Susquehanna Bancshares (SUSQ) 8-K/A Other Events

Exhibit 99.2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Community Banks, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except per share data)

	September 30, 2007			December 31, 2006
ASSETS
Cash and due from banks	$	66,810		$	73,608
Interest-bearing deposits in other banks		5,383			3,561
Trading assets		20,003			—
Investment securities, available for sale		639,962			636,066
Investment securities, held to maturity (fair value approximates $22,729 and $23,415)		23,100			23,070
Loans, net of allowance for loan losses of $25,580 and $23,626		2,584,164			2,347,263
Premises and equipment, net		50,097			46,335
Goodwill and other intangible assets		279,219			259,406
Accrued interest receivable and other assets		120,896			107,061
Total assets	$	3,789,634		$	3,496,370
LIABILITIES
Deposits
Non-interest bearing	$	346,488		$	368,329
Interest bearing		2,280,300			2,144,853
Total deposits		2,626,788			2,513,182
Short-term borrowings		124,288			108,927
Long-term debt (including $29,999 at fair value at September 30, 2007)		413,483			315,079
Subordinated debt		75,260			51,548
Accrued interest payable and other liabilities		23,340			21,473
Total liabilities		3,263,159			3,010,209
STOCKHOLDERS’ EQUITY
Preferred stock, no par value; 500,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $5.00 par value; 50,000,000 shares authorized; 25,686,000 and 24,478,000 shares issued		128,430			122,391
Surplus		396,654			373,142
Retained Earnings		28,635			17,609
Accumulated other comprehensive loss, net of tax		(4,692	)		(1,806	)
Treasury stock; 861,000 and 959,000 shares, at cost		(22,552	)		(25,175	)
Total stockholders’ equity		526,475			486,161
Total liabilities and stockholders’ equity	$	3,789,634		$	3,496,370

The accompanying notes are an integral part of the consolidated financial statements.

Community Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007			2006
INTEREST INCOME:
Loans, including fees	$	47,265	$	42,915	$	137,581		$	123,109
Investment securities:
Taxable		5,705		4,322		16,702			13,116
Tax exempt		2,747		2,205		8,040			6,778
Dividends		339		611		1,265			1,841
Trading account securities		266		—		498			—
Other		346		390		1,524			1,426
Total interest income		56,668		50,443		165,610			146,270
INTEREST EXPENSE:
Deposits		21,056		17,858		60,660			47,063
Short-term borrowings		918		739		3,240			2,080
Long-term debt		5,207		3,936		15,008			13,611
Subordinated debt		1,351		972		3,720			2,707
Total interest expense		28,532		23,505		82,628			65,461
Net interest income		28,136		26,938		82,982			80,809
Provision for loan losses		1,050		250		3,050			1,400
Net interest income after provision for loan losses		27,086		26,688		79,932			79,409
NON-INTEREST INCOME:
Investment management and trust services		1,211		968		4,259			3,069
Service charges on deposit accounts		4,278		3,037		11,951			8,423
Other service charges, commissions and fees		2,209		1,817		6,494			5,420
Insurance premium income and commissions		1,079		1,053		3,318			3,098
Mortgage banking activities		459		533		1,701			1,581
Earnings on investment in life insurance		755		679		2,199			2,010
Investment security gains (losses)		—		28		(4,388	)		317
Trading activities gain		38		—		4			—
Other		345		725		1,168			1,849
Total non-interest income		10,374		8,840		26,706			25,767
NON-INTEREST EXPENSES:
Salaries and employee benefits		12,419		11,611		37,497			34,280
Net occupancy and equipment expense		3,917		3,452		11,691			10,350
Payment card processing expense		848		553		2,235			1,391
Marketing expense		350		354		1,407			1,194
Telecommunications expense		718		542		1,855			1,659
Merger expenses		754		—		754			—
Amortization of intangibles		750		659		2,222			2,015
Other		3,930		4,001		12,657			11,514
Total non-interest expenses		23,686		21,172		70,318			62,403
Income before income taxes		13,774		14,356		36,320			42,773
Income taxes		3,281		3,798		8,290			11,142
Net income	$	10,493	$	10,558	$	28,030		$	31,631
CONSOLIDATED PER SHARE DATA
Basic earnings per share	$	0.42	$	0.45	$	1.15		$	1.34
Diluted earnings per share	$	0.42	$	0.45	$	1.14		$	1.32
Dividends declared	$	0.21	$	0.20	$	0.63		$	0.59

The accompanying notes are an integral part of the consolidated financial statements.

