----

----

|                                                              | Page          |
|-------------------------------------------------------------------|---------------|
|                                                              |          |
| Letter to Shareholders                                            |   1 |
| Business of the Company                                           |   3 |
| Selected Consolidated Financial Information                       |   4 |
| Management’s Discussion and Analysis of Financial Condition |          |
|    and Results of Operations                       |   6 |
| Report of Independent Registered Public Accounting Firm           | 29            |
| Consolidated Financial Statements                                 | 30            |
| Notes to Consolidated Financial Statements                        | 35            |
| Common Stock Information                                          | 75            |
| Directors and Executive Officers                                  | 76            |
| Corporate Information                                             | 77            |

----

| ·   | improving efficiencies and profitability through better deposit and loan pricing and reducing our expenses; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | reducing and managing risk by improving our credit quality and better utilization of our capital and liquidity. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | cross-selling services to existing customers and attracting new core banking relationships |
|--------------------|--------------------------------------------------------------------------------------------|

----

----

----

|                                                      |   | At June 30,                                  |    |
|-----------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                      |   | 2011                                         |    |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                      |   | (In thousands)                               |    |
| FINANCIAL CONDITION DATA:                                 |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                              |   | $                                            | 209,344 |   |   | $ | 211,657 |   |   | $ | 229,915 |   |   | $ | 249,232 |   |   | $ | 241,331 |   |
| Loans receivable, net                                     |   |                                         | 95,817  |   |   |   | 108,683 |   |   |   | 133,162 |   |   |   | 167,035 |   |   |   | 158,993 |   |
| Cash, interest-bearing deposits                           |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   and securities                                |   |                                         | 100,394 |   |   |   | 90,156 |   |   |   | 81,335 |   |   |   | 64,195 |   |   |   | 65,498 |   |
| Deposits                                                  |   |                                         | 180,661 |   |   |   | 180,075 |   |   |   | 189,218 |   |   |   | 194,593 |   |   |   | 190,090 |   |
| Retail repurchase agreements                              |   |                                         | 6,416   |   |   |   | 5,352 |   |   |   | 5,713 |   |   |   | 4,648 |   |   |   | 2,103 |   |
| Borrowed funds                                            |   |                                         | 3,000   |   |   |   | 3,000 |   |   |   | 10,000 |   |   |   | 22,000 |   |   |   | 22,000 |   |
| Stockholders' equity                                      |   |                                         | 18,065  |   |   |   | 22,611 |   |   |   | 23,764 |   |   |   | 27,100 |   |   |   | 26,468 |   |
|                                                      |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   | Years Ended June 30,                         |    |
|                                                      |   |                                         | 2011    |   |   |   | 2010 |   |   |   | 2009 |   |   |   | 2008 |   |   |   | 2007 |   |
|                                                      |   | (In thousands, except per share information) |    |
| OPERATING DATA:                                           |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                           |   | $                                            | 8,253   |   |   | $ | 9,777 |   |   | $ | 12,366 |   |   | $ | 14,828 |   |   | $ | 13,724 |   |
| Interest expense                                          |   |                                         | 2,104   |   |   |   | 3,266 |   |   |   | 5,443 |   |   |   | 7,451 |   |   |   | 7,354 |   |
| Net interest income                                       |   |                                         | 6,149   |   |   |   | 6,511 |   |   |   | 6,923 |   |   |   | 7,377 |   |   |   | 6,370 |   |
| Provision for loan losses                                 |   |                                         | 1,182   |   |   |   | 852 |   |   |   | 5,314 |   |   |   | 1,291 |   |   |   | 426 |   |
| Net interest income after provision                       |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   for loan losses                               |   |                                         | 4,967   |   |   |   | 5,659 |   |   |   | 1,609 |   |   |   | 6,086 |   |   |   | 5,944 |   |
| Impairment of and gains/(losses) on  securities |   |                                         | 315     |   |   |   | - |   |   |   | 143 |   |   |   | - |   |   |   | 177 |   |
| Non-interest income, excluding                            |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  gains (losses) on securities                        |   |                                         | (1,051  | ) |   |   | 1,535 |   |   |   | 2,514 |   |   |   | 2,903 |   |   |   | 2,127 |   |
| Non-interest expense                                      |   |                                         | 7,751   |   |   |   | 7,637 |   |   |   | 9,834 |   |   |   | 8,557 |   |   |   | 8,094 |   |
| Income (loss) before taxes                                |   |                                         | (3,520  | ) |   |   | (443 | ) |   |   | (5,568 | ) |   |   | 432 |   |   |   | 154 |   |
| Income tax expense (benefit)                              |   |                                         | 581     |   |   |   | 1,041 |   |   |   | (1,532 | ) |   |   | 69 |   |   |   | (118 | ) |
| Net income (loss)                                         |   | $                                            | (4,101  | ) |   | $ | (1,484 | ) |   | $ | (4,036 | ) |   | $ | 363 |   |   | $ | 272 |   |
| Basic earnings (loss) per share                           |   | $                                            | (2.66   | ) |   | $ | (0.96 | ) |   | $ | (2.60 | ) |   | $ | 0.23 |   |   | $ | 0.18 |   |
| Diluted earnings (loss) per share                         |   | $                                            | (2.65   | ) |   | $ | (0.96 | ) |   | $ | (2.60 | ) |   | $ | 0.23 |   |   | $ | 0.18 |   |
| Dividends per share                                       |   | $                                            | 0.00    |   |   | $ | 0.00 |   |   | $ | 0.10 |   |   | $ | 0.00 |   |   | $ | 0.08 |   |

----

|                                                      | At or For the Years Ended June 30, |   |
|-----------------------------------------------------------|------------------------------------|--------|
|                                                      | 2011                               |   | 2010 |   | 2009 |   | 2008 |   | 2007 |   |
| KEY OPERATING RATIOS:                                     |                               |   |   |   |   |   |   |   |   |   |
|                                                      |                               |   |   |   |   |   |   |   |   |   |
| Return on average assets                                  | N/A                                | %      | N/A | % | N/A | % |   0.15 | % |   0.09 | % |
| Return on average equity                                  | N/A                                |   | N/A |   | N/A |   |   1.34 |   |   0.77 |   |
| Average equity to average assets                          | 10.32                              |   | 11.07 |   | 10.70 |   | 11.05 |   | 11.32 |   |
| Interest rate spread for period                           | 3.10                               |   | 3.11 |   | 2.94 |   | 3.01 |   | 2.71 |   |
| Net interest margin for period                            | 3.22                               |   | 3.28 |   | 3.16 |   | 3.16 |   | 3.01 |   |
| Non-interest expense to average  assets         | 3.73                               |   | 3.52 |   | 4.00 |   | 3.49 |   | 2.88 |   |
| Average interest-earning assets to                        |                               |   |   |   |   |   |   |   |   |   |
|   interest-bearing liabilities                  | 110.80                             |   | 109.81 |   | 108.87 |   | 108.95 |   | 108.66 |   |
| Allowance for loan losses to total loans                  |                               |   |   |   |   |   |   |   |   |   |
|   at end of period                              | 2.03                               |   | 2.28 |   | 3.05 |   | 1.65 |   | 1.59 |   |
| Net charge-offs to average loans                          |                               |   |   |   |   |   |   |   |   |
|   outstanding during the period                 | 1.70                               |   | 2.21 |   | 2.63 |   | 0.74 |   | 0.14 |   |
| Ratio of non-performing assets to total  assets | 5.00                               |   | 6.19 |   | 5.23 |   | 1.56 |   | 1.47 |   |
| Ratio of loan loss allowance to                           |                               |   |   |   |   |   |   |   |   |
|   non-performing assets                         | 18.93                              |   |  30.13 |   |  83.40 |   | 72.10 |   | 79.08 |   |
| Dividend payout ratio                                     |  N/A                          |   | N/A |   | N/A |   | N/A |   | 44.44 |   |
|                                                      |                               |   |   |   |   |   |   |   |   |   |
|                                                      |                               |   |   |   |   |   |   |   |   |   |
|                                                      |                               |   |   |   |   |   |   |   |   |   |
|                                                      | June 30,                           |   |
| OTHER DATA:                                               | 2011                               |   | 2010 |   | 2009 |   | 2008 |   | 2007 |   |
|                                                      |                               |   |   |   |   |   |   |   |   |   |
| Number of:                                                |                               |   |   |   |   |   |   |   |   |   |
|   Loans outstanding                             | 2,132                              |   | 2,370 |   |   2,802 |   | 3,388 |   | 3,450 |   |
|   Deposit accounts                              | 19,103                             |   | 20,163 |   | 21,965 |   | 23,221 |   | 23,983 |   |
|   Full service offices                          | 11                                 |   | 11 |   | 11 |   | 11 |   | 11 |   |

----

----

----

----

| ·   | Increase assets during any quarter; |
|--------------------|-------------------------------------|

| ·   | Pay dividends; |
|--------------------|----------------|

| ·   | Increase brokered deposits; |
|--------------------|-----------------------------|

| ·   | Repurchase shares of the Company’s outstanding common stock; and |
|--------------------|------------------------------------------------------------------------|

| ·   | Issue any debt securities or incur any debt (other than that incurred in the normal course of business). |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | develop an acceptable business plan for enhancing, measuring and maintaining profitability, increasing earnings, improving liquidity, maintaining capital levels; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ensure the Savings Bank’s compliance with applicable laws, rules, regulations and agency guidelines, including the terms of the order; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not appoint any new director or senior executive officer or change the responsibilities of any current senior executive officers without notifying the applicable banking regulators; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not enter into, renew, extend or revise any compensation or benefit agreements for directors or senior executive officers; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | not make any indemnification, severance or golden parachute payments; |
|--------------------|-----------------------------------------------------------------------|

| ·   | enhance its asset classification policy; |
|--------------------|------------------------------------------|

| ·   | provide progress reports to the FDIC regarding certain classified assets; |
|--------------------|---------------------------------------------------------------------------|

| ·   | submit a comprehensive plan for reducing classified assets; |
|--------------------|-------------------------------------------------------------|

| ·   | develop a plan to reduce the concentration of certain loans contained in the loan portfolio and that addresses the assessment, monitoring and control of the risks associated with the commercial real estate portfolio; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not enter into any arrangement or contract with a third party service provider that is significant to the overall operation or financial condition of the Savings Bank, or that is outside the normal course of business; and prepare and submit progress reports to the FDIC and the Federal Reserve. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                 |   | At or for theYear Ended June 30, |   |
|------------------------------------------------------|--------|----------------------------------|--------|
|                                                 |   | 2011                             |   |   | 2010 |   |
| Non-performing assets:                               |   |                             |   |   |   |   |
|  Past due over 90 days                          |   | $                                | -      |   |   | $ | - |   |
|  Non-accrual loans                              |   |                             | 1,339  |   |   |   | 3,927 |   |
|  Other                                          |   |                             | -      |   |   |   | - |   |
| Total non-performing loans                           |   |                             | 1,339  |   |   |   | 3,927 |   |
|  Real estate owned                              |   |                             | 4,914  |   |   |   | 3,885 |   |
|  Repossessed assets                             |   |                             | -      |   |   |   | 61 |   |
|  Impaired loans not past due                    |   |                             | 4,221  |   |   |   | 5,228 |   |
| Total non-performing assets                          |   | $                                | 10,474 |   |   | $ | 13,101 |   |
|                                                 |   |                             |   |   |   |   |   |   |
| Classified loans:                                    |   |                             |   |   |   |   |   |   |
|  Loss                                           |   | $                                | -      |   |   | $ | - |   |
|  Doubtful                                       |   |                             | -      |   |   |   | - |   |
|  Substandard                                    |   |                             | 5,560  |   |   |   | 7,678 |   |
|      Total classified loans |   |                             | 5,560  |   |   |   | 7,678 |   |
|      Special mention loans  |   |                             | 176    |   |   |   | 1,602 |   |
|      Total loans of concern |   | $                                | 5,736  |   |   | $ | 9,280 |   |
|                                                 |   |                             |   |   |   |   |   |   |
| Net charge-offs                                      |   | $                                | 1,726  |   |   | $ | 2,661 |   |
| Provision for loan losses                            |   | $                                | 1,182  |   |   | $ | 852 |   |

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|                                                              | At June 30, |   |   | Years Ended June 30 |
|-------------------------------------------------------------------|-------------|--------|--------|---------------------|
|                                                              | 2011        |   |   | 2011                |   |   | 2010 |   |
| Weighted average yield                                            |        |   |   |                |   |   |   |   |
|     on loan portfolio                         | 5.69        | %      |   | 5.82                | % |   | 6.24 | % |
| Weighted average yield                                            |        |   |   |                |   |   |   |   |
|     on securities                             | 3.29        |   |   | 3.12                |   |   | 3.88 |   |
| Weighted average yield on other                                   |        |   |   |                |   |   |   |   |
|     interest-earning assets                   | 0.37        |   |   | 0.68                |   |   | 0.91 |   |
| Weighted average yield                                            |        |   |   |                |   |   |   |   |
|     on all interest-earning assets            | 4.11        |   |   | 4.32                |   |   | 4.92 |   |
| Weighted average rate                                             |        |   |   |                |   |   |   |   |
|     paid on total deposits                    | 0.75        |   |   | 1.14                |   |   | 1.77 |   |
| Weighted average rate paid on retail                              |        |   |   |                |   |   |   |   |
|     repurchase agreements                     | 1.48        |   |   | 1.44                |   |   | 1.45 |   |
| Weighted average rate paid on other                               |        |   |   |                |   |   |   |   |
|     interest-bearing liabilities              | 4.94        |   |   | 5.00                |   |   | 3.18 |   |
| Weighted average rate paid on                                     |        |   |   |                |   |   |   |   |
|     All interest-bearing liabilities          | 0.84        |   |   | 1.22                |   |   | 1.80 |   |
| Interest rate spread (spread                                      |        |   |   |                |   |   |   |   |
|     between weighted average                  |        |   |   |                |   |   |   |   |
|     rate on all interest-earning assets       |        |   |   |                |   |   |   |   |
|     and all interest-bearing liabilities)     | 3.27        |   |   | 3.10                |   |   | 3.11 |   |
| Net interest margin (net interest                                 |        |   |   |                |   |   |   |   |
|     income (expense) as a percentage          |        |   |   |                |   |   |   |   |
|      of average interest-earning assets) | N/A         |   |   | 3.22                |   |   | 3.28 |   |

