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| New Jersey                                                    |   | 22-3665653                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) |   | IRS Employer Identification Number) |

|   | 2650 Route 130, P.O. Box 634, Cranbury, NJ  08512  |   |
|--------|--------------------------------------------------------------|--------|
|   | (Address of Principal Executive Offices, including Zip Code) |   |

|   | (609) 655-4500                                             |   |
|--------|------------------------------------------------------------|--------|
|   | (Registrant’s telephone number, including area code) |   |

|   | Common Stock, No Par ValueStock Purchase Rights Relating to Common Stock, No Par Value |   |
|--------|----------------------------------------------------------------------------------------|--------|

|   |  None |   |
|--------|------------|--------|

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| Large accelerated filer                             | o      | Accelerated filer         | o |
|-----------------------------------------------------|--------|---------------------------|---|
|  Non-accelerated filer                         | o      | Smaller reporting company | x |
| (Do not check if a smaller reporting company)  |   |                      |

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|             | FORM 10-K                                                                                                                     |   |   |
|------------------|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|             |
|             | TABLE OF CONTENTS                                                                                                             |   |   |
|             |
|             | PART I                                                                                                                        |   |   |
|             |
| Item 1.     | Business                                                                                                                 |   | 1      |
| Item 1A.         | Risk Factors                                                                                                                  |   | 13     |
| Item 1B.         | Unresolved Staff Comments                                                                                                     |   | 19     |
| Item 2.     | Properties                                                                                                               |   | 20     |
| Item 3.     | Legal Proceedings                                                                                                        |   | 21     |
| Item 4.     | (Removed and Reserved)                                                                                                   |   | 21     |
|             |
|             | PART II                                                                                                                       |   |   |
|             |
| Item 5.     | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities  |   | 21     |
| Item 6.     | Selected Financial Data                                                                                                  |   | 22     |
| Item 7.     | Management’s Discussion and Analysis of Financial Condition and Results of Operation                               |   | 22     |
| Item 7A.         | Quantitative and Qualitative Disclosures About Market Risk                                                               |   | 48     |
| Item 8.     | Financial Statements and Supplementary Data                                                                              |   | 48     |
| Item 9.     | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                                     |   | 48     |
| Item 9A.         | Controls and Procedures                                                                                                  |   | 48     |
| Item 9B.         | Other Information                                                                                                             |   | 49     |
|             |
|             | PART III                                                                                                                      |   |   |
|             |
| Item 10.    | Directors, Executive Officers and Corporate Governance                                                                   |   | 49     |
| Item 11.    | Executive Compensation                                                                                                   |   | 49     |
| Item 12.    | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters                           |   | 49     |
| Item 13.    | Certain Relationships and Related Transactions, and Director Independence                                                |   | 51     |
| Item 14.    | Principal Accounting Fees and Services                                                                                   |   | 51     |
|             |
|             | PART IV                                                                                                                       |   |   |
|             |
| Item 15.    | Exhibits, Financial Statement Schedules                                                                                  |   | 51     |
|             |
| SIGNATURES  |                                                                                                                          | 56     |

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Item 1.  Business.

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|   | · | personal service; |
|--------|--------|-------------------|

|   | · | expansion of its branch network; |
|--------|--------|----------------------------------|

|   | · | innovative product offerings; and |
|--------|--------|-----------------------------------|

|   | · | technological advances and e-commerce. |
|--------|--------|----------------------------------------|

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|   | · | allows bank holding companies meeting management, capital and Community Reinvestment Act standards to engage in a substantially broader range of non-banking activities than is permissible for a bank holding company, including insurance underwriting and making merchant banking investments in commercial and financial companies; if a bank holding company elects to become a financial holding company, it files a certification, effective in 30 days, and thereafter may engage in certain financial activities without further approvals; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | allows banks to establish subsidiaries to engage in certain activities which a financial holding company could engage in, if the bank meets certain management, capital and Community Reinvestment Act standards; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | allows insurers and other financial services companies to acquire banks and removes various restrictions that currently apply to bank holding company ownership of securities firms and mutual fund advisory companies; and establishes the overall regulatory structure applicable to financial holding companies that also engage in insurance and securities operations. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a prohibition on personal loans made or arranged by the issuer to its directors and executive officers (except for loans made by a bank subject to Regulation O of the Federal Reserve Board); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | independence requirements for audit committee members; |
|--------|--------|--------------------------------------------------------|

|   | · | disclosure of whether at least one member of the audit committee is a “financial expert” (as such term is defined by the Securities and Exchange Commission (“SEC”) and if not, why not; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | independence requirements for outside auditors; |
|--------|--------|-------------------------------------------------|

|   | · | a prohibition by a company’s registered public accounting firm from performing statutorily mandated audit services for the company if the company’s chief executive officer, chief financial officer, comptroller, chief accounting officer or any person serving in equivalent positions had been employed by such firm and participated in the audit of such company during the one-year period preceding the audit initiation date; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | certification of financial statements and annual and quarterly reports by the principal executive officer and the principal financial officer; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement due to corporate misconduct; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | disclosure of off-balance sheet transactions; |
|--------|--------|-----------------------------------------------|

|   | · | two-business day filing requirements for insiders filing Forms 4; |
|--------|--------|-------------------------------------------------------------------|

|   | · | disclosure of a code of ethics for financial officers and filing a Form 8-K for a change or waiver of such code; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | “real time” filing of periodic reports; |
|--------|--------|-----------------------------------------------------|

|   | · | posting of certain SEC filings and other information on the company website; |
|--------|--------|------------------------------------------------------------------------------|

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|   | · | the reporting of securities violations “up the ladder” by both in-house and outside attorneys; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | restrictions on the use of non-GAAP financial measures; |
|--------|--------|---------------------------------------------------------|

|   | · | the formation of a public accounting oversight board; and |
|--------|--------|-----------------------------------------------------------|

|   | · | various increased criminal penalties for violations of securities laws. |
|--------|--------|-------------------------------------------------------------------------|

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Item 1A.  Risk Factors.

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|   | · | quarterly fluctuations in our operating and financial results; |
|--------|--------|----------------------------------------------------------------|

|   | · | operating results that vary from the expectations of management, securities analysts and investors; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | events negatively impacting the financial services industry which result in a general decline in the market valuation of our common stock; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | announcements of material developments affecting our operations or our dividend policy; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | future sales of our equity securities; |
|--------|--------|----------------------------------------|

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|   | · | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | changes in accounting standards, policies, guidance, interpretations or principles; and |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | general domestic economic and market conditions. |
|--------|--------|--------------------------------------------------|

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Item 1B.  Unresolved Staff Comments.

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Item 2.  Properties.

| Location                          | Leased orOwned                      | Original Year Leasedor Acquired | Year of LeaseExpiration |
|-----------------------------------|-------------------------------------|---------------------------------|-------------------------|
| Main Office                       |                                |                            |                    |
|                              | 2650 Route 130                      | Leased                          | 1989                    | 2017 |
|                              | Cranbury, New Jersey                |                            |                    |   |
|                              |                                |                            |                    |   |
| Village Office                    |                                |                            |                    |
|                              | 74 North Main Street                | Owned                           | 2005                    | --- |
|                              | Cranbury, New Jersey                |                            |                    |   |
|                              |                                |                            |                    |   |
| Montgomery Office                 |                                |                            |                    |
|                              | 947 State Road                      | Leased                          | 1995                    | 2011 |
|                              | Princeton, New Jersey               |                            |                    |   |
|                              |                                |                            |                    |   |
| Plainsboro Office                 |                                |                            |                    |
|                              | Plainsboro Village Center           | Leased                          | 1998                    | 2021 |
|                              | 11 Shalks Crossing Road             |                            |                    |   |
|                              | Plainsboro, New Jersey              |                            |                    |   |
|                              |                                |                            |                    |   |
| Hamilton Office                   |                                |                            |                    |
|                              | 3659 Nottingham Way                 | Leased                          | 1999                    | 2014 |
|                              | Hamilton, New Jersey                |                            |                    |   |
|                              |                                |                            |                    |   |
| Princeton Office                  |                                |                            |                    |
|                              | The Windrows at Princeton Forrestal | Leased                          | 2001                    | 2011 |
|                              | 2000 Windrow Drive                  |                            |                    |   |
|                              | Princeton, New Jersey               |                            |                    |   |
|                              |                                |                            |                    |   |
| Perth Amboy Office                |                                |                            |                    |
|                              | 145 Fayette Street                  | Leased                          | 2003                    | 2018 |
|                              | Perth Amboy, New Jersey             |                            |                    |   |
|                              |                                |                            |                    |   |
| Jamesburg Office                  |                                |                            |                    |
|                              | 1 Harrison Street                   | Owned                           | 2002                    | --- |
|                              | Jamesburg, New Jersey               |                            |                    |   |
|                              |                                |                            |                    |   |
| West Windsor Office               |                                |                            |                    |
|                              | 44 Washington Road                  | Leased                          | 2004                    | 2019 |
|                              | Princeton Jct, New Jersey           |                            |                    |   |
|                              |                                |                            |                    |
| Fort Lee Office                   |                                |                            |                    |
|                              | 180 Main Street                     | Leased                          | 2006                    | 2014 |
|                              | Fort Lee, New Jersey                |                            |                    |   |
|                              |                                |                            |                    |   |
| Hightstown Office                 |                                |                            |                    |
|                              | 140 Mercer Street                   | Leased                          | 2007                    | 2014 |
|                              | Hightstown, New Jersey              |                            |                    |   |
|                              |                                |                            |                    |   |
| Mortgage Warehouse Funding Office |                                |                            |                    |
|                              | 285 Davidson Avenue                 | Leased                          | 2009                    | 2015 |
|                              | Somerset, New Jersey                |                            |                    |   |
|                              |                                |                            |                    |   |
| Lawrenceville Property            |                                |                            |                    |
|                              | 146 Lawrenceville-Pennington Road,  | Owned                           | 2009                    | --- |
|                              | Lawrenceville, New Jersey           |                            |                    |   |
|                              |                                |                            |                    |   |
| South River Operations Center     | Leased                              | 2010                            | 2015                    |
|                              | 1246 South River Road, Bldg. 1      |                            |                    |   |
|                              | Cranbury, New Jersey                |                            |                    |   |

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Item 3.  Legal Proceedings.

Item 4.  (Removed and Reserved).

Item 5.  Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

|           |   | 2010(1) |   |   | 2009(1) |   |
|----------------|--------|---------|--------|--------|---------|--------|
|           |   | High    |   |   | Low     |   |   | High |   |   | Low |   |
| First Quarter  |   | $       | 8.29   |   |    | $      | 5.07 |   |   | $ | 9.76 |   |   | $ | 3.67 |   |
| Second Quarter |   |    | 8.50   |   |    |   | 6.12 |   |   |   | 9.06 |   |   |   | 5.44 |   |
| Third Quarter  |   |    | 7.57   |   |    |   | 5.80 |   |   |   | 8.26 |   |   |   | 6.67 |   |
| Fourth Quarter |   |    | 8.14   |   |    |   | 5.86 |   |   |   | 7.39 |   |   |   | 5.00 |   |

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| Period           |              | TotalNumber of SharesPurchased |   | AveragePrice PaidPer Share |   | Total Number ofShares PurchasedAs Part of PubliclyAnnounced Plan orProgram |   | MaximumNumber ofShares That MayYet be PurchasedUnder the Plan orProgram |   |
|------------------|-------------------|-------------------------------------|--------|----------------------------|--------|----------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
| Beginning        | Ending            |                                |   |                       |   |                                                                       |   |                                                                    |   |   |   |   |   |
| October 1, 2010  | October 31, 2010  |                                |   | -                          |   |                                                                       |   | -                                                                       |   |   |   | - |   |   |   | 171,394 |   |
| November 1, 2010 | November 30, 2010 |                                |   | 647                        |   |                                                                       | $      | 8.09                                                                    |   |   |   | 616 |   |   |   | 170,163 |   |
| December 1, 2010 | December 31, 2010 |                                |   | 584                        |   |                                                                       |   | 7.64                                                                    |   |   |   | 556 |   |   |   | 170,163 |   |
|             | Total             |                                |   | 1,231                      |   |                                                                       | $      | 7.88                                                                    |   |   |   | 1,172 |   |   |   | 170,163 |   |

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|   | (1) | The Company’s common stock repurchase program covers a maximum of 204,829 shares of common stock of the Company, representing 5% of the outstanding common stock of the Company on July 21, 2005, as adjusted for subsequent stock dividends. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 6.  Selected Financial Data.

 Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operation.

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|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|--------------------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|--------------------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|
| (interest and yields on a tax-equivalent basis)                                                                           |   |   | 2010               |   |   | 2009   |       |   |   | 2008   |        |
|                                                                                                                      |   |   | Average            |   |   |   |       |   |   |   |        |   |   |   | Average            |   |   |   |       |   |   |   |        |   |   |   | Average            |   |   |   |       |   |   |   |        |   |
|                                                                                                                      |   |   | BalanceOutstanding |   |   |   | Interest   |   |   |   | AverageRate |   |   |   | BalanceOutstanding |   |   |   | Interest   |   |   |   | AverageRate |   |   |   | BalanceOutstanding |   |   |   | Interest   |   |   |   | AverageRate |   |
|   Assets:                                                                                                            |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Federal Funds Sold/Short-Term         Investments                            |   | $      | $18,009,601        |   |   | $      | 45,023     |   |   |   | 0.25        | %      |   | $      | 39,676,869         |   |   | $      | 116,070    |   |   |   | 0.29        | %      |   | $      | 4,667,073          |   |   | $      | 112,427    |   |   |   | 2.41        | %      |
| Investment Securities:                                                                                                    |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|     Taxable                                                                                           |   |   | 197,134,646        |   |   |   | 4,782,984  |   |   |   | 2.43        | %      |   |   | 136,588,291        |   |   |   | 5,143,123  |   |   |   | 3.77        | %      |   |   | 84,611,384         |   |   |   | 4,158,923  |   |   |   | 4.92        | %      |
|     Tax-exempt (4)                                                                                    |   |   | 11,961,266         |   |   |   | 670,657    |   |   |   | 5.61        | %      |   |   | 12,483,060         |   |   |   | 720,245    |   |   |   | 5.77        | %      |   |   | 14,471,144         |   |   |   | 829,249    |   |   |   | 5.73        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|     Total                                                                                             |   |   | 209,095,912        |   |   |   | 5,453,641  |   |   |   | 2.61        | %      |   |   | 149,071,351        |   |   |   | 5,863,368  |   |   |   | 3.93        | %      |   |   | 99,082,528         |   |   |   | 4,988,172  |   |   |   | 5.03        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Loan Portfolio (1):                                                                                                       |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|     Construction                                                                                      |   |   | 71,590,569         |   |   |   | 4,080,517  |   |   |   | 5.70        | %      |   |   | 89,202,415         |   |   |   | 5,451,941  |   |   |   | 6.11        | %      |   |   | 115,517,676        |   |   |   | 8,090,444  |   |   |   | 7.00        | %      |
|     Residential Real Estate                                                                           |   |   | 10,866,758         |   |   |   | 635,681    |   |   |   | 5.85        | %      |   |   | 10,834,490         |   |   |   | 675,464    |   |   |   | 6.23        | %      |   |   | 10,376,822         |   |   |   | 652,728    |   |   |   | 6.29        | %      |
|      Home Equity                                                                                 |   |   | 13,500,060         |   |   |   | 786,419    |   |   |   | 5.83        | %      |   |   | 14,722,638         |   |   |   | 869,531    |   |   |   | 5.91        | %      |   |   | 15,490,320         |   |   |   | 986,117    |   |   |   | 6.37        | %      |
|     Commercial and Commercial       Real Estate                    |   |   | 139,672,655        |   |   |   | 9,441,741  |   |   |   | 6.76        | %      |   |   | 140,449,945        |   |   |   | 9,751,822  |   |   |   | 6.94        | %      |   |   | 127,377,980        |   |   |   | 9,302,815  |   |   |   | 7.30        | %      |
|      Mortgage Warehouse Lines                                                                    |   |   | 139,430,511        |   |   |   | 6,585,590  |   |   |   | 4.72        | %      |   |   | 114,749,562        |   |   |   | 5,305,911  |   |   |   | 4.62        | %      |   |   | 57,477,364         |   |   |   | 2,755,003  |   |   |   | 4.79        |   |
|      Installment                                                                                 |   |   | 523,354            |   |   |   | 39,409     |   |   |   | 7.53        | %      |   |   | 770,169            |   |   |   | 60,572     |   |   |   | 7.86        | %      |   |   | 1,204,297          |   |   |   | 96,375     |   |   |   | 8.00        | %      |
|      All Other Loans                                                                                  |   |   | 30,644,358         |   |   |   | 2,450,509  |   |   |   | 8.00        | %      |   |   | 32,843,891         |   |   |   | 2,275,030  |   |   |   | 6.93        | %      |   |   | 26,660,793         |   |   |   | 2,405,176  |   |   |   | 9.02        | %      |
|     Total                                                                                             |   |   | 406,228,265        |   |   |   | 24,019,866 |   |   |   | 5.91        | %      |   |   | 403,573,110        |   |   |   | 24,390,271 |   |   |   | 6.04        | %      |   |   | 354,105,252        |   |   |   | 24,288,658 |   |   |   | 6.86        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Total Interest-Earning Assets                                                                                             |   |   | 633,333,778        |   |   |   | 29,518,530 |   |   |   | 4.66        | %      |   |   | 592,321,330        |   |   |   | 30,369,709 |   |   |   | 5.13        | %      |   |   | 457,854,853        |   |   |   | 29,389,257 |   |   |   | 6.42        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Allowance for Loan Losses                                                                                                 |   |   | (5,249,095         | )      |   |   |       |   |   |   |        |   |   |   | (4,155,438         | )      |   |   |       |   |   |   |        |   |   |   | (3,612,156         | )      |   |   |       |   |   |   |        |   |
| Cash and Due From Banks                                                                                                   |   |   | 9,468,512          |   |   |   |       |   |   |   |        |   |   |   | 18,414,336         |   |   |   |       |   |   |   |        |   |   |   | 12,446,849         |   |   |   |       |   |   |   |        |   |
| Other Assets                                                                                                              |   |   | 29,680,680         |   |   |   |       |   |   |   |        |   |   |   | 21,030,355         |   |   |   |       |   |   |   |        |   |   |   | 22,180,579         |   |   |   |       |   |   |   |        |   |
| Total Assets                                                                                                              |   | $      | 667,233,875        |   |   |   |       |   |   |   |        |   |   | $      | 627,610,583        |   |   |   |       |   |   |   |        |   |   | $      | 488,870,125        |   |   |   |       |   |   |   |        |   |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Liabilities and Shareholders' Equity:                                                                                     |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Interest-Bearing Liabilities:                                                                                             |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|     Money Market and NOW Accounts                                                                     |   | $      | 121,849,620        |   |   | $      | 1,705,233  |   |   |   | 1.40        | %      |   | $      | 105,526,965        |   |   | $      | 1,987,269  |   |   |   | 1.88        | %      |   | $      | 89,274,785         |   |   | $      | 2,164,369  |   |   |   | 2.42        | %      |
|     Savings Accounts                                                                                  |   |   | 177,605,496        |   |   |   | 1,896,323  |   |   |   | 1.07        | %      |   |   | 154,261,417        |   |   |   | 2,907,443  |   |   |   | 1.88        | %      |   |   | 79,864,816         |   |   |   | 1,990,479  |   |   |   | 2.49        | %      |
|     Certificates of Deposit under $100,000                                                            |   |   | 87,523,084         |   |   |   | 1,525,160  |   |   |   | 1.74        | %      |   |   | 84,121,374         |   |   |   | 2,454,236  |   |   |   | 2.92        | %      |   |   | 76,921,495         |   |   |   | 3,096,986  |   |   |   | 4.03        | %      |
|     Certificates of Deposit of         $100,000 and Over |   |   | 73,573,668         |   |   |   | 1,521,153  |   |   |   | 2.07        | %      |   |   | 93,913,185         |   |   |   | 2,480,084  |   |   |   | 2.64        | %      |   |   | 70,297,311         |   |   |   | 2,855,024  |   |   |   | 4.06        | %      |
|     Other Borrowed Funds                                                                              |   |   | 35,883,534         |   |   |   | 1,100,354  |   |   |   | 3.07        | %      |   |   | 29,526,575         |   |   |   | 1,353,489  |   |   |   | 4.58        | %      |   |   | 37,111,612         |   |   |   | 1,556,238  |   |   |   | 4.19        | %      |
|     Trust Preferred Securities                                                                        |   |   | 18,557,000         |   |   |   | 1,071,275  |   |   |   | 5.78        | %      |   |   | 18,557,000         |   |   |   | 1,072,827  |   |   |   | 5.78        | %      |   |   | 18,557,000         |   |   |   | 1,069,351  |   |   |   | 5.76        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Total Interest-Bearing Liabilities                                                                                        |   |   | 514,992,402        |   |   |   | 8,819,498  |   |   |   | 1.71        | %      |   |   | 485,906,516        |   |   |   | 12,255,348 |   |   |   | 2.52        | %      |   |   | 372,027,019        |   |   |   | 12,732,447 |   |   |   | 3.42        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Net Interest Spread (2)                                                                                                   |   |   |               |   |   |   |       |   |   |   | 2.95        | %      |   |   |               |   |   |   |       |   |   |   | 2.61        | %      |   |   |               |   |   |   |       |   |   |   | 3.00        | %      |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
| Non-interest Bearing   Demand Deposits                                                                     |   |   | 87,482,143         |   |   |   |       |   |   |   |        |   |   |   | 78,588,727         |   |   |   |       |   |   |   |        |   |   |   | 69,907,048         |   |   |   |       |   |   |   |        |   |
| Other Liabilities                                                                                                         |   |   | 7,497,664          |   |   |   |       |   |   |   |        |   |   |   | 6,480,126          |   |   |   |       |   |   |   |        |   |   |   | 4,608,108          |   |   |   |       |   |   |   |        |   |
| Total Liabilities                                                                                                         |   |   | 609,972,209        |   |   |   |       |   |   |   |        |   |   |   | 570,975,369        |   |   |   |       |   |   |   |        |   |   |   | 446,542,175        |   |   |   |       |   |   |   |        |   |
| Shareholders' Equity                                                                                                      |   |   | 57,261,666         |   |   |   |       |   |   |   |        |   |   |   | 56,635,214         |   |   |   |       |   |   |   |        |   |   |   | 42,327,950         |   |   |   |       |   |   |   |        |   |
| Total Liabilities and Shareholders' Equity                                                                                |   | $      | 667,233,875        |   |   |   |       |   |   |   |        |   |   | $      | 627,610,583        |   |   |   |       |   |   |   |        |   |   | $      | 488,870,125        |   |   |   |       |   |   |   |        |   |
|                                                                                                                      |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |   |   |               |   |   |   |       |   |   |   |        |   |
|                Net Interest Margin (3)         |   |   |               |   |   | $      | 20,699,032 |   |   |   | 3.27        | %      |   |   |               |   |   | $      | 18,114,361 |   |   |   | 3.06        | %      |   |   |               |   |   | $      | 16,656,810 |   |   |   | 3.64        | %      |

