EXHIBIT 13
 PORTIONS OF THE ANNUAL REPORT TO STOCKHOLDERS
FOR FISCAL YEAR ENDED DECEMBER 31, 2008
 42




---



##### 



Comm Bancorp, Inc.
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)
 Year Ended December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Condensed statements of financial performance:Interest income
    
    $
    32,901
    
    
    $
    35,654
    
    
    $
    33,040
    
    
    $
    28,359
    
    
    $
    26,333Interest expense
    
    
    12,467
    
    
    
    14,449
    
    
    
    12,505
    
    
    
    10,103
    
    
    
    9,233Net interest income
    
    
    20,434
    
    
    
    21,205
    
    
    
    20,535
    
    
    
    18,256
    
    
    
    17,100Provision for loan losses
    
    
    1,760
    
    
    
    525
    
    
    
    890
    
    
    
    782
    
    
    
    600Net interest income after provision for loan losses
    
    
    18,674
    
    
    
    20,680
    
    
    
    19,645
    
    
    
    17,474
    
    
    
    16,500Noninterest income
    
    
    3,961
    
    
    
    3,543
    
    
    
    3,408
    
    
    
    3,884
    
    
    
    3,566Noninterest expense
    
    
    16,317
    
    
    
    15,420
    
    
    
    14,829
    
    
    
    14,897
    
    
    
    14,662Income before income taxes
    
    
    6,318
    
    
    
    8,803
    
    
    
    8,224
    
    
    
    6,461
    
    
    
    5,404Provision for income tax expense
    
    
    618
    
    
    
    1,903
    
    
    
    1,874
    
    
    
    1,251
    
    
    
    679Net income
    
    $
    5,700
    
    
    $
    6,900
    
    
    $
    6,350
    
    
    $
    5,210
    
    
    $
    4,725Condensed statements of financial position:Investment securities
    
    $
    80,574
    
    
    $
    39,407
    
    
    $
    91,213
    
    
    $
    104,965
    
    
    $
    118,756Net loans
    
    
    480,627
    
    
    
    466,720
    
    
    
    403,639
    
    
    
    384,475
    
    
    
    377,864Other assets
    
    
    42,840
    
    
    
    42,860
    
    
    
    45,552
    
    
    
    54,137
    
    
    
    31,702Total assets
    
    $
    604,041
    
    
    $
    548,987
    
    
    $
    540,404
    
    
    $
    543,577
    
    
    $
    528,322Deposits
    
    $
    542,291
    
    
    $
    491,357
    
    
    $
    483,442
    
    
    $
    491,365
    
    
    $
    478,484Other liabilities
    
    
    3,952
    
    
    
    3,257
    
    
    
    2,844
    
    
    
    2,523
    
    
    
    2,520Stockholders equity
    
    
    57,798
    
    
    
    54,373
    
    
    
    54,118
    
    
    
    49,689
    
    
    
    47,318Total liabilities and stockholders equity
    
    $
    604,041
    
    
    $
    548,987
    
    
    $
    540,404
    
    
    $
    543,577
    
    
    $
    528,322Per share data:Net income
    
    $
    3.26
    
    
    $
    3.87
    
    
    $
    3.43
    
    
    $
    2.80
    
    
    $
    2.50Cash dividends declared
    
    
    1.08
    
    
    
    1.04
    
    
    
    1.00
    
    
    
    0.92
    
    
    
    0.88Stockholders equity
    
    $
    33.41
    
    
    $
    31.01
    
    
    $
    29.27
    
    
    $
    26.86
    
    
    $
    25.38Cash dividends declared as a percentage of net income
    
    
    33.09
    %
    
    
    26.81
    %
    
    
    29.18
    %
    
    
    32.84
    %
    
    
    35.09
    %Average common shares outstanding
    
    
    1,748,489
    
    
    
    1,784,495
    
    
    
    1,853,089
    
    
    
    1,860,563
    
    
    
    1,890,960Selected ratios (based on average balances):Net income as a percentage of total assets
    
    
    0.98
    %
    
    
    1.24
    %
    
    
    1.17
    %
    
    
    0.97
    %
    
    
    0.92
    %Net income as a percentage of stockholders equity
    
    
    10.10
    
    
    
    12.94
    
    
    
    12.18
    
    
    
    10.68
    
    
    
    9.97Stockholders equity as a percentage of total assets
    
    
    9.73
    
    
    
    9.62
    
    
    
    9.62
    
    
    
    9.13
    
    
    
    9.19Tier I capital as a percentage of adjusted total assets
    
    
    9.62
    
    
    
    9.54
    
    
    
    9.74
    
    
    
    9.04
    
    
    
    8.75Net interest income as a percentage of earning assets
    
    
    4.07
    
    
    
    4.33
    
    
    
    4.28
    
    
    
    3.88
    
    
    
    3.76Loans, net, as a percentage of deposits
    
    
    96.39
    %
    
    
    93.75
    %
    
    
    87.58
    %
    
    
    82.59
    %
    
    
    80.34
    %Selected ratios and data (based on period end balances):Tier I capital as a percentage of risk-weighted assets
    
    
    11.12
    %
    
    
    11.17
    %
    
    
    12.50
    %
    
    
    11.99
    %
    
    
    11.36
    %Total capital as a percentage of risk-weighted assets
    
    
    12.17
    
    
    
    12.15
    
    
    
    13.55
    
    
    
    13.02
    
    
    
    12.33Allowance for loan losses as a percentage of loans, net
    
    
    1.08
    %
    
    
    0.98
    %
    
    
    1.09
    %
    
    
    1.06
    %
    
    
    1.01
    %Full-time equivalent employees
    
    
    185
    
    
    
    197
    
    
    
    186
    
    
    
    194
    
    
    
    205Locations
    
    
    16
    
    
    
    17
    
    
    
    17
    
    
    
    16
    
    
    
    17
  43




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share data)
  Forward-Looking Discussion:
     44




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
       46




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   Operating Environment:
   47




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    48




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  December 31
    
    2008
    
    
    2007National
    
    
    7.2
    %
    
    
    4.9
    %Pennsylvania
    
    
    6.7
    
    
    
    4.4Lackawanna County
    
    
    7.4
    
    
    
    5.1Luzerne County
    
    
    7.9
    
    
    
    5.4Monroe County
    
    
    7.7
    
    
    
    5.2Susquehanna County
    
    
    7.2
    
    
    
    4.7Wayne County
    
    
    6.4
    
    
    
    4.4Wyoming County
    
    
    7.6
    %
    
    
    5.7
    %
   49




---



##### 



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




---



##### 



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




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
      
    
    Promoting CB&T
DirectSM, our remote deposit capture system;
    
    Expanding our Trust and Wealth Management Division to include the corporate and
municipal sectors;
    
    Consolidating two outdated facilities; and
    
    Strengthening our core processing system by installing fraud protection software.
 53




---



##### 



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




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    Investment Portfolio:
    56




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
    58




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of investment securities available-for-sale
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004December 31
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %U.S. Government agencies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    39,201
    
    
    
    42.98
    %
    
    $
    42,711
    
    
    
    40.69
    %
    
    $
    44,645
    
    
    
    37.59
    %State and municipals:Taxable
    
    
    
    
    
    
    
    
    
    $
    5,227
    
    
    
    13.26
    %
    
    
    11,912
    
    
    
    13.06
    
    
    
    15,268
    
    
    
    14.54
    
    
    
    16,898
    
    
    
    14.23Tax-exempt
    
    $
    47,007
    
    
    
    58.34
    %
    
    
    30,897
    
    
    
    78.41
    
    
    
    30,956
    
    
    
    33.94
    
    
    
    33,795
    
    
    
    32.20
    
    
    
    34,605
    
    
    
    29.14Mortgage-backed securities
    
    
    32,226
    
    
    
    40.00
    
    
    
    1,904
    
    
    
    4.83
    
    
    
    7,760
    
    
    
    8.51
    
    
    
    12,217
    
    
    
    11.64
    
    
    
    21,281
    
    
    
    17.92Equity securities:Restricted
    
    
    1,116
    
    
    
    1.38
    
    
    
    1,128
    
    
    
    2.86
    
    
    
    1,206
    
    
    
    1.32
    
    
    
    808
    
    
    
    0.77
    
    
    
    1,153
    
    
    
    0.97Other
    
    
    225
    
    
    
    0.28
    
    
    
    251
    
    
    
    0.64
    
    
    
    178
    
    
    
    0.19
    
    
    
    166
    
    
    
    0.16
    
    
    
    174
    
    
    
    0.15Total
    
    $
    80,574
    
    
    
    100.00
    %
    
    $
    39,407
    
    
    
    100.00
    %
    
    $
    91,213
    
    
    
    100.00
    %
    
    $
    104,965
    
    
    
    100.00
    %
    
    $
    118,756
    
    
    
    100.00
    %
    59




---



##### 



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, 2008
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    YieldAmortized cost:State and municipals
    
    $
    1,962
    
    
    
    7.21
    %
    
    $
    5,686
    
    
    
    7.84
    %
    
    $
    20,633
    
    
    
    7.44
    %
    
    $
    16,592
    
    
    
    7.45
    %
    
    $
    44,873
    
    
    
    7.48
    %Mortgage-backed securities
    
    
    6,067
    
    
    
    4.35
    
    
    
    24,405
    
    
    
    4.28
    
    
    
    1,253
    
    
    
    4.56
    
    
    
    191
    
    
    
    4.39
    
    
    
    31,916
    
    
    
    4.30Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,116
    
    
    
    3.68
    
    
    
    1,116
    
    
    
    3.68Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    2.68
    
    
    