----

|                                                                     |   | Years Ended June 30,   |    |
|--------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                     |   | 2011                   |    |   | 2010 |   |
|                                                                     |   |                   |    |   | Interest |   |   |   |   |   |   |   |   | Interest |   |   |   |   |
|                                                                     |   | Average                |    |   | and |   |   | Yield/ |   |   | Average |   |   | and |   |   | Yield/ |   |
|                                                                     |   | Balance(2)             |    |   | Dividends |   |   | Cost |   |   | Balance(2) |   |   | Dividends |   |   | Cost |   |
|                                                                     |   | (Dollars in thousands) |    |
| Interest-earning assets:                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans(1)                                                     |   | $                      | 101,703 |   |   | $ | 5,918 |   |   |   | 5.82 | % |   | $ | 120,468 |   |   | $ | 7,518 |   |   |   | 6.24 | % |
|   Securities                                                   |   |                   | 70,612  |   |   |   | 2,207 |   |   |   | 3.13 |   |   |   | 51,995 |   |   |   | 2,020 |   |   |   | 3.88 |   |
|   Other                                                        |   |                   | 18,892  |   |   |   | 128 |   |   |   | 0.68 |   |   |   | 26,336 |   |   |   | 239 |   |   |   | 0.91 |   |
|      Total interest-earning assets              |   |                   | 191,207 |   |   |   | 8,253 |   |   |   | 4.32 |   |   |   | 198,799 |   |   |   | 9,777 |   |   |   | 4.92 |   |
| Non-interest earning assets                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Office properties and equipment, net                         |   |                   | 6,032   |   |   |   |   |   |   |   |   |   |   |   | 6,311 |   |   |   |   |   |   |   |   |   |
|   Real estate, net                                             |   |                   | 5,215   |   |   |   |   |   |   |   |   |   |   |   | 3,016 |   |   |   |   |   |   |   |   |   |
|   Other non-interest earning assets                            |   |                   | 5,611   |   |   |   |   |   |   |   |   |   |   |   | 8,766 |   |   |   |   |   |   |   |   |   |
|      Total assets                               |   | $                      | 208,065 |   |   |   |   |   |   |   |   |   |   | $ | 216,892 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                            |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Savings and Money Market savings     accounts |   | $                      | 45,717  |   |   |   | 300 |   |   |   | 0.66 |   |   | $ | 46,738 |   |   |   | 631 |   |   |   | 1.35 |   |
|   Checking and Super Saver accounts                            |   |                   | 45,465  |   |   |   | 225 |   |   |   | 0.49 |   |   |   | 42,459 |   |   |   | 362 |   |   |   | 0.85 |   |
|   Certificates of deposit                                      |   |                   | 72,642  |   |   |   | 1,346 |   |   |   | 1.85 |   |   |   | 81,319 |   |   |   | 2,022 |   |   |   | 2.49 |   |
|      Total deposits                             |   |                   | 163,824 |   |   |   | 1,871 |   |   |   | 1.14 |   |   |   | 170,516 |   |   |   | 3,015 |   |   |   | 1.77 |   |
|   Retail repurchase agreements                                 |   |                   | 5,744   |   |   |   | 83 |   |   |   | 1.44 |   |   |   | 4,837 |   |   |   | 70 |   |   |   | 1.45 |   |
|   Advances  from Federal Home Loan Bank              |   |                   | 3,000   |   |   |   | 150 |   |   |   | 5.00 |   |   |   | 5,692 |   |   |   | 181 |   |   |   | 3.18 |   |
|      Total interest-bearing liabilities         |   |                   | 172,568 |   |   |   | 2,104 |   |   |   | 1.22 |   |   |   | 181,045 |   |   |   | 3,266 |   |   |   | 1.80 |   |
| Non-interest bearing liabilities:                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Other liabilities                                            |   |                   | 14,297  |   |   |   |   |   |   |   |   |   |   |   | 11,837 |   |   |   |   |   |   |   |   |   |
|      Total liabilities                          |   |                   | 186,865 |   |   |   |   |   |   |   |   |   |   |   | 192,882 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                     |   |                   | 21,200  |   |   |   |   |   |   |   |   |   |   |   | 24,010 |   |   |   |   |   |   |   |   |   |
|      Total liabilities and                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        stockholders' equity           |   | $                      | 208,065 |   |   |   |   |   |   |   |   |   |   | $ | 216,892 |   |   |   |   |   |   |   |   |   |
| Net interest income                                                      |   |                   |    |   |   | $ | 6,149 |   |   |   |   |   |   |   |   |   |   | $ | 6,511 |   |   |   |   |   |
| Interest rate spread                                                     |   |                   |    |   |   |   |   |   |   |   | 3.10 | % |   |   |   |   |   |   |   |   |   |   | 3.11 | % |
| Net interest margin                                                      |   |                   |    |   |   |   |   |   |   |   | 3.22 | % |   |   |   |   |   |   |   |   |   |   | 3.28 | % |
| Ratio of average interest-earning                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   assets to average interest-                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   bearing liabilities                                          |   |                   | 110.8   | % |   |   |   |   |   |   |   |   |   |   | 109.8 | % |   |   |   |   |   |   |   |   |

| (1)   | Average balances include non-accrual loans and loans 90 days or more past due. The corresponding interest up to the date of non-accrual status has been included in the "Interest and Dividends" column. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Average balances for a period have been calculated using the average monthly balances for the respective year. |
|-----------------|---------------------------------------------------------------------------------------------------------------------|

----

|                                           |   | Years Ended June 30,  |   |   | Years Ended June 30,  |   |
|------------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                           |   | 2011 Compared to 2010 |   |   | 2010 Compared to 2009 |   |
|                                           |   | Increase/(Decrease)   |   |   | Increase/(Decrease)   |   |
|                                           |   | Due to                |   |   | Due to                |   |
|                                           |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Volume                |   |   | Rate                  |   |   | Net |   |   | Volume |   |   | Rate |   |   | Net |   |
|                                           |   | (In thousands)        |   |
| Interest-earning assets:                       |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans (1)                          |   | $                     | (1,117 | )      |                  | $      | (483 | ) |   | $ | (1,600 | ) |   | $ | (1,820 | ) |   | $ | (432 | ) |   | $ | (2,252 | ) |
|   Securities                         |   |                  | 632    |   |                  |   | (445 | ) |   |   | 187 |   |   |   | 133 |   |   |   | (565 | ) |   |   | (432 | ) |
|   Other                              |   |                  | (59    | )      |                  |   | (52 | ) |   |   | (111 | ) |   |   | 44 |   |   |   | 51 |   |   |   | 95 |   |
| Total net change in income on                  |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   interest-earnings assets           |   |                  | (544   | )      |                  |   | (980 | ) |   |   | (1,524 | ) |   |   | (1,643 | ) |   |   | (946 | ) |   |   | (2,589 | ) |
|                                           |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                  |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing deposits          |   |                  | (113   | )      |                  |   | (1,031 | ) |   |   | (1,144 | ) |   |   | (74 | ) |   |   | (1,093 | ) |   |   | (1,167 | ) |
|   Retail repurchase agreements       |   |                  | 13     |   |                  |   | - |   |   |   | 13 |   |   |   | (3 | ) |   |   | (13 | ) |   |   | (16 | ) |
|   Other interest-bearing liabilities |   |                  | (111   | )      |                  |   | 80 |   |   |   | (31 | ) |   |   | (659 | ) |   |   | (335 | ) |   |   | (994 | ) |
| Total net change in expense on                 |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   interest-bearing liabilities       |   |                  | (211   | )      |                  |   | (951 | ) |   |   | (1,162 | ) |   |   | (736 | ) |   |   | (1,441 | ) |   |   | (2,177 | ) |
| Net change in net interest income              |   | $                     | (333   | )      |                  | $      | (29 | ) |   | $ | (362 | ) |   | $ | (907 | ) |   | $ | 495 |   |   | $ | (412 | ) |

----

----

|                                 |   | Contract or            |   |
|--------------------------------------|--------|------------------------|--------|
|                                 |   | Notional Amount        |   |
|                                 |   | (dollars in thousands) |   |
| Commitments:                         |   |                   |   |
|                                 |   | (In thousands)         |   |
| Fixed rate loans                     |   | $                      | 292    |   |
| Adjustable rate loans                |   |                   | 64     |   |
| Undisbursed balance of loans closed  |   |                   | 755    |   |
| Unused lines of credit               |   |                   | 991    |   |
| Commercial standby letters of credit |   |                   | 107    |   |
|    Total              |   | $                      | 2,209  |   |

----

|               |   |   |                   |   |                      |      |   |   |    |   | Net Portfolio as % of |   |   |
|--------------------|--------|--------|------------------------|--------|---------------------------|-----------|--------|--------|---------|--------|-----------------------|--------|--------|
|               |   |   | Net Portfolio Value    |   | Portfolio Value of Assets |      |   |
| Basis Point ("bp") |   |   | Dollar                 |   |                      | Dollar    |   |   | Percent |   | Net Portfolio         |   |   |   |   |   |
| Change in Rates    |   |   | Amount                 |   |                      | Change(1) |   |   | Change  |   | Value Ratio(2)        |   |   | Change(3) |   |   |
|               |   |   | (Dollars in thousands) |   |                      |
|               | 300    | bp     |                   | $      | 24,135                    |      |   | $      | (2,249  | )      |                  |   | (9     | ) |   | 11.30 | % |   |   | (82 | ) |  bp |
|               | 200    |   |                   |   | 25,512                    |      |   |   | (872    | )      |                  |   | (3     | ) |   | 11.84 |   |   |   | (28 | ) |   |
|               | 100    |   |                   |   | 26,360                    |      |   |   | (24     | )      |                  |   | 0      |   |   | 12.14 |   |   |   | 3 |   |   |
|               | 50     |   |                   |   | 25,762                    |      |   |   | (622    | )      |                  |   | (2     | ) |   | 11.88 |   |   |   | (23 | ) |   |
|               | -      |   |                   |   | 26,384                    |      |   |   | -       |   |                  |   | -      |   |   | 12.12 |   |   |   | - |   |   |
|               | (50)   |   |                   |   | 25,579                    |      |   |   | (805    | )      |                  |   | (3     | ) |   | 11.78 |   |   |   | (34 | ) |   |
|               | (100)  |   |                   |   | 25,396                    |      |   |   | (987    | )      |                  |   | (4     | ) |   | 11.69 |   |   |   | (42 | ) |   |

| (1) | Represents the increase (decrease) of the estimated net portfolio value at the indicated change in interest rates compared to the net portfolio value assuming no change in interest rates. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Calculated as the estimated net portfolio value divided by the portfolio value of total assets. |
|-----|-------------------------------------------------------------------------------------------------|

| (3) | Calculated as the increase (decrease) of the net portfolio value ratio assuming the indicated change in interest rates over the estimated net portfolio value ratio assuming no change in interest rates. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                              |   | June 30, |   | March 31,      |   | June 30,      |
|---------------------------------------------------|--------|----------|--------|----------------|--------|---------------|
|                                              |   | 2011     |   | 2011           |   | 2010          |
|  Pre-shock net portfolio                     |   |     |   |           |   |          |
|     Value ratio               |   | 12.12%   |   | 12.63%         |   | 13.45%        |
|  Post-shock net portfolio                    |   |     |   |           |   |          |
|     Value ratio (Up 200 bp)   |   | 11.84%   |   | 11.46%         |   | 14.07%        |
|  Increase (decrease) in portfolio            |   |     |   |           |   |          |
|     Value ratio (Up 200 bp)   |   | (28) bp  |   |  (117) bp |   |  62 bp   |
|  Post-shock net portfolio                    |   |     |   |           |   |          |
|     Value ratio (Down 100 bp) |   | 11.69%   |   | 12.70%         |   | 12.83%        |
|  Increase (decrease) in portfolio            |   |     |   |           |   |          |
|     Value ratio (Down 100 bp) |   | (43) bp  |   |  7 bp     |   |  (62) bp |

----

----

|                                                                                                   |   | 2011   |        |   | 2010   |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                 ASSETS |   |   |        |   |   |   |
| Cash and cash equivalents                                                                              |   | $      | 24,798,915  |   |   | $      | 20,182,593 |   |
| Certificates of deposit purchased                                                                      |   |   | 2,939,675   |   |   |   | 7,221,578 |   |
| Securities available-for-sale                                                                          |   |   | 54,080,467  |   |   |   | 60,304,479 |   |
| Securities held to maturity. fair value at:                                                            |   |   |        |   |   |   |   |   |
|   June 30, 2011, $18,193,227; June 30, 2010, $2,072,084                                      |   |   | 18,145,893  |   |   |   | 2,012,940 |   |
| Federal Home Loan Bank stock, at cost                                                                  |   |   | 428,800     |   |   |   | 434,000 |   |
| Loans receivable, net allowance for loan losses at:                                                    |   |   |        |   |   |   |   |   |
|   June 30, 2011, $1,982,599; June 30, 2010, $2,526,862                                       |   |   | 95,816,656  |   |   |   | 108,683,381 |   |
| Loans held for sale                                                                                    |   |   | 61,140      |   |   |   | - |   |
| Accrued interest receivable                                                                            |   |   | 778,420     |   |   |   | 819,752 |   |
| Prepaid FDIC insurance premiums                                                                        |   |   | 752,998     |   |   |   | 1,196,465 |   |
| Prepaid expenses                                                                                       |   |   | 439,677     |   |   |   | 380,487 |   |
| Property and equipment, net                                                                            |   |   | 5,897,731   |   |   |   | 6,051,423 |   |
| Real estate owned and other repossessed assets, net                                                    |   |   | 4,913,828   |   |   |   | 3,945,628 |   |
| Intangible assets, net                                                                                 |   |   | 85,126      |   |   |   | 135,241 |   |
| Income taxes receivable                                                                                |   |   | 138,360     |   |   |   | 152,975 |   |
| Other assets                                                                                           |   |   | 66,123      |   |   |   | 136,031 |   |
|      Total assets                                                             |   | $      | 209,343,809 |   |   | $      | 211,656,973 |   |
|                                                                                                   |   |   |        |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                   |   |   |        |   |   |   |   |   |
|                                                                                                   |   |   |        |   |   |   |   |   |
| Deposits                                                                                               |   | $      | 180,660,992 |   |   | $      | 180,075,425 |   |
| Retail repurchase agreements                                                                           |   |   | 6,416,491   |   |   |   | 5,352,402 |   |
| Advances from Federal Home Loan Bank                                                                   |   |   | 3,000,000   |   |   |   | 3,000,000 |   |
| Accrued expenses                                                                                       |   |   | 1,201,657   |   |   |   | 617,915 |   |
|      Total liabilities                                                        |   |   | 191,279,140 |   |   |   | 189,045,742 |   |
|                                                                                                   |   |   |        |   |   |   |   |   |
| Commitments and contingencies (Note 13)                                                                |   |   |        |   |   |   |   |   |
|                                                                                                   |   |   |        |   |   |   |   |   |
| Preferred stock, $.01 par value; 2,000,000 shares authorized,                                          |   |   |        |   |   |   |   |   |
|   none issued                                                                                |   |   | -           |   |   |   | - |   |
| Common stock, $.01 par value; 8,000,000 shares authorized,                                             |   |   |        |   |   |   |   |   |
|   issued 2,895,036 in 2011 and in 2010, outstanding                                          |   |   |        |   |   |   |   |   |
|   1,550,815 in 2011 and in 2010                                                              |   |   | 28,950      |   |   |   | 28,950 |   |
| Paid-in capital                                                                                        |   |   | 18,061,442  |   |   |   | 18,056,714 |   |
| Retained earnings – substantially restricted                                                     |   |   | 18,437,566  |   |   |   | 22,538,555 |   |
| Treasury stock, at cost - 1,344,221 shares in 2011 and in 2010                                         |   |   | (19,112,627 | )      |   |   | (19,112,627 | ) |
| Accumulated other comprehensive income                                                                 |   |   | 649,338     |   |   |   | 1,099,639 |   |
|      Total stockholders' equity                                               |   |   | 18,064,669  |   |   |   | 22,611,231 |   |
|      Total liabilities and stockholders' equity                               |   | $      | 209,343,809 |   |   | $      | 211,656,973 |   |
|                                                                                                   |   |
| See notes to the consolidated financial statements                                                     |   |
|                                                                                                   |   |