Community Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2007 and 2006

(Dollars in Thousands)

	Outstanding Shares		Common Stock			Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Equity
Balance, January 1, 2006	22,915		$	116,572		$	347,827	$	27,031		$	(3,779	)	$	(10,978	)	$	476,673
Comprehensive income:
Net income									31,631									31,631
Unrealized gain on securities, net of reclassification adjustment and tax effect												1,109						1,109
Total comprehensive income																		32,740
Cash dividends ($0.59 per share)									(13,973	)								(13,973	)
5% stock dividend	1,133			5,820			24,162		(29,982	)								—
Purchases of treasury stock	(668	)													(17,922	)		(17,922	)
Exercise of common stock options and issuances under stock purchase plan	98								(1,291	)					2,636			1,345
Compensation and tax benefits from employee stock transactions							721											721
Balance, September 30, 2006	23,478		$	122,392		$	372,710	$	13,416		$	(2,670	)	$	(26,264	)	$	479,584
Balance, January 1, 2007	23,519		$	122,391		$	373,142	$	17,609		$	(1,806	)	$	(25,175	)	$	486,161
Comprehensive income:
Net income									28,030									28,030
Unrealized loss on securities, net of reclassification adjustment and tax effect												(2,886	)					(2,886	)
Total comprehensive income																		25,144
Cash dividends ($0.63 per share)									(15,323	)								(15,323	)
Purchases of treasury stock	(12	)													(299	)		(299	)
Exercise of common stock options and issuances under stock purchase plan	102			(41	)				(1,681	)					3,234			1,512
Compensation and tax benefits from employee stock transactions							610											610
Acquisition of BUCS Financial Corp	548			2,741			10,300											13,041
Acquisition of East Prospect State Bank	668			3,339			12,602								(312	)		15,629
Balance, September 30, 2007	24,825		$	128,430		$	396,654	$	28,635		$	(4,692	)	$	(22,552	)	$	526,475

The accompanying notes are an integral part of the consolidated financial statements.

Community Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Nine Months Ended September 30,
	2007			2006
Operating Activities:
Net income	$	28,030		$	31,631
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		3,050			1,400
Depreciation and amortization		5,950			5,475
Stock option expense		610			478
Net amortization (accretion) of securities		(587	)		321
Realized (gains) losses on sales of available-for-sale securities, net		4,388			(317	)
Loans originated for sale		(22,720	)		(8,665	)
Proceeds from sales of loans held for sale		21,695			6,444
Gains on loan sales		(975	)		(599	)
Earnings on investment in life insurance		(2,199	)		(2,010	)
Purchases of trading assets		(20,000	)		—
Net change in fair value of trading assets and liabilities		(4	)		—
Net change in other assets and other liabilities, net		(2,033	)		10,904
Net cash provided by operating activities		15,205			45,062
Investing Activities:
Net change in interest-bearing deposits in other banks		279			(30,351	)
Activity in available-for-sale securities:
Sales		225,149			64,914
Maturities, prepayments and calls		65,104			43,826
Purchases		(252,177	)		(45,518	)
Net increase in total loans		(111,199	)		(110,409	)
Proceeds from sales of loans		1,441			1,267
Additions to premises and equipment		(3,380	)		(6,364	)
Cash acquired in acquisitions		8,208			—
Cash paid for acquisitions		(13,797	)		(2,440	)
Net cash used in investing activities		(80,372	)		(85,075	)
Financing Activities:
Net increase (decrease) in deposits		(51,902	)		189,152
Net change in short-term borrowings		5,360			(29,688	)
Proceeds from issuance of long-term debt		175,619			75,620
Repayment of long-term debt		(56,598	)		(148,765	)
Cash dividends and cash paid in lieu of fractional shares		(15,323	)		(13,973	)
Purchases of treasury stock		(299	)		(17,922	)
Tax benefits from employee stock transactions		—			243
Proceeds from issuance of common stock		1,512			1,345
Net cash provided by financing activities		58,369			56,012
Net change in cash and cash equivalents		(6,798	)		15,999
Cash and cash equivalents at beginning of period		73,608			76,820
Cash and cash equivalents at end of period	$	66,810		$	92,819

The accompanying notes are an integral part of the consolidated financial statements.

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Basis of Presentation

The accompanying unaudited consolidated financial statements of Community Banks, Inc. and Subsidiaries (“Community”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.