    137
    
    
    
    2.68Total
    
    $
    8,029
    
    
    
    5.05
    %
    
    $
    30,091
    
    
    
    4.95
    %
    
    $
    21,886
    
    
    
    7.28
    %
    
    $
    18,036
    
    
    
    7.15
    %
    
    $
    78,042
    
    
    
    6.12
    %Fair value:State and municipals
    
    $
    1,999
    
    
    
    
    
    
    $
    5,909
    
    
    
    
    
    
    $
    22,087
    
    
    
    
    
    
    $
    17,012
    
    
    
    
    
    
    $
    47,007Mortgage-backed securities
    
    
    6,155
    
    
    
    
    
    
    
    24,584
    
    
    
    
    
    
    
    1,292
    
    
    
    
    
    
    
    195
    
    
    
    
    
    
    
    32,226Equity securities:Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,116
        
        



     
    
    1,116Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    225
    
    
    
    
    
    
    

    225Total
    
    $
    8,154
    
    
    
    
    
    
    $
    30,493
    
    
    
    
    
    
    $
    23,379
    
    
    
    
    
    
    $
    18,548
    
    
    
    
    
    
    $
    80,574
  Loan Portfolio:
  60




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    61




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
      Distribution of loan portfolio
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004December 31
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial, financial and others
    
    $
    170,305
    
    
    
    35.05
    %
    
    $
    181,417
    
    
    
    38.49
    %
    
    $
    141,868
    
    
    
    34.77
    %
    
    $
    137,034
    
    
    
    35.27
    %
    
    $
    113,379
    
    
    
    29.70
    %Real estate:Construction
    
    
    25,332
    
    
    
    5.21
    
    
    
    12,810
    
    
    
    2.72
    
    
    
    5,513
    
    
    
    1.35
    
    
    
    2,575
    
    
    
    0.66
    
    
    
    6,704
    
    
    
    1.76Residential
    
    
    112,053
    
    
    
    23.06
    
    
    
    110,633
    
    
    
    23.47
    
    
    
    98,262
    
    
    
    24.08
    
    
    
    92,717
    
    
    
    23.86
    
    
    
    92,325
    
    
    
    24.19Commercial
    
    
    142,641
    
    
    
    29.36
    
    
    
    128,852
    
    
    
    27.33
    
    
    
    129,411
    
    
    
    31.71
    
    
    
    125,438
    
    
    
    32.28
    
    
    
    139,192
    
    
    
    36.46Consumer, net
    
    
    32,812
    
    
    
    6.76
    
    
    
    35,149
    
    
    
    7.46
    
    
    
    31,500
    
    
    
    7.72
    
    
    
    29,157
    
    
    
    7.50
    
    
    
    27,893
    
    
    
    7.31Lease financing, net
    
    
    2,739
    
    
    
    0.56
    
    
    
    2,483
    
    
    
    0.53
    
    
    
    1,520
    
    
    
    0.37
    
    
    
    1,682
    
    
    
    0.43
    
    
    
    2,230
    
    
    
    0.58Loans, net of unearned income
    
    
    485,882
    
    
    
    100.00
    %
    
    
    471,344
    
    
    
    100.00
    %
    
    
    408,074
    
    
    
    100.00
    %
    
    
    388,603
    
    
    
    100.00
    %
    
    
    381,723
    
    
    
    100.00
    %Less: allowance for loan losses
    
    
    5,255
    
    
    
    
    
    
    
    4,624
    
    
    
    
    
    
    
    4,435
    
    
    
    
    
    
    
    4,128
    
    
    
    
    
    
    
    3,859Net loans
    
    $
    480,627
    
    
    
    
    
    
    $
    466,720
    
    
    
    
    
    
    $
    403,639
    
    
    
    
    
    
    $
    384,475
    
    
    
        
    

    $
    377,864
  62




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    63




---



##### 



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, 2008
    
    one year
    
    
    five years
    
    
    five years
    
    
    TotalMaturity schedule:Commercial, financial and others
    
    $
    66,318
    
    
    $
    49,786
    
    
    $
    54,201
    
    
    $
    170,305Real estate:Construction
    
    
    15,901
    
    
    
    4,973
    
    
    
    4,458
    
    
    
    25,332Residential
    
    
    15,983
    
    
    
    49,858
    
    
    
    46,212
    
    
    
    112,053Commercial
    
    
    20,573
    
    
    
    53,515
    
    
    
    68,553
    
    
    
    142,641Consumer, net
    
    
    4,636
    
    
    
    23,015
    
    
    
    5,161
    
    
    
    32,812Lease financing, net
    
    
    548
    
    
    
    2,191
    
    
    
    
    
    
    
    2,739Total
    
    $
    123,959
    
    
    $
    183,338
    
    
    $
    178,585
    
    
    $
    485,882Predetermined interest rates
    
    $
    53,231
    
    
    $
    110,888
    
    
    $
    77,948
    
    
    $
    242,067Floating or adjustable interest rates
    
    
    70,728
    
    
    
    72,450
    
    
    
    100,637
    
    
    
    243,815Total
    
    $
    123,959
    
    
    $
    183,338
    
    
    $
    178,585
    
    
    $
    485,882
   64




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
      65




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Distribution of off-balance sheet commitments
 December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commitments to extend credit
    
    $
    69,235
    
    
    $
    80,675
    
    
    $
    60,878
    
    
    $
    59,135
    
    
    $
    49,504Unused portions of lines of credit
    
    
    19,855
    
    
    
    17,901
    
    
    
    21,091
    
    
    
    20,257
    
    
    
    12,776Commercial letters of credit
    
    
    15,447
    
    
    
    19,634
    
    
    
    21,405
    
    
    
    18,565
    
    
    
    9,062Total
    
    $
    104,537
    
    
    $
    118,210
    
    
    $
    103,374
    
    
    $
    97,957
    
    
    $
    71,342
    Asset Quality:
  66




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  
    
    Subprime lending;
    
    Adjustable-rate mortgages and home equity lines of credit;
    
    Deflation in real estate values; and
    
    Rising unemployment.
     67




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
       68




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Distribution of nonperforming assets
 December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Nonaccrual loans:Commercial, financial and others
    
    $
    7,608
    
    
    $
    2,444
    
    
    $
    1,060
    
    
    $
    1,574
    
    
    $
    849Real estate:Construction
    
    
    8,775Residential
    
    
    1,070
    
    
    
    755
    
    
    
    414
    
    
    
    1,088
    
    
    
    989Commercial
    
    
    5,498
    
    
    
    2,057
    
    
    
    442
    
    
    
    626
    
    
    
    134Consumer, net
    
    
    117
    
    
    
    77
    
    
    
    94
    
    
    
    98Lease financing, netTotal nonaccrual loans
    
    
    23,068
    
    
    
    5,333
    
    
    
    2,010
    
    
    
    3,386
    
    
    
    1,972Accruing loans past due 90 days or more:Commercial, financial and others
    
    
    170
    
    
    
    80
    
    
    
    13
    
    
    
    62
    
    
    
    91Real estate:ConstructionResidential
    
    
    75
    
    
    
    295
    
    
    
    217
    
    
    
    230
    
    
    
    367Commercial
    
    
    417
    
    
    
    1,757
    
    
    
    
    
    
    
    103
    
    
    
    286Consumer, net
    
    
    104
    
    
    
    85
    
    
    
    60
    
    
    
    118
    
    
    
    169Lease financing, net
    
    
    69
    
    
    
    17
    
    
    
    2
    
    
    
    33Total accruing loans past due 90 days or more
    
    
    835
    
    
    
    2,234
    
    
    
    292
    
    
    
    546
    
    
    
    913Total nonperforming loans
    
    
    23,903
    
    
    
    7,567
    
    
    
    2,302
    
    
    
    3,932
    
    
    
    2,885Foreclosed assets
    
    
    336
    
    
    
    125
    
    
    
    352
    
    
    
    363
    
    
    
    399Total nonperforming assets
    
    $
    24,239
    
    
    $
    7,692
    
    
    $
    2,654
    
    
    $
    4,295
    
    
    $
    3,284Ratios:Nonperforming loans as a percentage of loans, net
    
    
    4.92
    %
    
    
    1.61
    %
    
    
    0.56
    %
    
    
    1.01
    %
    
    
    0.76
    %Nonperforming assets as a percentage of loans, net, and foreclosed
assets
    
    
    4.99
    %
    
    
    1.63
    %
    
    
    0.65
    %
    
    
    1.10
    %
    
    
    0.86
    %
   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 impaired loans
 December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Nonaccrual loans:Commercial, financial and others
    
    $
    7,608
    
    
    $
    2,444
    
    
    $
    1,060
    
    
    $
    1,574
    
    
    $
    849Real estate:Construction
    
    
    8,775Residential
    
    
    1,070
    
    
    
    755
    
    
    
    414
    
    
    
    1,088
    
    
    
    989Commercial
    
    
    5,498
    
    
    
    2,057
    
    
    
    442
    
    
    
    626
    
    
    
    134Consumer, net
    
    
    117
    
    
    
    77
    
    
    
    94
    
    
    
    98Lease financing, netTotal nonaccrual loans
    
    
    23,068
    
    
    
    5,333
    
    
    
    2,010
    
    
    
    3,386
    
    
    
    1,972Accruing loans:Commercial, financial and others
    
    
    1,920
    
    
    
    2,338
    
    
    
    1,312
    
    
    
    638
    
    
    
    3,839Real estate:Construction
    
    
    1,512
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Residential
    
    
    486
    
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    376Commercial
    
    
    6,904
    
    
    
    7,247
    
    
    
    6,334
    
    
    