| (1) | Loan origination fees are considered an adjustment to interest income.  For the purpose of calculating loan yields, average loan balances include nonaccrual loans with no related interest income. Please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation under the heading “Non-Performing Assets” for a discussion of the Bank’s policy with regard to non-accrual loans. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The interest rate spread is the difference between the average yield on interest earning assets and the average rate paid on interest bearing liabilities. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The net interest margin is equal to net interest income divided by average interest earning assets. |
|-----|-----------------------------------------------------------------------------------------------------|

| (4) | Tax equivalent basis. |
|-----|-----------------------|

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Table of Contents

|   Rate/Volume Table                                                                |   | Amount of Increase (Decrease)           |       |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                         |   | Year Ended December 31,2010 versus 2009 |       |   | Year Ended December 31,2009 versus 2008 |   |
|                                                                                         |   | Due to Change in:                       |       |   | Due to Change in: |   |
| (Tax-equivalent basis)                                                                       |   | Volume                                  |       |   | Rate |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
|                                                                                         |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Income:                                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Loans:                                                               |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Construction                                 |   | $                                       | (1,040,889 | ) |   | $ | (330,535 | ) |   | $ | (1,371,424 | ) |   | $ | (1,693,382 | ) |   | $ | (945,121 | ) |   | $ | (2,638,503 | ) |
|         Residential Real Estate                      |   |                                    | 1,699      |   |   |   | (41,482 | ) |   |   | (39,783 | ) |   |   | 28,874 |   |   |   | (6,138 | ) |   |   | 22,736 |   |
|         Home Equity                                  |   |                                    | (71,794    | ) |   |   | (11,318 | ) |   |   | (83,112 | ) |   |   | (47,116 | ) |   |   | (69,469 | ) |   |   | (116,586 | ) |
|         Commercial and Commercial Real Estate        |   |                                    | (55,607    | ) |   |   | (254,474 | )  |   |   | (310,081 | ) |   |   | 870,410 |   |   |   | (421,403 | )  |   |   | 449,007 |   |
|         Mortgage Warehouse Lines                     |   |                                    | 1,152,595  |   |   |   | 127,085 |   |   |   | 1,279,679 |   |   |   | 2,695,979 |   |   |   | (145,072 | ) |   |   | 2,550,908 |   |
|         Installment                                  |   |                                    | (19,011    | ) |   |   | (2,153 | ) |   |   | (21,163 | ) |   |   | (34,424 | ) |   |   | (1,379 | ) |   |   | (35,803 | ) |
|         All Other Loans                              |   |                                    | (164,189   | ) |   |   | 339,668 |   |   |   | 175,479 |   |   |   | 492,389 |   |   |   | (622,537 | ) |   |   | (130,147 | ) |
| Total Loans                                                                                  |   |                                    | (197,196   | )  |   |   | (173,209 | ) |   |   | (370,405 | ) |   |   | 2,312,730 |   |   |   | (2,221,118 | ) |   |   | 101,612 |   |
|     Investment Securities :                                              |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Taxable                                      |   |                                    | 1,876,372  |   |   |   | (2,236,511 | ) |   |   | (360,139 | ) |   |   | 2,257,248 |   |   |   | (1,273,048 | ) |   |   | 984,200 |   |
|         Tax-exempt                                   |   |                                    | (29,863    | ) |   |   | (19,725 | )  |   |   | (49,588 | ) |   |   | (114,354 | ) |   |   | 5,350 |   |   |   | (109,004 | ) |
| Total Investment Securities                                                                  |   |                                    | 1,846,509  |   |   |   | (2,256,236 | ) |   |   | (409,727 | ) |   |   | 2,142,894 |   |   |   | (1,267,697 | ) |   |   | 875,196 |   |
|     Federal Funds Sold / Short-Term Investments                          |   |                                    | 176,019    |   |   |   | (247,066 | ) |   |   | (71,047 | ) |   |   | 180,375 |   |   |   | (176,732 | ) |   |   | 3,643 |   |
| Total Interest Income                                                                        |   |                                    | 1,825,332  |   |   |   | (2,676,511 | ) |   |   | (851,179 | ) |   |   | 4,635,999 |   |   |   | (3,655,548 | ) |   |   | 980,451 |   |
|                                                                                         |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense :                                                                           |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Money Market and NOW Accounts                |   |  $                                 | 265,680    |   |   |  $ | (547,716 | ) |   | $ | (282,036 | ) |   |  $ | 349,145 |   |   | $ | (526,243 | )  |   | $ | (177,098 | )  |
|         Savings Accounts                             |   |                                    | 338,633    |   |   |   | (1,349,753 | ) |   |   | (1,011,120 | ) |   |   | 1,628,306 |   |   |   | (711,343 | ) |   |   | 916,963 |   |
|         Certificates of Deposit under $100,000       |   |                                    | 81,443     |   |   |   | (1,010,519 | ) |   |   | (929,076 | ) |   |   | 250,617 |   |   |   | (893,368 | ) |   |   | (642,751 | ) |
|         Certificates of Deposit of $100,000 and Over |   |                                    | (480,295   | )  |   |   | (478,636 | ) |   |   | (958,931 | )  |   |   | 791,043 |   |   |   | (1,165,984 | ) |   |   | (374,941 | )  |
|         Other Borrowed Funds                         |   |                                    | 241,933    |   |   |   | (495,068) |   |   |   | (253,135 | ) |   |   | (332,648 | ) |   |   | 129,899 |   |   |   | (202,749 | ) |
|         Trust Preferred Securities                   |   |                                    | 0          |   |   |   | (1,552 | ) |   |   | (1,552 | ) |   |   | 0 |   |   |   | 3,476 |   |   |   | 3,476 |   |
| Total Interest Expense                                                                       |   |                                    | 447,394    |   |   |   | (3,883,244 | ) |   |   | (3,435,850 | )  |   |   | 2,686,463 |   |   |   | (3,163,563 | ) |   |   | (477,100 | )  |
|                                                                                         |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                                                          |   | $                                       | 1,377,938  |   |   | $ | 1,206,733 |   |   |  $ | 2,584,671 |   |   | $ | 1,949,536 |   |   | $ | (491,985 | ) |   | $ | 1,457,551 |   |
|                                                                                         |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

----

Table of Contents

|                                         |   |
|----------------------------------------------|--------|
| Non-interest Expenses                        |   |   |   |   |   |   |
|                                         |   | 2010 |   |   | 2009 |   |
| Salaries and employee benefits               |   | $ | 10,087,569 |   |   | $ | 9,352,360 |   |
| Occupancy expense                            |   |   | 1,903,702 |   |   |   | 1,783,031 |   |
| Data processing services                     |   |   | 1,121,519 |   |   |   | 1,085,257 |   |
| Equipment expense                            |   |   | 657,905 |   |   |   | 631,677 |   |
| Marketing                                    |   |   | 140,975 |   |   |   | 130,393 |   |
| Regulatory, professional and consulting fees |   |   | 1,087,314 |   |   |   | 1,006,830 |   |
| Office expense                               |   |   | 657,430 |   |   |   | 572,477 |   |
| FDIC deposit insurance                       |   |   | 816,125 |   |   |   | 1,193,309 |   |
| Directors’ fees                        |   |   | 104,375 |   |   |   | 105,700 |   |
| Other real estate owned expenses             |   |   | 336,307 |   |   |   | 123,795 |   |
| Other expenses                               |   |   | 905,902 |   |   |   | 1,130,972 |   |
| Total                                        |   | $ | 17,819,123 |   |   | $ | 17,115,801 |   |
|                                         |   |   |   |   |   |   |   |   |

----

Table of Contents

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Table of Contents

|                                                                                                                                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   |     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|----------|--------|
|                                                                                                                                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair     |   |
| 2010                                                                                                                                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value    |   |
|                                                                                                                                                                                        |   |      |       |   |       |   |      |       |   |   |     |   |
| Available for sale-                                                                                                                                                                         |   |      |       |   |       |   |      |       |   |   |
| U. S. Treasury securities and                                                                                                                                                               |   |      |       |   |       |   |      |       |   |   |     |   |
| obligations of U.S. Government                                                                                                                                                              |   |      |       |   |       |   |      |       |   |   |     |   |
| sponsored corporations (“GSE”) and agencies                                                                                                                                     |   | $         | 34,299,374 |   |       | $      | 60,189    |       |   | $      | 0        |   |   | $ | 34,359,563 |   |
|          Residential collateralized mortgage obligations- GSE                                                                                  |   |      | 18,653,850 |   |       |   | 483,908   |       |   |   | 0        |   |   |   | 19,137,758 |   |
|          Residential collateralized mortgage obligations-             non GSE |   |      | 5,677,577  |   |       |   | 113,496   |       |   |   | (29,751  | )      |   |   | 5,761,322 |   |
| Residential mortgage backed securities - GSE                                                                                                                                                |   |      | 16,963,589 |   |       |   | 1,206,146 |       |   |   | 0        |   |   |   | 18,169,735 |   |
| Obligations of State and                                                                                                                                                                    |   |      |       |   |       |   |      |       |   |   |     |   |   |   |   |   |
| Political subdivisions                                                                                                                                                                      |   |      | 3,110,145  |   |       |   | 23,768    |       |   |   | (112,485 | )      |   |   | 3,021,428 |   |
|          Trust preferred debt securities                                                                                                       |   |      | 2,460,380  |   |       |   | 0         |       |   |   | (602,877 | )      |   |   | 1,857,503 |   |
|          Corporate debt securities                                                                                                             |   |      | 1,495,438  |   |       |   | 4,973     |       |   |   | (1,827   | )      |   |   | 1,498,584 |   |
|          Restricted stock                                                                                                                      |   |      | 1,640,100  |   |       |   | 0         |       |   |   | 0        |   |   |   | 1,640,100 |   |
|          Mutual fund                                                                                                                           |   |      | 25,000     |   |       |   | 0         |       |   |   | 0        |   |   |   | 25,000 |   |
|                                                                                                                                                                                        |   |      |       |   |       |   |      |       |   |   |     |   |   |   |   |   |
|                                                                                                                                                                                        |   | $         | 84,325,453 |   |       | $      | 1,892,480 |       |   | $      | (746,940 | )      |   | $ | 85,470,993 |   |