----

|                                                                |   | 2011   |       |   | 2010   |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Interest Income:                                                    |   |   |       |   |   |   |
|   Loans receivable                                        |   | $      | 5,918,248  |   |   | $      | 7,517,826 |   |
|   Securities                                              |   |   | 2,201,748  |   |   |   | 2,045,358 |   |
|   Other interest-earning assets                           |   |   | 133,007    |   |   |   | 213,568 |   |
|       Total interest income           |   |   | 8,253,003  |   |   |   | 9,776,752 |   |
|                                                                |   |   |       |   |   |   |   |   |
| Interest Expense:                                                   |   |   |       |   |   |   |   |   |
|   Deposits                                                |   |   | 1,871,096  |   |   |   | 3,015,281 |   |
|   Retail repurchase agreements                            |   |   | 82,550     |   |   |   | 69,778 |   |
|   Advances from Federal Home Loan Bank                    |   |   | 150,258    |   |   |   | 181,183 |   |
|      Total interest expense                |   |   | 2,103,904  |   |   |   | 3,266,242 |   |
|      Net interest income                   |   |   | 6,149,099  |   |   |   | 6,510,510 |   |
|                                                                |   |   |       |   |   |   |   |   |
| Provision for loan losses                                           |   |   | 1,182,384  |   |   |   | 852,182 |   |
|      Net interest income after             |   |   |       |   |   |   |   |   |
|        provision for loan losses |   |   | 4,966,715  |   |   |   | 5,658,328 |   |
|                                                                |   |   |       |   |   |   |   |   |
| Non-interest Income:                                                |   |   |       |   |   |   |   |   |
|   Service charges and other fee income                    |   |   | 1,022,622  |   |   |   | 1,510,334 |   |
|   Gain on the sale of loans                               |   |   | 24,317     |   |   |   | 44,937 |   |
|   Gain on sale of securities                              |   |   | 314,732    |   |   |   | - |   |
|   Gain on sale of property and equipment                  |   |   |       |   |   |   |   |   |
|      and real estate owned                 |   |   | 5,656      |   |   |   | 35,257 |   |
|   Write-down on real estate owned                         |   |   | (2,182,895 | )      |   |   | (181,115 | ) |
|   Income from bank-owned life insurance                   |   |   | -          |   |   |   | 15,064 |   |
|   Other                                                   |   |   | 79,460     |   |   |   | 110,908 |   |
|      Total non-interest income             |   |   | (736,109   | )      |   |   | 1,535,385 |   |
|                                                                |   |   |       |   |   |   |   |   |
| Non-interest Expense:                                               |   |   |       |   |   |   |   |   |
|   Compensation and employee benefits                      |   |   | 3,435,421  |   |   |   | 3,630,094 |   |
|   Occupancy and equipment                                 |   |   | 1,343,835  |   |   |   | 1,374,441 |   |
|   Professional fees                                       |   |   | 762,532    |   |   |   | 531,380 |   |
|   Deposit insurance premiums                              |   |   | 465,437    |   |   |   | 603,419 |   |
|   Other                                                   |   |   | 1,743,588  |   |   |   | 1,497,530 |   |
|      Total non-interest expense            |   |   | 7,750,813  |   |   |   | 7,636,864 |   |
|                                                                |   |   |       |   |   |   |   |   |
|      Loss before income taxes              |   |   | (3,520,207 | )      |   |   | (443,151 | ) |
| Income taxes                                                        |   |   | 580,782    |   |   |   | 1,040,931 |   |
|                                                                |   |   |       |   |   |   |   |   |
|      Net loss                              |   | $      | (4,100,989 | )      |   | $      | (1,484,082 | ) |
|                                                                |   |   |       |   |   |   |   |   |
|      Basic loss per share                  |   | $      | (265       | )      |   | $      | (0.96 | ) |
|                                                                |   |   |       |   |   |   |   |   |
|      Diluted loss per share                |   | $      | (2.65      | )      |   | $      | (0.96 | ) |

----

|                                                                   |   | Common |      |   |    |   |   |     |   |   |       |   |   | Accumulated Other |       |   | Total         |   |
|------------------------------------------------------------------------|--------|--------|-----------|--------|---------|--------|--------|----------|--------|--------|------------|--------|--------|-------------------|------------|--------|---------------|--------|
|                                                                   |   | Stock  |      |   | Paid-in |   |   | Retained |   |   | Treasury   |   |   | Comprehensive     |       |   | Stockholders' |   |
|                                                                   |   | Shares |      |   | Amount  |   |   | Capital  |   |   | Earnings   |   |   | Stock             |       |   | Income (Loss) |   |   | Equity |   |
| Balances at June 30, 2009                                              |   |   | 1,550,815 |   |    | $      | 28,950 |     |   | $      | 18,047,257 |   |   | $                 | 24,022,637 |   |          | $      | (19,112,627 | ) |   | $ | 777,674 |   |   | $ | 23,763,891 |   |
| Comprehensive income:                                                  |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|   Net loss                                                   |   |   | -         |   |    |   | -      |     |   |   | -          |   |   |              | (1,484,082 | )      |          |   | - |   |   |   | - |   |   |   | (1,484,082 | ) |
|   Other comprehensive income, net of tax:                    |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     Change in unrealized gain (loss) on            |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     securities available-for-sale, net of deferred |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     income taxes of $165,861                       |   |   | -         |   |    |   | -      |     |   |   | -          |   |   |              | -          |   |          |   | - |   |   |   | 321,965 |   |   |   | 321,965 |   |
|       Total Comprehensive Income         |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   | (1,162,117 | ) |
|   Stock based compensation                                   |   |   | -         |   |    |   | -      |     |   |   | 9,457      |   |   |              | -          |   |          |   | - |   |   |   | - |   |   |   | 9,457 |   |
| Balances at June 30, 2010                                              |   |   | 1,550,815 |   |    |   | 28,950 |     |   |   | 18,056,714 |   |   |              | 22,538,555 |   |          |   | (19,112,627 | ) |   |   | 1,099,639 |   |   |   | 22,611,231 |   |
| Comprehensive income:                                                  |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|   Net loss                                                   |   |   | -         |   |    |   | -      |     |   |   | -          |   |   |              | (4,100,989 | )      |          |   | - |   |   |   | - |   |   |   | (4,100,989 | ) |
|   Other comprehensive income, net of tax:                    |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     Change in unrealized gain (loss) on            |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     securities available-for-sale, net of deferred |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     income taxes of $(333,133) and a               |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     reclassification adjustment, net of deferred   |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   |   |   |
|     income taxes of $101,160                       |   |   | -         |   |    |   | -      |     |   |   | -          |   |   |              | -          |   |          |   | - |   |   |   | (450,301 | ) |   |   | (450,301 | ) |
|       Total Comprehensive Income         |   |   |      |   |    |   |   |     |   |   |       |   |   |              |       |   |          |   |   |   |   |   |   |   |   |   | (3,563,790 | ) |
|   Stock based compensation                                   |   |   | -         |   |    |   | -      |     |   |   | 4,728      |   |   |              | -          |   |          |   | - |   |   |   | - |   |   |   | 4,728 |   |
| Balances at June 30, 2011                                              |   |   | 1,550,815 |   |    | $      | 28,950 |     |   | $      | 18,061,442 |   |   | $                 | 18,437,566 |   |          | $      | (19,112,627 | ) |   | $ | 649,338 |   |   | $ | 18,064,669 |   |

----

|                                                                                                           |   | 2011   |        |   | 2010   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Cash flows from operating activities:                                                                          |   |   |        |   |   |   |
|   Net loss                                                                                           |   | $      | (4,100,989  | )      |   | $      | (1,484,082 | ) |
|   Adjustments to reconcile net income  to net                                              |   |   |        |   |   |   |   |   |
|     cash provided by operating activities:                                                 |   |   |        |   |   |   |   |   |
|       Depreciation                                                               |   |   | 574,327     |   |   |   | 552,515 |   |
|       Amortization                                                               |   |   | 50,115      |   |   |   | 50,114 |   |
|       Net premium amortization and (discount accretion) on securities            |   |   | 145,541     |   |   |   | (43,485 | ) |
|       Stock based compensation                                                   |   |   | 4,728       |   |   |   | 9,457 |   |
|       Gain on sale of securities                                                 |   |   | (314,732    | )      |   |   | - |   |
|       Provision for loan losses                                                  |   |   | 1,182,384   |   |   |   | 852,182 |   |
|       Write down on real estate owned                                            |   |   | 2,182,896   |   |   |   | 181,115 |   |
|       Gain on the sale of loans                                                  |   |   | (24,317     | )      |   |   | (44,937 | ) |
|       Proceeds from the sale of loans originated for sale                        |   |   | 1,966,961   |   |   |   | 1,576,243 |   |
|       Loans originated for sale                                                  |   |   | (2,003,784  | )      |   |   | (691,130 | ) |
|       Deferred income taxes                                                      |   |   | 566,481     |   |   |   | 1,672,924 |   |
|       Gain on sale of property and equipment                                     |   |   |        |   |   |   |   |   |
|         and real estate owned                                          |   |   | (5,656      | )      |   |   | (39,236 | ) |
|       Loss on the sale of other repossessed assets                               |   |   | 38,310      |   |   |   | 3,176 |   |
|       Increase in cash surrender value on bank-owned                             |   |   |        |   |   |   |   |   |
|         life insurance                                                 |   |   | -           |   |   |   | (15,064 | ) |
|       Net change in operating accounts:                                          |   |   |        |   |   |   |   |   |
|         Accrued interest receivable, prepaid expenses and other assets |   |   | 52,050      |   |   |   | 330,674 |   |
|         Deferred loan costs                                            |   |   | 15,469      |   |   |   | 21,171 |   |
|         Income taxes receivable                                        |   |   | 14,615      |   |   |   | 121,608 |   |
|         Prepaid FDIC insurance premium                                 |   |   | 443,467     |   |   |   | (1,113,917 | ) |
|         Accrued expenses                                               |   |   | 249,324     |   |   |   | (602,227 | ) |
|           Net cash provided by operating activities          |   |   | 1,037,100   |   |   |   | 1,337,101 |   |
| Cash flows from investing activities:                                                                          |   |   |        |   |   |   |   |   |
|   Purchase of certificates of deposit purchased                                                      |   |   | (2,399,000  | )      |   |   | (8,725,856 | ) |
|   Maturities of certificates of deposit purchased                                                    |   |   | 6,680,903   |   |   |   | 7,132,340 |   |
|   Purchase of securities available-for-sale                                                          |   |   | (36,202,920 | )      |   |   | (36,691,737 | ) |
|   Proceeds from sale of securities available-for-sale                                                |   |   | 6,120,006   |   |   |   | - |   |
|   Proceeds from maturities of securities                                                             |   |   |        |   |   |   |   |   |
|     available-for-sale                                                                     |   |   | 35,786,548  |   |   |   | 22,235,498 |   |
|   Purchase of securities held to maturity                                                            |   |   | (17,936,733 | )      |   |   | - |   |
|   Proceeds from sale of securities held to maturity                                                  |   |   | 157,982     |   |   |   |   |   |
|   Proceeds from maturities of securities held to maturity                                            |   |   | 1,653,093   |   |   |   | 578,445 |   |
|   Proceeds from redemption of Federal Home Loan Bank stock                                           |   |   | 5,200       |   |   |   | 1,146,800 |   |
|   Net (increase) decrease in loans receivable                                                        |   |   | 7,736,098   |   |   |   | 19,716,395 |   |
|   Proceeds from surrender of bank owned life insurance                                               |   |   | -           |   |   |   | 2,169,089 |   |
|   Purchases of property and equipment                                                                |   |   | (420,635    | )      |   |   | (248,035 | ) |
|   Proceeds from sale of property and equipment                                                       |   |   | -           |   |   |   | 313,471 |   |
|   Capital expenditures on real estate owned                                                          |   |   | (7,500      | )      |   |   | (22,000 | ) |
|   Proceeds from sale of real estate owned and other repossessed assets                               |   |   | 756,524     |   |   |   | 1,526,908 |   |
|           Net cash provided by investing activities          |   |   | 1,929,566   |   |   |   | 9,131,318 |   |

----

|                                                                                          |   | 2011   |       |   | 2010   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flows from financing activities:                                                         |   |   |       |   |   |   |
|   Net change in deposits                                                            |   | $      | 585,567    |   |   | $      | (9,142,453 | ) |
|   Net change in retail repurchase agreements                                        |   |   | 1,064,089  |   |   |   | (360,980 | ) |
|   Payments on borrowed funds                                                        |   |   | -          |   |   |   | (7,000,000 | ) |
|        Net cash provided by (used in) financing activities |   |   | 1,649,656  |   |   |   | (16,503,433 | ) |
|                                                                                          |   |   |       |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                          |   |   | 4,616,322  |   |   |   | (6,035,014 | ) |
|                                                                                          |   |   |       |   |   |   |   |   |
| Cash and cash equivalents -                                                                   |   |   |       |   |   |   |   |   |
|   Beginning of period                                                               |   |   | 20,182,593 |   |   |   | 26,217,607 |   |
| Cash and cash equivalents -                                                                   |   |   |       |   |   |   |   |   |
|   end of period                                                                     |   | $      | 24,798,915 |   |   | $      | 20,182,593 |   |
|                                                                                          |   |   |       |   |   |   |   |   |
|                                                                                          |   |   |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                            |   |   |       |   |   |   |   |   |
|                                                                                          |   |   |       |   |   |   |   |   |
|   Cash paid during the year for:                                                    |   |   |       |   |   |   |   |   |
|     Interest on deposits and                                              |   |   |       |   |   |   |   |   |
|       other borrowings                                          |   | $      | 2,189,727  |   |   | $      | 3,448,021 |   |
|     Income taxes                                                          |   | $      | (314       | )      |   | $      | (754,601 | ) |
|                                                                                          |   |   |       |   |   |   |   |   |
|                                                                                          |   |   |       |   |   |   |   |   |
| Supplemental schedule of non-cash investing and                                               |   |   |       |   |   |   |   |   |
|   financing activities:                                                             |   |   |       |   |   |   |   |   |
|                                                                                          |   |   |       |   |   |   |   |   |
|   Loans transferred to real estate owned                                            |   | $      | 3,932,774  |   |   | $      | 3,888,976 |   |
|                                                                                          |   |   |       |   |   |   |   |   |
|                                                                                          |   |
| See notes to consolidated financial statements                                                |   |

----

|   | Nature of business – First Bancshares, Inc., a Missouri corporation (“Company”),  was organized on September 30, 1993 for the purpose of becoming a unitary savings and loan holding company for First Home Savings Bank (”Savings Bank”).  The Savings Bank is primarily engaged in providing a full range of banking and mortgage services to individual and corporate customers in southern Missouri.  The Company and Savings Bank are also subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Principles of consolidation – The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, the Savings Bank and SCMG, Inc. (formerly South Central Missouri Title, Inc.) and the wholly-owned subsidiaries of the Savings Bank, Fybar Service Corporation and First Home Investments.  In consolidation, all significant intercompany balances and transactions have been eliminated. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Estimates – In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the fair value of financial instruments, the allowance for loan losses and the deferred tax valuation. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Segment reporting – An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and evaluate performance. The Company has one operating segment, community banking. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Consolidated statements of cash flows – For purposes of the consolidated statements of cash flows, cash consists of cash on hand and deposits with other financial institutions.  Cash equivalents include highly-liquid instruments with an original maturity of three months or less. Cash flows from loans and deposits are reported net. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Certificates of deposit purchased – These are funds placed on deposit at other financial institutions which mature in one year or less and do not, at any one financial institution, aggregate to more than the insurance of accounts limitation. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Securities – Securities which are designated as held-to-maturity are designated as such because the Company has the ability and intent to hold these securities to maturity.  Such securities are reported at amortized cost. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All other securities are designated as available-for-sale, a designation which provides the Company with certain flexibility in managing its investment portfolio.  Such securities are reported at fair value; net unrealized gains and losses are excluded from income and reported net of applicable income taxes as a separate component of stockholders’ equity. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

|   | Federal Home Loan Bank stock – The Savings Bank, as a member of the Federal Home Loan Bank (“FHLB”) system, is required to maintain an investment in capital stock of the FHLB of Des Moines.  The stock does not have a readily determinable fair market value and, as such, is carried at cost and evaluated for impairment in accordance with ASC 942-325-35. In accordance with the guidance, the stock’s value is determined by the ultimate recoverability of the par value rather than recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) The significance of the decline in net assets of the Federal Home Loan Bank as compared to the capital stock amount and the length of time the situation has persisted; (b) Commitments by the Federal home Loan Bank to make payments in relation to the operating performance; (c) The impact of legislative and regulatory changes on the customer base of the Federal Home Loan Bank, and; (d) The liquidity position of the Federal Home Loan Bank. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