    1,464
    
    
    
    829Consumer, net
    
    
    9
    
    
    
    
    
    
    
    44
    
    
    
    61Lease financing, netTotal accruing loans
    
    
    10,831
    
    
    
    9,585
    
    
    
    7,690
    
    
    
    2,321
    
    
    
    5,094Total impaired loans
    
    $
    33,899
    
    
    $
    14,918
    
    
    $
    9,700
    
    
    $
    5,707
    
    
    $
    7,066Ratio:Impaired loans as a percentage of loans, net
    
    
    6.98
    %
    
    
    3.16
    %
    
    
    2.38
    %
    
    
    1.47
    %
    
    
    1.85
    %
  72




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
   73




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Reconciliation of allowance for loan losses
 December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Allowance for loan losses at beginning of period
    
    $
    4,624
    
    
    $
    4,435
    
    
    $
    4,128
    
    
    $
    3,859
    
    
    $
    3,584Loans charged-off:Commercial, financial and others
    
    
    172
    
    
    
    177
    
    
    
    199
    
    
    
    45
    
    
    
    33Real estate:ConstructionResidential
    
    
    58
    
    
    
    15
    
    
    
    187
    
    
    
    116
    
    
    
    104Commercial
    
    
    749
    
    
    
    24
    
    
    
    33
    
    
    
    128
    
    
    
    21Consumer, net
    
    
    241
    
    
    
    225
    
    
    
    298
    
    
    
    297
    
    
    
    324Lease financing, net
    
    
    16Total
    
    
    1,236
    
    
    
    441
    
    
    
    717
    
    
    
    586
    
    
    
    482Loans recovered:Commercial, financial and others
    
    
    12
    
    
    
    32
    
    
    
    12
    
    
    
    1
    
    
    
    23Real estate:ConstructionResidential
    
    
    3
    
    
    
    3
    
    
    
    4
    
    
    
    13
    
    
    
    15Commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Consumer, net
    
    
    92
    
    
    
    70
    
    
    
    118
    
    
    
    59
    
    
    
    118Lease financing, netTotal
    
    
    107
    
    
    
    105
    
    
    
    134
    
    
    
    73
    
    
    
    157Net loans charged-off
    
    
    1,129
    
    
    
    336
    
    
    
    583
    
    
    
    513
    
    
    
    325Provision for loan losses
    
    
    1,760
    
    
    
    525
    
    
    
    890
    
    
    
    782
    
    
    
    600Allowance for loan losses at end of period
    
    $
    5,255
    
    
    $
    4,624
    
    
    $
    4,435
    
    
    $
    4,128
    
    
    $
    3,859Ratios:Net loans charged-off as a percentage of average loans outstanding
    
    
    0.23
    %
    
    
    0.07
    %
    
    
    0.14
    %
    
    
    0.13
    %
    
    
    0.09
    %Allowance for loan losses as a percentage of period end loans
    
    
    1.08
    %
    
    
    0.98
    %
    
    
    1.09
    %
    
    
    1.06
    %
    
    
    1.01
    %
   74




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
   Allocation of the allowance for loan losses
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Categoryas a
    
    
    
    
    
    
    Categoryas a
    
    
    
    
    
    
    Categoryas a
    
    
    
    
    
    
    Categoryas a
    
    
    
    
    
    
    Categoryas a% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofDecember 31
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loansAllocated allowance:Specific:Commercial, financial and others
    
    $
    1,533
    
    
    
    1.96
    %
    
    $
    2,216
    
    
    
    1.01
    %
    
    $
    1,000
    
    
    
    0.58
    %
    
    $
    1,549
    
    
    
    0.57
    %
    
    $
    679
    
    
    
    1.23
    %Real estate:Construction
    
    
    1,516
    
    
    
    2.12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    0.01Residential
    
    
    169
    
    
    
    0.32
    
    
    
    63
    
    
    
    0.16
    
    
    
    4
    
    
    
    0.10
    
    
    
    298
    
    
    
    0.32
    
    
    
    272
    
    
    
    0.36Commercial
    
    
    253
    
    
    
    2.55
    
    
    
    860
    
    
    
    1.97
    
    
    
    1,292
    
    
    
    1.66
    
    
    
    234
    
    
    
    0.54
    
    
    
    178
    
    
    
    0.25Consumer, net
    
    
    101
    
    
    
    0.03
    
    
    
    77
    
    
    
    0.02
    
    
    
    114
    
    
    
    0.03
    
    
    
    125
    
    
    
    0.04Lease financing, netTotal specific
    
    
    3,572
    
    
    
    6.98
    
    
    
    3,216
    
    
    
    3.16
    
    
    
    2,410
    
    
    
    2.37
    
    
    
    2,206
    
    
    
    1.47
    
    
    
    1,179
    
    
    
    1.85Formula:Commercial, financial and others
    
    
    253
    
    
    
    33.09
    
    
    
    247
    
    
    
    37.48
    
    
    
    120
    
    
    
    34.19
    
    
    
    123
    
    
    
    34.70
    
    
    
    149
    
    
    
    28.47Real estate:Construction
    
    
    37
    
    
    
    3.09
    
    
    
    
    
    
    
    2.72
    
    
    
    
    
    
    
    1.35
    
    
    
    
    
    
    
    0.66
    
    
    
    
    
    
    
    1.75Residential
    
    
    246
    
    
    
    22.74
    
    
    
    108
    
    
    
    23.31
    
    
    
    231
    
    
    
    23.98
    
    
    
    201
    
    
    
    23.54
    
    
    
    348
    
    
    
    23.83Commercial
    
    
    522
    
    
    
    26.81
    
    
    
    118
    
    
    
    25.36
    
    
    
    289
    
    
    
    30.05
    
    
    
    271
    
    
    
    31.74
    
    
    
    530
    
    
    
    36.21Consumer, net
    
    
    511
    
    
    
    6.73
    
    
    
    344
    
    
    
    7.44
    
    
    
    374
    
    
    
    7.69
    
    
    
    360
    
    
    
    7.46
    
    
    
    288
    
    
    
    7.31Lease financing, net
    
    
    7
    
    
    
    0.56
    
    
    
    
    
    
    
    0.53
    
    
    
    
    
    
    
    0.37
    
    
    
    
    
    
    
    0.43
    
    
    
    1
    
    
    
    0.58Total formula
    
    
    1,576
    
    
    
    93.02
    
    
    
    817
    
    
    
    96.84
    
    
    
    1,014
    
    
    
    97.63
    
    
    
    955
    
    
    
    98.53
    
    
    
    1,316
    
    
    
    98.15Total allocated allowance
    
    
    5,148
    
    
    
    100.00
    %
    
    
    4,033
    
    
    
    100.00
    %
    
    
    3,424
    
    
    
    100.00
    %
    
    
    3,161
    
    
    
    100.00
    %
    
    
    2,495
    
    
    
    100.00
    %Unallocated allowance
    
    
    107
    
    
    
    
    
    
    
    591
    
    
    
    
    
    
    
    1,011
    
    
    
    
    
    
    
    967
    
    
    
    
    
    
    
    1,364Total
    
    $
    5,255
    
    
    
    
    
    
    $
    4,624
    
    
    
    
    
    
    $
    4,435
    
    
    
    
    
    
    $
    4,128
    
    
    
    
    
    
    $
    3,859
   75




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    Deposits:
  76




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  SM
  Deposit distribution
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Average
    
    
    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
    
    $
    25,871
    
    
    
    1.74
    %
    
    $
    27,466
    
    
    
    2.84
    %
    
    $
    30,220
    
    
    
    2.58
    %
    
    $
    24,694
    
    
    
    1.56
    %
    
    $
    20,098
    
    
    
    1.06
    %NOW accounts
    
    
    71,820
    
    
    
    2.16
    
    
    
    67,612
    
    
    
    3.07
    
    
    
    60,814
    
    
    
    2.40
    
    
    
    54,354
    
    
    
    1.66
    
    
    
    42,480
    
    
    
    1.00Savings accounts
    
    
    103,237
    
    
    
    0.99
    
    
    
    102,767
    
    
    
    1.46
    
    
    
    109,588
    
    
    
    1.32
    
    
    
    120,550
    
    
    
    0.93
    
    
    
    129,564
    
    
    
    0.76Time deposits less than $100
    
    
    171,337
    
    
    
    3.96
    
    
    
    177,372
    
    
    
    4.40
    
    
    
    187,385
    
    
    
    4.05
    
    
    
    180,457
    
    
    
    3.65
    
    
    
    180,044
    
    
    
    3.68Time deposits $100 or more
    
    
    60,161
    
    
    
    4.14
    
    
    
    40,888
    
    
    
    4.76
    
    
    
    24,599
    
    
    
    4.38
    
    
    
    28,484
    
    
    
    3.52
    
    
    
    29,488
    
    
    
    3.31Total interest-bearing
    
    
    432,426
    
    
    
    2.84
    %
    
    
    416,105
    
    
    
    3.39
    %
    
    
    412,606
    
    
    
    2.99
    %
    
    
    408,539
    
    
    
    2.45
    %
    
    
    401,674
    
    
    
    2.30
    %Noninterest-bearing
    
    
    81,521
    
    
    
    
    
    
    
    75,779
    
    
    
    
    
    
    
    71,853
    
    
    
    
    
    
    
    71,606
    
    
    
    
    
    
    
    63,954Total deposits
    
    $
    513,947
    
    
    
    
    
    
    $
    491,884
    
    
    
    
    
    
    $
    484,459
    
    
    
    
    
    
    $
    480,145
    
    
    
    
    