|                                                                                                                                                                                             |   |      Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveIncome |   |     |      CarryingValue |   |   |     GrossUnrealizedGains |   |   |     GrossUnrealizedLosses |    |   |      FairValue |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|--------|-----------------------------------------------------------------------------------------|--------|----------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|---------|--------|-----------------------------------------|--------|
| Held to maturity-                                                                                                                                                                                |   |                                         |       |   |                                                                                    |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
|     U. S. Treasury securities and                                                                                                                                            |   |                                         |       |   |                                                                                    |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
|          obligations of U.S. Government                                                                                                             |   |                                         |       |   |                                                                                    |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
|          sponsored corporations (“GSE”) and              agencies |   | $                                            | 23,170,741 |   |                                                                                    | $      | 0        |                                        |   | $      | 23,170,741                                   |   |   | $                                             | 93,600  |   |                                    | $      | (50,721 | ) |   | $ | 23,213,620 |   |
|     Residential collateralized        mortgage obligations – GSE                                                               |   |                                         | 2,520,690  |   |                                                                                    |   | 0        |                                        |   |   | 2,520,690                                    |   |   |                                          | 84,253  |   |                                    |   | 0 |   |   |   | 2,604,943 |   |
|     Residential mortgage backed        securities – GSE                                                                        |   |                                         | 9,344,517  |   |                                                                                    |   | 0        |                                        |   |   | 9,344,517                                    |   |   |                                          | 131,443 |   |                                    |   | (41,711 | ) |   |   | 9,434,249 |   |
| Obligations of State and                                                                                                                                                                         |   |                                         |       |   |                                                                                    |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|       Political subdivisions                                                                                                                                       |   |                                         | 19,467,404 |   |                                                                                    |   | 0        |                                        |   |   | 19,467,404                                   |   |   |                                          | 245,290 |   |                                    |   | (352,534 | ) |   |   | 19,360,160 |   |
| Trust preferred debt securities - pooled                                                                                                                                                         |   |                                         | 642,478    |   |                                                                                    |   | (500,944 | )                                           |   |   | 141,534                                      |   |   |                                          | 0       |   |                                    |   | (137,361 | ) |   |   | 4,173 |   |
| Corporate debt securities                                                                                                                                                                        |   |                                         | 27,245,009 |   |                                                                                    |   | 0        |                                        |   |   | 27,245,009                                   |   |   |                                          | 67,696  |   |                                    |   | (217,846 | ) |   |   | 27,094,859 |   |
|                                                                                                                                                                                             |   |                                         |       |   |                                                                                    |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                             |   | $                                            | 82,390,839 |   |                                                                                    | $      | (500,944 | )                                           |   | $      | 81,889,895                                   |   |   | $                                             | 622,282 |   |                                    | $      | (800,173 | ) |   | $ | 81,712,004 |   |

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Table of Contents

|                                                                                                                                                                                                      |   |      |        |   | Gross      |   |      | Gross      |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                                                                                                                                                                                      |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair       |   |
| 2009                                                                                                                                                                                                      |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | Value      |   |
|                                                                                                                                                                                                      |   |      |        |   |       |   |      |       |   |   |       |   |
| Available for sale-                                                                                                                                                                                       |   |      |        |   |       |   |      |       |   |   |
| U. S. Treasury securities and                                                                                                                                                                             |   |      |        |   |       |   |      |       |   |   |       |   |
| obligations of U.S. Government                                                                                                                                                                            |   |      |        |   |       |   |      |       |   |   |       |   |
| sponsored corporations (“GSE”) and agencies                                                                                                                                                   |   | $         | 138,351,028 |   |       | $      | 291,906   |       |   | $      | (673,252   | )      |   | $ | 137,969,682 |   |
|          Residential collateralized mortgage obligations - GSE                                                                                               |   |      | 26,541,021  |   |       |   | 141,061   |       |   |   | (158,696   | )      |   |   | 26,523,387 |   |
|          Residential collateralized mortgage obligations –              non- GSE |   |      | 8,208,102   |   |       |   | 31,637    |       |   |   | (93,327    | )      |   |   | 8,146,411 |   |
| Residential mortgage backed securities – GSE                                                                                                                                                        |   |      | 24,182,584  |   |       |   | 1,449,071 |       |   |   | 0          |   |   |   | 25,631,655 |   |
| Obligations of State and                                                                                                                                                                                  |   |      |        |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Political subdivisions                                                                                                                                                                                    |   |      | 2,633,210   |   |       |   | 45,644    |       |   |   | (91,212    | )      |   |   | 2,587,642 |   |
|          Trust preferred debt securities                                                                                                                     |   |      | 2,457,262   |   |       |   | 0         |       |   |   | (687,089   | )      |   |   | 1,770,173 |   |
|          Restricted stock                                                                                                                                    |   |      | 1,464,900   |   |       |   | 0         |       |   |   | 0          |   |   |   | 1,464,900 |   |
|          Mutual fund                                                                                                                                         |   |      | 25,000      |   |       |   | 0         |       |   |   | 0          |   |   |   | 25,000 |   |
|                                                                                                                                                                                                      |   |      |        |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                                                                                                                                                                                      |   | $         | 203,863,107 |   |       | $      | 1,959,319 |       |   | $      | (1,703,576 | )      |   | $ | 204,118,850 |   |

|                                                                                                                                  |   |      Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveLoss |   |     |      CarryingValue |   |   |     GrossUnrealizedGains |   |   |     GrossUnrealizedLosses |    |   |      FairValue |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|--------|----------------------------------------------------------------------------------|--------|----------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|---------|--------|-----------------------------------------|--------|
| Held to maturity-                                                                                                                     |   |                                         |       |   |                                                                             |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
|     Residential collateralized        mortgage obligations – GSE    |   | $                                            | 4,881,475  |   |                                                                             | $      | -        |                                        |   | $      | 4,881,475                                    |   |   | $                                             | 150,055 |   |                                    | $      | 0 |   |   | $ | 5,031,530 |   |
|     Residential mortgage backed          securities – GSE |   |                                         | 6,111,131  |   |                                                                             |   | -        |                                        |   |   | 6,111,131                                    |   |   |                                          | 97,782  |   |                                    |   | (29,521 | ) |   |   | 6,179,392 |   |
| Obligations of State and                                                                                                              |   |                                         |       |   |                                                                             |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|       Political subdivisions                                                                            |   |                                         | 8,600,596  |   |                                                                             |   | -        |                                        |   |   | 8,600,596                                    |   |   |                                          | 270,947 |   |                                    |   | 0 |   |   |   | 8,871,543 |   |
| Trust preferred debt securities - pooled                                                                                              |   |                                         | 633,998    |   |                                                                             |   | (500,944 | )                                           |   |   | 133,054                                      |   |   |                                          | 0       |   |                                    |   | 0 |   |   |   | 133,054 |   |
| Corporate debt securities                                                                                                             |   |                                         | 3,882,724  |   |                                                                             |   | -        |                                        |   |   | 3,882,724                                    |   |   |                                          | 117,287 |   |                                    |   | 0 |   |   |   | 4,000,011 |   |
|                                                                                                                                  |   |                                         |       |   |                                                                             |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|                                                                                                                                  |   | $                                            | 24,109,924 |   |                                                                             | $      | (500,944 | )                                           |   | $      | 23,608,980                                   |   |   | $                                             | 636,071 |   |                                    | $      | (29,521 | ) |   | $ | 24,215,530 |   |

|                                                                                  |   |      |       |   | Gross      |   |      | Gross      |   |   |       |   |
|---------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                                                                  |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair       |   |
| 2008                                                                                  |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value      |   |
|                                                                                  |   |      |       |   |       |   |      |       |   |   |       |   |
| Available for sale-                                                                   |   |      |       |   |       |   |      |       |   |   |       |   |
| U. S. Treasury securities and                                                         |   |      |       |   |       |   |      |       |   |   |       |   |
| obligations of U.S. Government                                                        |   |      |       |   |       |   |      |       |   |   |       |   |
| sponsored corporations (“GSE”) and agencies                               |   | $         | 22,802,334 |   |       | $      | 415,626   |       |   | $      | 0          |   |   | $ | 23,217,960 |   |
| Residential collateralized mortgage obligations – GSE                           |   |      | 7,014,272  |   |       |   | 16,792    |       |   |   | (253,432   | )      |   |   | 6,777,632 |   |
| Residential mortgage backed securities - GSE                                          |   |      | 54,727,033 |   |       |   | 1,930,299 |       |   |   | (594       | )      |   |   | 56,656,738 |   |
| Obligations of State and                                                              |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Political subdivisions                                                                |   |      | 2,868,049  |   |       |   | 6,872     |       |   |   | (16,234    | )      |   |   | 2,858,687 |   |
|          Trust preferred debt securities |   |      | 2,454,969  |   |       |   | 0         |       |   |   | (1,173,163 | )      |   |   | 1,281,806 |   |
|          Restricted stock                |   |      | 2,659,200  |   |       |   | 0         |       |   |   | 0          |   |   |   | 2,659,200 |   |
| Mutual fund                                                                           |   |      | 25,000     |   |       |   | 0         |       |   |   | 0          |   |   |   | 25,000 |   |
|                                                                                  |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                                                                  |   | $         | 92,550,857 |   |       | $      | 2,369,589 |       |   | $      | (1,443,423 | )      |   | $ | 93,477,023 |   |

----

Table of Contents

|                                                                                                                                                               |   |      Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveLoss |   |    |      CarryingValue |   |   |     GrossUnrealizedGains |   |   |     GrossUnrealizedLosses |    |   |      FairValue |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|--------|----------------------------------------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|---------|--------|-----------------------------------------|--------|
| Held to maturity-                                                                                                                                                  |   |                                         |       |   |                                                                             |   |    |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
| U. S. Treasury securities and obligations    of U.S. Government sponsored    corporations (“GSE”) and agencies |   | $                                            | 10,000,000 |   |                                                                             | $      |  - |                                        |   | $      | 1,000,000                                    |   |   | $                                             | 193,800 |   |                                    | $      |  0 |   |   | $ | 10,193,800 |   |
|     Residential collateralized        mortgage obligations – GSE                                 |   |                                         | 8,727,315  |   |                                                                             |   | -       |                                        |   |   | 8,727,315                                    |   |   |                                          | 49,897  |   |                                    |   | (9,675 | ) |   |   | 8,767,537 |   |
|     Residential mortgage backed securities –         GSE                                    |   |                                         | 3,794,931  |   |                                                                             |   | -       |                                        |   |   | 3,794,931                                    |   |   |                                          | 33,007  |   |                                    |   | (212 | ) |   |   | 3,827,726 |   |
| Obligations of State and                                                                                                                                           |   |                                         |       |   |                                                                             |   |    |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|       Political subdivisions                                                                                                         |   |                                         | 10,516,726 |   |                                                                             |   | -       |                                        |   |   | 10,516,726                                   |   |   |                                          | 75,515  |   |                                    |   | (93,502 | ) |   |   | 10,498,739 |   |
| Trust preferred debt securities - pooled                                                                                                                           |   |                                         | 982,160    |   |                                                                             |   | -       |                                        |   |   | 982,160                                      |   |   |                                          | 0       |   |                                    |   | (635,172 | ) |   |   | 346,988 |   |
| Corporate debt securities                                                                                                                                          |   |                                         | 2,529,445  |   |                                                                             |   | -       |                                        |   |   | 2,529,445                                    |   |   |                                          | 0       |   |                                    |   | (23,856 | ) |   |   | 2,505,589 |   |
|                                                                                                                                                               |   |                                         |       |   |                                                                             |   |    |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|                                                                                                                                                               |   | $                                            | 36,550,577 |   |                                                                             |   | -       |                                        |   | $      | 36,550,577                                   |   |   | $                                             | 352,219 |   |                                    | $      | (762,417 | ) |   | $ | 36,140,379 |   |

|                                                     |   | AmortizedCost |       |   | FairValue |   |       | WeightedAverageYield* |   |
|----------------------------------------------------------|--------|---------------|------------|--------|-----------|--------|------------|-----------------------|--------|
| Available for sale-                                      |   |          |       |   |      |   |       |                  |   |
|    Due in one year or less                |   | $             | 35,978,738 |   |      | $      | 36,039,903 |                  |   |   | 0.90 | % |
|    Due after one year through five years  |   |          | 3,021,270  |   |      |   | 3,087,164  |                  |   |   | 3.38 | % |
|    Due after five years through ten years |   |          | 5,855,939  |   |      |   | 6,167,604  |                  |   |   | 5.04 | % |
|    Due after ten years                    |   |          | 39,469,506 |   |      |   | 40,176,322 |                  |   |   | 3.90 | % |
|                                                     |   |          |       |   |      |   |       |                  |   |   |   |   |
| Total                                                    |   | $             | 84,325,453 |   |      | $      | 85,470,993 |                  |   |   | 2.70 | % |
|                                                     |   |          |       |   |      |   |       |                  |   |   |   |   |
| Held to maturity-                                        |   |          |       |   |      |   |       |                  |   |   |   |   |
|    Due in one year or less                |   | $             | 1,268,643  |   |      | $      | 1,264,678  |                  |   |   | 1.70 | % |
|    Due after one year through five years  |   |          | 48,663,237 |   |      |   | 48,622,175 |                  |   |   | 1.71 | % |
|    Due after five years through ten years |   |          | 12,653,167 |   |      |   | 12,825,064 |                  |   |   | 4.21 | % |
|    Due after ten years                    |   |          | 19,805,792 |   |      |   | 19,000,087 |                  |   |   | 4.86 | % |
|                                                     |   |          |       |   |      |   |       |                  |   |   |   |   |
| Total                                                    |   | $             | 82,390,839 |   |      | $      | 81,712,004 |                  |   |   | 2.85 | % |

