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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2005
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission file number 000-23777
PENSECO FINANCIAL SERVICES CORPORATION
Incorporated pursuant to the laws of Pennsylvania
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Internal Revenue Service -- Employer Identification No. 23-2939222
150 North Washington Avenue, Scranton, Pennsylvania 18503-1848
(570) 346-7741
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Securities registered pursuant to section 12(g) of the Act:

Common Stock, Par Value $ .01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes | | No|X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes | | No|X|

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No| |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. | |

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes | | No|X|

The aggregate market value of the Company's voting stock held by non-affiliates
of the registrant on June 30, 2005, based on the closing price of such stock on
that date, equals approximately $81,706,328.

The number of shares of common stock outstanding as of February 10, 2006 equals
2,148,000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Corporation's definitive proxy statement relating to the 2006
Annual Meeting of Stockholders are incorporated by reference in Part III.

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PENSECO FINANCIAL SERVICES CORPORATION

Page

Part I -- FINANCIAL INFORMATION

Item 1. Business....................................................... 3

Item 1A. Risk Factors................................................... 3

Item 1B. Unresolved Staff Comments...................................... 5

Item 2. Properties..................................................... 5

Item 3. Legal Proceedings.............................................. 6

Item 4. Submission of Matters to a Vote of Security Holders............ 6

Part II -- OTHER INFORMATION

Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities............. 6

Item 6. Selected Financial Data........................................ 7

Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 8

Item 7A. Quantitative and Qualitative Disclosures About Market Risk..... 8

Item 8. Financial Statements and Supplementary Data.................... 8

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........................ 8

Item 9A. Controls and Procedures........................................ 8

Item 9B. Other Information.............................................. 8

Part III -- OTHER INFORMATION

Item 10. Directors and Executive Officers of the Registrant............. 8

Item 11. Executive Compensation......................................... 9

Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters............... 9

Item 13. Certain Relationships and Related Transactions................. 9

Item 14. Principal Accountant Fees and Services......................... 9

Part IV -- OTHER INFORMATION

Item 15. Exhibits and Financial Statements Schedules.................... 10

Signatures.............................................................. 11

Index to Exhibits....................................................... 12

Certifications.......................................................... 97

PART I

ITEM 1 Business

GENERAL

PENSECO FINANCIAL SERVICES CORPORATION, (the "Company"), which is headquartered
in Scranton, Pennsylvania, was formed under the general corporation laws of the
State of Pennsylvania in 1997 and is registered as a financial holding company.
The Company became a holding company upon the acquisition of all of the
outstanding shares of Penn Security Bank and Trust Company (the "Bank"), a
state-chartered bank, on December 31, 1997. The Company is subject to
supervision by the Federal Reserve Board. The Bank, as a state-chartered
financial institution, is subject to supervision, regulation and examination by
the Federal Deposit Insurance Corporation and the Pennsylvania Department of
Banking.

The Company's principal banking office is located at 150 North Washington
Avenue, Scranton, Pennsylvania, containing trust, investor services, marketing,
audit, credit card, human resources, executive, data processing and central
bookkeeping offices. There are eight additional offices.

Through its banking subsidiary, the Company generates interest income from
its outstanding loans receivable and its investment portfolio. Other income is
generated primarily from merchant transaction fees, trust fees and service
charges on deposit accounts. The Company's primary costs are interest paid on
deposits and borrowings and general operating expenses. The Bank provides a
variety of commercial and retail banking services to business and professional
customers, as well as retail customers, on a personalized basis. The Bank's
primary lending products are real estate, commercial and consumer loans. The
Bank also offers ATM access, credit cards, active investment accounts, trust
department services and other various lending, depository and related financial
services. The Bank's primary deposit products are savings and demand deposit
accounts and certificates of deposit. The Company also offers collateralized
repurchase agreements, that have a one day maturity, as an alternative deposit
option for its customers.

The Bank has a third party marketing agreement with National Financial
Services (formerly Fiserv Investor Services, Inc.) that allows the bank to offer
a full range of securities, brokerage and annuity sales to its customers. The
Investor Services division is located in the headquarters building and the
services are offered throughout the entire branch system.