    
    $
    465,628
 77




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     78




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
    79




---



##### 



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
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Within three months
    
    $
    19,271
    
    
    $
    11,336
    
    
    $
    5,307
    
    
    $
    3,964
    
    
    $
    7,353After three months but within six months
    
    
    20,470
    
    
    
    8,040
    
    
    
    6,923
    
    
    
    2,547
    
    
    
    4,426After six months but within twelve months
    
    
    25,522
    
    
    
    12,702
    
    
    
    13,136
    
    
    
    4,238
    
    
    
    6,198After twelve months
    
    
    16,272
    
    
    
    11,148
    
    
    
    10,554
    
    
    
    12,830
    
    
    
    16,515Total
    
    $
    81,535
    
    
    $
    43,226
    
    
    $
    35,920
    
    
    $
    23,579
    
    
    $
    34,492
   Market Risk Sensitivity:
  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)
  Changes in fair value of financial instruments
 Fair ValueDecember 31, 2008
    
    +100 BPS
    
    
    Level
    
    
    -100 BPSFinancial assets:Cash and due from banks
    
    $
    8,017
    
    
    $
    8,017
    
    
    $
    8,017Federal funds sold
    
    
    12,700
    
    
    
    12,700
    
    
    
    12,700Investment securities
    
    
    78,334
    
    
    
    80,574
    
    
    
    82,346Loans held for sale, net
    
    
    1,390
    
    
    
    1,390
    
    
    
    1,390Net loans
    
    
    481,045
    
    
    
    487,917
    
    
    
    495,345Mortgage servicing rights
    
    
    578
    
    
    
    578
    
    
    
    578Accrued interest receivable
    
    
    2,143
    
    
    
    2,143
    
    
    
    2,143Total
    
    $
    584,207
    
    
    $
    593,319
    
    
    $
    602,519Financial liabilities:Noninterest-bearing deposits
    
    $
    79,674
    
    
    $
    79,674
    
    
    $
    79,674Money market, NOW and savings accounts
    
    
    210,867
    
    
    
    210,867
    
    
    
    210,867Time deposits
    
    
    255,723
    
    
    
    260,019
    
    
    
    264,240Accrued interest payable
    
    
    1,815
    
    
    
    1,815
    
    
    
    1,815Total
    
    $
    548,079
    
    
    $
    552,375
    
    
    $
    556,596
   82




---



##### 



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, 2008
    
    three months
    
    
    twelve months
    
    
    five years
    
    
    five years
    
    
    TotalRate-sensitive assets:Investment securities
    
    $
    1,645
    
    
    $
    6,509
    
    
    $
    30,493
    
    
    $
    41,927
    
    
    $
    80,574Loans held for sale, net
    
    
    1,390
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,390Loans, net of unearned income
    
    
    127,717
    
    
    
    64,746
    
    
    
    212,130
    
    
    
    81,289
    
    
    
    485,882Federal funds sold
    
    
    12,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,700Total
    
    $
    143,452
    
    
    $
    71,255
    
    
    $
    242,623
    
    
    $
    123,216
    
    
    $
    580,546Rate-sensitive liabilities:Money market accounts
    
    $
    21,155
    
    
    $
    7,052
    
    
    
    
    
    
    
    
    
    
    $
    28,207NOW accounts
    
    
    65,422
    
    
    
    16,287
    
    
    
    
    
    
    
    
    
    
    
    81,709Savings accounts
    
    
    9,998
    
    
    
    
    
    
    $
    90,953
    
    
    
    
    
    
    
    100,951Time deposits less than $100
    
    
    33,152
    
    
    
    47,249
    
    
    
    75,822
    
    
    $
    13,992
    
    
    
    170,215Time deposits $100 or more
    
    
    19,271
    
    
    
    45,992
    
    
    
    13,066
    
    
    
    3,206
    
    
    
    81,535Total
    
    $
    148,998
    
    
    $
    116,580
    
    
    $
    179,841
    
    
    $
    17,198
    
    
    $
    462,617Rate-sensitivity gap:Period
    
    $
    (5,546
    )
    
    $
    (45,325
    )
    
    $
    62,782
    
    
    $
    106,018Cumulative
    
    $
    (5,546
    )
    
    $
    (50,871
    )
    
    $
    11,911
    
    
    $
    117,929
    
    
    $
    117,929RSA/RSL ratio:Period
    
    
    0.96
    
    
    
    0.61
    
    
    
    1.35
    
    
    
    7.16Cumulative
    
    
    0.96
    
    
    
    0.81
    
    
    
    1.03
    
    
    
    1.25
    
    
    
    1.25
  83




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     84




---



##### 



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.
    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)
    Capital Adequacy:
   
    
    The current and expected capital requirements, including the maintenance of
capital ratios in excess of minimum regulatory guidelines;
 87




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 
    
    The market value of our securities and the resulting effect 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.
   88




---



##### 



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




---



##### 



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.
  90




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
     91




---



##### 



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
 2008 vs. 2007Increase (decrease)attributable toTotalChange
    
    
    Rate
    
    
    VolumeInterest income:Loans:Taxable
    
    $
    (2,309
    )
    
    $
    (3,885
    )
    
    $
    1,576Tax-exempt
    
    
    655
    
    
    
    (121
    )
    
    
    776Investments:Taxable
    
    
    (911
    )
    
    
    (81
    )
    
    
    (830
    )Tax-exempt
    
    
    61
    
    
    
    13
    
    
    
    48Federal funds sold
    
    
    (6
    )
    
    
    (172
    )
    
    
    166Total interest income
    
    
    (2,510
    )
    
    
    (4,246
    )
    
    
    1,736Interest expense:Money market accounts
    
    
    (330
    )
    
    
    (287
    )
    
    
    (43
    )NOW accounts
    
    
    (525
    )
    
    
    (647
    )
    
    
    122Savings accounts
    
    
    (483
    )
    
    
    (490
    )
    
    
    7Time deposits less than
$100
    
    
    (1,024
    )
    
    
    (765
    )
    
    
    (259
    )Time deposits $100 or more
    
    
    543
    
    
    
    (280
    )
    
    
    823Short-term borrowings
    
    
    (163
    )
    
    
    (156
    )
    
    
    (7
    )Total interest expense
    
    
    (1,982
    )
    
    
    (2,625
    )
    
    
    643Net interest income
    
    $
    (528
    )
    
    $
    (1,621
    )
    
    $
    1,093
    92




---



##### 



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




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
  Summary of net interest income
 2008
    
    
    2007Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Interest
    
    
    Average
    
    
    Income/
    
    
    InterestBalance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateASSETS:Earning assets:Loans:Taxable
    
    $
    442,430
    
    
    $
    28,421
    
    
    
    6.42
    %
    
    $
    420,067
    
    
    $
    30,730
    
    
    
    7.32
    %Tax-exempt
    
    
    52,943
    
    
    
    3,451
    
    
    
    6.52
    
    
    
    41,095
    
    
    
    2,796
    
    
    
    6.80Investments:Taxable
    
    
    13,876
    
    
    
    534
    
    
    
    3.85
    
    
    
    35,323
    
    
    
    1,445
    
    
    
    4.09Tax-exempt
    
    
    30,267
    
    
    
    2,296
    
    
    
    7.59
    
    
    
    29,636
    
    
    
    2,235
    
    
    
    7.54Federal funds sold
    
    
    10,934
    
    
    
    153
    
    
    
    1.40
    
    
    
    3,381
    
    
    
    159
    
    
    
    4.70Total earning assets
    
    
    550,450
    
    
    
    34,855
    
    
    
    6.33
    %
    
    
    529,502
    
    
    
    37,365
    
    
    
    7.06
    %Less: allowance for loan losses
    
    
    4,981
    
    
    
    
    
    
    
    
    
    
    
    4,595Other assets
    
    
    34,220
    
    
    
    
    
    
    
    
    
    
    
    29,498Total assets
    
    $
    579,689
    
    
    
    
    
    
    
    
    
    
    $
    554,405LIABILITIES AND STOCKHOLDERS EQUITY:Interest-bearing liabilities:Money market accounts
    
    $
    25,871
    
    
    
    450
    
    
    
    1.74
    %
    
    $
    27,466
    
    
    
    780
    
    
    
    2.84
    %NOW accounts
    
    
    71,820
    
    
    
    1,548
    
    
    
    2.16
    
    
    
    67,612
    
    
    
    2,073
    
    
    
    3.07Savings accounts
    
    
    103,237
    
    
    
    1,020
    
    
    
    0.99
    
    
    
    102,767
    
    
    
    1,503
    
    
    
    1.46Time deposits less than $100
    
    
    171,337
    
    
    
    6,782
    
    
    
    3.96
    
    
    
    177,372
    
    
    
    7,806
    
    
    
    4.40Time deposits $100 or more
    
    
    60,161
    
    
    
    2,488
    
    
    
    4.14
    
    
    
    40,888
    
    
    
    1,945
    
    
    
    4.76Short-term borrowings
    
    
    6,230
    
    
    
    179
    
    
    
    2.87
    
    
    
    6,354
    
    
    
    342
    
    
    
    5.38Total interest-bearing liabilities
    
    
    438,656
    
    
    
    12,467
    
    
    
    2.84
    %
    
    
    422,459
    
    
    
    14,449
    
    
    
    3.42
    %Noninterest-bearing deposits
    
    
    81,521
    
    
    
    
    
    
    
    
    
    
    
    75,779Other liabilities
    
    
    3,080
    
    
    
    
    
    
    
    
    
    
    
    2,833Stockholders equity
    
    
    56,432
    
    
    
    
    
    
    
    
    
    
    