----

Table of Contents

| Pooled Trust Preferred Security Detail |
|----------------------------------------|
|    Security             |    Class |   BookValue |   FairValue |  UnrealizedGain (Loss) | Percent ofUnderlyingCollateralPerforming | Percent ofUnderlyingCollateralIn Deferral | Percent ofUnderlying CollateralIn Default |  Moody’s/S & PRatings |
| PreTSL XXV                             | B-1 | $141,534 | $4,273 | $(137,261) | 64.1% | 23.3% | 12.6% | Caa2/NR |

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Table of Contents

|                                           |   |   December 31, |
|------------------------------------------------|--------|---------------------|
|                                           |   | 2010                | 2009 |   | 2008 |   | 2007 |   | 2006 |
|                                           |   | Amount              |   |   | % | Amount |   |   | % |   | Amount |   |   | % |   | Amount |   |   | % |   | Amount |   |   | % |
| Construction loans                             |   | $                   | 67,890,703 |   |   |   | 16 | % |   | $ | 79,805,278 |   |   |   | 21 | % |   | $ | 94,163,997 |   |   |   | 25 | % |   | $ | 132,735,920 |   |   |   | 45 | % |   | $ | 125,268,871 |   |   |   | 47 | % |
| Residential real estate   Loans |   |                | 10,435,038 |   |   |   | 3 | % |   |   | 10,253,895 |   |   |   | 3 | % |   |   | 11,078,402 |   |   |   | 3 | % |   |   | 10,088,515 |   |   |   | 3 | % |   |   | 7,670,370 |   |   |   | 3 | % |
| Commercial business                            |   |                | 54,733,172 |   |   |   | 13 | % |   |   | 57,925,392 |   |   |   | 15 | % |   |   | 57,528,879 |   |   |   | 15 | % |   |   | 57,232,295 |   |   |   | 19 | % |   |   | 48,112,857 |   |   |   | 18 | % |
| Commercial real estate                         |   |                | 95,277,814 |   |   |   | 23 | % |   |   | 96,306,097 |   |   |   | 25 | % |   |   | 90,904,418 |   |   |   | 24 | % |   |   | 77,896,347 |   |   |   | 27 | % |   |   | 66,784,183 |   |   |   | 26 | % |
| Mortgage warehouse lines                       |   |                | 169,575,899 |   |   |   | 41 | % |   |   | 119,382,078 |   |   |   | 32 | % |   |   | 106,000,231 |   |   |   | 28 | % |   |   | - |   |   |   | 0 | % |   |   | - |   |   |   | 0 | % |
| Loans to individuals                           |   |                | 13,349,036 |   |   |   | 3 | % |   |   | 15,554,027 |   |   |   | 4 | % |   |   | 16,797,194 |   |   |   | 5 | % |   |   | 16,324,817 |   |   |   | 6 | % |   |   | 16,728,025 |   |   |   | 6 | % |
| Deferred loan fees                             |   |                | 543,753 |   |   |   | 0 | % |   |   | 489,809 |   |   |   | 0 | % |   |   | 647,673 |   |   |   | 0 | % |   |   | 302,818 |   |   |   | 0 | % |   |   | 404,074 |   |   |   | 0 | % |
| All other loans                                |   |                | 181,924 |   |   |   | 0 | % |   |   | 229,159 |   |   |   | 0 | % |   |   | 227,622 |   |   |   | 0 | % |   |   | 180,006 |   |   |   | 0 | % |   |   | 173,933 |   |   |   | 0 | % |
|                                           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                          |   | $                   | 411,987,339 |   |   |   | 100 | % |   | $ | 379,945,735 |   |   |   | 100 | % |   | $ | 377,348,416 |   |   |   | 100 | % |   | $ | 294,760,718 |   |   |   | 100 | % |   | $ | 265,142,313 |   |   |   | 100 | % |
|                                           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

|                                    |   | Maturity Range |        |   |                          |   |
|-----------------------------------------|--------|----------------|-------------|--------|-------------------------------|--------|
|  Type                              |   | WithinOneYear  |        |   | After One ButWithinFive Years |   |   | AfterFiveYears |   |   | Total |   |
| Commercial & commercial real estate |   | $              | 41,808,492  |   |                          |   | 33,096,048 |   |   |   | 75,106,446 |   |   |   | 150,010,986 |   |
| Construction                            |   |           | 64,748,758  |   |                          |   | 2,240,428 |   |   |   | 901,517 |   |   |   | 67,890,703 |   |
| Total                                   |   | $              | 106,557,250 |   |                          |   | 35,336,476 |   |   |   | 76,007,963 |   |   |   | 217,901,689 |   |
|                                    |   |           |        |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Fixed rate loans                        |   | $              | 4,496,869   |   |                          |   | 20,919,105 |   |   |   | 13,020,878 |   |   |   | 38,436,852 |   |
| Floating rate loans                     |   |           | 102,060,381 |   |                          |   | 14,417,371 |   |   |   | 62,987,085 |   |   |   | 179,464,837 |   |
|  Total                             |   | $              | 106,557,250 |   |                          |   | 35,336,476 |   |   |   | 76,007,963 |   |   |   | 217,901,689 |   |

----

Table of Contents

|                                                                                                         |   |               |       |   |   |   |      |   |   |   |      |   |   |   |      |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Non-Performing Assets and Loans                                                                              |   |  December 31, |       |
|                                                                                                         |   | 2010               |       |   | 2009   |   |      | 2008   |   |   | 2007      |   |   | 2006   |      |
| Non-Performing loans:                                                                                        |   |               |       |   |   |   |      |   |   |   |      |   |   |   |      |
|    Loans 90 days or more past due and       still accruing |   | $                  | 0          |   |   | $      | 145,898   |   |   | $      | 0         |   |   | $      | 0         |   |   | $ | 0 |   |
|    Non-accrual loans                                                                          |   |               | 8,809,167  |   |   |   | 4,161,628 |   |   |   | 3,351,777 |   |   |   | 2,036,858 |   |   |   | 4,193,209 |   |
|    Total non-performing loans                                                                 |   |               | 8,809,167  |   |   |   | 4,307,526 |   |   |   | 3,351,777 |   |   |   | 2,036,858 |   |   |   | 4,193,209 |   |
| Other real estate owned:                                                                                     |   |               | 4,850,818  |   |   |   | 1,362,621 |   |   |   | 4,296,536 |   |   |   | 2,960,727 |   |   |   | 0 |   |
|    Total non-performing assets                                                                |   | $                  | 13,659,985 |   |   | $      | 5,670,147 |   |   | $      | 7,648,313 |   |   | $      | 4,997,585 |   |   | $ | 4,193,209 |   |
|                                                                                                         |   |               |       |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Non-performing loans to total loans                                                                          |   |               | 2.14       | %      |   |   | 1.13      | %      |   |   | 0.89      | %      |   |   | 0.67      | % |   |   | 1.50 | % |
| Non-performing assets to total assets                                                                        |   |               | 2.12       | %      |   |   | 0.84      | %      |   |   | 1.40      | %      |   |   | 1.16      | % |   |   | 1.07 | % |
|                                                                                                         |   |               |       |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |

----

Table of Contents

| Aging of Financing Receivables (By Class)  |   |       |      |   |       |   |   |                 |   |   |           |   |   |
|--------------------------------------------|--------|------------|-----------|--------|------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|
|                                       |   | 30-59 Days |      |   | 60-89 Days |   |   | Greater than 90 Days |   |   | Total Past Due |   |   | Current |   |   | TotalLoan Receivable |   |   | Recorded Investment > 90 Days Accruing |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Commercial                                 |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |
|    Construction             |   | $          | 0         |   |       | $      | 0      |                 |   | $      | 6,569,296      |   |   | $ | 6,569,296 |   |   | $ | 61,321,407 |   |   | $ | 67,890,703 |   |   | $ | 0 |   |
|    Commercial Business      |   |       | 113,801   |   |       |   | 60,526 |                 |   |   | 605,208        |   |   |   | 779,335 |   |   |   | 53,953,637 |   |   |   | 54,733,172 |   |   |   | 0 |   |
|    Commercial Real Estate   |   |       | 3,179,541 |   |       |   | 0      |                 |   |   | 1,411,390      |   |   |   | 4,590,931 |   |   |   | 90,686,883 |   |   |   | 95,277,814 |   |   |   | 0 |   |
|    Mortgage Warehouse Lines |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |   | 0 |   |   |   | 169,575,899 |   |   |   | 169,575,899 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Residential Real Estate  |   |       | 173,708   |   |       |   | 0      |                 |   |   | 0              |   |   |   | 173,708 |   |   |   | 10,261,330 |   |   |   | 10,435,038 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer                                   |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans to Individuals     |   |       | 0         |   |       |   | 0      |                 |   |   | 77,858         |   |   |   | 77,858 |   |   |   | 13,271,178 |   |   |   | 13,349,036 |   |   |   | 0 |   |
|    Other                    |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |   | 0 |   |   |   | 181,924 |   |   |   | 181,924 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred Loan Fees                         |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |   | 0 |   |   |   | 543,753 |   |   |   | 543,753 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                      |   | $          | 3,467,050 |   |       | $      | 60,526 |                 |   | $      | 8,663,752      |   |   | $ | 12,191,328 |   |   | $ | 399,796,011 |   |   | $ | 411,987,339 |   |   | $ | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | · | General economic conditions. |
|--------|--------|------------------------------|

|   | · | Trends in charge-offs. |
|--------|--------|------------------------|

|   | · | Trends and levels of delinquent loans. |
|--------|--------|----------------------------------------|

|   | · | Trends and levels of non-performing loans, including loans over 90 days delinquent. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Trends in volume and terms of loans. |
|--------|--------|--------------------------------------|

|   | · | Levels of allowance for specific classified loans. |
|--------|--------|----------------------------------------------------|

|   | · | Credit concentrations. |
|--------|--------|------------------------|

----

Table of Contents

|   | · | Management judges the loan to be uncollectible; |
|--------|--------|-------------------------------------------------|

|   | · | Repayment is deemed to be protracted beyond reasonable time frames; |
|--------|--------|---------------------------------------------------------------------|

|   | · | The loan has been classified as a loss by either internal loan review process or external examiners; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | The customer has filed bankruptcy and the loss becomes evident owing to a lack of assets; or |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | The loan is significantly past due unless both well secured and in the process of collection. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