|   | Prepaid insurance assessment – In November 2009, the Federal Deposit Insurance Corporation (“FDIC”) adopted a final rule amending the assessment regulations to require depository institutions to prepay their quarterly risk-based assessment for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The payment of $1.6 million, which was made December 30, 2009, was recorded as a prepaid asset and is being amortized over the assessment period. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Loans receivable – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their principal amount outstanding, net of deferred loan origination fees and certain direct costs.  Loan origination fees and certain direct loan origination costs are deferred and recognized in interest income over the contractual lives of the related loans using the interest method.  When a loan is paid-off, the unamortized balance of these deferred fees and costs is recognized in income. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Allowance for loan losses – Management believes that the accounting estimate related to the allowance for loan losses is a critical accounting estimate because it is highly susceptible to change from period to period.  This may require management to make assumptions about losses on loans; and the impact of a sudden large loss could require increased provisions, which would negatively affect earnings. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

|   | Loans held for sale – Loans held for sale are originated and intended for sale on the secondary market on a loan by loan basis with terms established with both the borrower and the investor prior to commitment and closing. Funding by the investor, based on the established terms, generally takes place in three to four weeks. Loans held for sale are carried at cost, which approximates fair value, due to the short term nature of the loans. Gains on loans sold are recognized based on the net cash flow of each sale. Loans are generally sold with servicing rights released. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Property and equipment and related depreciation – Land is stated at cost. Property and equipment are stated at cost, net of accumulated depreciation. Maintenance and repair costs are charged to expense as incurred. Major improvements are considered individually and are capitalized or expensed as the facts dictate. Property and equipment depreciation is principally computed by applying the following methods and estimated lives: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Category                                             | Estimated Life    | Method        |
|------------------------------------------------------|-------------------|---------------|
|                                                 |              |          |
| Automobiles                                     | 5 years           | Straight-line |
| Office furniture, fixtures  and equipment  | 3-10 years   | Straight-line |
| Buildings                                       | 15-40 years  | Straight-line |
| Investment real estate                          | 15-40 years  | Straight-line |

|   | Intangible assets – The intangible asset relates to customer relationships that were acquired in connection with the acquisition of two branches.  The premium paid by the Savings Bank for the branches is being amortized on a straight-line basis over 15 years. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Income taxes – Deferred taxes are determined using the liability (or balance sheet) method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As a result of the Company’s operating results over the five year period ended June 30, 2010, management provided a valuation allowance of $1.2 million for the deferred tax assets of both the Company and the Savings Bank as of June 30, 2010. During the fiscal year ended June 30, 2011, management provided an additional valuation allowance of $1.4 million for the deferred tax assets of both the Company and the Savings Bank. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

|   | The Company is no longer subject to U. S. federal or state and local income tax examinations by tax authorities for years before fiscal 2008. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | Real estate owned and repossessed assets – Real estate acquired through foreclosure is initially recorded at fair value, less estimated costs to sell.  If the fair value less costs to sell is less than the respective loan balance, a charge against the allowance for loan losses is recorded upon property acquisition.  Declines in property value subsequent to acquisition are charged to operations.  Holding costs are expensed. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Earnings per share – Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or resulted in the issuance of common stock that would share in the earnings of the Company.  Dilutive potential common shares are added to weighted average shares used to compute basic earnings per share.  The number of shares that would be issued from the exercise of stock options has been reduced by the number of shares that could have been purchased from the proceeds at the average market price of the Company’s stock. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income.  Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Employee stock options – The Company has stock-based employee compensation plans which are described more fully in Note 10, Employee Benefit Plans. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|-----|--------------------------------------------------------|

|   | Revenue recognition – Deposit account transaction fees and other ancillary non-interest income related to the Savings Bank’s deposit and lending activities are recognized as services are performed. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Transfers of financial assets – Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the assets it received, and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a modest benefit to the transferor, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Impairment of long-lived assets – Long-lived assets, including property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | New accounting standards – In January 2011, the FASB issued FASB ASU No. 2011-01, Receivables (Topic 310), Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. ASU No. 2011-01 temporarily deferred the effective date for disclosures related to troubled debt restructurings to coincide with the effective date of ASU No. 2011-02, which is effective for periods beginning on or after June 15, 2011. The adoption of this pronouncement will not have a significant impact on the Company’s consolidated financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| A summary of the securities available-for-sale at June 30, 2011 is as follows: |   |      |       |   |
|--------------------------------------------------------------------------------|--------|-----------|------------|--------|
|                                                                           |   | Amortized |       |   | Gross Unrealized |   |   | Fair |   |
|                                                                           |   | Cost      |       |   | Gains |   |   | Losses |   |   | Value |   |
| United States Government and                                                   |   |      |       |   |   |   |   |   |   |   |   |   |
|  Federal agency obligations                                               |   | $         | 22,877,384 |   |   | $ | 78,157 |   |   | $ | (165,853 | ) |   | $ | 22,789,688 |   |
| Obligations of states and                                                      |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  political subdivisions                                                   |   |      | 110,000    |   |   |   | 297 |   |   |   | - |   |   |   | 110,297 |   |
| Mutual funds                                                                   |   |      | 16,206     |   |   |   | - |   |   |   | - |   |   |   | 16,206 |   |
| Federal agency residential                                                     |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  mortgage-backed securities                                               |   |      | 29,865,031 |   |   |   | 1,076,812 |   |   |   | (5,567 | ) |   |   | 30,936,276 |   |
| Common and preferred stocks                                                    |   |      | 228,000    |   |   |   | - |   |   |   | - |   |   |   | 228,000 |   |
|   Total                                                              |   | $         | 53,096,621 |   |   | $ | 1,155,266 |   |   | $ | (171,420 | ) |   | $ | 54,080,467 |   |

| A summary of the securities held to maturity at June 30, 2011 is as follows: |   |      |       |   |
|------------------------------------------------------------------------------|--------|-----------|------------|--------|
|                                                                         |   | Amortized |       |   | Gross Unrealized |   |   | Fair |   |
|                                                                         |   | Cost      |       |   | Gains |   |   | Losses |   |   | Value |   |
| United States Government and                                                 |   |      |       |   |   |   |   |   |   |   |   |   |
|  Federal agency obligations                                             |   | $         | 16,943,120 |   |   | $ | 102,750 |   |   | $ | (98,490 | ) |   | $ | 16,947,380 |   |
| Obligations of states and                                                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  political subdivisions                                                 |   |      | 992,420    |   |   |   | 31,133 |   |   |   | - |   |   |   | 1,023,553 |   |
| Federal agency residential                                                   |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  mortgage-backed securities                                             |   |      | 210,353    |   |   |   | 11,941 |   |   |   | - |   |   |   | 222,294 |   |
|   Total                                                            |   | $         | 18,145,893 |   |   | $ | 145,824 |   |   | $ | (98,490 | ) |   | $ | 18,193,227 |   |

----

| (2) | SECURITIES (CONTINUED) |
|-----|------------------------|

|                                               |   | Available for Sale |       |
|----------------------------------------------------|--------|--------------------|------------|
|                                               |   | Amortized          |       |   |   |   |
|                                               |   | Cost               |       |   | Fair Value |   |
| Due in one year or less                            |   | $                  | -          |   |   | $ | - |   |
| Due after one year through five years              |   |               | 5,115,228  |   |   |   | 5,190,467 |   |
| Due after five years through ten years             |   |               | 9,873,568  |   |   |   | 9,773,892 |   |
| Due after ten years                                |   |               | 7,998,588  |   |   |   | 7,935,626 |   |
| Subtotal                                           |   |               | 22,987,384 |   |   |   | 22,899,985 |   |
| Mutual funds                                       |   |               | 16,206     |   |   |   | 16,206 |   |
| Federal agency residential                         |   |               |       |   |   |   |   |   |
|     mortgage-backed securities |   |               | 29,865,031 |   |   |   | 30,936,276 |   |
| Common and preferred stocks                        |   |               | 228,000    |   |   |   | 228,000 |   |
| Total                                              |   | $                  | 53,096,621 |   |   | $ | 54,080,467 |   |
|                                               |   |               |       |   |   |   |   |   |
|                                               |   | Held to Maturity   |       |
|                                               |   | Amortized          |       |   |   |   |   |
|                                               |   | Cost               |       |   | Fair Value |   |
| Due in one year or less                            |   | $                  | 294,959    |   |   | $ | 297,625 |   |
| Due after one year through five years              |   |               | 495,000    |   |   |   | 510,004 |   |
| Due after five years through ten years             |   |               | 9,154,894  |   |   |   | 9,258,554 |   |
| Due after ten years                                |   |               | 7,990,687  |   |   |   | 7,904,750 |   |
| Subtotal                                           |   |               | 17,935,540 |   |   |   | 17,970,933 |   |
| Federal agency residential                         |   |               |       |   |   |   |   |   |
|     mortgage-backed securities |   |               | 210,353    |   |   |   | 222,294 |   |
| Total                                              |   | $                  | 18,145,893 |   |   | $ | 18,193,227 |   |

| A summary of the securities available-for-sale at June 30, 2010 is as follows: |   |      |       |   |
|--------------------------------------------------------------------------------|--------|-----------|------------|--------|
|                                                                           |   | Amortized |       |   | Gross Unrealized |   |   | Fair |   |
|                                                                           |   | Cost      |       |   | Gains |   |   | Losses |   |   | Value |   |
| United States Government and                                                   |   |      |       |   |   |   |   |   |   |   |   |   |
|  Federal agency obligations                                               |   | $         | 26,652,246 |   |   | $ | 375,853 |   |   | $ | - |   |   | $ | 27,028,099 |   |
| Obligations of states and                                                      |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  political subdivisions                                                   |   |      | 130,000    |   |   |   | 2,064 |   |   |   | - |   |   |   | 132,064 |   |
| Mutual funds                                                                   |   |      | 17,952     |   |   |   | - |   |   |   | - |   |   |   | 17,952 |   |
| Federal agency residential                                                     |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  mortgage-backed securities                                               |   |      | 31,580,162 |   |   |   | 1,418,516 |   |   |   | (130,314 | ) |   |   | 32,868,364 |   |
| Common and preferred stocks                                                    |   |      | 258,000    |   |   |   | - |   |   |   | - |   |   |   | 258,000 |   |
|   Total                                                              |   | $         | 58,638,360 |   |   | $ | 1,796,433 |   |   | $ | (130,314 | ) |   | $ | 60,304,479 |   |

----

| (2) | SECURITIES (CONTINUED) |
|-----|------------------------|

| A summary of the securities held to maturity at June 30, 2010 is as follows: |   |      |       |   |
|------------------------------------------------------------------------------|--------|-----------|------------|--------|
|                                                                         |   | Amortized |       |   | Gross Unrealized |   |   | Fair |   |
|                                                                         |   | Cost      |       |   | Gains |   |   | Losses |   |   | Value |   |
| Obligations of states and                                                    |   |      |       |   |   |   |   |   |   |   |   |   |
|  political subdivisions                                                 |   | $         | 1,4442,742 |   |   | $ | 34,961 |   |   | $ | (187 | ) |   | $ | 1,477,516 |   |
| Federal agency residential                                                   |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  mortgage-backed securities                                             |   |      | 570,198    |   |   |   | 24,370 |   |   |   | - |   |   |   | 594,568 |   |
|   Total                                                            |   | $         | 2,012,940  |   |   | $ | 59,331 |   |   | $ | (187 | ) |   | $ | 2,072,084 |   |

| Available for Sale as of June 30, 2011 |   |
|----------------------------------------|--------|
|                                   |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total |   |
|                                   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                                   |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |
|                                   |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |
| United States                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Government and             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Federal agency             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Obligations                |   | $ | 13,841,560 |   |   | $ | (165,853 | ) |   | $ | - |   |   | $ | - |   |   | $ | 13,841,560 |   |   | $ | (165,853 | ) |
| Federal agency                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  residential mortgaged            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  -backed securities               |   |   | 1,006,381 |   |   |   | (2,921 | ) |   |   | 145,828 |   |   |   | (2,646 | ) |   |   | 1,152,209 |   |   |   | (5,567 | ) |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total temporarily                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   impaired securities        |   | $ | 14,847,941 |   |   | $ | (168,774 | ) |   | $ | 145,828 |   |   | $ | (2,646 | ) |   | $ | 14,993,769 |   |   | $ | (171,420 | ) |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Held to Maturity as of June 30, 2011 |   |
|--------------------------------------|--------|
|                                 |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total |   |
|                                 |   |   |   |   | Gross |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                                 |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |
|                                 |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |
| United States                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Government and           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Federal agency           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Obligations              |   | $ | 6,901,510 |   |   | $ | (98,490 | ) |   | $ | - |   |   | $ | - |   |   | $ | ,6,901,510 |   |   | $ | (98,490 | ) |
| Total temporarily                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   impaired securities      |   | $ | 6,901,510 |   |   | $ | (98,490 | ) |   | $ | - |   |   | $ | - |   |   | $ | 6,901,510 |   |   | $ | (98,490 | ) |

----

|  (2) | SECURITIES (CONTINUED) |
|-----------|------------------------|

| Available for Sale as of June 30, 2010 |   |
|----------------------------------------|--------|
|                                   |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total |   |
|                                   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                                   |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |   |   |   |   | Unrealized |   |
|                                   |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |   | Fair Value |   |   | (Losses) |   |
| Federal agency                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  residential mortgage             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  -backed securities               |   | $ | 3,092,027 |   |   | $ | (121,661 | ) |   | $ | 324,307 |   |   | $ | (8,653 | ) |   | $ | 3,416,334 |   |   | $ | (130,314 | ) |
| Total temporarily                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   impaired securities        |   | $ | 3,092,027 |   |   | $ | (121,661 | ) |   | $ | 324,307 |   |   | $ | (8,653 | ) |   | $ | 3,416,334 |   |   | $ | (130,314 | ) |

|                                 |   |                |   |   |              |   |   |       |   |   |       |   |   |       |   |   |       |   |
|--------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Held to Maturity as of June 30, 2010 |   |
|                                 |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total      |   |
|                                 |   |                |   |   | Gross             |   |   |       |   |   | Gross      |   |   |       |   |   | Gross      |   |
|                                 |   |                |   |   | Unrealized        |   |   |       |   |   | Unrealized |   |   |       |   |   | Unrealized |   |
|                                 |   | Fair Value          |   |   | (Losses)          |   |   | Fair Value |   |   | (Losses)   |   |   | Fair Value |   |   | (Losses)   |   |
| Obligations of states                |   |                |   |   |              |   |   |       |   |   |       |   |   |       |   |   |       |   |
|   and political            |   |                |   |   |              |   |   |       |   |   |       |   |   |       |   |   |       |   |
|   Subdivisions             |   | $                   | -      |   |              | $      | -      |       |   | $      | 202,666    |   |   | $          | (187   | )      |       | $      | 202,666 |   |   | $ | (187 | ) |
| Total temporarily                    |   |                |   |   |              |   |   |       |   |   |       |   |   |       |   |   |       |   |   |   |   |   |   |   |
|   impaired securities      |   | $                   | -      |   |              | $      | -      |       |   | $      | 202,666    |   |   | $          | (187   | )      |       | $      | 202,666 |   |   | $ | (187 | ) |