    53,334Total liabilities and stockholders equity
    
    $
    579,689
    
    
    
    
    
    
    
    
    
    
    $
    554,405Net interest income/spread
    
    
    
    
    
    $
    22,388
    
    
    
    3.49
    %
    
    
    
    
    
    $
    22,916
    
    
    
    3.64
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    4.07
    %
    
    
    
    
    
    
    
    
    
    
    4.33
    %Tax-equivalent adjustments:Loans
    
    
    
    
    
    $
    1,173
    
    
    
    
    
    
    
    
    
    
    $
    951Investments
    
    
    
    
    
    
    781
    
    
    
    
    
    
    
    
    
    
    
    760Total adjustments
    
    
    
    
    
    $
    1,954
    
    
    
    
    
    
    
    
    
    
    $
    1,711
  94




---



##### 



Comm Bancorp, Inc.
MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)
(Dollars in thousands, except per share data)
 Summary of net interest income (continued)
 2006
    
    
    2005
    
    
    2004Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
        
    Interest
        
    Average
        
    Income/
        
    Interest
        
    Average
        
    Income/
        
    InterestBalance
    
    
    Expense
        
    Rate
        

    Balance
        
    Expense
        
    Rate
        
    Balance
        
    Expense
        
    Rate$
    386,268
    
    
    $
    27,457
    
    
    
    7.11
    %
    
    $
    358,326
    
    
    $
    22,985
    
    
    
    6.41
    %
    
    $
    346,990
    
    
    $
    21,597
    
    
    
    6.22
    %38,036
    
    
    
    2,358
    
    
    
    6.20
    
    
    
    38,246
    
    
    
    2,014
    
    
    
    5.27
    
    
    
    27,090
    
    
    
    1,284
    
    
    
    4.7456,578
    
    
    
    2,276
    
    
    
    4.02
    
    
    
    72,155
    
    
    
    2,201
    
    
    
    3.05
    
    
    
    71,274
    
    
    
    2,168
    
    
    
    3.0430,374
    
    
    
    2,258
    
    
    
    7.43
    
    
    
    31,792
    
    
    
    2,359
    
    
    
    7.42
    
    
    
    32,057
    
    
    
    2,382
    
    
    
    7.435,064
    
    
    
    261
    
    
    
    5.15
    
    
    
    7,943
    
    
    
    287
    
    
    
    3.61
    
    
    
    10,857
    
    
    
    148
    
    
    
    1.36516,320
    
    
    
    34,610
    
    
    
    6.70
    %
    
    
    508,462
    
    
    
    29,846
    
    
    
    5.87
    %
    
    
    488,268
    
    
    
    27,579
    
    
    
    5.65
    %4,363
    
    
    
    
    
    
    
    
    
    
    
    4,025
    
    
    
    
    
    
    
    
    
    
    
    3,77930,219
    
    
    
    
    
    
    
    
    
    
    
    30,299
    
    
    
    
    
    
    
    
    
    
    
    31,396$
    542,176
    
    
    
    
    
    
    
    
    
    
    $
    534,736
    
    
    
    
    
    
    
    
    
    
    $
    515,885$
    30,220
    
    
    
    780
    
    
    
    2.58
    %
    
    $
    24,694
    
    
    
    385
    
    
    
    1.56
    %
    
    $
    20,098
    
    
    
    213
    
    
    
    1.06
    %60,814
    
    
    
    1,459
    
    
    
    2.40
    
    
    
    54,354
    
    
    
    901
    
    
    
    1.66
    
    
    
    42,480
    
    
    
    425
    
    
    
    1.00109,588
    
    
    
    1,452
    
    
    
    1.32
    
    
    
    120,550
    
    
    
    1,121
    
    
    
    0.93
    
    
    
    129,564
    
    
    
    985
    
    
    
    0.76187,385
    
    
    
    7,587
    
    
    
    4.05
    
    
    
    180,457
    
    
    
    6,586
    
    
    
    3.65
    
    
    
    180,044
    
    
    
    6,632
    
    
    
    3.6824,599
    
    
    
    1,078
    
    
    
    4.38
    
    
    
    28,484
    
    
    
    1,004
    
    
    
    3.52
    
    
    
    29,488
    
    
    
    977
    
    
    
    3.313,102
    
    
    
    149
    
    
    
    4.80
    
    
    
    3,894
    
    
    
    106
    
    
    
    2.72
    
    
    
    15
    
    
    
    1
    
    
    
    2.35415,708
    
    
    
    12,505
    
    
    
    3.01
    %
    
    
    412,433
    
    
    
    10,103
    
    
    
    2.45
    %
    
    
    401,689
    
    
    
    9,233
    
    
    
    2.30
    %71,853
    
    
    
    
    
    
    
    
    
    
    
    71,606
    
    
    
    
    
    
    
    
    
    
    
    63,9542,476
    
    
    
    
    
    
    
    
    
    
    
    1,897
    
    
    
    
    
    
    
    
    
    
    
    2,85652,139
    
    
    
    
    
    
    
    
    
    
    
    48,800
    
    
    
    
    
    
    
    
    
    
    
    47,386$
    542,176
    
    
    
    
    
    
    
    
    
    
    $
    534,736
    
    
    
    
    
    
    
    
    
    
    $
    515,885$
    22,105
    
    
    
    3.69
    %
    
    
    
    
    
    $
    19,743
    
    
    
    3.42
    %
    
    
    
    
    
    $
    18,346
    
    
    
    3.35
    %4.28
    %
    
    
    
    
    
    
    
    
    
    
    3.88
    %
    
    
    
    
    
    
    
    
    
    
    3.76
    %$
    802
    
    
    
    
    
    
    
    
    
    
    $
    685
    
    
    
    
    
    
    
    
    
    
    $
    436768
    
    
    
    
    
    
    
    
    
    
    
    802
    
    
    
    
    
    
    
    
    
    
    
    810$
    1,570
    
    
    
    
    
    
    
    
    
    
    $
    1,487
    
    
    
    
    
    
    
    
    
    
    $
    1,246
 95




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
 Provision for Loan Losses:
   Noninterest Income:
   96




---



##### 



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




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  Noninterest expense
 Year Ended December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Salaries and employee benefits expense:Salaries and payroll taxes
    
    $
    6,788
    
    
    $
    6,210
    
    
    $
    6,122
    
    
    $
    5,880
    
    
    $
    5,617Employee benefits
    
    
    1,743
    
    
    
    1,794
    
    
    
    1,526
    
    
    
    1,354
    
    
    
    1,351Salaries and employee benefits expense
    
    
    8,531
    
    
    
    8,004
    
    
    
    7,648
    
    
    
    7,234
    
    
    
    6,968Net occupancy and equipment expense:Net occupancy expense
    
    
    1,189
    
    
    
    1,140
    
    
    
    1,158
    
    
    
    1,183
    
    
    
    1,158Equipment expense
    
    
    1,273
    
    
    
    1,256
    
    
    
    1,195
    
    
    
    1,179
    
    
    
    1,306Net occupancy and equipment expense
    
    
    2,462
    
    
    
    2,396
    
    
    
    2,353
    
    
    
    2,362
    
    
    
    2,464Other expenses:Marketing expense
    
    
    807
    
    
    
    714
    
    
    
    569
    
    
    
    634
    
    
    
    586Other taxes
    
    
    513
    
    
    
    470
    
    
    
    503
    
    
    
    449
    
    
    
    394Stationery and supplies
    
    
    303
    
    
    
    401
    
    
    
    330
    
    
    
    367
    
    
    
    365Contractual services
    
    
    1,738
    
    
    
    1,800
    
    
    
    1,777
    
    
    
    1,982
    
    
    
    1,556Insurance, including FDIC assessment
    
    
    311
    
    
    
    247
    
    
    
    278
    
    
    
    277
    
    
    
    235Other
    
    
    1,652
    
    
    
    1,388
    
    
    
    1,371
    
    
    
    1,592
    
    
    
    2,094Other expenses
    
    
    5,324
    
    
    
    5,020
    
    
    
    4,828
    
    
    
    5,301
    
    
    
    5,230Total noninterest expense
    
    $
    16,317
    
    
    $
    15,420
    
    
    $
    14,829
    
    
    $
    14,897
    
    
    $
    14,662
    98




---



##### 



Comm Bancorp, Inc.  MANAGEMENTS DISCUSSION AND ANALYSIS (CONTINUED)  (Dollars in thousands, except per share data)
  SM SM
    99




---



##### 



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




---



##### 



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




---



##### 



Comm Bancorp, Inc.
REPORT OF MANAGEMENT
     102




---



##### 



Comm Bancorp, Inc.
REPORT OF MANAGEMENT (CONTINUED)
     103




---



##### 



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)  104




---



##### 



Comm Bancorp, Inc.  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 105




---



##### 



Comm Bancorp, Inc.  CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  (Dollars in thousands, except per share data)
 Year Ended December 31
    
    2008
    
    
    2007Interest income:Interest and fees on loans:Taxable
    
    $
    28,421
    
    
    $
    30,730Tax-exempt
    
    
    2,278
    
    
    
    1,845Interest and dividends on investment securities available-for-sale:Taxable
    
    
    489
    
    
    
    1,364Tax-exempt
    
    
    1,515
    
    
    
    1,475Dividends
    
    
    45
    
    
    
    81Interest on federal funds sold
    
    
    153
    
    
    
    159Total interest income
    
    
    32,901
    
    
    
    35,654Interest expense:Interest on deposits
    
    
    12,288
    
    
    
    14,107Interest on short-term borrowings
    
    
    179
    
    
    
    342Total interest expense
    
    
    12,467
    
    
    