The Company is not dependent upon a single customer, or a few customers,
the loss of one or more of which would have a material adverse effect on its
operations. The operations and earnings of the Corporation are not materially
affected by seasonal changes or by Federal, state or local environmental laws or
regulations.

FORWARD LOOKING INFORMATION

This Form 10-K contains forward-looking informational statements, in addition to
the historical financial information required by the Securities and Exchange
Commission. There are certain risks and uncertainties associated with these
forward-looking statements which could cause actual results to differ materially
from those stated herein. Such risks are discussed in the section entitled
"Management Discussion and Analysis of Financial Condition and Results of
Operations". These forward-looking statements reflect management's analysis as
of this point in time. Readers should review the other documents the Company
periodically files with the Securities and Exchange Commission in order to keep
apprised of any material changes.

ITEM 1A Risk Factors

RISKS RELATED TO OUR BUSINESS

Credit Risk

Changes in the credit quality of our loan portfolio may impact the level of our
allowance for loan losses.

We make various judgments about the collectibility of our loans, including the
creditworthiness of our borrowers and the value of the real estate and other
assets serving as collateral for our loans. In determining the amount of the
allowance for loan losses, we review our loans and our loan loss and delinquency
experience, and we evaluate economic conditions. If our judgments are incorrect,
our allowance for loan losses may not be sufficient to cover future losses,
which will result in additions to our allowance through increased provisions for
loan losses. In addition, bank regulators periodically review our allowance for
loan losses and may require us to increase our provision for loan losses or
recognize further loan charge-offs. Increased provisions for loan losses would
increase our expenses and reduce our profits.

Nonetheless, to the best of management's knowledge, there are also no
particular risk elements in the local economy that put a group or category of
loans at increased risk. Also the Company is not dependent upon a single
customer, or a few customers, the loss of one or more of which would have a
material adverse effect on its operations. The operations and earnings of the
Corporation are also not materially affected by seasonal changes.

Market Risk

Changes in interest rates could affect our investment values and net interest
income.

At December 31, 2005, the Company owned approximately $147.9 million of
marketable securities available for sale. These securities are carried at fair
value on the consolidated balance sheet. Unrealized gains or losses on these
securities, that is, the difference between the fair value and the amortized
cost of these securities, is reflected in stockholders' equity, net of deferred
taxes. As of December 31, 2005, the Company's available for sale marketable
securities portfolio had a net unrealized gain, net of taxes, of $363. The fair
value of the Company's available for sale marketable securities is subject to
interest rate change, which would not affect recorded earnings, but would
increase or decrease comprehensive income and stockholders' equity.

The principal component of the Company's earnings is net interest income,
which is the difference between interest and fees earned on interest-earning
assets and interest paid on deposits and other borrowings. The most significant
impact on net interest income between periods is derived from the interaction of
changes in the volume of and rates earned or paid on interest-earning assets and
interest-bearing liabilities. The volume of earning dollars in loans and
investments, compared to the volume of interest-bearing liabilities represented
by deposits and borrowings, combined with the spread, produces the changes in
net interest income between periods.

The Company continually monitors the relationship of its interest rate
sensitive assets and liabilities through its Asset/Liability Committee.

Strong competition within our market could affect our profits and growth.

The Bank operates in a competitive environment in which it must share its market
with many local independent banks as well as several banks which are affiliates
or branches of very large regional holding companies. The Bank encounters
competition from diversified financial institutions, ranging in size from small
banks to the nationwide banks operating in its region. The competition includes
commercial banks, savings and loan associations, credit unions, other lending
institutions and mortgage originators.

The principal competitive factors among the Company's competitors can be
grouped into two categories: pricing and services. In the Company's primary
service area, interest rates on deposits, especially time deposits, and interest
rates and fees charged to customers on loans are very competitive. From a
service perspective, the Bank competes in areas such as convenience of location,
types of services, service costs and banking hours.

