Exhibit 99


Friday, July 28, 2006, 4:00 pm Eastern Time

Company Press Release

Source:  Penseco Financial Services Corporation

Penseco Financial Services  Corporation  Reports  an Increase in  Second Quarter
Earnings

     SCRANTON,  PA,  July 28 --  Penseco  Financial  Services  Corporation  (OTC
Bulletin  Board:  PFNS),  the Scranton,  Pennsylvania  based  financial  holding
company of Penn Security Bank & Trust Company  reported net income for the three
months ended June 30, 2006  increased  $41,000 or 2.7% to $1,561,000 or $.73 per
share compared with  $1,520,000 or $.71 per share from the year ago period.  Net
interest income after provision for loan losses  increased  $297,000 or 6.1%, to
$5,185,000 for the three months ended June 30, 2006 compared to $4,888,000,  for
the same quarter of 2005. Largely, the increase resulted from higher interest on
loans due to increases in interest  rates as well as an increase in net loans of
$40.9 million or 14.1%.

     Asset quality continues to remain strong.  The allowance for loan losses at
June 30, 2006 was  $3,900,000  or 1.2% of total loans  compared to $3,722,000 or
1.3% of total loans at June 30, 2005.  Management  continues to believe the loan
loss reserve is adequate.

     Other income decreased $471,000 or 22.2% to $1,655,000 for the three months
ended June 30, 2006 compared  with  $2,126,000  for the similar  period of 2005.
Merchant transaction income decreased $324,000 or 30.7% due to lower transaction
volume.  Service charges on deposit  accounts  decreased  $10,000 or 4.2%. Other
operating  income  decreased  $137,000 or 76.5%,  mainly due to lower  brokerage
income of  $93,000  along  with the  effect of a gain on the sale of  foreclosed
property for the three month period of June 2005. Total other expenses decreased
$265,000 or 5.2% to $4,832,000 for the three months ended June 30, 2006 compared
with  $5,097,000  for the same period of 2005.  Salaries and  employee  benefits
increased $37,000 or 1.6%. Merchant transaction expense decreased by $266,000 or
30.6%  due to lower  transaction  volume.  Other  operating  expenses  decreased
$25,000  or 1.9%.  Applicable  income  taxes  increased  $50,000 or 12.6% due to
higher operating income.

         For the six months ended June 30, 2006, net income increased $369,000
or 13.3% to $3,135,000 or $1.46 per share compared with the year ago period of
$2,766,000 or $1.29 per share. Net interest income after provision for loan
losses increased $766,000 or 8.1% to $10,229,000 for the first half of 2006 from
$9,463,000 for the same period of 2005. Largely, the increase came from higher
interest and fees on loans of $2,566,000 or 29.6%, as net loans increased $40.9
million along with the effect of interest rate increases. Interest on
investments declined by $551,000 or 11.2%.

     Other income  decreased  $779,000 or 17.4% to  $3,693,000  during the first
half of 2006 from  $4,472,000  for the same period of 2005.  Service  charges on
deposit  accounts  decreased  $45,000  or  9.8%.  Merchant   transaction  income
decreased  $572,000  or 23.7%  mainly  due to lower  transaction  volume.  Other
operating  income  decreased  $158,000  mainly  from lower  brokerage  income of
$62,000 and the effect of increased  collection  efforts on a previously written
off cash item and gains on the sale of foreclosed  properties during 2005. Total
other expenses decreased $548,000 or 5.2% to $9,955,000 during the first half of
2006  compared  with  $10,503,000  for the same  period  of 2005.  Salaries  and
employee  benefits  expense  increased  $184,000 or 4.0%.  Merchant  transaction
expenses  decreased  $494,000 or 25.4% due to lower  transaction  volume.  Other
operating  expenses  decreased  $204,000 or 7.6% mostly from lower  professional
fees and general operating expenses.  Applicable income taxes increased $166,000
or 24.9% due to higher operating income.

     Dividends  increased by 6.1% to $1,504,000  or $.70 per share,  compared to
$1,418,000 or $.66 per share from the first half of 2005.

     Penn Security Bank & Trust Company is  headquartered  in downtown  Scranton
and operates nine branches and twenty-two  ATMs in Lackawanna,  Wayne and Monroe
counties.

     More  detailed  financial  information  for the period is  available at the
Bank's website, www.pennsecurity.com, or at any branch location.