    14,449Net interest income
    
    
    20,434
    
    
    
    21,205Provision for loan losses
    
    
    1,760
    
    
    
    525Net interest income after provision for loan losses
    
    
    18,674
    
    
    
    20,680Noninterest income:Service charges, fees and commissions
    
    
    3,357
    
    
    
    3,168Mortgage banking income
    
    
    604
    
    
    
    375Total noninterest income
    
    
    3,961
    
    
    
    3,543Noninterest expense:Salaries and employee benefits expense
    
    
    8,531
    
    
    
    8,004Net occupancy and equipment expense
    
    
    2,462
    
    
    
    2,396Other expenses
    
    
    5,324
    
    
    
    5,020Total noninterest expense
    
    
    16,317
    
    
    
    15,420Income before income taxes
    
    
    6,318
    
    
    
    8,803Provision for income tax expense
    
    
    618
    
    
    
    1,903Net income
    
    
    5,700
    
    
    
    6,900Other comprehensive income:Unrealized holding gains on investment securities available-for-sale
    
    
    843
    
    
    
    239Income tax expense related to other comprehensive income
    
    
    287
    
    
    
    81Other comprehensive income, net of income taxes
    
    
    556
    
    
    
    158Comprehensive income
    
    $
    6,256
    
    
    $
    7,058Per share data:Net income
    
    $
    3.26
    
    
    $
    3.87Cash dividends declared
    
    $
    1.08
    
    
    $
    1.04Average common shares outstanding
    
    
    1,748,489
    
    
    
    1,784,495
  106




---



##### 



Comm Bancorp, Inc.  CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except per share data)
 December 31
    
    2008
    
    
    2007Assets:Cash and due from banks
    
    $
    8,017
    
    
    $
    13,125Federal funds sold
    
    
    12,700
    
    
    
    8,751Investment securities available-for-sale
    
    
    80,574
    
    
    
    39,407Loans held for sale, net
    
    
    1,390
    
    
    
    1,248Loans, net of unearned income
    
    
    485,882
    
    
    
    471,344Less: allowance for loan losses
    
    
    5,255
    
    
    
    4,624Net loans
    
    
    480,627
    
    
    
    466,720Premises and equipment, net
    
    
    11,753
    
    
    
    10,891Accrued interest receivable
    
    
    2,143
    
    
    
    2,634Other assets
    
    
    6,837
    
    
    
    6,211Total assets
    
    $
    604,041
    
    
    $
    548,987Liabilities:Deposits:Noninterest-bearing
    
    $
    79,674
    
    
    $
    75,232Interest-bearing
    
    
    462,617
    
    
    
    416,125Total deposits
    
    
    542,291
    
    
    
    491,357Accrued interest payable
    
    
    1,815
    
    
    
    1,308Other liabilities
    
    
    2,137
    
    
    
    1,949Total liabilities
    
    
    546,243
    
    
    
    494,614Stockholders equity:Common stock, par value $0.33, authorized 12,000,000 shares, issued and outstanding:2008, 1,730,062 shares; 2007, 1,753,622 shares
    
    
    571
    
    
    
    579Capital surplus
    
    
    7,694
    
    
    
    7,326Retained earnings
    
    
    47,862
    
    
    
    45,353Accumulated other comprehensive income
    
    
    1,671
    
    
    
    1,115Total stockholders equity
    
    
    57,798
    
    
    
    54,373Total liabilities and stockholders equity
    
    $
    604,041
    
    
    $
    548,987
  107




---



##### 



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, 2008
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance,
December 31, 2006
    
    $
    610
    
    
    $
    7,146
    
    
    $
    45,405
    
    
    $
    957
    
    
    $
    54,118Net income
    
    
    
    
    
    
    
    
    
    
    6,900
    
    
    
    
    
    
    
    6,900Dividends declared: $1.04 per share
    
    
    
    
    
    
    
    
    
    
    (1,850
    )
    
    
    
    
    
    
    (1,850
    )Dividend reinvestment plan: 10,680 shares issued
    
    
    4
    
    
    
    497
    
    
    
    
    
    
    
    
    
    
    
    501Repurchase and retirement: 105,745 shares
    
    
    (35
    )
    
    
    (317
    )
    
    
    (5,102
    )
    
    
    
    
    
    
    (5,454
    )Other comprehensive income, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    158Balance,
December 31, 2007
    
    
    579
    
    
    
    7,326
    
    
    
    45,353
    
    
    
    1,115
    
    
    
    54,373Net income
    
    
    
    
    
    
    
    
    
    
    5,700
    
    
    
    
    
    
    
    5,700D
ividends 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
    
    
    $
    57,798
  108




---



##### 



Comm Bancorp, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands, except per share data)
 Year Ended December 31
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    5,700
    
    
    $
    6,900Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    1,760
    
    
    
    525Depreciation and amortization of premises and equipment
    
    
    941
    
    
    
    1,074Net amortization (accretion) of investment securities
    
    
    159
    
    
    
    (6
    )Amortization of net loan costs
    
    
    360
    
    
    
    365Amortization of mortgage servicing rights
    
    
    217
    
    
    
    234Deferred income tax benefit
    
    
    (376
    )
    
    
    (108
    )Net gains on sale of loans
    
    
    (467
    )
    
    
    (258
    )Net gains on sale of foreclosed assets
    
    
    (12
    )
    
    
    (39
    )Changes in:Loans held for sale, net
    
    
    325
    
    
    
    (418
    )Accrued interest receivable
    
    
    491
    
    
    
    229Other assets
    
    
    (255
    )
    
    
    142Accrued interest payable
    
    
    507
    
    
    
    202Other liabilities
    
    
    (114
    )
    
    
    169Net cash provided by operating activities
    
    
    9,236
    
    
    
    9,011Cash flows from investing activities:Proceeds from repayments of investment securities available-for-sale
    
    
    70,495
    
    
    
    64,789Purchases of investment securities available-for-sale
    
    
    (110,978
    )
    
    
    (12,738
    )Purchases of investment in residential housing program
    
    
    
    
    
    
    (3,272
    )Proceeds from sale of foreclosed assets
    
    
    137
    
    
    
    356Net increase in lending activities
    
    
    (16,363
    )
    
    
    (64,061
    )Purchases of premises and equipment
    
    
    (1,803
    )
    
    
    (947
    )Net cash used in investing activities
    
    
    (58,512
    )
    
    
    (15,873
    )Cash flows from financing activities:Net changes in:Money market, NOW, savings and noninterest-bearing accounts
    
    
    5,666
    
    
    
    13,742Time deposits
    
    
    45,268
    
    
    
    (5,827
    )Proceeds from the issuance of common shares
    
    
    473
    
    
    
    501Repurchase and retirement of common shares
    
    
    (1,418
    )
    
    
    (5,454
    )Cash dividends paid
    
    
    (1,872
    )
    
    
    (1,858
    )Net cash provided by financing activities
    
    
    48,117
    
    
    
    1,104Net decrease in cash and cash equivalents
    
    
    (1,159
    )
    
    
    (5,758
    )Cash and cash equivalents at beginning of year
    
    
    21,876
    
    
    
    27,634Cash and cash equivalents at end of year
    
    $
    20,717
    
    
    $
    21,876Supplemental disclosures:Cash paid during the period for:Interest
    
    $
    11,960
    
    
    $
    14,247Income taxes
    
    
    1,320
    
    
    
    1,840Noncash items:Transfers of loans to foreclosed assets
    
    
    336
    
    
    
    90Unrealized gains on investment securities available-for-sale, net
    
    $
    (556
    )
    
    $
    (158
    )
  109




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies:
 Nature of operations:
      110




---



##### 



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:
     111




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Use of estimates:
     112




---



##### 



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




---



##### 



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




---



##### 



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




---



##### 



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:
   Off-balance sheet financial instruments:
   120




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   Premises and equipment, net:
  Premises
    
    15-45 yearsEquipment
    
    3-10 yearsLeasehold improvements
    
    15 years
 121




---



##### 



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:
    122




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
  Intangible assets:
   123




---



##### 



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




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
   Cash and cash equivalents:
 Investment securities available for sale:
 Loans held for sale, net:
 Net loans:
 Mortgage servicing rights:
 Accrued interest receivable:
 Deposits without stated maturities:
 125




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
 Deposits with stated maturities:
 Accrued interest payable:
 Off-balance sheet financial instruments:
   126




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 1. Summary of significant accounting policies (continued):
     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:
  Advertising costs:
  Other expenses:
  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:
  2. Cash and due from banks:
  129




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities:
  Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2008
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueState and municipals:TaxableTax-exempt
    
    $
    44,873
    
    
    $
    2,288
    
    
    $
    154
    
    
    $
    47,007Mortgage-backed securities
    
    
    31,916
    
    
    
    366
    
    
    
    56
    
    
    
    32,226Equity securities:Restricted
    
    
    1,116
    
    
    
    
    
    
    
    
    
    
    
    1,116Other
    
    
    137
    
    
    
    90
    
    
    
    2
    
    
    
    225Total
    
    $
    78,042
    
    
    $
    2,744
    
    
    $
    212
    
    
    $
    80,574
 Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2007
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueState and municipals:Taxable
    
    $
    5,254
    
    
    
    
    
    
    $
    27
    
    
    $
    5,227Tax-exempt
    
    
    29,300
    
    
    $
    1,597
    
    
    
    
    
    
    
    30,897Mortgage-backed securities
    
    
    1,898
    
    
    
    10
    
    
    
    4
    
    
    
    1,904Equity securities:Restricted
    
    
    1,128
    
    
    
    
    
    
    
    
    
    
    