Table of Contents

|   | · | Consumer credit scores |
|--------|--------|------------------------|

|   | · | Internal credit risk grades |
|--------|--------|-----------------------------|

|   | · | Loan-to-value ratios |
|--------|--------|----------------------|

|   | · | Collateral |
|--------|--------|------------|

|   | · | Collection experience |
|--------|--------|-----------------------|

----

Table of Contents

| Commercial Credit Exposure - By Internally Assigned Grade                         |   | Construction         |       |   | Commercial Business |   |       | Commercial Real Estate |   |   | Mortgage Warehouse Lines |   |   | Residential Real Estate |        |
|-----------------------------------------------------------------------------------|--------|----------------------|------------|--------|---------------------|--------|------------|------------------------|--------|--------|--------------------------|--------|--------|-------------------------|-------------|
|                                                                              |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |
| Grade:                                                                            |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |
| Pass                                                                              |   | $                    | 52,445,421 |   |                | $      | 52,587,444 |                   |   | $      | 85,122,509               |   |   | $                       | 169,575,899 |   |   | $ | 10,435,038 |   |
| Special Mention                                                                   |   |                 | 4,482,569  |   |                |   | 433,377    |                   |   |   | 3,668,243                |   |   |                    | 0           |   |   |   | 0 |   |
| Substandard                                                                       |   |                 | 10,962,713 |   |                |   | 1,499,461  |                   |   |   | 5,823,312                |   |   |                    | 0           |   |   |   | 0 |   |
| Doubtful                                                                          |   |                 | 0          |   |                |   | 212,890    |                   |   |   | 663,750                  |   |   |                    | 0           |   |   |   | 0 |   |
| Total                                                                             |   | $                    | 67,890,703 |   |                | $      | 54,733,172 |                   |   | $      | 95,277,814               |   |   | $                       | 169,575,899 |   |   | $ | 10,435,038 |   |
|                                                                              |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Consumer Credit Exposure -      By Payment Activity |   | Loans To Individuals |       |   | Other               |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |
|                                                                              |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Performing                                                                        |   | $                    | 13,271,178 |   |                | $      | 181,924    |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Nonperforming                                                                     |   |                 | 77,858     |   |                |   | 0          |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Total                                                                             |   | $                    | 13,349,036 |   |                | $      | 181,924    |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |

| Period-End Allowance for Credit Losses Balances By Impairment Method and Loan Class                                                      |   |         |       |   |       |   |       |        |   |   |       |   |   |        |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|------------|-------------|--------|--------|------------|--------|--------|-------------|
|                                                                                                                                     |   |         |       |   |       |   |       | Commercial  |   |   | Mortgage   |   |   | Residential |   |   |   |   |   |   |   |   |   |   |   | Deferred |   |   | Total |   |
|                                                                                                                                     |   | Construction |       |   | Commercial |   |       | Real Estate |   |   | Warehouse  |   |   | Real Estate |   |   | Consumer |   |   | Other |   |   | Unallocated |   |   | Fees |   |   |   |   |
| Allowance for credit losses:                                                                                                             |   |         |       |   |       |   |       |        |   |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   | $            | 1,744,068  |   |       | $      | 971,994    |        |   | $      | 1,723,865  |   |   | $           | 763,092 |   |   | $ | 67,828 |   |   | $ | 192,457 |   |   | $ | 1,910 |   |   | $ | 297,498 |   |   | $ | 0 |   |   | $ | 5,762,712 |   |
|                                                                                                                                     |   |         |       |   |       |   |       |        |   |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   |         |       |   |       |   |       |        |   |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated     for impairment                                                           |   |         | 45,000     |   |       |   | 180,525    |        |   |   | 271,382    |   |   |        | 0 |   |   |   | 0 |   |   |   | 77,858 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 574,765 |   |
|   Collectively evaluated      for impairment                                                     |   |         | 1,699,068  |   |       |   | 791,469    |        |   |   | 1,452,483  |   |   |        | 763,092 |   |   |   | 67,828 |   |   |   | 114,599 |   |   |   | 1,910 |   |   |   | 297,498 |   |   |   | 0 |   |   |   | 5,187,947 |   |
|                                                                                                                                     |   |         |       |   |       |   |       |        |   |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivables:                                                                                                                       |   |         |       |   |       |   |       |        |   |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   | $            | 67,890,703 |   |       | $      | 54,733,172 |        |   | $      | 95,277,814 |   |   | $           | 169,575,899 |   |   | $ | 10,435,038 |   |   | $ | 13,271,178 |   |   | $ | 181,924 |   |   |   | -- |   |   |   | -- |   |   | $ | 411,987,339 |   |
|   Individually evaluated        for impairment                                         |   |         | 4,142,137  |   |       |   | 3,177,782  |        |   |   | 1,411,390  |   |   |        | 0 |   |   |   | 0 |   |   |   | 77,858 |   |   |   | 0 |   |   |   | -- |   |   |   | 0 |   |   |   | 8,809,167 |   |
|   Collectively evaluated       for impairment                                               |   |         | 63,748,566 |   |       |   | 51,555,390 |        |   |   | 93,866,424 |   |   |        | 169,575,899 |   |   |   | 10,435,038 |   |   |   | 13,271,178 |   |   |   | 181,924 |   |   |   | -- |   |   |   | 543,753 |   |   |   | 403,178,172 |   |
|    Loans acquired with            deteriorated credit quality |   |         | 0          |   |       |   | 0          |        |   |   | 0          |   |   |        | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | -- |   |   |   | 0 |   |   |   | 0 |   |

----

Table of Contents

| Impaired Loans Receivables (By Class)      |   |               |      |   |                    |   |      |
|--------------------------------------------|--------|--------------------|-----------|--------|-------------------------|--------|-----------|
|                                       |   |               |      |   |                    |   |      |   |   |
|                                       |   | RecordedInvestment |      |   | UnpaidPrincipal Balance |   |      | RelatedAllowance |   |
|                                       |   |               |      |   |                    |   |      |   |   |
| With no related allowance:                 |   |               |      |   |                    |   |      |   |   |
|                                       |   |               |      |   |                    |   |      |   |   |
| Commercial                                 |   |               |      |   |                    |   |      |   |   |
|    Construction             |   | $                  | 4,409,296 |   |                    | $      | 4,453,796 |   |   | $ | -- |   |
|    Commercial Business      |   |               | 385,370   |   |                    |   | 394,654   |   |   |   | -- |   |
|    Commercial Real Estate   |   |               | 554,986   |   |                    |   | 554,986   |   |   |   | -- |   |
|    Mortgage Warehouse Lines |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Residential Real Estate                    |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Consumer                                   |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Loans to Individuals     |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|    Other                    |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| With an allowance:                         |   |               |      |   |                    |   |      |   |   |   |   |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Commercial                                 |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Construction             |   |               | 2,160,000 |   |                    |   | 2,160,000 |   |   |   | 45,000 |   |
|    Commercial Business      |   |               | 365,253   |   |                    |   | 365,253   |   |   |   | 180,525 |   |
|    Commercial Real Estate   |   |               | 856,404   |   |                    |   | 856,404   |   |   |   | 271,382 |   |
|    Mortgage Warehouse Lines |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Residential Real Estate                    |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Consumer                                   |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Loans to Individuals     |   |               | 77,858    |   |                    |   | 77,858    |   |   |   | 77,858 |   |
|    Other                    |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Total:                                     |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Commercial               |   | $                  | 8,731,309 |   |                    | $      | 8,785,093 |   |   | $ | 496,907 |   |
|    Residential Real Estate  |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|    Consumer                 |   |               | 77,858    |   |                    |   | 77,858    |   |   |   | 77,858 |   |

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Table of Contents

| Allowance for Loan Losses                                                                              |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |
|--------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|---------|--------|--------|-------------|--------|--------|--------|-------------|
|                                                                                                   |   | 2010   |        |   | 2009   |   |        | 2008    |   |   | 2007        |   |   | 2006   |        |
| Balance, beginning of year                                                                             |   | $      | 4,505,387   |   |   | $      | 3,684,764   |    |   | $      | 3,348,080   |   |   | $      | 3,228,360   |   |   | $ | 2,361,375 |   |
|                                                                                                   |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
| Provision charged to operating expenses                                                                |   |   | 2,325,000   |   |   |   | 2,553,000   |    |   |   | 640,000     |   |   |   | 130,000     |   |   |   | 893,500 |   |
|                                                                                                   |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
| Loans charged off:                                                                                     |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
|    Construction loans                                                                   |   |   | (450,000    | )      |   |   | (1,226,754  | )  |   |   | (53,946     |   |   |   | -      |   |   |   | - |   |
|    Residential real estate loans                                                        |   |   | -           |   |   |   | -           |    |   |   | (31,865     | )      |   |   | -      |   |   |   | - |   |
|    Commercial and commercial real       estate loans |   |   | (609,468    | )      |   |   | (511,791    | )       |   |   | (220,565    | )      |   |   | (88,891     | ) |   |   | (11,154 | ) |
|    Loans to individuals                                                                 |   |   | (22,087     | )      |   |   | (1,973      | )       |   |   | -           |   |   |   | (1,614      | ) |   |   | (18,314 | ) |
|    All other loans                                                                      |   |   | -           |   |   |   | -           |    |   |   | -           |   |   |   | -           |   |   |   | - |   |
|                                                                                                   |   |   | (1,081,555  | )      |   |   | (1,740,518  | )       |   |   | (306,376    | )      |   |   | (90,983     | ) |   |   | (29,468 | ) |
| Recoveries:                                                                                            |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
|    Construction loans                                                                   |   |   | -           |   |   |   | -           |    |   |   | -           |   |   |   | 75,000      |   |   |   | - |   |
|    Residential real estate loans                                                        |   |   | -           |   |   |   | -           |    |   |   | -           |   |   |   | -           |   |   |   | - |   |
|    Commercial and commercial real       estate loans |   |   | 13,880      |   |   |   | 2,575       |    |   |   | 3,060       |   |   |   | -           |   |   |   | 153 |   |
|    Loans to individuals                                                                 |   |   | -           |   |   |   | 5,566       |    |   |   | -           |   |   |   | 5,703       |   |   |   | 2,800 |   |
|    Lease financing                                                                      |   |   | -           |   |   |   | -           |    |   |   | -           |   |   |   | -           |   |   |   | - |   |
|    All other loans                                                                      |   |   | -           |   |   |   | -           |    |   |   | -           |   |   |   | -           |   |   |   | - |   |
|                                                                                                   |   |   | 13,880      |   |   |   | 8,141       |    |   |   | 3,060       |   |   |   | 80,703      |   |   |   | 2,953 |   |
| Net (charge offs) / recoveries                                                                         |   |   | (1,067,675  | )      |   |   | (1,732,377  | )       |   |   | (303,316    | )      |   |   | (10,280     | ) |   |   | (26,515 | ) |
|                                                                                                   |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
| Balance, end of year                                                                                   |   | $      | 5,762,712   |   |   | $      | 4,505,387   |    |   | $      | 3,684,764   |   |   | $      | 3,348,080   |   |   | $ | 3,228,360 |   |
|                                                                                                   |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
| Loans (excluding held for sale loans):                                                                 |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
|    At year end                                                                          |   | $      | 411,987,339 |   |   | $      | 379,945,735 |    |   | $      | 377,348,416 |   |   | $      | 294,760,718 |   |   | $ | 265,142,313 |   |
|    Average during the year                                                              |   |   | 387,575,677 |   |   |   | 384,314,052 |    |   |   | 340,666,744 |   |   |   | 281,176,955 |   |   |   | 259,397,578 |   |
|    Net (charge offs) recoveries to averageloans outstanding                             |   |   | (0.28       | %)     |   |   | (0.45       | %)      |   |   | (0.09       | %)     |   |   | (0.00       | %) |   |   | (0.01 | %) |
| Allowance for loan losses to:                                                                          |   |   |        |   |   |   |        |    |   |   |        |   |   |   |        |   |   |   |   |   |
|    Total loans at year end                                                              |   |   | 1.40        | %      |   |   | 1.19        | %       |   |   | 0.98        | %      |   |   | 1.14        | % |   |   | 1.22 | % |
|    Non-performing loans                                                                 |   |   | 65.42       | %      |   |   | 104.59      | %       |   |   | 109.93      | %      |   |   | 164.37      | % |   |   | 76.99 | % |