Operating results for the three months and nine months ended September 30, 2007, are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

For further information, refer to the audited consolidated financial statements, and footnotes thereto, included in the Annual Report on Form 10-K, for the year ended December 31, 2006.

Community is a financial holding company whose wholly-owned subsidiaries include CommunityBanks, CommunityBanks Investments, Inc. (CBII), and Community Banks Life Insurance Co. (CBLIC). CommunityBanks provides a wide range of services through its network of offices in Adams, Berks, Chester, Cumberland, Dauphin, Lancaster, Luzerne, Northumberland, Schuylkill, Snyder, and York Counties in Pennsylvania and Baltimore, Carroll, and Howard Counties in Maryland.

2.Fair Value Measurements

In September 2006, the Financial Accountings Standard Board (“FASB”) issued SFAS No. 157,Fair Value Measurements , which defines fair value, establishes a framework for measuring fair value, and enhances disclosures about assets and liabilities carried at fair value, but does not change existing guidance as to whether or not an asset or liability is carried at fair value. SFAS No. 157 also: (1) precludes the use of a liquidity or block discount when measuring instruments traded in an active market at fair value; (2) requires cost related to acquiring financial instruments carried at fair value to be included in earnings and; (3) clarifies that an issuer’s credit standing should be considered when measuring liabilities at fair value. The purpose of this Standard was to provide consistency and comparability in determining fair value measurements.

Community elected to adopt SFAS No. 157 and SFAS No. 159 as of January 1, 2007, under the early adoption provisions of both standards. In its original filing on Form 10-Q for the period ended March 31, 2007, Community applied the fair value option provisions of SFAS No. 159 to certain securities that had a fair value of approximately $150 million that were included in its available-for-sale portfolio at December 31, 2006. These securities, which had an historical cost basis of approximately $155 million, consisted primarily of various mortgage-backed securities and collateralized mortgage backed obligations.

All of the available-for-sale securities for which SFAS No. 159 was adopted reflected previously unrecognized loss positions prior to January 1, 2007 (i.e., their fair value was less than historic cost). Prior to the decision to early adopt SFAS No. 159 for the identified securities, Community had intended to hold these securities until their scheduled maturity or until there was a recovery in the market prices associated with these specific investments.

In April of 2007, Community sold these trading securities, all of which had been reclassified pursuant to the early adoption of SFAS No. 159, in order to facilitate a balance sheet restructuring strategy. A portion of the replacement investments, approximately $20 million, were classified as trading securities. The remaining replacement investments, totaling approximately $128 million were classified as available-for sale securities at the date of purchase. Also in April, 2007, Community applied the fair value option provisions of SFAS No. 159 to $30 million of Federal Home Loan Bank advances issued to facilitate its balance sheet restructuring.

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.Fair Value Measurements (continued)

Subsequent to the transactions discussed above and the original filing of Community’s first quarter Form 10-Q on May 10, 2007, the staff of the Securities and Exchange Commission (SEC) advised Community that the balance sheet restructuring strategy, as presented, was inconsistent with the spirit and intent of SFAS No. 159 and therefore was deemed a non-substantive adoption of the Standard. Consequently, as reflected in an amended Form 10-Q for its first quarter, Community decided to reverse its decision to apply SFAS No. 159 to those securities as of January 1, 2007. The investment securities that were sold early in the second quarter were reclassified as available-for-sale securities. Those securities were considered “other-than-temporarily-impaired” at the end of the first quarter of 2007 based upon the presumption that Community had the intent to sell those securities as of March 31, 2007. In the first quarter of 2007, Community recognized a charge to earnings for the other-than-temporary impairment of $4.4 million. The effect of the other-than-temporary impairment charge and other related adjustments reduced income before income taxes by $4.7 million, reduced income tax expense by $1.6 million, and reduced net income by $3.1 million for the three months ended March 31, 2007. The “other-than-temporary impairment” charge was reclassified as an “investment security loss” as of the date of the actual sale of the securities in April of 2007.

Fair Value Measurements (SFAS No. 157)

Assets and liabilities, at fair value, consist of the following at September 30, 2007 (in thousands):

Trading assets, consisting of Federal agency debt securities	$	20,003
Federal Home Loan Bank (“FHLB”) advances (contractual principal; $30,000)	$	29,999

Community records trading assets and selected FHLB advances at fair value, with unrealized gains and losses reflected in the consolidated statement of income. The degree of judgment utilized in measuring the fair value of these assets and liabilities generally correlates to their level of pricing observability. Pricing observability is impacted by a number of factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets and liabilities rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value.