    1,128Other
    
    
    138
    
    
    
    113
    
    
    
    
    
    
    
    251Total
    
    $
    37,718
    
    
    $
    1,720
    
    
    $
    31
    
    
    $
    39,407
  130




---



##### 



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, 2008
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipals:TaxableTax-exempt
    
    $
    4,102
    
    
    $
    154
    
    
    
    
    
    
    
    
    
    
    $
    4,102
    
    
    $
    154Mortgage-backed securities
    
    
    6,071
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    6,071
    
    
    
    56Equity securities:RestrictedOther
    
    
    7
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    2Total
    
    $
    10,180
    
    
    $
    212
    
    
    
    
    
    
    
    
    
    
    $
    10,180
    
    
    $
    212
 Less than 12 months
    
    
    12 months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDecember 31, 2007
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipals:Taxable
    
    
    
    
    
    
    
    
    
    $
    3,617
    
    
    $
    27
    
    
    $
    3,617
    
    
    $
    27Tax-exemptMortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    1,624
    
    
    
    4
    
    
    
    1,624
    
    
    
    4Equity securities:RestrictedOtherTotal
    
    
    
    
    
    
    
    
    
    $
    5,241
    
    
    $
    31
    
    
    $
    5,241
    
    
    $
    31
  131




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 3. Investment securities (continued):
     132




---



##### 



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, 2008
    
    one year
    
    
    five years
    
    
    ten years
    
    
    ten years
    
    
    TotalState and municipals
    
    $
    1,999
    
    
    $
    5,909
    
    
    $
    22,087
    
    
    $
    17,012
    
    
    $
    47,007Mortgage-backed securities
    
    
    6,155
    
    
    
    24,584
    
    
    
    1,292
    
    
    
    195
    
    
    
    32,226Total
    
    $
    8,154
    
    
    $
    30,493
    
    
    $
    23,379
    
    
    $
    17,207
    
    
    $
    79,233
  133




---



##### 



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
    
    2008
    
    
    2007Commercial, financial and others
    
    $
    170,305
    
    
    $
    181,417Real estate:Construction
    
    
    25,332
    
    
    
    12,810Residential
    
    
    112,053
    
    
    
    110,633Commercial
    
    
    142,641
    
    
    
    128,852Consumer, net
    
    
    32,812
    
    
    
    35,149Lease financing, net
    
    
    2,739
    
    
    
    2,483Total
    
    $
    485,882
    
    
    $
    471,344
     2008
    
    
    2007Balance, January 1
    
    $
    4,624
    
    
    $
    4,435Provision for loan losses
    
    
    1,760
    
    
    
    525Loans charged-off
    
    
    (1,236
    )
    
    
    (441
    )Loans recovered
    
    
    107
    
    
    
    105Balance, December 31
    
    $
    5,255
    
    
    $
    4,624
 134




---



##### 



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
    
    2008
    
    
    2007Nonaccrual loans:Commercial, financial and others
    
    $
    7,608
    
    
    $
    2,444Real estate:Construction
    
    
    8,775Residential
    
    
    1,070
    
    
    
    755Commercial
    
    
    5,498
    
    
    
    2,057Consumer, net
    
    
    117
    
    
    
    77Lease financing, netTotal nonaccrual loans
    
    
    23,068
    
    
    
    5,333Accruing loans past due 90 days or more:Commercial, financial and others
    
    
    170
    
    
    
    80Real estate:ConstructionResidential
    
    
    75
    
    
    
    295Commercial
    
    
    417
    
    
    
    1,757Consumer, net
    
    
    104
    
    
    
    85Lease financing, net
    
    
    69
    
    
    
    17Total accruing loans past due 90 days or more
    
    
    835
    
    
    
    2,234Total nonperforming loans
    
    
    23,903
    
    
    
    7,567Foreclosed assets
    
    
    336
    
    
    
    125Total nonperforming assets
    
    $
    24,239
    
    
    $
    7,692
  2008
    
    
    2007Recorded
    
    
    Related
    
    
    Recorded
    
    
    RelatedDecember 31
    
    Investment
    
    
    Allowance
    
    
    Investment
    
    
    AllowanceImpaired loans:With a related allowance
    
    $
    19,707
    
    
    $
    3,572
    
    
    $
    7,575
    
    
    $
    3,216With no related allowance
    
    
    14,192
    
    
    
    
    
    
    
    7,343Total
    
    $
    33,899
    
    
    $
    3,572
    
    
    $
    14,918
    
    
    $
    3,216
 135




---



##### 



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):
  Year Ended December 31
    
    2008
    
    
    2007Gross interest due under terms
    
    $
    2,349
    
    
    $
    902Interest income recognized
    
    
    1,621
    
    
    
    882Interest income not recognized
    
    $
    728
    
    
    $
    20Interest income recognized (cash-basis)
    
    $
    1,400
    
    
    $
    681Average recorded investment in impaired loans
    
    $
    32,817
    
    
    $
    12,405
  5. Commitments, concentrations and contingent liabilities:
   December 31
    
    2008
    
    
    2007Commitments to extend credit
    
    $
    69,235
    
    
    $
    80,675Unused portions of lines of credit
    
    
    19,855
    
    
    
    17,901Commercial letters of credit
    
    
    15,447
    
    
    
    19,634Total
    
    $
    104,537
    
    
    $
    118,210
  136




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 5. Commitments, concentrations and contingent liabilities (continued):
      137




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 5. Commitments, concentrations and contingent liabilities (continued):
    6. Premises and equipment, net:
  December 31
    
    2008
    
    
    2007Land
    
    $
    3,993
    
    
    $
    3,993Premises
    
    
    10,038
    
    
    
    10,531Leasehold improvements
    
    
    291
    
    
    
    291Furniture and equipment
    
    
    11,079
    
    
    
    10,362Total premises and equipment
    
    
    25,401
    
    
    
    25,177Less: accumulated depreciation and amortization
    
    
    13,648
    
    
    
    14,286Premises and equipment, net
    
    $
    11,753
    
    
    $
    10,891
  138




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 6. Premises and equipment, net (continued):
   2009
    
    $
    1662010
    
    
    1192011
    
    
    1192012
    
    
    1192013
    
    
    902014 and thereafter
    
    
    260Total
    
    $
    873
 7. Other assets:
  December 31
    
    2008
    
    
    2007Goodwill
    
    $
    349
    
    
    $
    349Deferred income taxes
    
    
    479
    
    
    
    390Foreclosed assets
    
    
    336
    
    
    
    125Mortgage servicing rights
    
    
    578
    
    
    
    580Investment in residential housing program
    
    
    3,094
    
    
    
    3,455Other
    
    
    2,001
    
    
    
    1,312Total
    
    $
    6,837
    
    
    $
    6,211
   139




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 7. Other assets (continued):
   2008
    
    
    2007Balance, January 1
    
    $
    580
    
    
    $
    676Additions
    
    
    215
    
    
    
    138Amortization
    
    
    (217
    )
    
    
    (234
    )Balance, December 31
    
    $
    578
    
    
    $
    580
  8. Deposits:
  December 31
    
    2008
    
    
    2007Interest-bearing deposits:Money market accounts
    
    $
    28,207
    
    
    $
    28,657NOW accounts
    
    
    81,709
    
    
    
    78,091Savings accounts
    
    
    100,951
    
    
    
    102,895Time deposits less than $100
    
    
    170,215
    
    
    
    163,256Time deposits $100 or more
    
    
    81,535
    
    
    
    43,226Total interest-bearing deposits
    
    
    462,617
    
    
    
    416,125Noninterest-bearing deposits
    
    
    79,674
    
    
    
    75,232Total deposits
    
    $
    542,291
    
    
    $
    491,357
  140




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 8. Deposits (continued):
  2009
    
    $
    145,6642010
    
    
    25,6002011
    
    
    13,2702012
    
    
    25,3212013
    
    
    24,6972014 and thereafter
    
    
    17,198Total
    
    $
    251,750
   9. Short-term borrowings:
  141




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 9. Short-term borrowings (continued):
  10. Fair value of financial instruments:
  2008
    
    
    2007Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairDecember 31
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    20,717
    
    
    $
    20,717
    
    
    $
    21,876
    
    
    $
    21,876Investment securities available-for-sale
    
    
    80,574
    
    
    
    80,574
    
    
    
    39,407
    
    
    
    39,407Loans held for sale, net
    
    
    1,390
    
    
    
    1,390
    
    
    
    1,248
    
    
    
    1,248Net loans
    
    
    480,627
    
    
    
    487,917
    
    
    
    466,720
    
    
    
    470,020Mortgage servicing rights
    
    
    578
    
    
    
    578
    
    
    
    580
    
    
    
    580Accrued interest receivable
    
    
    2,143
    
    
    
    2,143
    
    
    
    2,634
    
    
    
    2,634Total
    
    $
    586,029
    
    
    $
    593,319
    
    
    $
    532,465
    
    
    $
    535,765Financial liabilities:Deposits without stated maturities
    
    $
    290,541
    
    
    $
    290,541
    
    
    $
    284,875
    
    
    $
    284,875Deposits with stated maturities
    
    
    251,750
    
    
    
    260,019
    
    
    
    206,482
    
    
    
    207,269Accrued interest payable
    
    
    1,815
    
    
    
    1,815
    
    
    
    1,308
    
    
    
    1,308Total
    
    $
    544,106
    
    
    $
    552,375
    
    
    $
    492,665
    
    
    $
    493,452
 142




---



##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
 10. Fair value of financial instruments (continued):
  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
    
    $
    79,458
    
    
    $
    225
    
    
    $
    79,233
   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
    
    
    
    
    