Compliance

We operate in a highly regulated environment and may be affected by changes in
laws and regulations.

The Company is registered as a financial holding company under the Bank Holding
Company Act of 1956, as amended, and, as such, is subject to supervision and
regulation by the Board of Governors of the Federal Reserve System ("FRB"). The
Company is required to file quarterly reports of its operations with the FRB.

As a financial holding company, the Company is permitted to engage in
banking-related activities as authorized by the Federal Reserve Board, directly
or through subsidiaries or by acquiring companies already established in such
activities subject to the FRB regulations relating to those activities.

Our banking subsidiary, Penn Security Bank and Trust Company, as a
Pennsylvania state-chartered financial institution, is subject to supervision,
regulation and examination by the Commonwealth of Pennsylvania Department of
Banking and by the Federal Deposit Insurance Corporation (the "FDIC"), which
insures the Bank's deposits to the maximum extent permitted by law.

Operational Risk

The Company needs to continually attract and retain qualified personnel for its
operations.

High quality customer service, as well as efficient and profitable operations,
are dependent on the Company's ability to attract and retain qualified
individuals for key positions within the organization. As of December 31, 2005,
the Company employed 189 full-time equivalent employees. The employees of the
Company are not represented by any collective bargaining group. Management of
the Company considers relations with its employees to be good.

Our operations could be affected if we do not have access to modern and reliable
technology.

The Company operates in a highly-automated environment, wherein almost all
transactions are processed by computer software to produce results. To remain
competitive, the Company must continually evaluate the adequacy of its data
processing capabilities and make revisions as needed. At the present time, the
Company is upgrading its computer technology at a total cost of $1.5 million of
which $.7 million is included in fixed assets at December 31, 2005 but not yet
placed into service. The project is expected to be completed in the first
quarter of 2006.

The Company regularly tests its ability to restore data capabilities in the
event of a natural disaster, sustained power failure or other inability to
utilize its primary systems.

Liquidity Risk

Increased needs for disbursement of funds on loans and deposits can affect our
liquidity.

The objective of liquidity management is to maintain a balance between sources
and uses of funds in such a way that the cash requirements of customers for
loans and deposit withdrawals are met in the most economical manner. Management
monitors its liquidity position continuously in relation to trends of loans and
deposits for short-term as well as long-term requirements. Liquid assets are
monitored on a daily basis to assure maximum utilization. Management also
manages its liquidity requirements by maintaining an adequate level of readily
marketable assets and access to short-term funding sources. Management does not
foresee any adverse trends in liquidity.

Our future pension plan costs and contributions could be unfavorably impacted by
the factors that are used in the actuarial calculations.

Our costs of providing non-contributory defined benefit pension plans are
dependent upon a number of factors, such as the rates of return on plan assets,
discount rates, the level of interest rates used to measure the required minimum
funding levels of the plans, future government regulation and our required or
voluntary contributions made to the plans. While the Company complies with the
minimum funding requirements under the Employee Retirement Income Security Act
of 1974, our pension plan obligations exceeded the value of plan assets by
approximately $1.0 million as of December 31, 2005. An additional contribution
of this amount was made to the Pension Plan in 2006 to resolve the unfunded
liability. Without sustained growth in the pension investments over time to
increase the value of our plan assets and depending upon the other factors
impacting our costs as listed above, we could be required to fund our plans with
higher amounts of cash than are anticipated by our actuaries. Such cash
increased funding obligations could have a material impact on our liquidity by
reducing our cash flows.

ITEM 1B Unresolved Staff Comments

Not applicable

ITEM 2 Properties

There are nine offices positioned throughout the greater Northeastern
Pennsylvania region. They are located in the South Scranton, East Scranton,
Green Ridge, and Central City sections of Scranton, the Borough of Moscow, the
Town of Gouldsboro, South Abington Township, the Borough of Mount Pocono and the
Borough of East Stroudsburg at Eagle Valley Corners. Through these offices, the
Company provides a full range of banking and trust services primarily to
Lackawanna, Wayne, Monroe and the surrounding counties. All offices are owned by
the Bank or through a wholly owned subsidiary of the Bank, Penseco Realty, Inc.,
with the exception of the Mount Pocono Office, which is owned by the Bank but is
located on land occupied under a long-term lease. The Company also owns property
in the Borough of Dalton, Lackawanna County, to use for potential future
expansion.