----

| (2) | SECURITIES (CONTINUED) |
|-----|------------------------|

|                |   | Years Ended June 30, |      |
|---------------------|--------|----------------------|-----------|
|                |   | 2011                 |      |   | 2010 |   |
| Proceeds from sales |   | $                    | 6,277,988 |   |   | $ | - |   |
|                |   |                 |      |   |   |   |   |   |
| Realized gains      |   | $                    | 315,692   |   |   | $ | - |   |
| Realized (losses)   |   |                 | (630      | ) |   |   | - |   |
| Net realized        |   | $                    | 315,062   |   |   | $ | - |   |
|                |   |                 |      |   |   |   |   |   |

|   | At June 30, 2011 and 2010, loans consisted of the following: |
|--------|--------------------------------------------------------------|

|                                     |   | (Dollars in thousands) |       |
|------------------------------------------|--------|------------------------|------------|
|                                     |   | June 30, 2011          |       |   | June 30, 2010 |   |
| Type of Loan                             |   | Amount                 |       |   | Percent |   |   | Amount |   |   | Percent |   |
| Mortgage Loans:                          |   |                   |       |   |   |   |   |   |   |   |   |   |
| Residential                              |   | $                      | 54,859,965 |   |   |   | 56.22 | % |   | $ | 60,217,252 |   |   |   | 54.24 | % |
| Commercial Real Estate                   |   |                   | 29,877,216 |   |   |   | 30.61 |   |   |   | 34,572,677 |   |   |   | 31.15 |   |
| Land                                     |   |                   | 3,283,105  |   |   |   | 3.36 |   |   |   | 4,358,033 |   |   |   | 3.93 |   |
| Second Mortgage Loans                    |   |                   | 3,944,786  |   |   |   | 4.04 |   |   |   | 4,468,596 |   |   |   | 4.03 |   |
| Total Mortgage Loans                     |   |                   | 91,965,072 |   |   |   | 94.23 |   |   |   | 103,616,558 |   |   |   | 93.35 |   |
| Consumer Loans:                          |   |                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Automobile Loans                         |   |                   | 807,282    |   |   |   | 0.83 |   |   |   | 1,126,724 |   |   |   | 1.02 |   |
| Savings Account Loans                    |   |                   | 1,143,362  |   |   |   | 1.17 |   |   |   | 1,181,204 |   |   |   | 1.06 |   |
| Mobile Home Loans                        |   |                   | 138,488    |   |   |   | 0.14 |   |   |   | 188,211 |   |   |   | 0.17 |   |
| Other Consumer Loans                     |   |                   | 244,573    |   |   |   | 0.25 |   |   |   | 392,035 |   |   |   | 0.35 |   |
| Total Consumer Loans                     |   |                   | 2,333,705  |   |   |   | 2.39 |   |   |   | 2,888,174 |   |   |   | 2.60 |   |
| Commercial Business Loans                |   |                   | 3,301,645  |   |   |   | 3.38 |   |   |   | 4,491,209 |   |   |   | 4.05 |   |
| Total Loans                              |   |                   | 97,600,422 |   |   |   | 100.00 | % |   |   | 110,995,941 |   |   |   | 100.00 | % |
| Add: Unamortized deferred loan costs,    |   |                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   net of origination fees      |   |                   | 198,833    |   |   |   |   |   |   |   | 214,302 |   |   |   |   |   |
| Less :Allowance for possible loan losses |   |                   | 1,982,599  |   |   |   |   |   |   |   | 2,526,862 |   |   |   |   |   |
| Total Loans Receivable, net              |   | $                      | 95,816,656 |   |   |   |   |   |   | $ | 108,683,381 |   |   |   |   |   |

----

----

|                    |   | (Amounts in Thousands) |   |
|-------------------------|--------|------------------------|--------|
|                    |   | June 30,               |   |   | June 30, |   |
|                    |   | 2011                   |   |   | 2010 |   |
| Non-Accrual Loans       |   |                   |   |   |   |   |
| Real Estate:            |   |                   |   |   |   |   |
| Residential             |   | $                      | 452    |   |   | $ | 258 |   |
| Commercial and Land     |   |                   | 630    |   |   |   | 3,587 |   |
| Commercial Business     |   |                   | 251    |   |   |   | 82 |   |
| Consumer                |   |                   | 6      |   |   |   | - |   |
| Total Non-Accrual Loans |   | $                      | 1,339  |   |   | $ | 3,927 |   |

----

|                      |   | (Amounts in Thousands) |   |
|---------------------------|--------|------------------------|--------|
|                      |   | Accruing Loans         |   |   | Non- |   |   |   |   |   |   |   |
|                      |   | 30 - 89 Days           |   |   | 90+ Days |   |   | Accrual |   |   | Current |   |   | Total Net |   |
| Type of Loan              |   | Past Due               |   |   | Past Due |   |   | Loans |   |   | Loans |   |   | Loans |   |
| Mortgage Loans:           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential               |   | $                      | 434    |   |   | $ | - |   |   | $ | 433 |   |   | $ | 53,993 |   |   | $ | 54,860 |   |
| Commercial Real Estate    |   |                   | 532    |   |   |   | - |   |   |   | 630 |   |   |   | 28,715 |   |   |   | 29,877 |   |
| Land                      |   |                   | 109    |   |   |   | - |   |   |   | - |   |   |   | 3,174 |   |   |   | 3,283 |   |
| Second Mortgage Loans     |   |                   | 17     |   |   |   | - |   |   |   | 19 |   |   |   | 3,909 |   |   |   | 3,945 |   |
| Total Mortgage Loans      |   |                   | 1,092  |   |   |   | - |   |   |   | 1,082 |   |   |   | 89,791 |   |   |   | 91,965 |   |
| Total Consumer Loans      |   |                   | 15     |   |   |   | - |   |   |   | 6 |   |   |   | 2,313 |   |   |   | 2,334 |   |
| Commercial Business Loans |   |                   | 2      |   |   |   | - |   |   |   | 251 |   |   |   | 3,049 |   |   |   | 3,302 |   |
| Total Loans               |   | $                      | 1,109  |   |   | $ | - |   |   | $ | 1,339 |   |   | $ | 95,153 |   |   | $ | 97,601 |   |

----

| June 30, 2011           |   | Unpaid      |      |   | Recorded   |   |      | Recorded   |   |   |       |   |   |      |      |   |       |   |
|-------------------------|--------|-------------|-----------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|--------|-----------|-----------|--------|------------|--------|
|                    |   | Contractual |      |   | Investment |   |      | Investment |   |   | Total      |   |   |      |      |   | Average    |   |
|                    |   | Principal   |      |   | With No    |   |      | With       |   |   | Recorded   |   |   | Related   |      |   | Recorded   |   |
|                    |   | Balance     |      |   | Allowance  |   |      | Allowance  |   |   | Investment |   |   | Allowance |      |   | Investment |   |
| Residential Real Estate |   | $           | 846,833   |   |       | $      | 460,134   |       |   | $      | 363,732    |   |   | $         | 823,866   |   |       | $      | 22,967 |   |   | $ | 912,850 |   |
| Commercial Real Estate  |   |        | 3,693,505 |   |       |   | 1,228,767 |       |   |   | 1,846,353  |   |   |      | 3,075,120 |   |       |   | 618,385 |   |   |   | 4,153,983 |   |
| Land                    |   |        | 176,147   |   |       |   | 176,147   |       |   |   | -          |   |   |      | 176,147   |   |       |   | - |   |   |   | 351,233 |   |
| Commercial Business     |   |        | 829,023   |   |       |   | 497,872   |       |   |   | 266,484    |   |   |      | 764,356   |   |       |   | 64,667 |   |   |   | 465,368 |   |
| Consumer                |   |        | 14,155    |   |       |   | 14,155    |       |   |   | -          |   |   |      | 14,155    |   |       |   | - |   |   |   | 2,831 |   |
|                    |   | $           | 5,559,663 |   |       | $      | 2,377,075 |       |   | $      | 2,476,569  |   |   | $         | 4,853,644 |   |       | $      | 706,019 |   |   | $ | 5,886,265 |   |

|                    |   |        |      |   |       |   |      |       |   |   |       |   |   |      |      |   |       |   |
|-------------------------|--------|-------------|-----------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|--------|-----------|-----------|--------|------------|--------|
|                    |   |        |      |   |       |   |      |       |   |   |       |   |   |      |      |   |       |   |
| June 30, 2010           |   | Unpaid      |      |   | Recorded   |   |      | Recorded   |   |   |       |   |   |      |      |   |       |   |
|                    |   | Contractual |      |   | Investment |   |      | Investment |   |   | Total      |   |   |      |      |   | Average    |   |
|                    |   | Principal   |      |   | With No    |   |      | With       |   |   | Recorded   |   |   | Related   |      |   | Recorded   |   |
|                    |   | Balance     |      |   | Allowance  |   |      | Allowance  |   |   | Investment |   |   | Allowance |      |   | Investment |   |
| Residential Real Estate |   | $           | 1,052,316 |   |       | $      | 150,301   |       |   | $      | 736,296    |   |   | $         | 886,597   |   |       | $      | 165,719 |   |   | $ | 1,378,760 |   |
| Commercial Real Estate  |   |        | 7,034,762 |   |       |   | 598,153   |       |   |   | 5,395,146  |   |   |      | 5,993,299 |   |       |   | 1,041,463 |   |   |   | 3,027,617 |   |
| Land                    |   |        | 480,296   |   |       |   | 387,097   |       |   |   | 73,219     |   |   |      | 460,316   |   |       |   | 19,980 |   |   |   | 1,453,010 |   |
| Commercial Business     |   |        | 587,745   |   |       |   | 491,459   |       |   |   | 86,930     |   |   |      | 578,389   |   |       |   | 9,356 |   |   |   | 1,176,730 |   |
| Consumer                |   |        | -         |   |       |   | -         |       |   |   | -          |   |   |      | -         |   |       |   | - |   |   |   | 3,815 |   |
|                    |   | $           | 9,155,119 |   |       | $      | 1,627,010 |       |   | $      | 6,291,591  |   |   | $         | 7,918,601 |   |       | $      | 1,236,518 |   |   | $ | 7,039,932 |   |

| ·   | Grades 1 and 2 - These grades include loans to very high credit quality borrowers. These borrowers (grades 1 and 2), generally have significant capital strength, moderate leverage, stable earnings, growth, and readily available financing alternatives. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grades 3 - This grade includes loans that are "pass grade" loans to borrowers of acceptable credit quality and risk. These borrowers have satisfactory asset quality and liquidity, adequate debt capacity and coverage, and good management in critical positions. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grades 4 - This grade includes loans that require ”increased management attention”.  These borrowers generally have limited additional debt capacity and modest coverage and average or below average asset quality, margins, and market share. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Grade 5 - This grade is for "Other Assets Especially Mentioned" in accordance with regulatory guidelines. This grade is intended to be temporary and includes loans to borrowers whose credit quality has clearly deteriorated and are at risk of further decline unless active measures are taken to correct the situation. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grade 6 - This grade includes "Substandard" loans, in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. By definition under regulatory guidelines, a "Substandard" loan has defined weaknesses which make payment default or principal exposure likely, but not yet certain. Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business.  Also, included in "Substandard" loans, in accordance with regulatory guidelines, are loans for which the accrual of interest has been stopped. This grade includes loans where interest is more than 90 days past due and not fully secured and loans where a specific valuation allowance may be necessary. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grade 7 - This grade includes "Doubtful" loans in accordance with regulatory guidelines. Such loans are placed on non-accrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. Additionally, these loans generally have a specific valuation allowance in excess of 30% of the principal balance. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grade 8 - This grade includes "Loss" loans in accordance with regulatory guidelines. Such loans are to be charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. "Loss" is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| June 30, 2011             |   |   |       |   |       |   |    |        |   |   |      |   |   |   |   |
|---------------------------|--------|--------|------------|--------|------------|--------|---------|-------------|--------|--------|-----------|--------|--------|--------|--------|
|                      |   |   |       |   | Especially |   |    |        |   |   |      |   |   |   |   |
| Type of Loan              |   | Pass   |       |   | Mentioned  |   |    | Substandard |   |   | Doubtful  |   |   | Total  |   |
| Mortgage Loans:           |   |   |       |   |       |   |    |        |   |   |      |   |   |   |   |
| Residential               |   | $      | 54,031,990 |   |       | $      | -       |        |   | $      | 827,975   |   |   | $      | -      |   |   | $ | 4,859,965 |   |
| Commercial Real Estate    |   |   | 26,008,159 |   |       |   | 175,552 |        |   |   | 3,693,505 |   |   |   | -      |   |   |   | 29,877,216 |   |
| Land                      |   |   | 3,106,958  |   |       |   | -       |        |   |   | 176,147   |   |   |   | -      |   |   |   | 3,283,105 |   |
| Second Mortgage Loans     |   |   | 3,925,928  |   |       |   | -       |        |   |   | 18,858    |   |   |   | -      |   |   |   | 3,944,786 |   |
| Total Mortgage Loans      |   |   | 87,073,035 |   |       |   | 175,552 |        |   |   | 4,716,485 |   |   |   | -      |   |   |   | 91,965,072 |   |
|                      |   |   |       |   |       |   |    |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Consumer Loans:           |   |   |       |   |       |   |    |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Automobile Loans          |   |   | 793,128    |   |       |   | -       |        |   |   | 14,154    |   |   |   | -      |   |   |   | 807,282 |   |
| Savings Account Loans     |   |   | 1,143,361  |   |       |   | -       |        |   |   | -         |   |   |   | -      |   |   |   | 1,143,361 |   |
| Mobile Home Loans         |   |   | 138,488    |   |       |   | -       |        |   |   | -         |   |   |   | -      |   |   |   | 138,488 |   |
| Other Consumer Loans      |   |   | 244,573    |   |       |   | -       |        |   |   | -         |   |   |   | -      |   |   |   | 244,573 |   |
| Total Consumer Loans      |   |   | 2,319,550  |   |       |   | -       |        |   |   | 14,154    |   |   |   | -      |   |   |   | 2,333,704 |   |
| Commercial Business Loans |   |   | 2,472,622  |   |       |   | -       |        |   |   | 829,023   |   |   |   | -      |   |   |   | 3,301,645 |   |
| Total Gross Loans         |   | $      | 91,865,207 |   |       | $      | 175,552 |        |   | $      | 5,559,662 |   |   | $      | -      |   |   | $ | 97,600,421 |   |

----

|                      |   |   |        |   | Especially |   |      |        |   |   |      |   |   |   |   |
|---------------------------|--------|--------|-------------|--------|------------|--------|-----------|-------------|--------|--------|-----------|--------|--------|--------|--------|
| Type of Loan              |   | Pass   |        |   | Mentioned  |   |      | Substandard |   |   | Doubtful  |   |   | Total  |   |
| Mortgage Loans:           |   |   |        |   |       |   |      |        |   |   |      |   |   |   |   |
| Residential               |   | $      | 59,164,936  |   |       | $      | -         |        |   | $      | 1,052,316 |   |   | $      | -      |   |   | $ | 0,217,252 |   |
| Commercial Real Estate    |   |   | 27,512,857  |   |       |   | 623,211   |        |   |   | 6,436,609 |   |   |   | -      |   |   |   | 34,572,677 |   |
| Land                      |   |   | 4,195,114   |   |       |   | 69,720    |        |   |   | 93,199    |   |   |   | -      |   |   |   | 4,358,033 |   |
| Second Mortgage Loans     |   |   | 4,468,596   |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 4,468,596 |   |
| Total Mortgage Loans      |   |   | 95,341,503  |   |       |   | 692,931   |        |   |   | 7,582,124 |   |   |   | -      |   |   |   | 103,616,558 |   |
|                      |   |   |        |   |       |   |      |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Consumer Loans:           |   |   |        |   |       |   |      |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Automobile Loans          |   |   | 1,126,724   |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 1,126,724 |   |
| Savings Account Loans     |   |   | 1,181,204   |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 1,181,204 |   |
| Mobile Home Loans         |   |   | 188,211     |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 188,211 |   |
| Other Consumer Loans      |   |   | 392,035     |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 392,035 |   |
| Total Consumer Loans      |   |   | 2,888,174   |   |       |   | -         |        |   |   | -         |   |   |   | -      |   |   |   | 2,888,174 |   |
| Commercial Business Loans |   |   | 3,485,452   |   |       |   | 909,471   |        |   |   | 96,286    |   |   |   | -      |   |   |   | 4,491,209 |   |
| Total Gross Loans         |   | $      | 101,715,129 |   |       | $      | 1,602,402 |        |   | $      | 7,678,410 |   |   | $      | -      |   |   | $ | 110,995,941 |   |
|                      |   |   |        |   |       |   |      |        |   |   |      |   |   |   |   |   |   |   |   |   |

|                   |   | June 30, 2011 |   |   | June 30, 2010 |   |
|------------------------|--------|---------------|--------|--------|---------------|--------|
|                   |   | Weighted      |   |   |          |   |   | Weighted |   |   |   |   |
|                   |   | Average       |   |   | Classified    |   |   | Average |   |   | Classified |   |
|                   |   | Risk Grade    |   |   | Loans         |   |   | Risk Grade |   |   | Loans |   |
| Commercial Real Estate |   |          | 3.40   |   |          | $      | 3,693,505 |   |   |   | 3.53 |   |   | $ | 6,436,609 |   |
| Land                   |   |          | 3.19   |   |          |   | 176,147 |   |   |   | 3.22 |   |   |   | 93,199 |   |
| Commercial Business    |   |          | 3.81   |   |          |   | 829,023 |   |   |   | 3.73 |   |   |   | 96,286 |   |
| Total                  |   |          |   |   |          | $      | 4,698,675 |   |   |   |   |   |   | $ | 6,626,094 |   |

|                              |   | (Dollars in thousands)                          |
|-----------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   | Year Ended                                                                                                                                                                   |   |   | Year Ended |   |   |
|                              |   | June 30, 2011                                                                                                                                                                |   |   | June 30, 2011 |   |   |
| Mortgage Loans:                   |   |                                                                                                                                                                         |   |   |   |   |   |   |
| Residential                       |   | $                                                                                                                                                                            | (533 | ) |   | $ | (682 | ) |
| Commercial Real  Estate |   |                                                                                                                                                                         | (920 | ) |   |   | (1,006 | ) |
| Land                              |   |                                                                                                                                                                         | (22 | ) |   |   | (126 | ) |
| Commercial Business Loans         |   |                                                                                                                                                                         | (239 | ) |   |   | (840 | ) |
| Consumer Loans                    |   |                                                                                                                                                                         | (12 | ) |   |   | (7 | ) |
|                              |   |                                                                                                                                                                         |   |   |   |   |   |   |
| Total                             |   | $                                                                                                                                                                            | (1,726 | ) |   | $ | (2,661 | ) |