Community’s early adoption of SFAS No. 157, among other things, requires enhanced disclosures about assets and liabilities that are carried at fair value. SFAS No. 157 establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets or liabilities at fair value. The three broad levels defined by the SFAS No. 157 hierarchy are as follows:

Level I – Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

Level III – Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.Fair Value Measurements (continued)

The following table summarizes the valuation of Community’s trading assets and liabilities that Community measures on a recurring basis, as well as available-for-sale securities that Community measures at fair value on a recurring basis, by the above SFAS No. 157 pricing observability levels as of September 30, 2007, (in thousands):

Description	Level I		Level II		Total
Trading assets – Federal agency debt securities	$	—	$	20,003	$	20,003
FHLB borrowings	$	—	$	29,999	$	29,999
Available-for-sale securities	$	—	$	639,962	$	639,962

3.Summary of Significant Accounting Policies

Cash Flows Information – Refer to Note 5, “Acquisitions,” for the terms of non-cash transactions in 2007.

Earnings Per Share – Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by Community relate solely to outstanding stock options, and are determined using the treasury stock method. All share and per share amounts are restated for stock splits and stock dividends that occur prior to the issuance of the financial statements.

Earnings per share for the three and nine months ended September 30 have been computed as follows (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Net income	$	10,493	$	10,558	$	28,030	$	31,631
Weighted average shares outstanding (basic)		24,815		23,459		24,376		23,693
Effect of dilutive stock options		174		204		225		233
Weighted average shares outstanding (diluted)		24,989		23,663		24,601		23,926
Per share information:
Basic earnings per share	$	0.42	$	0.45	$	1.15	$	1.34
Diluted earnings per share		0.42		0.45		1.14		1.32

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.Summary of Significant Accounting Policies (continued)

Comprehensive Income (Loss)—The components of comprehensive income (loss) and related tax effect for the three and nine months ended September 30 are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Unrealized holding gains (losses) on available-for-sale securities	$	5,551		$	11,470		$	(8,828	)	$	2,023
Reclassification adjustments for losses (gains) included in net income		—			(28	)		4,388			(317	)
Net unrealized gains (losses)		5,551			11,442			(4,440	)		1,706
Tax effect		(1,943	)		(4,005	)		1,554			(597	)
Net-of-tax amount	$	3,608		$	7,437		$	(2,886	)	$	1,109

The components of accumulated other comprehensive loss, included in stockholders’ equity, are as follows (in thousands):

	September 30, 2007			December 31, 2006
Net unrealized gain (loss) on available-for-sale securities	$	(4,006	)	$	434
Tax effect		1,402			(152	)
Net-of-tax amount		(2,604	)		282
Unfunded pension liability		(3,213	)		(3,213	)
Tax effect		1,125			1,125
Net-of-tax amount		(2,088	)		(2,088	)
Accumulated other comprehensive loss	$	(4,692	)	$	(1,806	)

Reclassifications – Certain amounts reported in the prior year have been reclassified to conform with the 2007 presentation. These reclassifications did not impact Community’s financial condition or results of operations.

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4.Pending Merger

On May 1, 2007, Community announced that it had signed a definitive agreement pursuant to which Community will combine with Susquehanna Bancshares, Inc. (“Susquehanna”), under Susquehanna’s charter. Under the terms of the agreement, Community shareholders will be entitled to elect to receive for each share of Community stock they own, either $34.00 in cash or 1.48 shares of Susquehanna common stock. Community shareholders may elect to receive cash for some shares and stock for others, but all shareholder elections will be subject to allocation procedures that will result in the exchange of 90 percent of Community’s common shares outstanding for shares of Susquehanna common stock and the remaining 10 percent of Community common shares outstanding for cash. At the time of the announcement, the value of the transaction was approximately $860 million. Following consummation, the joint franchise will include approximately 240 banking offices in the mid-Atlantic region. The merger has received regulatory approval and the separate approvals of the shareholders of both Community and Susquehanna and is expected to be consummated on November 16, 2007.

5.Acquisitions

On April 1, 2007, Community and BUCS Financial Corp (“BUCS”), parent company of BUCS Federal Bank, completed a merger in which BUCS was merged into Community. Also on that date, BUCS Federal Bank was merged into CommunityBanks, Community’s banking subsidiary. BUCS was headquartered in Baltimore County, Maryland, with 4 banking offices in Baltimore and Howard counties, Maryland. The purchase price consisted of shares of Community common stock (65%) and cash (35%). Community issued approximately 550,000 shares with an aggregate value of approximately $13 million, based on Community’s share price of $23.87 at the merger date. Cash payments to electing BUCS shareholders totaled $7 million. BUCS had approximately $147 million in assets, $118 million in net loans, $9 million in investments, $123 million in deposits, $13 million in borrowings and $10 million of stockholders’ equity at the merger date.