The principal office, located at the corner of North Washington Avenue and
Spruce Street in the "Central City" of Scranton's business district, houses the
operations, trust, investor services, marketing, credit card and audit
departments as well as the Company's executive offices. Several remote ATM
locations are leased by the Bank, which are located throughout Northeastern
Pennsylvania. All branches and ATM locations are equipped with closed circuit
television monitoring.

ITEM 3 Legal Proceedings

There are no material pending legal proceedings, other than ordinary routine
litigation incidental to the business of the Company, as to which the Company or
subsidiary is a party or of which any of their property is subject.

ITEM 4 Submission of Matters to a Vote of Security Holders

No matter was submitted by the Company to its shareholders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.

PART II

ITEM 5 Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities

This Form 10-K is the Company's annual disclosure statement as required under
Section 13 or 15(d) of the Securities Exchange Act of 1934. Questions may be
directed to any branch location of the Company or by contacting the Controller's
office at:

Patrick Scanlon, Controller
Penseco Financial Services Corporation
150 North Washington Avenue
Scranton, Pennsylvania 18503-1848
1-800-327-0394

Management of the Company is aware of the following securities dealers who make
a market in the Company stock:

Archipelago Trading Services, Inc. Knight Equity Markets, LP
Boenning & Scattergood, Inc. Monroe Securities, Inc.
Ferris, Baker, Watts, Inc. Ryan, Beck & Company, Inc.
Hill Thompson Magid & Company, Inc. UBS Capital Markets, LP
Jefferies & Company, Inc.

The Company's capital stock is traded on the "Over-the-Counter" BULLETIN BOARD
under the symbol "PFNS". The following table sets forth the price range together
with dividends paid for each of the past two years. These quotations do not
necessarily reflect the value of actual transactions.

Dividends Paid
2005 High Low Per Share
- ---------------------------------------------
First Quarter $ 41 $ 41 $ .33
Second Quarter 47 42 .33
Third Quarter 44 41 .33
Fourth Quarter 43 41 .45
------
$ 1.44
======

Dividends Paid
2004 High Low Per Share
- ---------------------------------------------
First Quarter $ 41 $ 38 $ .30
Second Quarter 41 35 .30
Third Quarter 41 34 .30
Fourth Quarter 42 40 .45
------
$ 1.35
======

As of February 10, 2006 there were approximately 921 stockholders of the Company
based on the number of holders of record.

Reference should be made to the information about the Company's dividend policy
and regulatory guidelines in the Consolidated Financial Statements and Notes
thereto filed at Exhibit 13 to this report.

TRANSFER AGENT

Penn Security Bank and Trust Company, Trust Department, 150 North Washington
Avenue, Scranton, Pennsylvania 18503-1848. Stockholders' questions should be
directed to the Bank's Trust Department at 570-346-7741.

QUARTERLY FINANCIAL AMOUNTS (unaudited)
(in thousands, except per share amounts)

First Second Third Fourth
2005 Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------
Net Interest Income $ 4,697 $ 4,888 $ 4,960 $ 5,045
Provision for Loan Losses 122 - - 141
Other Income 2,346 2,126 2,564 1,838
Other Expenses and Taxes 5,675 5,494 5,827 5,336
Net Income 1,246 1,520 1,697 1,406
Earnings Per Share $ 0.58 $ 0.71 $ 0.79 $ 0.65

First Second Third Fourth
2004 Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------
Net Interest Income $ 4,216 $ 4,363 $ 4,591 $ 4,636
Provision for Loan Losses 18 3 114 9
Other Income 2,414 2,006 2,830 2,344
Other Expenses and Taxes 5,467 5,003 5,692 5,493
Net Income 1,145 1,363 1,615 1,478
Earnings Per Share $ 0.53 $ 0.64 $ 0.75 $ 0.69

