- Current report filing (8-K)
08 May 2010 - 4:32AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2010
Comm Bancorp, Inc.
(Exact name of registrant as specified in its charter)
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Pennsylvania
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0-17455
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23-2242292
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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125 North State Street, Clarks Summit, PA
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18411
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code:
(570)586-0377
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(Former name or former address if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 4.
02(a)
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim
Review.
On May 6, 2010, the Joint Audit Committee of Comm Bancorp, Inc. (the Company) concluded, based on the recommendation
of management, that the Companys consolidated financial statements for the fiscal year ended December 31, 2009,
contained in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the
Securities and Exchange Commission on March 29, 2010, should be restated to correct errors in the recognition,
measurement, presentation and disclosure of the Companys allowance for loan losses because of the misuse of facts that
existed at the time these consolidated financial statements were prepared.
In addition, the Company will, accordingly, amend the call reports of its wholly-owned subsidiary, Community Bank and
Trust Company, for the year ended December 31, 2009 and the quarter ended March 31, 2010.
This restatement is the result of a misunderstanding between management and the Federal Reserve Board (FRB) as to the
methodology, i.e., model, to be used by the Company in determining the estimate for the allowance for loan losses under
generally accepted accounting principles (GAAP). Management was of the opinion that the Companys model to determine
the allowance for loan losses was in accordance with applicable supervisory guidance as provided by the FRB in 2009 and
GAAP. The Company was informed on May 5, 2010, by the FRB that the Company did not comply with the FRB supervisory
guidance, and, therefore, must restate its consolidated financial statements for the year ended December 31, 2009.
Such restatement for the year ended December 31, 2009, will cause the following to occur:
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the allowance for loan losses will increase from $10,461,698 to $17,461,698;
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earnings will change from net income of $50,000 to a net loss of $4,570,000;
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stockholders equity will decrease from $54,954,285 to $50,334,285;
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book value per share will decrease from $31.93 to $29.25; and
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earnings per share will change from net income per share of $0.03 to a net loss per share of $2.65.
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The Companys independent registered public accounting firm and management are still in the process of reviewing these
corrections, and, therefore, these amounts could change at the time the Company files a Form 10-K/A.
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The Companys consolidated financial statements for the fiscal year ended December 31, 2009, should no longer
be relied upon. The Company intends to file an amended annual report on Form 10-K/A as soon as practicable.
Management has reassessed the effect of this restatement on its internal controls over financial reporting and
disclosure controls and procedures and found such controls to be ineffective as of December 31, 2009. Accordingly,
management is in the process of remediating the weaknesses that led to the restatement of the Companys consolidated
financial statements as of and for the year ended December 31, 2009.
The information in this Item 4.02 shall not be deemed to be filed for purposes of Section 18 of the Securities and
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2)
of the Securities Act of 1933, as amended. The information contain in this Item 4.02 shall not be incorporated by
reference into any offering circular, report or other document filed with the Securities and Exchange Commission by the
Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing,
except as shall be expressly set forth by specific reference in any such filing.
This Current Report includes forward-looking statements as that term is defined in the Private Securities Litigation
Reform Act of 1995. In particular, this Current Report includes forward-looking statements regarding the Companys
change in its allowance for loan losses, and the effect such change will have on the Companys financial statements.
These statements are subject to certain risks and uncertainties including risks relating to the Companys ability to
find qualified borrowers, changes in consumer confidence, changes in general economic climate, unforeseen action taken
by regulators and the other risks set forth in the Companys filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made. The Company does not intend to update publicly any
forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements
are made or to reflect the occurrence of unanticipated events except as required by law.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
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Comm Bancorp, Inc.
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(Registrant)
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Date: May 7, 2010
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By:
/s/ Scott A. Seasock
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Scott A. Seasock
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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