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Table of Contents

| Allocation of the Allowance for Loan Losses                  |
|--------------------------------------------------------------|
|                                                         |
|                                                         |   | December 31, 2010 |   | December 31, 2009 |   | December 31, 2008 |   | December 31, 2007 |   | December 31, 2006 |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   | Amount |   |   | % ofloans ineachcategoryto totalloans |   | Amount |   |   | % ofloans ineach categoryto totalloans |   | Amount |   |   | % ofloans ineachcategoryto totalloans |   | Amount |   |   | % ofloans ineachcategoryto totalloans |   | Amount |   |   | % ofloans ineachcategoryto totalloans |
| Balance at end of period applicable to:                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Domestic:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Commercial and commercialreal estate loans |   | $ | 2,695,859 |   |   |   | 36 | % |   | $ | 1,486,659 |   |   |   | 40 | % |   | $ | 1,477,550 |   |   |   | 39 | % |   | $ | 1,671,059 |   |   |   | 46 | % |   | $ | 1,131,266 |   |   |   | 44 | % |
|    Construction loans                         |   |   | 1,744,068 |   |   |   | 16 | % |   |   | 1,739,332 |   |   |   | 21 | % |   |   | 1,478,520 |   |   |   | 25 | % |   |   | 1,308,651 |   |   |   | 45 | % |   |   | 1,696,175 |   |   |   | 47 | % |
|     Mortgage warehouse lines             |   |   | 763,092 |   |   |   | 41 | % |   |   | 537,219 |   |   |   | 32 | % |   |   | 477,001 |   |   |   | 28 | % |   |   | - |   |   |   | 0 | % |   |   | - |   |   |   | 0 | % |
|    Residential real estate loans              |   |   | 67,828 |   |   |   | 3 | % |   |   | 72,718 |   |   |   | 3 | % |   |   | 71,087 |   |   |   | 3 | % |   |   | 104,326 |   |   |   | 3 | % |   |   | 61,634 |   |   |   | 3 | % |
|    Loans to individuals                       |   |   | 194,367 |   |   |   | 3 | % |   |   | 145,542 |   |   |   | 4 | % |   |   | 149,386 |   |   |   | 5 | % |   |   | 154,437 |   |   |   | 6 | % |   |   | 139,055 |   |   |   | 6 | % |
|    Unallocated                                |   |   | 297,498 |   |   |   |   |   |   |   | 523,917 |   |   |   |   |   |   | 31,220 |   |   |   |   |   |   | 109,607 |   |   |   |   |   |   | 200,230 |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   | $ | 5,762,712 |   |   |   | 100 | % |   | $ | 4,505,387 |   |   |   | 100 | % |   | $ | 3,684,764 |   |   |   | 100 | % |   | $ | 3,348,080 |   |   |   | 100 | % |   | $ | 3,228,360 |   |   |   | 100 | % |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                                           |   |
|--------------------------------------------------------------------------------|--------|
|                                                                           |   |
| Average Deposit Balances                                                       |   |
|                                                                           |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                                                           |   | AverageBalance |   |   | Percentageof Total |   |   | AverageBalance |   |   | Percentage of Total |   |   | AverageBalance |   |   | Percentageof Total |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand     Deposits              |   | $ | 87,482,143 |   |   |   | 16 | % |   | $ | 78,588,727 |   |   |   | 15 | % |   | $ | 69,907,048 |   |   |   | 18 | % |
| Interest bearing demand deposits                                               |   |   | 121,849,620 |   |   |   | 22 | % |   |   | 105,526,965 |   |   |   | 21 | % |   |   | 89,274,785 |   |   |   | 23 | % |
| Savings deposits                                                               |   |   | 177,605,496 |   |   |   | 32 | % |   |   | 154,261,417 |   |   |   | 30 | % |   |   | 79,864,816 |   |   |   | 21 | % |
| Certificates of deposit of $100,000      or more |   |   | 73,573,668 |   |   |   | 13 | % |   |   | 93,913,185 |   |   |   | 18 | % |   |   | 70,297,311 |   |   |   | 18 | % |
| Other certificates of deposit                                                  |   |   | 87,523,084 |   |   |   | 16 | % |   |   | 84,121,374 |   |   |   | 16 | % |   |   | 76,921,495 |   |   |   | 20 | % |
|       Total                                      |   | $ | 548,034,011 |   |   |   | 100 | % |   | $ | 516,411,668 |   |   |   | 100 | % |   | $ | 386,265,455 |   |   |   | 100 | % |
|                                                                           |   |

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Table of Contents

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Table of Contents

|                                  |   | One Yearor Less |        |   | One toThree Years |   |   | Three toFive Years |   |   | Over FiveYears |   |   | Total |   |
|---------------------------------------|--------|-----------------|-------------|--------|-------------------|--------|--------|--------------------|--------|--------|----------------|--------|--------|-------|--------|
| Standby letters of credit             |   | $               | 3,563,120   |   |              | $      | 0      |               |   | $      | 0              |   |   | $     | 0      |   |   | $ | 3,563,120 |   |
| Commitments to extend credit          |   | $               | 182,610,215 |   |              | $      | 0      |               |   | $      | 0              |   |   | $     | 0      |   |   | $ | 182,610,215 |   |
| Commitments to sell residential loans |   | $               | 21,219,230  |   |              | $      | 0      |               |   | $      | 0              |   |   | $     | 0      |   |   | $ | 21,219,230 |   |

----

Table of Contents

| Interest Rate Sensitivity Analysis at December 31, 2010   |   |                        |    |   |           |   |    |                  |   |   |    |   |   |                |    |   |                 |   |    |
|-----------------------------------------------------------|--------|-----------------------------|---------|--------|----------------|--------|---------|-----------------------|--------|--------|---------|--------|--------|---------------------|---------|--------|----------------------|--------|---------|
|                                                      |   |                        |    |   |           |   |    |                  |   |   |    |   |   | TotalWithinOne Year |    |   | One YeartoFive Years |   |    |   |   |   |   |   |   |   |   |
| ( $ in thousands )                                        |   | Interest Sensitivity Period |    |   | OverFive Years |   |    | Non-interestSensitive |   |   |    |   |
|                                                      |   | 30 Day                      |    |   | 90 Day         |   |    | 180 Day               |   |   | 365 Day |   |   | Total               |    |
| Assets :                                                  |   |                        |    |   |           |   |    |                  |   |   |    |   |   |                |    |   |                 |   |    |   |   |   |   |   |   |   |   |
|    Cash and due from banks                 |   | $                           | 9,519   |   |           | $      | -       |                  |   | $      | -       |   |   | $                   | -       |   |                 | $      | 9,519   |   |   | $ | - |   |   | $ | - |   |   | $ | 8,180 |   |   | $ | 17,699 |   |
|    Federal funds sold                      |   |                        | 11      |   |           |   | -       |                  |   |   | -       |   |   |                | -       |   |                 |   | 11      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11 |   |
|    Investment securities                   |   |                        | 8,162   |   |           |   | 31,064  |                  |   |   | 20,414  |   |   |                | 10,889  |   |                 |   | 70,529  |   |   |   | 69,027 |   |   |   | 27,805 |   |   |   | - |   |   |   | 167,361 |   |
|    Loans held for sale                     |   |                        | 21,219  |   |           |   | -       |                  |   |   | -       |   |   |                | -       |   |                 |   | 21,219  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,219 |   |
|    Loans, net of allowance for loan losses |   |                        | 289,816 |   |           |   | 7,711   |                  |   |   | 9,938   |   |   |                | 16,615  |   |                 |   | 324,080 |   |   |   | 69,976 |   |   |   | 17,932 |   |   |   | (5,763 | ) |   |   | 406,225 |   |
|    Other assets                            |   |                        | -       |   |           |   | -       |                  |   |   | -       |   |   |                | -       |   |                 |   | -       |   |   |   | - |   |   |   | - |   |   |   | 31,880 |   |   |   | 31,880 |   |
|                                                      |   | $                           | 328,727 |   |           | $      | 38,775  |                  |   | $      | 30,352  |   |   | $                   | 27,504  |   |                 | $      | 425,358 |   |   | $ | 139,003 |   |   | $ | 45,737 |   |   | $ | 34,297 |   |   | $ | 644,395 |   |
| Sources of Funds :                                        |   |                        |    |   |           |   |    |                  |   |   |    |   |   |                |    |   |                 |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Demand deposits - noninterest bearing   |   | $                           | -       |   |           | $      | -       |                  |   | $      | -       |   |   | $                   | -       |   |                 | $      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | 92,023 |   |   | $ | 92,023 |   |
|    Demand deposits - interest bearing      |   |                        | 58,964  |   |           |   | -       |                  |   |   | -       |   |   |                | -       |   |                 |   | 58,964  |   |   |   | 59,470 |   |   |   | 11,435 |   |   |   | - |   |   |   | 129,869 |   |
|    Savings deposits                        |   |                        | 110,200 |   |           |   | -       |                  |   |   | -       |   |   |                | 19      |   |                 |   | 110,219 |   |   |   | 24,762 |   |   |   | 30,408 |   |   |   | - |   |   |   | 165,389 |   |
|    Time deposits                           |   |                        | 10,942  |   |           |   | 29,128  |                  |   |   | 25,315  |   |   |                | 42,568  |   |                 |   | 107,953 |   |   |   | 48,501 |   |   |   | - |   |   |   | - |   |   |   | 156,454 |   |
|    Borrowings                              |   |                        | 15,900  |   |           |   | -       |                  |   |   | -       |   |   |                |    |   |                 |   | 15,900  |   |   |   | - |   |   |   | 10,000 |   |   |   | - |   |   |   | 25,900 |   |
|    Redeemable subordinated debentures      |   |                        | -       |   |           |   | 18,557  |                  |   |   | -       |   |   |                | -       |   |                 |   | 18,557  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 18,557 |   |
|    Non-interest-bearing sources            |   |                        | -       |   |           |   | -       |                  |   |   | -       |   |   |                | -       |   |                 |   | -       |   |   |   | - |   |   |   | - |   |   |   | 56,203 |   |   |   | 56,203 |   |
|                                                      |   | $                           | 196,006 |   |           | $      | 47,685  |                  |   | $      | 25,315  |   |   | $                   | 42,587  |   |                 | $      | 311,593 |   |   | $ | 132,733 |   |   | $ | 51,843 |   |   | $ | 148,226 |   |   | $ | 644,395 |   |
|                                                      |   |                        |    |   |           |   |    |                  |   |   |    |   |   |                |    |   |                 |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset (Liability) Sensitivity Gap :                       |   |                        |    |   |           |   |    |                  |   |   |    |   |   |                |    |   |                 |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Period Gap                              |   | $                           | 132,721 |   |           | $      | (8,910  | )                     |   | $      | 5,037   |   |   | $                   | (15,083 | )      |                 | $      | 113,765 |   |   | $ | 6,270 |   |   | $ | (6,106 | ) |   | $ | (113,929 | ) |   |   | - |   |
|    Cumulative Gap                          |   | $                           | 132,721 |   |           | $      | 123,811 |                  |   | $      | 128,848 |   |   | $                   | 113,765 |   |                 | $      | 113,765 |   |   | $ | (120,035 | ) |   | $ | 113,929 |   |   |   | - |   |   |   | - |   |
|    Cumulative Gap to Total Assets          |   |                        | 20.6    | %      |           |   | 19.2    | %                     |   |   | 20.0    | %      |   |                | 17.7    | %      |                 |   | 17.7    | % |   |   | (18.6 | )% |   |   | - |   |   |   | - |   |   |   | - |   |

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

Item 8.  Financial Statements and Supplementary Data.