ITEM 6 Selected Financial Data

(in thousands, except per share amounts)

RESULTS OF OPERATIONS:

2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------

Interest Income $ 28,170 $ 25,385 $ 26,014 $ 27,899 $ 31,860
Interest Expense 8,580 7,579 8,228 8,011 12,524
- ---------------------------------------------------------------------------------------------
Net Interest Income 19,590 17,806 17,786 19,888 19,336
Provision for Loan Losses 263 144 476 813 954
- ---------------------------------------------------------------------------------------------
Net Interest Income after
Provision for Loan Losses 19,327 17,662 17,310 19,075 18,382
Other Income 8,874 9,594 10,743 11,032 9,186
Other Expenses 20,719 20,584 20,454 21,098 20,077
Income Taxes 1,613 1,071 1,628 2,256 1,869
- ---------------------------------------------------------------------------------------------
Net Income $ 5,869 $ 5,601 $ 5,971 $ 6,753 $ 5,622
=============================================================================================

BALANCE SHEET AMOUNTS:
Assets $ 575,688 $ 563,708 $ 584,590 $ 496,956 $ 482,551
Investment Securities $ 229,957 $ 262,678 $ 293,125 $ 139,132 $ 128,623
Net Loans $ 317,562 $ 276,576 $ 236,882 $ 285,509 $ 320,208
Deposits $ 397,867 $ 395,301 $ 407,944 $ 414,664 $ 406,531
Long-Term Borrowings $ 75,401 $ 84,620 $ 93,523 $ - $ -
Stockholders' Equity $ 63,799 $ 62,376 $ 60,807 $ 58,975 $ 54,648

PER SHARE AMOUNTS:
Earnings per Share $ 2.73 $ 2.61 $ 2.78 $ 3.14 $ 2.62
Dividends per Share $ 1.44 $ 1.35 $ 1.35 $ 1.35 $ 1.25
Book Value per Share $ 29.70 $ 29.04 $ 28.31 $ 27.46 $ 25.44
Common Shares Outstanding 2,148,000 2,148,000 2,148,000 2,148,000 2,148,000

FINANCIAL RATIOS:
Net Interest Margin 3.57% 3.18% 3.24% 4.21% 4.30%
Return on Average Assets 1.03% .96% 1.05% 1.37% 1.18%
Return on Average Equity 9.23% 9.11% 9.87% 11.79% 10.57%
Average Equity to Average Assets 11.19% 10.57% 10.59% 11.58% 11.19%
Dividend Payout Ratio 52.75% 51.72% 48.56% 42.99% 47.71%

ITEM 7 Management's Discussion and Analysis of Financial Condition and Results
of Operations

The information called for by this item is filed at Exhibit 13 to this report
and is incorporated in its entirety by reference under this Item 7.

ITEM 7A Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is filed at Exhibit 13 to this report
and is incorporated in its entirety by reference under this Item 7A.

ITEM 8 Financial Statements and Supplementary Data

The information called for by this item is filed at Exhibit 13 to this report
and is incorporated in its entirety by reference under this Item 8.

ITEM 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

There were no changes in or disagreements with accountants on matters of
accounting principles or practices or financial statement disclosures in 2005.

ITEM 9A Controls and Procedures

Under the supervision and with the participation of our management, including
our Chief Executive Officer and Controller, we conducted an evaluation of our
disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
under the Securities Exchange Act of 1934. Based upon this evaluation, our Chief
Executive Officer and our Controller concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this annual
report. Management's annual report on internal control over financial reporting
is included under the heading "Report on Internal Control Over Financial
Reporting" at Item 8 of this Annual Report on Form 10-K. The attestation report
of the registered public accounting firm is included under the heading "Report
of the Independent Registered Public Accounting Firm" at Item 8 of this Annual
Report on Form 10-K.