----

----

----

|                            |   | (Amounts in Thousands) |   |
|---------------------------------|--------|------------------------|--------|
|                            |   |                   |   |   | Commercial |   |   |   |   |   |   |   |
|                            |   | Mortgage               |   |   | Business |   |   | Consumer |   |   |   |   |
|                            |   | Loans                  |   |   | Loans |   |   | Loans |   |   | Total |   |
| June 30, 2011:                  |   |                   |   |   |   |   |   |   |   |   |   |   |
| Balance – June 30, 2010   |   | $                      | 2,273  |   |   | $ | 234 |   |   | $ | 20 |   |   | $ | 2,527 |   |
| Provision for loan losses       |   |                   | 904    |   |   |   | 263 |   |   |   | 15 |   |   |   | 1,182 |   |
| Charge-offs                     |   |                   | (1,538 | ) |   |   | (282 | ) |   |   | (30 | ) |   |   | (1,850 | ) |
| Recoveries                      |   |                   | 63     |   |   |   | 43 |   |   |   | 18 |   |   |   | 124 |   |
| Net (Charge-offs) / Recoveries  |   |                   | (1,475 | ) |   |   | (239 | ) |   |   | (12 | ) |   |   | (1,726 | ) |
| Balance – June 30, 2011   |   | $                      | 1,702  |   |   | $ | 258 |   |   | $ | 23 |   |   | $ | 1,983 |   |
| Period-end amount allocated to: |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated    |   | $                      | 641    |   |   | $ | 65 |   |   | $ | - |   |   | $ | 706 |   |
| for impairment                  |
| Loans collectively evaluated    |   |                   | 1,061  |   |   |   | 193 |   |   |   | 23 |   |   |   | 1,277 |   |
| for impairment                  |
| Balance – June 30, 2011   |   | $                      | 1,702  |   |   | $ | 258 |   |   | $ | 23 |   |   | $ | 1,983 |   |

| June 30, 2010:                  |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Balance –June 30, 2009    |   | $      | 2,073  |   |   | $      | 2,027  |   |   | $      | 86     |   |   | $ | 4,186 |   |
| Provision for loan losses       |   |   | 1,864  |   |   |   | (953   | )      |   |   | (59    | )      |   |   | 852 |   |
| Transfer from reserve on        |   |   | 150    |   |   |   | -      |   |   |   | -      |   |   |   | 150 |   |
| Letters of Credit               |
| Charge-offs                     |   |   | (1,853 | )      |   |   | (1,034 | )      |   |   | (28    | )      |   |   | (2,915 | ) |
| Recoveries                      |   |   | 39     |   |   |   | 194    |   |   |   | 21     |   |   |   | 254 |   |
| Net (Charge-offs) / Recoveries  |   |   | (1,814 | )      |   |   | (840   | )      |   |   | (7     | )      |   |   | (2,661 | ) |
| Balance –June 30, 2010    |   | $      | 2,273  |   |   | $      | 234    |   |   | $      | 20     |   |   | $ | 2,527 |   |
|                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period-end amount allocated to: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated    |   | $      | 1,227  |   |   | $      | 10     |   |   | $      | -      |   |   | $ | 1,237 |   |
| for impairment                  |
| Loans collectively evaluated    |   |   | 1,046  |   |   |   | 224    |   |   |   | 20     |   |   |   | 1,290 |   |
| for impairment                  |
| Balance –June 30, 2010    |   | $      | 2,273  |   |   | $      | 234    |   |   | $      | 20     |   |   | $ | 2,527 |   |

----

|                                        |   | (Amounts in Thousands) |    |
|---------------------------------------------|--------|------------------------|---------|
|                                        |   |                   |    |   |   |   |   |   |   |   |   |   |
|                                        |   |                   |    |   | Commercial |   |   |   |   |   |   |   |
|                                        |   | Mortgage               |    |   | Business |   |   | Consumer |   |   | Total |   |
|                                        |   | Loans                  |    |   | Loans |   |   | Loans |   |   | Loans |   |
| June 30, 2011                               |   |                   |    |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated for impairment |   | $                      | 4,717   |   |   | $ | 829 |   |   | $ | 14 |   |   | $ | 5,560 |   |
| Loans collectively evaluated for impairment |   |                   | 87,248  |   |   |   | 2,473 |   |   |   | 2,320 |   |   |   | 92,041 |   |
| Ending Balance                              |   | $                      | 91,965  |   |   | $ | 3,302 |   |   | $ | 2,334 |   |   | $ | 97,601 |   |
|                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2010                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated for impairment |   | $                      | 7,582   |   |   | $ | 96 |   |   | $ | - |   |   | $ | 7,678 |   |
| Loans collectively evaluated for impairment |   |                   | 96,035  |   |   |   | 4,395 |   |   |   | 2,888 |   |   |   | 103,318 |   |
| Ending Balance                              |   | $                      | 103,617 |   |   | $ | 4,491 |   |   | $ | 2,888 |   |   | $ | 110,996 |   |

|                                                                                                            |    | 2011             |   |
|-----------------------------------------------------------------------------------------------------------------|---------|------------------|--------|
|                                                                                                            |    | Cost        |   | AccumulatedDepreciation |   | Net |   |
|                   Category |    |             |   |   |   |   |   |   |   |
| Land                                                                                                       | $  | 643,704     |   | $  | - |   | $  |  643,704 |   |
| Buildings                                                                                                       |    | 6,006,729   |   |   | 2,769,407 |   |   | 3,237,322 |   |
| Office furniture, fixtures  and equitpment                                                                 |    | 4,660,284   |   |   | 3,799,791 |   |   | 860,493 |   |
| Automobiles                                                                                                     |    | 180,852     |   |   | 117,440 |   |   | 63,412 |   |
| Investment real estate                                                                                     |    | 1,785,856   |   |   |  693,056 |   |   |  1,092,800 |   |
|     Total                                                                                   | $  | 13,277,425  |   | $  |  7,379,694 |   | $  | 5,897,731 |   |
|                                                                                                            |    |             |   |   |   |   |   |   |   |

|                                                                                    |    | 2011             |   |
|-----------------------------------------------------------------------------------------|---------|------------------|--------|
|                                                                                    |    | Cost        |   | AccumulatedDepreciation |   | Net |   |
|               Category |    |             |   |   |   |   |   |   |   |
| Land                                                                               | $  | 643,704     |   | $  |  - |   | $  |  643,704 |   |
| Buildings                                                                               |    | 5,912,409   |   |   | 2,586,224 |   |   | 3,326,185 |   |
| Office furniture, fixtures  and equipment                                          |    | 4,422,335   |   |   | 3,485,481 |   |   | 936,854 |   |
| Automobiles                                                                             |    | 132,530     |   |   | 96,060 |   |   | 36,470 |   |
| Investment real estate                                                             |    | 1,745,812   |   |   | 637,602  |   |   | 1,108,210 |   |
|     Total                                                           | $  | 12,856,790  |   | $  | 6,805,367  |   | $  | 6,051,423 |   |

----

| (4) | PROPERTY AND EQUIPMENT (CONTINUED) |
|-----|------------------------------------|

|   |   |   |    |   | 2655 South      |   |    |   |   |
|--------|--------|--------|---------|--------|-----------------|--------|---------|--------|--------|
|   |   |   |    |   | Campbell        |   |    |   |   |
|   |   | ATMs   |    |   | Springfield, MO |   |    | Totals |   |
| 2012   |   | $      | 64,620  |   |            | $      | 94,416  |   |   | $ | 159,036 |   |
| 2013   |   |   | 43,080  |   |            |   | 94,416  |   |   |   | 137,496 |   |
| 2014   |   |   | -       |   |            |   | 94,416  |   |   |   | 94,416 |   |
| 2015   |   |   | -       |   |            |   | 94,416  |   |   |   | 94,416 |   |
| 2016   |   |   | -       |   |            |   | 3,934   |   |   |   | 3,934 |   |
| Total  |   | $      | 107,700 |   |            | $      | 381,598 |   |   | $ | 489,298 |   |

|                              |   | 2011   |      |   |   | 2010    |            |
|-----------------------------------|--------|--------|-----------|--------|--------|---------|-----------------|
| Premium on branch acquisition     |   | $      | 1,020,216 |   |   | $  |  1,020,216 |   |
| Accumulated amortization          |   |   | (935,090  | )      |   |    |  (884,975  | )  |
| Net premium on branch acquisition |   | $      | 85,126    |   |   | $       |   135,241  |   |

|   | Amortization expense relating to this premium was $50,115 for the year ended June 30, 2011 and $50,114 for the year ended June 30, 2010. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | Estimated future amortization expense is as follows for the years ending June 30: |
|--------|-----------------------------------------------------------------------------------|

| 2012   |   | $      | 50,115 |   |
|--------|--------|--------|--------|--------|
| 2013   |   |   | 35,011 |   |
|   |   | $      | 85,126 |   |

----

| (6) | DEPOSITS |
|-----|----------|

|   | A summary of deposit accounts at June 30 is as follows: |
|--------|---------------------------------------------------------|

|                          |   |  2011 |             |   |   2010 |   |
|-------------------------------|--------|------------|------------------|--------|------------------|--------|
| Non-interest-bearing checking |   | $          | 24,303,463       |   |             | $      | 11,773,833 |   |
| Interest-bearing checking     |   |       | 37,126,676       |   |             |   | 34,632,542 |   |
| Super Saver money market      |   |       | 12,605,656       |   |             |   | 11,379,774 |   |
| Savings                       |   |       | 8,627,391        |   |             |   | 9,086,554 |   |
| Money Market savings accounts |   |       | 31,367,281       |   |             |   | 36,031,680 |   |
| Certificates of Deposit       |   |       |  66,630,525 |   |             |   |  77,171,042 |   |
| Total                         |   | $          | 180,660,992      |   |             | $      | 180,075,425 |   |

| Fiscal | 2012       |   | $      | 43,360,888 |   |
|--------|------------|--------|--------|------------|--------|
|   | 2013       |   |   | 11,577,728 |   |
|   | 2014       |   |   | 4,058,721  |   |
|   | 2015       |   |   | 5,489,882  |   |
|   | 2016       |   |   | 2,113,209  |   |
|   | Thereafter |   |   | 30,097     |   |
|   |       |   | $      | 66,630,525 |   |

| (7) | RETAIL REPURCHASE AGREEMENTS |
|-----|------------------------------|

|   | The Savings Bank offers retail repurchase agreements as an additional item in its product mix. Retail repurchase agreements allow customers to have excess checking account balances “swept” from the checking accounts into a non-insured interest bearing account. The customers’ investment in these non-insured accounts is collateralized by securities of the Savings Bank pledged at FHLB for that purpose. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | The advances listed below were obtained from the FHLB of Des Moines.  The advances are secured by FHLB stock and a blanket pledge of qualifying one-to-four family mortgage loans.  Advances from the FHLB at June 30 are summarized as follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (8)         ADVANCES FROM FEDERAL HOME LOAN BANK AND OTHER BORROWED MONEY (CONTINUED) |
|------------------------------------------------------------------------------------------------------------------------------------|

|                                           |   | 2011   |      |   | Weighted AverageRate |   |   | 2010   |   |   | WeightedAverageRate |   |
|------------------------------------------------|--------|--------|-----------|--------|----------------------|--------|--------|--------|--------|--------|---------------------|--------|
| Term Advances:                                 |   |   |      |   |                 |   |   |   |   |   |                |   |
| Long-term; fixed-rate;  non-callable |   | $      | 3,000,000 |   |                 |   | 4.94   | %      |   | $      | 3,000,000           |   |   |   | 4.94 | % |
|                                           |   |   |      |   |                 |   |   |   |   |   |                |   |   |   |   |   |
| Total                                          |   | $      | 3,000,000 |   |                 |   | 4.94   | %      |   | $      | 3,000,000           |   |   |   | 4.94 | % |

| Year Ended June 30 |   | AggregateAnnual Maturities |      |
|--------------------|--------|----------------------------|-----------|
| 2012               |   | $                          | -         |   |
| 2013               |   |                       | -         |   |
| 2014               |   |                       | 3,000,000 |   |
|               |   |                       | 3,000,000 |   |

|              |   | 2011   |    |   | 2010   |   |
|-------------------|--------|--------|---------|--------|--------|--------|
| Current           |   | $      | 14,301  |   |   | $      | (631,992 | ) |
| Deferred          |   |   | 566,481 |   |   |   | 1,672,923 |   |
|   Total |   | $      | 580,782 |   |   | $      | 1,040,931 |   |

----

| (9) | INCOME TAXES (CONTINUED) |
|-----|--------------------------|

|                                                 |   | 2011   |       |   | 2010   |   |
|------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Tax at statutory rate                                |   | $      | (1,196,870 | )      |   | $      | (150,671 | ) |
|  Increase (decrease) in taxes resulting from:   |   |   |       |   |   |   |   |   |
|   State taxes, net of federal benefit      |   |   | (109,396   | )      |   |   | (7,682 | ) |
|   Tax-exempt income                        |   |   | (18,013    | )      |   |   | (24,206 | ) |
|   Bank-owned life insurance                |   |   | -          |   |   |   | 46,671 |   |
|   Dividends received deduction             |   |   | (2,982     | )      |   |   | (2,979 | ) |
|   Change in valuation allowance            |   |   | 1,897,659  |   |   |   | 1,126,326 |   |
|   Stock based compensation                 |   |   | 1,608      |   |   |   | 3,215 |   |
|   Net effect of other book/tax differences |   |   | 8,776      |   |   |   | 50,257 |   |
| Provision for income taxes                           |   | $      | 580,782    |   |   | $      | 1,040,931 |   |

|                                                                |   | 2011   |       |   | 2010   |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred tax assets:                                                |   |   |       |   |   |   |
| Allowance for loan losses                                           |   | $      | 732,608    |   |   | $      | 932,648 |   |
| Write-down of real estate owned                                     |   |   | 1,419,999  |   |   |   | 23,312 |   |
| Book amortization in excess of tax amortization                     |   |   | 11,250     |   |   |   | 17,873 |   |
| Compensated employee absences                                       |   |   | 20,025     |   |   |   | 24,385 |   |
| State net operating loss carry-forwards                             |   |   | 107,803    |   |   |   | 89,788 |   |
| Federal net operating loss carry-forwards                           |   |   | 1,329,878  |   |   |   | 917,858 |   |
| Charitable contributions                                            |   |   | 24,837     |   |   |   | 21,162 |   |
| Other                                                               |   |   | 6,921      |   |   |   | 107,644 |   |
|       Total gross deferred tax assets |   |   | 3,653,321  |   |   |   | 2,134,670 |   |
| Valuation allowance                                                 |   |   | (3,114,565 | )      |   |   | (1,216,906 | ) |
|                                                                |   |   | 538,756    |   |   |   | 917,764 |   |
| Deferred tax liabilities:                                           |   |   |       |   |   |   |   |   |
| Premises and equipment                                              |   |   | (258,692   | )      |   |   | (86,747 | ) |
| FHLB stock dividends                                                |   |   | (60,936    | )      |   |   | (60,936 | ) |
| Prepaid expenses                                                    |   |   | (145,560   | )      |   |   | (124,308 | ) |
| Net unrealized gain on available-for-sale securities                |   |   | (334,508   | )      |   |   | (566,481 | ) |
| Unamortized deferred loan costs, net of fees                        |   |   | (73,568    | )      |   |   | (79,292 | ) |
|    Total gross deferred tax liabilities              |   |   | (873,264   | )      |   |   | (917,764 | ) |
|    Total net deferred tax assets (liabilities)       |   | $      | (334,508   | )      |   | $      | - |   |