Community and East Prospect State Bank (“East Prospect”) also completed a merger on April 1, 2007, in which East Prospect was merged into CommunityBanks. East Prospect was a single-branch bank located in York County, Pennsylvania. The purchase price consisted of shares of Community common stock (75%) and cash (25%). Community issued approximately 668,000 shares with an aggregate value of approximately $16 million, based on Community’s share price of $23.87 at the merger date. Cash payments to electing East Prospect shareholders totaled $5 million. East Prospect had approximately $58 million in assets, $13 million in net loans, $41 million in investments, $43 million in deposits, and $13 million of stockholders’ equity at the merger date.

The results of operations of Community include BUCS’ and East Prospect’s results from and after April 1, 2007. Disclosed below is certain pro forma information for 2007 as if BUCS and East Prospect had been acquired on January 1, 2007, and for 2006 as if BUCS and East Prospect had been acquired on January 1, 2006. These results combine historical results of BUCS and East Prospect into Community’s consolidated statement of income. While certain adjustments have been made for the estimated impact of purchase accounting adjustments, they are not necessarily indicative of what would have occurred had the mergers taken place on the indicated dates.

	2007		2006
(in thousands, except per share data)	Nine Months Ended September 30		Three Months Ended September 30		Nine Months Ended September 30
Net interest income	$	84,558	$	28,522	$	85,552
Other income		27,499		9,741		28,549
Net income		24,809		10,729		32,557
Diluted earnings per common share	$	0.99	$	0.43	$	1.30

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6.Guarantees

Community does not issue any guarantees that would require liability recognition or disclosure, other than its standby letters of credit. Standby letters of credit written are conditional commitments issued by Community to guarantee the performance of a customer to a third party. Generally, all letters of credit, when issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that which is involved in extending loan facilities to customers. Community generally holds collateral and/or personal guarantees supporting these commitments. Community had issued $75.6 million and $84.2 million of standby letters of credit as of September 30, 2007 and December 31, 2006, respectively. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding letters of credit. The current amount of the liability as of September 30, 2007 and December 31, 2006, for guarantees under standby letters of credit issued is not material.

7.Long-Term Debt

(in thousands)	September 30, 2007		December 31, 2006
Outstanding advances from the FHLB of Pittsburgh mature from 2007 to 2017. The advances are collateralized by FHLB stock, certain first mortgage loans and both agency and mortgage-backed securities. The advance rates range from 2.85% to 6.35%, with a weighted average interest rate of 4.74%. Advances totaling $328 million are convertible advances. Convertible advances with an initial fixed-rate period are convertible to variable rate at the option of the FHLB. Convertible advances with an initial variable-rate period at LIBOR-100 basis points are convertible to fixed-rate or to a variable rate tied to a spread over LIBOR. Under the terms of the arrangements, if the FHLB opts to convert advances to variable rate, Community has the ability to prepay the advances at no penalty. At the current time no advances have been converted and remain fixed rate.	$	413,483	$	315,079

Maturities on long-term debt at September 30, 2007, are as follows for twelve month periods ending as indicated (in thousands):

September 30, 2008	$	14,481
September 30, 2009		70,079
September 30, 2010		5,090
September 30, 2011		25,092
September 30, 2012		11,083
Thereafter		287,658
	$	413,483

Community Banks, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8.Stock-Based Plans

In January, 2007, Community granted 273,000 option awards under its Long-Term Incentive Program. The fair value of the awards was estimated with the following weighted-average assumptions using the Black-Scholes option pricing model:

Dividend yield		3.1	%
Volatility		29.2	%
Risk-free interest rate		4.5	%
Expected life (years)		6.0
Resulting grant-date fair value	$	6.33

These assumptions are based on multiple factors, including historical exercise patterns of employees in relatively homogeneous groups with respect to exercise and post-vesting employment termination behaviors, expected future exercising patterns for the same homogeneous groups and the historical volatility of Community’s stock price.

At September 30, 2007, there was $2.4 million of unrecognized compensation cost related to all share-based payments. This cost is expected to be recognized over a weighted-average period of 3.6 years.