The Company continually assesses the adequacy of its internal control over
financial reporting and enhances its controls in response to internal control
assessments, and internal and external audit and regulatory recommendations. No
change in internal control over financial reporting during the quarter ended
December 31, 2004 or through the date of this Annual Report on Form 10-K have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate due to changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

ITEM 9B Other Information

There are no items required to be reported.

PART III

ITEM 10 Directors and Executive Officers of the Registrant

Code of Ethics

The Company has had for many years a Code of Ethics applicable to all employees
including the Company's principal Executive Officer and principal Financial
Officer (Controller). The purpose of the Code is to promote honest and ethical
conduct, full and fair disclosures of financial information, compliance with
laws and regulations and accountability for actions.

A copy of the Code of Ethics may be obtained, without charge, by
contacting:

Patrick Scanlon, Controller, Penseco Financial Services Corporation
150 North Washington Avenue, Scranton, PA 18503-1848
1-800-327-0394

AUDIT COMMITTEE FINANCIAL EXPERT

The Sarbanes-Oxley Act of 2002 requires the Company to disclose whether or not
its Audit Committee has, as one of its members, an "Audit Committee Financial
Expert", as that term is defined by the U. S. Securities and Exchange Commission
(SEC).

The Board of Directors has determined that the Audit Committee does not
have an "audit committee financial expert" as that term is defined in the
Securities and Exchange Commission's rules and regulations. However, the Board
believes that each of the members of the Audit Committee has demonstrated that
he is capable of analyzing and evaluating the Company's financial statements and
understanding internal controls and procedures for financial reporting. Because
the Board believes that the current members of the Audit Committee are qualified
to carry out all of the duties and responsibilities of the Company's Audit
Committee, the Board does not believe that it is necessary at this time to
actively search for an outside person to serve on the Board who would qualify as
an audit committee financial expert.

Other information required by this Item as to Directors of the Company
contained under the headings "Voting Securities & Principal Holders Thereof",
"Election of Directors", "Board and Committee Meetings" and "Certain
Relationships and Related Transactions" within the definitive proxy statement
relating to the Company's Annual Meeting of Shareholders, to be held May 2,
2006, is incorporated herein by reference thereto.

ITEM 11 Executive Compensation

The information contained under the headings "Executive Compensation",
"Directors Compensation", "Compensation Committee Report on Executive
Compensation" and "Compensation Committee Interlocks and Insider Participation"
in the definitive proxy statement relating to the Company's Annual Meeting of
stockholders, to be held May 2, 2006, is incorporated herein by reference
thereto.

ITEM 12 Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

The information contained under the heading "Voting Securities & Principal
Holders Thereof" in the definitive proxy statement relating to the Company's
Annual Meeting of stockholders, to be held May 2, 2006, is incorporated herein
by reference thereto.

ITEM 13 Certain Relationships and Related Transactions

The information contained under the heading "Certain Relationships and Related
Transactions" and "Transactions with Directors and Principal Officers" in the
definitive proxy statement relating to the Company's annual meeting of
stockholders, to be held May 2, 2006 is incorporated herein by reference
thereto.

ITEM 14 Principal Accountant Fees and Services

The information contained under the heading "Our Relationship with Our Auditors"
in the definitive proxy statement relating to the Company's Annual Meeting of
Stockholders, to be held May 2, 2006 is incorporated herein by reference
thereto.

PART IV

ITEM 15 Exhibits and Financial Statements Schedules

(a) (1) Financial Statements - The following financial statements are
incorporated by reference in Part II, Item 8 hereof:

Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
General Notes to Financial Statements
Report of Independent Registered Public Accounting Firm

(2) Financial Statement Schedules - The Financial Statement Schedules are
incorporated by reference in Part II, Item 8 hereof.

(3) Exhibits
The following exhibits are filed herewith or incorporated by reference
as part of this Annual Report.

3(i) Registrant's Articles of Incorporation (Incorporated herein by
reference to Exhibit 3(i) of Registrant's report on Form 10-K
filed with the SEC on March 30, 1998.)