----

|   | The Savings Bank had participated in a multiple-employer defined benefit pension plan covering substantially all employees.  In fiscal 2006, the Savings Bank opted to freeze the plan. Participants in the plan became entitled to their vested benefits at the date it was frozen. The Savings Bank limited its future obligations to the funding amount required by the annual actuarial evaluation of the plan and administrative costs. No participants will be added to the plan. Pension expense for the years ended June 30, 2011 and 2010 was approximately $109,000 and $72,000, respectively.  This plan is not subject to the requirements of FASB ASC Topics 715 and 958. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In accordance with FASB ASC Topics 718 and 505, compensation expense for stock-based awards is recorded over the vesting period at the fair values of the award at the time of the grant. The recording of such compensation began on July 1, 2006 for shares not yet vested as of that date and for all new grants subsequent to that date. The exercise price of options granted under the Company’s incentive plans is equal to the fair market value of the underlying stock at the grant date. The Company assumes no projected forfeiture rates on its stock-based compensation. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company’s 2004 Management Recognition Plan has authorized the award of shares to certain officers, employees and directors for up to 50,000 shares of the Company’s common stock.  All shares awarded will have a restricted period to be determined by the Corporation’s Compensation Committee.  The restricted period shall not be less than three years if the award is time based, or not less than one year if performance based.  The plan was approved by shareholders in October 2004. No shares have been issued from this plan. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (10) | EMPLOYEE BENEFIT PLANS (CONTINUED) |
|------|------------------------------------|

|   | No options were granted during either fiscal 2011 or fiscal 2010. The last options were granted in fiscal 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------|

|   | A summary of the Company’s stock option activity, and related information for the years ended June 30 follows: |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                             |   | 2011    |   |   | 2010     |   |
|----------------------------------|--------|---------|--------|--------|----------|--------|
|                             |   |    |   |   | Weighted |   |   |   |   |   | Weighted |   |
|                             |   |    |   |   | Average  |   |   |   |   |   | Average |   |
|                             |   |    |   |   | Exercise |   |   |   |   |   | Exercise |   |
|                             |   | Options |   |   | Price    |   |   | Options |   |   | Price |   |
| Outstanding at beginning of year |   |    | 22,000 |   |     | $      | 16.95 |   |   |   | 22,000 |   |   | $ | 16.95 |   |
| Granted                          |   |    | -      |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                        |   |    | -      |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                        |   |    | -      |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Outstanding at end of year       |   |    | 22,000 |   |     |   | 16.95 |   |   |   | 22,000 |   |   |   | 16.95 |   |
| Exercisable at end of year       |   |    | 20,000 |   |     | $      | 16.94 |   |   |   | 15,600 |   |   | $ | 16.94 |   |

|   | The following table summarizes information about stock options outstanding at June 30, 2011: |
|--------|----------------------------------------------------------------------------------------------|

| ExercisePrice |   |   | NumberOutstanding atJune 30 |   |   | NumberExercisable atJune 30 |   |   | RemainingContractualLife (Months) |   |
|---------------|--------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|-----------------------------------|--------|
| $             | 17.50  |   |                        |   | 2,000  |                        |   |   | 2,000                             |   |   |   | 56 |   |
|          | 17.00  |   |                        |   | 10,000 |                        |   |   | 8,000                             |   |   |   | 69 |   |
|          | 16.78  |   |                        |   | 10,000 |                        |   |   | 10,000                            |   |   |   | 60 |   |

| (11) | EARNINGS PER SHARE |
|------|--------------------|

----

| (11) | EARNINGS PER SHARE (CONTINUED) |
|------|--------------------------------|

|                           |   | Years Ended June 30, |       |
|--------------------------------|--------|----------------------|------------|
|                           |   | 2011                 |       |   | 2010 |   |
|                           |   |                 |       |   |   |   |   | Per Share |   |   |   |   |   |   |   |   | Per Share |   |
|                           |   | Income               |       |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |
| Basic EPS:                     |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) available        |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  to stockholders          |   | $                    | (4,100,989 | ) |   |   | 1,550,815 |   |   | $ | (2.65 | ) |   | $ | (1,484,082 | ) |   |   | 1,550,815 |   |   | $ | ( 0.96 | ) |
| Effect of dilutive             |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   securities:        |   |                 | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Diluted EPS:                   |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) available        |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   to stockholders    |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   plus stock options |   | $                    | (4,100,989 | ) |   |   | 1,550,815 |   |   | $ | ( 2.65 | ) |   | $ | (1,484,082 | ) |   |   | 1,550,815 |   |   | $ | ( 0.96 | ) |

| (12) | RELATED PARTY TRANSACTIONS |
|------|----------------------------|

|                      |   | 2011   |    |   | 2010   |   |
|---------------------------|--------|--------|---------|--------|--------|--------|
| Beginning balances        |   | $      | 125,982 |   |   | $      | 104,792 |   |
| Originations and advances |   |   | -       |   |   |   | 92,000 |   |
| Principal repayments      |   |   | (23,481 | )      |   |   | (70,810 | ) |
| Ending balances           |   | $      | 102,501 |   |   | $      | 125,982 |   |

----

|   | In the ordinary course of business, the Savings Bank has various outstanding commitments that are not reflected in the accompanying consolidated financial statements.  The principal commitments of the Savings Bank are as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Savings Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the FDIC. Failure to meet the minimum regulatory capital requirements can initiate |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (15)       REGULATORY MATTERS (CONTINUED) |
|------------------------------------------------------------------------------|

|                                                             |   | Actual |   |   | MinimumFor CapitalAdequacy Purposes |   |   | Minimumto Be Well-Capitalized UnderPrompt CorrectiveAction Provisions |   |
|------------------------------------------------------------------|--------|--------|--------|--------|-------------------------------------|--------|--------|-----------------------------------------------------------------------|--------|
|                                                             |   | Amount |   |   | Ratio                               |   |   | Amount                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of June 30, 2011:                                             |   |   |   |   |                                |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total Risk-Based Capital  (to Risk-Weighted Assets)    |   | $      | 17,568 |   |                                |   | 18.34  | %                                                                     |   | $ | 7,662 |   |   |   | 8.0 | % |   | $ | 9,577 |   |   |   | 10.0 | % |
| Core Capital  (to Adjusted Tangible Assets)                 |   |   | 16,387 |   |                                |   | 7.90   | %                                                                     |   |   | 8,292 |   |   |   | 4.0 | % |   |   | 10,365 |   |   |   | 5.0 | % |
| Tangible Capital    (to Adjusted Tangible Assets) |   |   | 16,387 |   |                                |   | 7.90   | %                                                                     |   |   | 3,110 |   |   |   | 1.5 | % |   |   | N/A |   |   |   |   |   |
| Tier 1 Capital  (to Risk-Weighted Assets)                   |   |   | 16,387 |   |                                |   | 17.11  | %                                                                     |   |   | 3,831 |   |   |   | 4.0 | % |   |   | 5,746 |   |   |   | 6.0 | % |

----

| (15)       REGULATORY MATTERS (CONTINUED) |
|------------------------------------------------------------------------------|

| As of June 30, 2010:                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Total Risk-Based Capital    (to Risk-Weighted Assets) |   | $      | 21,419 |   |   |   | 19.99  | %      |   | $      | 8,572  |   |   |   | 8.0    | %      |   | $      | 10,715 |   |   |   | 10.0 | % |
| Core Capital  (to Adjusted Tangible Assets)                     |   |   | 20,153 |   |   |   | 9.65   | %      |   |   | 8,354  |   |   |   | 4.0    | %      |   |   | 10,443 |   |   |   | 5.0 | % |
| Tangible Capital   (to Adjusted Tangible Assets)           |   |   | 20,153 |   |   |   | 9.65   | %      |   |   | 3,133  |   |   |   | 1.5    | %      |   |   | N/A |   |   |   |   |   |
| Tier 1 Capital   (to Risk-Weighted Assets)                 |   |   | 20,153 |   |   |   | 18.81  | %      |   |   | 4,286  |   |   |   | 4.0    | %      |   |   | 6,429 |   |   |   | 6.0 | % |

| ·   | Increase assets during any quarter; |
|--------------------|-------------------------------------|

| ·   | Pay dividends; |
|--------------------|----------------|

| ·   | Increase brokered deposits; |
|--------------------|-----------------------------|

| ·   | Repurchase shares of the Company’s outstanding common stock; and |
|--------------------|------------------------------------------------------------------------|

| ·   | Issue any debt securities or incur any debt (other than that incurred in the normal course of business). |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | develop an acceptable business plan for enhancing, measuring and maintaining profitability, increasing earnings, improving liquidity, maintaining capital levels; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ensure the Bank’s compliance with applicable laws, rules, regulations and agency guidelines, including the terms of the order; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not appoint any new director or senior executive officer or change the responsibilities of any (15) current senior executive officers without notifying the applicable banking regulators; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not enter into, renew, extend or revise any compensation or benefit agreements for directors or senior executive officers; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | not make any indemnification, severance or golden parachute payments; |
|--------------------|-----------------------------------------------------------------------|

| ·   | enhance its asset classification policy; |
|--------------------|------------------------------------------|

| ·   | provide progress reports to the FDIC regarding certain classified assets; |
|--------------------|---------------------------------------------------------------------------|

| ·   | submit a comprehensive plan for reducing classified assets; |
|--------------------|-------------------------------------------------------------|

| ·   | develop a plan to reduce the concentration of certain loans contained in the loan portfolio and that addresses the assessment, monitoring and control of the risks association with the commercial real estate portfolio; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not enter into any arrangement or contract with a third party service provider that is significant to the overall operation or financial of the Bank, or that is outside the normal course of business; and prepare and submit progress reports to the FDIC and the Federal Reserve. The orders will remain in effect until modified or terminated by the FDIC or the Federal Reserve. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (17) | FAIR VALUE MEASUREMENTS |
|------|-------------------------|

----

| (17) | FAIR VALUE MEASUREMENTS (CONTINUED) |
|------|-------------------------------------|

----

| (17) | FAIR VALUE MEASUREMENTS (CONTINUED) |
|------|-------------------------------------|

| June 30, 2011                                   |   | Level 1                |   | Level 2 |   | Level 3 |   | Total      |   |
|-------------------------------------------------|--------|------------------------|--------|---------|--------|---------|--------|------------|--------|
|                                            |   | Inputs                 |   | Inputs  |   | Inputs  |   | Fair Value |   |
|                                            |   | (dollars in thousands) |   |
|                                            |   |                   |   |    |   |    |   |       |   |
| Securities available-for-sale:                  |   |                   |   |    |   |    |   |       |   |
|   U. S. Agency Securities             |   | $                      | -      |    | $      | 22,790  |   | $          | -      |   | $ | 22,790 |   |
|   Residential mortgage-               |   |                   |   |    |   |    |   |       |   |   |   |   |   |
|      backed Securities |   |                   | -      |    |   | 30,936  |   |       | -      |   |   | 30,936 |   |
|   Municipal Securities                |   |                   | -      |    |   | 110     |   |       | -      |   |   | 110 |   |
|   Other                               |   |                   | -      |    |   | 244     |   |       | -      |   |   | 244 |   |
| Total                                           |   | $                      | -      |    | $      | 54,080  |   | $          | -      |   | $ | 54,080 |   |

| June 30, 2010                                   |   | Level 1                |   | Level 2 |   | Level 3 |   | Total      |   |
|-------------------------------------------------|--------|------------------------|--------|---------|--------|---------|--------|------------|--------|
|                                            |   | Inputs                 |   | Inputs  |   | Inputs  |   | Fair Value |   |
|                                            |   | (dollars in thousands) |   |
|                                            |   |                   |   |    |   |    |   |       |   |
| Securities available-for-sale:                  |   |                   |   |    |   |    |   |       |   |
|   U. S. Agency Securities             |   | $                      | 5,100  |    | $      | 21,928  |   | $          | -      |   | $ | 27,028 |   |
|   Residential mortgage-               |   |                   |   |    |   |    |   |       |   |   |   |   |   |
|      backed Securities |   |                   | -      |    |   | 32,722  |   |       | 146    |   |   | 32,868 |   |
|   Municipal Securities                |   |                   | -      |    |   | 132     |   |       | -      |   |   | 132 |   |
|   Other                               |   |                   | -      |    |   | 276     |   |       | -      |   |   | 276 |   |
| Total                                           |   | $                      | 5,100  |    | $      | 55,058  |   | $          | 146    |   | $ | 60,304 |   |

----

| (17)   | FAIR VALUE MEASUREMENTS (CONTINUED) |
|------------------|-------------------------------------|

| June 30, 2011     | Level 1                |   | Level 2 |   | Level 3 |   | Total      |   |
|-------------------|------------------------|--------|---------|--------|---------|--------|------------|--------|
|              | Inputs                 |   | Inputs  |   | Inputs  |   | Fair Value |   |
|              | (dollars in thousands) |   |
|              |                   |   |    |   |    |   |       |   |   |
| Impaired Loans    |                   | $      | -       |   | $       | -      |       | $      | 5,377 |   | $ | 5,377 |   |
| Real estate owned |                   |   | -       |   |    | -      |       |   | 5,503 |   |   | 5,503 |   |
| Total             |                   | $      | -       |   | $       | -      |       | $      | 10,880 |   | $ | 10,880 |   |

| June 30, 2010            | Level 1                |   | Level 2 |   | Level 3 |   | Total      |   |
|--------------------------|------------------------|--------|---------|--------|---------|--------|------------|--------|
|                     | Inputs                 |   | Inputs  |   | Inputs  |   | Fair Value |   |
|                     | (dollars in thousands) |   |
|                     |                   |   |    |   |    |   |       |   |   |
| Impaired Loans           |                   | $      | -       |   | $       | -      |       | $      | 8,360 |   | $ | 8,360 |   |
| Real estate owned        |                   |   | -       |   |    | -      |       |   | 3,885 |   |   | 3,885 |   |
| Other repossessed assets |                   |   |    |   |    |   |       |   | 61 |   |   | 61 |   |
| Total                    |                   | $      | -       |   | $       | -      |       | $      | 12,306 |   | $ | 12,306 |   |

|                                                      |   | June 30, 2011        |        |
|-----------------------------------------------------------|--------|----------------------|-------------|
|                                                      |   | Approximate Carrying |        |   | Approximate |   |
|                                                      |   | Amount               |        |   | Fair Value |   |
| Financial assets:                                         |   |                 |        |   |   |   |
|    Cash and cash equivalents               |   | $                    | 24,799,000  |   |   | $ | 24,799,000 |   |
|    Certificates of deposit purchased       |   |                 | 2,940,000   |   |   |   | 2,940,000 |   |
|    Available-for-sale securities           |   |                 | 54,080,000  |   |   |   | 54,080,000 |   |
|    Held-to-maturity securities             |   |                 | 18,146,000  |   |   |   | 18,193,000 |   |
|    Investment in FHLB stock                |   |                 | 429,000     |   |   |   | 429,000 |   |
|    Loans, net of allowance for loan losses |   |                 | 95,817,000  |   |   |   | 96,356,000 |   |
|    Accrued interest receivable             |   |                 | 778,000     |   |   |   | 778,000 |   |
| Financial liabilities:                                    |   |                 |        |   |   |   |   |   |
|    Deposits                                |   |                 | 180,661,000 |   |   |   | 180,642,000 |   |
|    Retail repurchase agreements            |   |                 | 6,416,000   |   |   |   | 6,416,000 |   |
|    FHLB advances                           |   |                 | 3,000,000   |   |   |   | 3,276,000 |   |
|    Accrued interest payable                |   |                 | 118,000     |   |   |   | 118,000 |   |