    
    
    
    
    
    $
    16,135Foreclosed assets
    
    $
    336
    
    
    
    
    
    
    
    
    
    
    $
    336
  11. Employee benefit plan:
  143




---



##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
 11. Employee benefit plan (continued):
   12. Income taxes:
  Year Ended December 31
    
    2008
    
    
    2007Current
    
    $
    994
    
    
    $
    2,011Deferred
    
    
    (376
    )
    
    
    (108
    )Total
    
    $
    618
    
    
    $
    1,903
  2008
    
    
    2007Year Ended December 31
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    RateFederal income tax at statutory rate
    
    $
    2,148
    
    
    
    34.0
    %
    
    $
    2,993
    
    
    
    34.0
    %Differences resulting from:Tax-exempt interest, net
    
    
    (1,167
    )
    
    
    (18.4
    )
    
    
    (1,006
    )
    
    
    (11.4
    )Residential housing program tax credit
    
    
    (372
    )
    
    
    (5.9
    )
    
    
    (94
    )
    
    
    (1.1
    )Other
    
    
    9
    
    
    
    0.1
    
    
    
    10
    
    
    
    0.1Federal income tax on income before income taxes
    
    $
    618
    
    
    
    9.8
    %
    
    $
    1,903
    
    
    
    21.6
    %
 144




---



##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
 12. Income Taxes (continued):
  December 31
    
    2008
    
    
    2007Deferred tax assets:Allowance for loan losses
    
    $
    1,555
    
    
    $
    1,369Accrued interest receivable
    
    
    392
    
    
    
    58Vacation salaries payable
    
    
    21
    
    
    
    20Core deposit intangible
    
    
    193
    
    
    
    243Total
    
    
    2,161
    
    
    
    1,690Deferred tax liabilities:Investment securities available-for-sale
    
    
    861
    
    
    
    574Loans, net of unearned income
    
    
    195
    
    
    
    193Prepaid expenses
    
    
    160
    
    
    
    119Premises and equipment, net
    
    
    396
    
    
    
    344Other
    
    
    70
    
    
    
    70Total
    
    
    1,682
    
    
    
    1,300Net deferred tax assets
    
    $
    479
    
    
    $
    390
   145




---



##### 



Comm Bancorp, Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  (Dollars in thousands, except per share data)
 13. Parent Company financial statements:
 CONDENSED STATEMENTS OF INCOME
 Year Ended December 31
    
    2008
    
    
    2007Income:Dividends from subsidiaries
    
    $
    2,880
    
    
    $
    10,070Management fees from subsidiaries
    
    
    240
    
    
    
    240Other income
    
    
    6
    
    
    
    5Total income
    
    
    3,126
    
    
    
    10,315Expense:Occupancy and equipment expenses
    
    
    
    
    
    
    87Other expenses
    
    
    660
    
    
    
    571Total expenses
    
    
    660
    
    
    
    658Income before income taxes and undistributed income of subsidiaries
    
    
    2,466
    
    
    
    9,657Income tax benefit
    
    
    (514
    )
    
    
    (235
    )Income before undistributed income of subsidiaries
    
    
    2,980
    
    
    
    9,892Equity in (excess of) undistributed income of subsidiaries
    
    
    2,720
    
    
    
    (2,992
    )Net income
    
    $
    5,700
    
    
    $
    6,900
 CONDENSED BALANCE SHEETS
 December 31
    
    2008
    
    
    2007Assets:Cash
    
    $
    95
    
    
    $
    75Investment in bank subsidiary
    
    
    52,586
    
    
    
    49,292Investment securities available-for-sale
    
    
    225
    
    
    
    251Other assets
    
    
    5,476
    
    
    
    5,332Total assets
    
    $
    58,382
    
    
    $
    54,950Liabilities:Dividends payable
    
    $
    470
    
    
    $
    456Other liabilities
    
    
    114
    
    
    
    121Total liabilities
    
    
    584
    
    
    
    577Stockholders equity
    
    
    57,798
    
    
    
    54,373Total liabilities and stockholders equity
    
    $
    58,382
    
    
    $
    54,950
 146




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 13. Parent Company financial statements (continued):
 CONDENSED STATEMENTS OF CASH FLOWS
 Year Ended December 31
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    5,700
    
    
    $
    6,900Adjustments:Excess of (equity in) undistributed income of subsidiaries
    
    
    (2,720
    )
    
    
    2,992Depreciation and amortization
    
    
    
    
    
    
    87Changes in:Other assets
    
    
    (144
    )
    
    
    45Other liabilities
    
    
    
    
    
    
    (1
    )Net cash provided by operating activities
    
    
    2,836
    
    
    
    10,023Cash flows from investing activities:Proceeds from repayments of investment securities
    
    
    1Purchases of investment securities
    
    
    
    
    
    
    (100
    )Purchases of investment in residential housing program
    
    
    
    
    
    
    (3,272
    )Net cash provided by (used in) investing activities
    
    
    1
    
    
    
    (3,372
    )Cash flows from financing activities:Issuance of common shares
    
    
    473
    
    
    
    501Repurchase and retirement of common shares
    
    
    (1,418
    )
    
    
    (5,454
    )Cash dividends paid
    
    
    (1,872
    )
    
    
    (1,858
    )Net cash used in financing activities
    
    
    (2,817
    )
    
    
    (6,811
    )Net increase (decrease) in cash
    
    
    20
    
    
    
    (160
    )Cash at beginning of year
    
    
    75
    
    
    
    235Cash at end of year
    
    $
    95
    
    
    $
    75
 14. Regulatory matters:
   147




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Regulatory matters (continued):
      148




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Regulatory matters (continued):
   149




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Regulatory matters (continued):
  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
 Minimum to be WellCapitalized underMinimum for Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsDecember 31, 2007
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier I capital to risk-weighted assets:Consolidated
    
    $
    52,852
    
    
    
    11.2
    %
    
    $
    18,921
    
    
    
    4.0
    %Community Bank
    
    
    47,845
    
    
    
    10.2
    
    
    
    18,773
    
    
    
    4.0
    
    
    $
    28,160
    
    
    
    6.0
    %Total capital to risk-weighted assets:Consolidated
    
    
    57,476
    
    
    
    12.2
    
    
    
    37,842
    
    
    
    8.0Community Bank
    
    
    52,469
    
    
    
    11.2
    
    
    
    37,546
    
    
    
    8.0
    
    
    
    46,933
    
    
    
    10.0Tier I capital to total average assets
less intangible assets:Consolidated
    
    
    52,852
    
    
    
    9.5
    
    
    
    22,160
    
    
    
    4.0Community Bank
    
    $
    47,845
    
    
    
    8.7
    %
    
    $
    22,083
    
    
    
    4.0
    %
    
    $
    27,604
    
    
    
    5.0
    %Risk-weighted assets:Consolidated
    
    $
    459,388Community Bank
    
    
    455,687Risk-weighted off-balance sheet items:Consolidated
    
    
    13,641Community Bank
    
    
    13,641Average assets for Leverage ratio:Consolidated
    
    
    553,999Community Bank
    
    $
    552,080
 150




---



##### 



Comm Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Dollars in thousands, except per share data)
 14. Regulatory matters (continued):
    151




---



##### 



Comm Bancorp, Inc.
DIRECTORS AND OFFICERS
 BOARD OF DIRECTORS  Comm 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
 ERWIN T. KOST
 SUSAN F. MANCUSO
 JOSEPH P. MOORE, III
 CORPORATE OFFICERS  Comm 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.
 152




---



##### 



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    FOREST CITY BRANCH
THOMAS BAILEYS
 RICHARD E. CURTIS
 ALLAN A. HORNBECK, JR.
 JOSEPH LUCCHESI, D.M.D.
 J. SCOTT MISKOVSKY
 LINDA M. RICHARDS
 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
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
 153




---



##### 



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
 GREGORY G. GULA
 DONALD J. GIBBS
 LISA A. HAHN
 DAVID A. JONES
 RICHARD J. LAPERA
 GARY S. LAVELLE
 ANNETTE M. LYNCH
 PAMELA S. MAGNOTTI
 MARY ANN MUSHO
 MICHAEL A. NARCAVAGE
 THOMAS G. NOREK
 ROBERT P. OMALLEY
 M. EVELYN PANTZAR
 JOHN PASH, III
 MARY BETH PASQUALICCHIO
 STEVE 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
 WAYNE R. WHIPPLE
 THERESA YOCUM
 LOUIS J. ZEFRAN
 154




---



##### 



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
 155




---



##### 



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 DIRECTSM Remote Deposit
 Klick Banking via the Internet
 InTouchSM Telephone Banking System
 
 *
    
    ATM Locations**
    
    Loan Production Office 156




---



##### 



Comm Bancorp, Inc.
OTHER INFORMATION (CONTINUED)
 Stockholder Information
Corporate Headquarters:
 Legal Counsel:
 Independent Auditors:
 Transfer Agent:
 Market Makers:
 
 
 
 
 
 
 
 
 
 
 Community Reinvestment:
  Common Stock Market Information:
 SM
  CashDividendsHigh
    
    Low
    
    Declared2008: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
    
    
    $
    0.272007:First Quarter
    
    $
    49.93
    
    
    $
    42.26
    
    
    $
    0.26Second Quarter
    
    
    50.22
    
    
    
    47.00
    
    
    
    0.26Third Quarter
    
    
    49.90
    
    
    
    46.00
    
    
    
    0.26Fourth Quarter
    
    $
    52.60
    
    
    $
    43.90
    
    
    $
    0.26
 Dividend Reinvestment:
  Dividend Direct Deposit:
  Website Information:
  157