3(ii) Registrant's By-Laws

10 Material contracts

13 Annual report to security holders

14 Code of Ethics

21 Subsidiaries of the registrant (Incorporated herein by reference
to Exhibit 21 of Registrant's report on Form 10-K filed with
the SEC on March 30, 1998.)

31 Certifications required under Section 302 of the Sarbanes-Oxley
Act of 2002

32 Certifications required under Section 906 of the Sarbanes-Oxley
Act of 2002

(b) A Form 8-K was filed during the fourth quarter of the fiscal year ended
December 31, 2005.

(d) There are no financial statement schedules required to be filed under
this item.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Bank has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on March 7, 2006.

By: /s/ CRAIG W. BEST
------------------------------
Craig W. Best
President and CEO

By: /s/ RICHARD E. GRIMM
------------------------------
Richard E. Grimm
Executive Vice-President

By: /s/ PATRICK SCANLON
------------------------------
Patrick Scanlon
Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 7, 2006.

By: /s/ CRAIG W. BEST By: /s/ ROBERT W. NAISMITH, PH.D.
------------------------------ ------------------------------
Craig W. Best Robert W. Naismith, Ph.D.
President and CEO Director

By: /s/ EDWIN J. BUTLER By: /s/ JAMES B. NICHOLAS
------------------------------ ------------------------------
Edwin J. Butler James B. Nicholas
Director Director

By: /s/ RICHARD E. GRIMM By: /s/ EMILY S. PERRY
------------------------------ ------------------------------
Richard E. Grimm Emily S. Perry
Director Director

By: /s/ RUSSELL C. HAZELTON By: /s/ SANDRA C.PHILLIPS
------------------------------ ------------------------------
Russell C. Hazelton Sandra C. Phillips
Director Director

By: /s/ D. WILLIAM HUME By: /s/ OTTO P. ROBINSON,JR.
------------------------------ ------------------------------
D. William Hume Otto P. Robinson, Jr.
Chairman of the Board Director

By: /s/ JAMES G. KEISLING By: /s/ STEVEN L.WEINBERGER
------------------------------ ------------------------------
James G. Keisling Steven L. Weinberger
Director Director

By: /s/ P. FRANK KOZIK
------------------------------
P. Frank Kozik
Director

INDEX TO EXHIBITS

Exhibit Number
Referred to
Item 601 of Prior Filing or Exhibit
Regulation S-K DESCRIPTION OF EXHIBIT Page Number Herein
- ----------------------------------------------------------------------------------------------------------------------------

2 Plan of acquisition, reorganization, arrangement, None
liquidation or succession

3 (i) Articles of Incorporation Incorporated herein by reference to Exhibit 3 (i) of
Registrant's report on Form 10-K filed with the
SEC on March 30, 1998.

(ii) By-Laws Filed at Exhibit 3(ii) to this report.

4 Instruments defining the rights of security holders, None
including indentures

9 Voting trust agreement None

10 Material contracts Filed at Exhibit 10 to this report.

11 Statement re: Computation of per share earnings None

12 Statements re: Computation of ratios None

13 Annual report to security holders, Form 10-Q or Filed at Exhibit 13 to this report.
quarterly report to security holders

14 Code of Ethics Filed at Exhibit 14 to this report.

16 Letter re: Change in certifying accountant None

18 Letter re: Change in accounting principles None

21 Subsidiaries of the registrant Incorporated herein by reference to Exhibit 21
of Registrant's report on Form 10-K filed with
the SEC on March 30, 1998.

22 Published report regarding matters submitted to None
vote of security holders

23 Consents of experts and counsel None

24 Power of attorney None

31 (i) Rule 13a-14(a)/15d-14(a) Certifications Filed at Exhibit 31 to this report.

(ii) Rule 13a-14(d)/15d-14(d) Certifications Filed at Exhibit 31 to this report.

32 Section 1350 Certifications Filed at Exhibit 32 to this report.

33 Report on assessment of compliance with None
servicing criteria for asset-backed securities

34 Attestation report on assessment of compliance None
with servicing criteria for asset-backed securities

35 Servicer compliance statement None

99 Additional Exhibits None