----

| (17) | FAIR VALUE MEASUREMENTS (CONTINUED) |
|------|-------------------------------------|

|                                                      |   | June 30, 2010        |        |
|-----------------------------------------------------------|--------|----------------------|-------------|
|                                                      |   | Approximate Carrying |        |   | Approximate |   |
|                                                      |   | Amount               |        |   | Fair Value |   |
| Financial assets:                                         |   |                 |        |   |   |   |
|    Cash and cash equivalents               |   | $                    | 26,218,000  |   |   | $ | 26,218,000 |   |
|    Certificates of deposit purchased       |   |                 | 5,628,000   |   |   |   | 5,628,000 |   |
|    Available-for-sale securities           |   |                 | 45,317,000  |   |   |   | 45,317,000 |   |
|    Held-to-maturity securities             |   |                 | 2,592,000   |   |   |   | 2,626,000 |   |
|    Investment in FHLB stock                |   |                 | 1,581,000   |   |   |   | 1,581,000 |   |
|    Loans, net of allowance for loan losses |   |                 | 133,162,000 |   |   |   | 134,947,000 |   |
|    Loans held for sale                     |   |                 | 820,000     |   |   |   | 820,000 |   |
|    Accrued interest receivable             |   |                 | 955,000     |   |   |   | 955,000 |   |
| Financial liabilities:                                    |   |                 |        |   |   |   |   |   |
|    Deposits                                |   |                 | 189,218,000 |   |   |   | 190,096,000 |   |
|    Retail repurchase agreements            |   |                 | 5,713,000   |   |   |   | 5,713,000 |   |
|    FHLB advances                           |   |                 | 10,000,000  |   |   |   | 10,450,000 |   |
|    Accrued interest payable                |   |                 | 385,000     |   |   |   | 385,000 |   |
|                                                      |   |                 |        |   |   |   |   |   |

|   | Cash and cash equivalents and certificates of deposit purchased – For these short-term instruments, the carrying amount approximates fair value. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Loans receivable – The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | Loans held for sale – The carrying amounts of loans held for sale approximate the fair value due to the short term nature of these loans. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Investment in FHLB stock – Fair value of the Savings Bank’s investment in FHLB stock approximates the carrying value as no ready market exists for this investment and the stock could only be sold back to the FHLB at par. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Accrued interest – The carrying amounts of accrued interest approximate their fair value.  |
|--------|-------------------------------------------------------------------------------------------------------|

|   | Deposits – The fair value of demand deposits, savings accounts and interest-bearing demand deposits is the amount payable on demand at the reporting date (i.e., their carrying amount).  The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the market rates currently offered for deposits of similar remaining maturities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Retail repurchase agreements – The fair value of retail repurchase agreements is the amount payable at the reporting date. |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | FHLB advances – Rates currently available to the Savings Bank for advances with similar terms and remaining maturities are used to estimate fair value of existing advances by discounting the future cash flows. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (17) | FAIR VALUE MEASUREMENTS (CONTINUED) |
|------|-------------------------------------|

|   | Commitments to extend credit, letters of credit and lines of credit – The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counterparties.  For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.  The fair value of letters of credit and lines of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date and are insignificant. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| (18) | PARENT COMPANY ONLY FINANCIAL INFORMATION |
|------|-------------------------------------------|

|   | The following condensed statements of financial condition and condensed statements of operations and cash flows for First Bancshares, Inc. are as follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Condensed Statements of Financial Condition |   |
|---------------------------------------------|--------|
|                                        |   | At June 30, |   |
| ASSETS                                      |   | 2011 |   |   | 2010 |   |
| Cash and cash equivalents                   |   | $ | 24,960 |   |   | $ | 233,958 |   |
| Certificates of deposit                     |   |   | - |   |   |   | 10,000 |   |
| Securities available-for-sale               |   |   | 218,000 |   |   |   | 248,000 |   |
| Investment in subsidiaries                  |   |   | 17,121,929 |   |   |   | 21,402,171 |   |
| Property and equipment, net                 |   |   | 1,079,010 |   |   |   | 1,108,209 |   |
| Real estate owned                           |   |   | 75,600 |   |   |   | 75,600 |   |
| Deferred tax asset, net                     |   |   | - |   |   |   | - |   |
| Other assets                                |   |   | 53,834 |   |   |   | 51,490 |   |
|   Total assets                    |   | $ | 18,573,333 |   |   | $ | 23,129,428 |   |

| LIABILITIES AND STOCKHOLDERS' EQUITY              |   |    |       |   |    |
|---------------------------------------------------|--------|---------|------------|--------|---------|
| Notes payable, subsidiaries                       |   | $       | 471,402    |   | $       | 501,588 |   |
| Accrued expenses                                  |   |    | 51,052     |   |    | 16,609 |   |
| Total Liabilities                                 |   |    | 522,454    |   |    | 518,197 |   |
| Stockholders' equity                              |   |    | 18,050,879 |   |    | 22,611,231 |   |
|   Total liabilities and stockholders' equity |   | $  | 18,573,333 |   | $  |  23,129,428 |   |

----

| (18) | PARENT COMPANY ONLY FINANCIAL INFORMATION (CONTINUED) |
|------|-------------------------------------------------------|

| Condensed Statements of Operations                                                             |   |
|------------------------------------------------------------------------------------------------|--------|
|                                                                                           |   | Years ended June 30, |   |
|                                                                                           |   | 2011 |   | 2010 |   |
| Income:                                                                                        |   |   |   |   |   |
|   Equity in loss of subsidiaries                                                     |   | $ | (3,834,668 | ) | $ | (1,108,365 | ) |
|   Interest and dividend income                                                       |   |   | 12,609 |   |   | 12,665 |   |
|   Gain/(loss) on sale or write-down    of property and equipment |   |   | 15,000 |   |   | - |   |
|   Other                                                                              |   |   | 8,044 |   |   | 31,209 |   |
|     Total income (loss)                                                    |   |   | (3,799,015 | ) |   | (1,064,491 | ) |
|                                                                                           |   |   |   |   |   |   |   |
| Expenses:                                                                                      |   |   |   |   |   |   |   |
|   Professional fees                                                                  |   |   | 176,595 |   |   | 106,294 |   |
|   Printing and office supplies                                                       |   |   | 9,330 |   |   | 7,504 |   |
|   Interest                                                                           |   |   | 32,158 |   |   | 40,634 |   |
|   Other                                                                              |   |   | 85,337 |   |   | 84,218 |   |
|   Income tax expense (benefit)                                                       |   |   | (1,446 | ) |   | 180,941 |   |
|     Total expenses                                                         |   |   | 301,974 |   |   | 419,591 |   |
|       Net loss                                                   |   | $ | (4,100,989 | ) | $ | (1,484,082 | ) |

----

| (18) | PARENT COMPANY ONLY FINANCIAL INFORMATION (CONTINUED) |
|------|-------------------------------------------------------|

|                                                                                                         |   | Years ended June 30. |       |
|--------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|
|                                                                                                         |   | 2011                 |       |   | 2010 |   |
| Cash flows from operating activities:                                                                        |   |                 |       |   |   |   |
|   Net income (loss)                                                                                |   | $                    | (4,100,989 | ) |   | $ | (1,484,082 | ) |
|   Adjustments to reconcile net income to                                                           |   |                 |       |   |   |   |   |   |
|     net cash provided from operating activities:                                         |   |                 |       |   |   |   |   |   |
|       Equity in earnings of subsidiaries                                       |   |                 | 3,834,668  |   |   |   | 1,153,884 |   |
|       Depreciation expense                                                     |   |                 | 55,454     |   |   |   | 56,476 |   |
|       Gain on sale of securities                                               |   |                 | (15,000    | ) |   |   | - |   |
|    Net change in operating accounts:                                                          |   |                 |       |   |   |   |   |   |
|    Deferred tax asset, net                                                                    |   |                 | -          |   |   |   | 183,163 |   |
|    Other assets and liabilities                                                               |   |                 | 32,100     |   |   |   | 121,169 |   |
|           Net cash provided (used) in operating activities |   |                 | (193,767   | ) |   |   | 30,610 |   |
|                                                                                                         |   |                 |       |   |   |   |   |   |
| Cash flows from investing activities:                                                                        |   |                 |       |   |   |   |   |   |
|   Purchase of property and equipment                                                               |   |                 | (40,045    | ) |   |   | (15,276 | ) |
|   Proceeds from sale of investments                                                                |   |                 | 45,000     |   |   |   | - |   |
|   Maturity of certificate of deposit                                                               |   |                 | 10,000     |   |   |   | - |   |
|   Proceeds from sales of property and equipment                                                    |   |                 | -          |   |   |   | 313,471 |   |
|   Purchase of real estate owned                                                                    |   |                 | -          |   |   |   | (75,600 | ) |
|     Net cash provided by investing activities                                            |   |                 | 14,955     |   |   |   | 222,595 |   |
| Cash flows from financing activities:                                                                        |   |                 |       |   |   |   |   |   |
|   Payments on notes payable                                                                        |   |                 | (30,186    | ) |   |   | (122,129 | ) |
|   Cash dividends paid                                                                              |   |                 | -          |   |   |   | - |   |
|     Net cash used in financing activities                                                |   |                 | (30,186    | ) |   |   | (122,129 | ) |
|                                                                                                         |   |                 |       |   |   |   |   |   |
| Net increase (decrease)  in cash and cash equivalents                                              |   |                 | (208,998   | ) |   |   | 131,076 |   |
|                                                                                                         |   |                 |       |   |   |   |   |   |
| Cash and cash equivalents-beginning of period                                                                |   |                 | 233,958    |   |   |   | 102,882 |   |
|                                                                                                         |   |                 |       |   |   |   |   |   |
| Cash and cash equivalents-end of period                                                                      |   | $                    | 24,960     |   |   | $ | 233,958 |   |

----

| Fiscal 2011    |   | High   |   |   | Low    |   |   | Dividend |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|           |   |   |   |   |   |   |   |     |   |
| First Quarter  |   | $      | 9.00   |   |   | $      | 7.00   |     |   |   | N/A |   |
| Second Quarter |   | $      | 8.00   |   |   | $      | 5.76   |     |   |   | N/A |   |
| Third Quarter  |   | $      | 7.99   |   |   | $      | 5.85   |     |   |   | N/A |   |
| Fourth Quarter |   | $      | 7.49   |   |   | $      | 5.12   |     |   |   | N/A |   |
|           |   |   |   |   |   |   |   |     |   |   |   |   |
| Fiscal 2010    |   | High   |   |   | Low    |   |   | Dividend |   |
|           |   |   |   |   |   |   |   |     |   |   |   |   |
| First Quarter  |   | $      | 12.48  |   |   | $      | 7.33   |     |   |   | N/A |   |
| Second Quarter |   | $      | 8.97   |   |   | $      | 7.28   |     |   |   | N/A |   |
| Third Quarter  |   | $      | 10.95  |   |   | $      | 6.80   |     |   |   | N/A |   |
| Fourth Quarter |   | $      | 9.70   |   |   | $      | 8.30   |     |   |   | N/A |   |

----

| FIRST BANCSHARES, INC.                                | FIRST HOME SAVINGS BANK                               |
|-------------------------------------------------------|-------------------------------------------------------|
|                                                  |                                                  |
| DIRECTORS:                                            | DIRECTORS:                                            |
| R. Bradley Weaver, Chairman and                  | R. Bradley Weaver, Chairman and                  |
| Chief Executive Officer                          | Chief Executive Officer                          |
|                                                  |                                                  |
| Thomas M. Sutherland                             | Thomas M. Sutherland                             |
| One of the owners and operators of Sutherlands        | One of the owners and operators of Sutherlands   |
| Home Improvement Centers group of stores         | Home Improvement Centers group of stores         |
|                                                  |                                                  |
| D. Mitch Ashlock                            | D. Mitch Ashlock                            |
| Director, President and Chief Executive Officer  | Director, President and Chief Executive Officer  |
| First Federal Savings Bank of Olathe        | First Federal Savings Bank of Olathe        |
|                                                  |                                                  |
| Harold F. Glass                                  | Harold F. Glass                                  |
| Partner                                          | Partner                                          |
| Millington, Glass & Love, Attorneys at Law   | Millington, Glass & Love, Attorneys at Law   |
|                                                  |                                                  |
| Billy E. Hixon                                   | Billy E. Hixon                                   |
| Retired partner from regional CPA firm           | Retired partner from regional CPA firm           |
| of BKD, LLP                                      | of BKD, LLP                                      |
|                                                  |                                                  |
| Robert J. Breidenthal                            | Robert J. Breidenthal                            |
| Director                                         | Director                                         |
| Security Bank of Kansas City                     | Security Bank of Kansas City                     |
|                                                  |                                                  |
| John G. Moody                                    | John G. Moody                                    |
| Elected Official                                 | Elected Official                                 |
|                                                  |                                                  |
| OFFICERS:                                             | OFFICERS:                                             |
| R. Bradley Weaver                                | R. Bradley Weaver                                |
| Chief Executive Officer                          | Chief Executive Officer                          |
|                                                  |                                                  |
| Lannie E. Crawford                               | Lannie E. Crawford                               |
| President                                        | President                                        |
|                                                  |                                                  |
| Ronald J. Walters, CPA                                | Ronald J. Walters, CPA                           |
| Senior Vice President, Treasurer                 | Senior Vice President, Treasurer                 |
| and Chief Financial Officer                      | and Chief Financial Officer                      |
|                                                  |                                                  |
| Dale W. Keenan                                   | Dale W. Keenan                                   |
| Vice President                                   | Executive Vice President and                     |
|                                                  | Senior Lender                                    |
|                                                  |                                                  |
| Shannon Peterson                                 | Shannon Peterson                                 |
| Secretary                                        | Secretary                                        |

----

| CORPORATE HEADQUARTERS:                    | TRANSFER AGENT:                        |
|-------------------------------------------------|---------------------------------------------|
|                                            |                                        |
| 142 East First Street                      | Registrar and Transfer Company         |
| P.O. Box 777                               | 10 Commerce Drive                      |
| Mountain Grove, Missouri  65711  | Cranford, New Jersey  07016  |
|                                            | (800) 866-1340                         |
|                                            |                                        |
| INDEPENDENT AUDITORS:                      | COMMON STOCK:                          |
|                                            |                                        |
| McGladrey & Pullen, LLP                | Traded on The Nasdaq Stock Market LLC  |
| Kansas City, Missouri                      | Nasdaq Symbol: FBSI                         |
|                                            |                                        |
| GENERAL COUNSEL:                           |                                        |
|                                            |                                        |
| Harold F. Glass                            |                                        |
| Springfield, Missouri                      |                                        |
|                                            |                                        |
| SPECIAL COUNSEL:                           |                                        |
|                                            |                                        |
| Breyer & Associates PC                      |                                        |
| McLean, Virginia                           |                                        |

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