEASOCK
 DIRECTORS EMERITUS
THOMAS M. CHESNICK
 MICHAEL T. GOSKOWSKI
 WILLIAM A. KERL
 WILLIAM B. LOPATOFSKY
 J. ROBERT McDONNELL
 JOSEPH P. MOORE, JR.
    158




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##### 



Comm Bancorp, Inc.
DIRECTORS AND OFFICERS (CONTINUED)
  ADVISORY BOARDS  Community Bank and Trust Company  CARBONDALE BRANCH  JOSEPH J. BRENNAN
 JOHN J. CERRA
 HENRY E. DEECKE
 ROBERT W. FARBER
 JOSEPH R. MAZZA
 CLIFFORD BRANCH  THOMAS J. LOPATOFSKY, JR.
 SEAN P. McGRAW
 PATRICK J. OLIVERI
 HEIDI L. STEPHENS
 LAKE WINOLA AND  TUNKHANNOCK BRANCHES  DOUGLAS A. GAY
 THOMAS S. HENRY
 JEFFREY KINTNER
 DONNA L. LABAR
 MONTROSE BRANCH  EDGAR B. BAKER
 THOMAS R. KERR
 FRANCIS J. PINKOWSKI
 DONNA L. WILLIAMS
 NICHOLSON BRANCH  RICHARD S. LOCHEN
 MARK W. NOVITCH
 MARK D. VANKO
 SIMPSON BRANCH  WILLIAM F. FARBER, JR.
 FRANCIS X. LAPERA, SR.
 ROBERT M. McDONNELL
 GERALD G. SALKO, D.D.S.
 TANNERSVILLE BRANCH  TIMOTHY B. FISHER, II
 GARY HAZEN, CPA
 CHARLES R. MARZZACCO
    159




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##### 



Comm Bancorp, Inc.
DIRECTORS AND OFFICERS (CONTINUED)
  OFFICERS  Community Bank and Trust Company  DAVID L. BAKER
 JANICE M. BEVACQUA
 WILLIAM R. BOYLE
 SHARON A. BYRNE
 ROBIN M. BULZONI
 DEBRA A. CARR
 MARK E. CATERSON
 ROBERT F. DAVIS
 WILLIAM F. FARBER, SR.
 MICHAEL J. GAGLIARDI
 DEBRA A. GAY
 DONALD J. GIBBS
 DAVID A. JONES
 DEBORAH J. KENNEDY
 RICHARD J. LAPERA
 GARY S. LAVELLE
 ANNETTE M. LYNCH
 PAMELA S. MAGNOTTI
 MARIA MARSILI, ESQUIRE
 MARY ANN MUSHO
 MICHAEL A. NARCAVAGE
 THOMAS G. NOREK
 ROBERT P. OMALLEY
 M. EVELYN PANTZAR
 JOHN PASH, III
 MARY BETH PASQUALICCHIO
 STEPHEN J. PELLESCHI
 JAMES R. PIETROWSKI
 SCOTT PREBICH
 MARK D. RENZINI, CPA
 CHERYL A. RUPP
 THOMAS A. SALUS
 SCOTT A. SEASOCK
 M. JAMES SHIELDS
 RONALD K. SMITH
 TAMI L. SNYDER
 BRIAN C. URBAS
 ANN E. VADELLA
 STEPHANIE A. WESTINGTON, CPA
 THERESA YOCUM
 LOUIS J. ZEFRAN
    160




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##### 



Comm Bancorp, Inc.
DIRECTORS AND OFFICERS (CONTINUED)
  BOARD OF DIRECTORS  Comm Realty Corporation  WILLIAM F. FARBER, SR.
CHAIRMAN OF THE BOARD
 WILLIAM R. BOYLE
 SCOTT A. SEASOCK
 OFFICERS  Comm Realty Corporation  THOMAS A. SALUS
 STEPHANIE A. WESTINGTON, CPA
 MICHAEL J. GAGLIARDI
 BOARD OF DIRECTORS  Community Leasing Corporation  WILLIAM F. FARBER, SR.
CHAIRMAN OF THE BOARD
 JOHN P. KAMEEN
 JOSEPH J. MUSKEY
 OFFICERS  Community Leasing Corporation  JOSEPH J. MUSKEY
 STEPHANIE A. WESTINGTON, CPA
 JAMES R. PIETROWSKI
 BOARD OF DIRECTORS  Comm Financial Services Corporation  WILLIAM F. FARBER, SR.
CHAIRMAN OF THE BOARD
 JOHN P. KAMEEN
 MARK D. RENZINI, CPA
 OFFICERS  Comm Financial Services Corporation  GEORGE J. COBB
 JOHN PASH, III
 MARY ANN MUSHO
 BOARD OF DIRECTORS  Community Abstract Services, LLC  WILLIAM F. FARBER, SR.
CHAIRMAN OF THE BOARD
 WILLIAM R. BOYLE
 SCOTT A. SEASOCK
 OFFICERS  Community Abstract Services, LLC  WILLIAM F. FARBER, SR.
 SCOTT A. SEASOCK
 STEPHANIE A. WESTINGTON, CPA
 WILLIAM R. BOYLE
    161




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##### 



Comm Bancorp, Inc.
OTHER INFORMATION
  LOCATIONS  Community Bank and Trust Company  Carbondale Branches*
 
 Clarks Summit Branch*
 Clifford Branch*
 Dickson City Branch*
 Eynon Branch*
 Forest City Branch*
 Lake Winola Branch*
 Lakewood Branch
 Montrose Branch*
 Nicholson Branch*
 Scranton Branch*
 Simpson Branch*
 Tannersville Branch*
 Tunkhannock Branch*
 Wilkes-Barre**
 Trust Services
 Loan Operations Center
 Remote ATM Location
 Community Abstract Services, LLC
 Comm Financial Services Corporation
 Community Leasing Corporation
 Comm Realty Corporation
 CB&T
DIRECTSMRemote Deposit
 KlickSMBanking via the Internet
 InTouchSMTelephone Banking System
   *
    
    ATM Locations**
    
    Loan Production Office  162




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##### 



Comm Bancorp, Inc.
OTHER INFORMATION (CONTINUED)
 Stockholder Information  Corporate Headquarters:
 Legal Counsel:
 Independent Auditors:
 Transfer Agent:
 Market Makers:
 Common Stock Market Information:
 _
  CashDividendsHigh
    
    
    Low
    
    
    Declared2009:First Quarter
    
    $
    40.99
    
    
    $
    35.04
    
    
    $
    0.28Second Quarter
    
    
    40.00
    
    
    
    35.31
    
    
    
    0.28Third Quarter
    
    
    40.00
    
    
    
    31.00
    
    
    
    0.28Fourth Quarter
    
    $
    34.50
    
    
    $
    21.80
    
    
    $
    0.142008:First Quarter
    
    $
    47.25
    
    
    $
    41.00
    
    
    $
    0.27Second Quarter
    
    
    48.00
    
    
    
    41.00
    
    
    
    0.27Third Quarter
    
    
    44.92
    
    
    
    40.75
    
    
    
    0.27Fourth Quarter
    
    $
    42.00
    
    
    $
    35.00
    
    
    $
    0.27
 Dividend Reinvestment:
  Dividend Direct Deposit:
  Website Information:
  Community Reinvestment:
   163