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

Item 9A.  Controls and Procedures.

|   | · | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the receipts and expenditures of the Company are being made only in accordance with authorizations of its management and directors; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 9B.  Other Information.

Item 10.  Directors, Executive Officers and Corporate Governance.

Item 11.  Executive Compensation.

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

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| Plan category                                                                     |   | Number of securities tobe issued upon exerciseof outstanding options,warrants and rights(a) |    | Weighted-average exerciseprice of outstanding options,warrants and rights(b) |   | Number of securitiesremaining available forfuture issuance under equitycompensation plans(excluding securitiesreflected in column (a))(c) |
|-----------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
|  Equity compensation plans approved by   security holders (1) |   |                                                                                        | 140,045 |                                                                         |   | $                                                                                                                                         | 11.03 |   |   |   | 235,554 |   |
| Equity compensation plans not approved by   security holders (2)   |   |                                                                                        | 16,199  |                                                                         |   | $                                                                                                                                         | 5.85 |   |   |   | - |   |
| Total                                                                             |   |                                                                                        | 156,244 |                                                                         |   | $                                                                                                                                         | 10.74 |   |   |   | 235,554 |   |

|   | (1) | Includes the Company’s 2000 Employee Stock Option and Restricted Stock Plan, 2005 Equity Incentive Plan and 2006 Directors Stock Plan. The Company’s 2000 Employee Stock Option and Restricted Stock Plan was adopted by the Board of the Company and approved by the shareholders in April 2000, the Company’s 2005 Equity Incentive Plan was adopted by the Board of the Company on February 17, 2005 and approved by the shareholders in May 2005 and the Company’s 2006 Directors Stock Plan was adopted by the Board of the Company on March 23, 2006 and approved by the shareholders in May 2006. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Directors Stock Option and Restricted Stock Plan. The Company’s Directors Stock Option and Restricted Stock Plan was adopted by the Board, and became effective, on April 22, 1999, prior to the listing of the Company’s common stock on the Nasdaq National Market System. The plan provides for grants of non-qualified stock options and restricted stock awards to directors of the Company and its subsidiaries. Participants in the plan may be granted non-qualified stock options or restricted stock. All stock option grants have an exercise price per share of no less than the fair market value per share of common stock on the grant date and may have a term of no longer than 10 years after the grant date. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 13.  Certain Relationships and Related Transactions, and Director Independence.

 Item 14.  Principal Accounting Fees and Services.

Item 15.  Exhibits, Financial Statement Schedules.

| Exhibit No. |                                  | Description |
|-------------|---------------------------------------|-------------|
|        |                                  |        |   |
| 3           | (i)(A)                                |        | Certificate of Incorporation of the Company (conformed copy) (incorporated by reference to Exhibit 3(i)(A) to the Company’s Form 10-K filed with the SEC on March 27, 2009) |
|        |                                  |        |   |
| 3           | (i)(B)                                |        | Certificate of Amendment to the Certificate of Incorporation increasing the number of shares designated as Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |                                  |        |   |
| 3           | (i)(C)                                |        | Certificate of Amendment to the Certificate of Incorporation establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series B (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |                                  |        |   |
| 3           | (ii)(A)      |        | Bylaws of the Company (conformed copy) (incorporated by reference to Exhibit 3(ii)(A) to the Company’s Form 8-K filed with the SEC on October 22, 2007) |

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| Exhibit No. |    |   | Description                                                                                                                                                                                                                                                                                                                                                                               |
|-------------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 3           | (ii)(B) |   | Amendment No. 2 to By-laws of the Company (incorporated by reference to Exhibit 3(ii)(B) to the Company’s Form 8-K filed with the SEC on October 22, 2007)                                                                                                                                                                                                                          |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.1         |    |   | Specimen Share of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-KSB (SEC File No. 000-32891) filed with the SEC on March 22, 2002)                                                                                                                                                                                                                |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.2         |    |   | Amended and Restated Declaration of Trust of 1st Constitution Capital Trust I dated as of April 10, 2002 among the Registrant, as sponsor, Wilmington Trust Company, as Delaware and institutional trustee, and the Administrators named therein (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002) |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.3         |    |   | Indenture dated as of April 10, 2002 between the Registrant, as issuer, and Wilmington Trust Company, as trustee, relating to the Floating Rate Junior Subordinated Debt Securities due 2032 (incorporated by reference to Exhibit 4.3 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002)                                                     |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.4         |    |   | Guarantee Agreement dated as of April 10, 2002 between the Registrant and the Wilmington Trust Company, as guarantee trustee (incorporated by reference to Exhibit 4.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002)                                                                                                                     |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.5         |    |   | Rights Agreement, dated as of March 18, 2004, between 1st Constitution Bancorp and Registrar and Transfer Company, as Rights Agent, (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-A12G (SEC File No. 000-32891) filed with the SEC on March 18, 2004)                                                                                                           |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 4.6         |    |   | Warrant, dated December 23, 2008, to purchase shares of 1st Constitution Bancorp common stock (incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008)                                                                                                                                                                          |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.1        |    | #      | 1st Constitution Bancorp Supplemental Executive Retirement Plan, dated as of October 1, 2002 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)                                                                                                                                              |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.2        |    | #      | Amended and Restated 1st Constitution Bancorp Directors’ Insurance Plan, effective as of June 16, 2005 (incorporated by reference to Exhibit No. 10 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on March 24, 2006)                                                                                                                                  |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3        |    | #      | 1st Constitution Bancorp Form of Executive Life Insurance Agreement (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)                                                                                                                                                                       |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.4        |    | #      | 2000 Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.3 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)                                                                                                                                                                                        |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.5        |    | #      | Directors Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.4 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)                                                                                                                                                                                            |
|        |    |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.6        |    | #      | Employment Agreement between the Company and Robert F. Mangano dated April 22, 1999 (incorporated by reference to Exhibit No. 6.5 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)                                                                                                                                                         |

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| Exhibit No. |   |   | Description                                                                                                                                                                                                                                                                    |
|-------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.7        |   | #      | Amendment No. 1 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective January 1, 2004 (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)                     |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.8        |   | #      | Change of Control Agreement, effective as of April 1, 2004, by and between the Company and Joseph M. Reardon (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)                      |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.9        |   | #      | Form of Stock Option Agreement under the 1st Constitution Bancorp  Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.14 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004)     |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.10       |   | #      | Form of Restricted Stock Agreement under the 1st Constitution Bancorp  Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004) |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.11       |   | #      | Employment Agreement between the Company and Robert F. Mangano dated February 22, 2005 (incorporated by reference to Exhibit No. 10.16 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on February 24, 2005)                                       |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.12       |   | #      | The 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Appendix A of the Company's proxy statement  (SEC File No. 000-32891) filed with the SEC on April 15, 2005)                                                                    |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.13       |   | #      | Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company’s Form 10-Q  (SEC File No. 000-32891) filed with the SEC on August 8, 2005)                        |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.14       |   | #      | Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-Q  (SEC File No. 000-32891) filed with the SEC on August 8, 2005)               |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.15       |   | #      | Form of Incentive Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-Q  (SEC File No. 000-32891) filed with the SEC on August 8, 2005)                  |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.16       |   | #      | 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K  (SEC File No. 000-32891) filed with the SEC on May 19, 2006)                                                                          |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.17       |   | #      | Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K  (SEC File No. 000-32891) filed with the SEC on May 19, 2006)                    |
|        |   |   |                                                                                                                                                                                                                                                                           |
| 10.18       |   | #      | Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K  (SEC File No. 000-32891) filed with the SEC on May 19, 2006)                             |

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| Exhibit No. |   |   | Description                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.19       |   |   | Amended and Restated Declaration of Trust of 1st Constitution Capital Trust II, dated as of June 15, 2006, among 1st Constitution Bancorp, as sponsor, the Delaware and institutional trustee named therein, and the administrators named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891)  filed with the SEC on June 16, 2006) |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.20       |   |   | Indenture, dated as of June 15, 2006, between 1st Constitution Bancorp, as issuer, and the trustee named therein, relating to the Floating Rate Junior Subordinated Debt Securities due 2036 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891)  filed with the SEC on June 16, 2006)                                                      |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.21       |   |   | Guarantee Agreement, dated as of June 15, 2006, between 1st Constitution Bancorp and the guarantee trustee named therein (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891)  filed with the SEC on June 16, 2006)                                                                                                                          |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.22       |   | #      | Amendment No. 2 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective as of December 31, 2004 (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K filed with the SEC on April 15, 2008)                                                                                                                                                         |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.23       |   | #      | 1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891)  filed with the SEC on December 28, 2006)                                                                                                                                         |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.24       |   |   | Letter Agreement, dated December 23, 2008, including Securities Purchase Agreement – Standard Terms incorporated by reference therein, between 1st Constitution Bancorp and the U.S. Department of the Treasury (incorporated by reference to Exhibit 10 to the Company’s Form S-3 filed with the SEC on January 29, 2009)                                                                |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.25       |   | #      | Form of Waiver, executed by each of Messrs. Robert Mangano and Joseph M. Reardon (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008)                                                                                                                                                                                                  |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.26       |   | #      | Form of Senior Executive Officer Agreement, executed by each of Messrs. Robert Mangano and Joseph M. Reardon (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008)                                                                                                                                                                      |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.27       |   | #      | Letter Agreement with Robert F. Mangano dated November 5, 2009 and executed by Mr. Mangano on November 7, 2009 (incorporated by reference to Exhibit 10.27 to the Company’s Form 10-K filed with the SEC on March 26, 2010)                                                                                                                                                                     |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.28       |   | #      | Letter Agreement with Joseph M. Reardon dated November 5, 2009 and executed by Mr. Reardon on November 7, 2009 (incorporated by reference to Exhibit 10.28 to the Company’s Form 10-K filed with the SEC on March 26, 2010)                                                                                                                                                                     |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.29       |   | #      | Amended and Restated Employment Agreement between the Company and Robert F. Mangano dated as of July 1, 2010 (incorporated by reference to Exhibit 10 to the Company’s Form 8-K filed with the SEC on July 14, 2010)                                                                                                                                                                            |
|        |   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.30       |   |   | Branch Purchase and Assumption Agreement and Agreement for Purchase between Amboy Bank and 1st Constitution Bank dated  as of December 31, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 3, 2011)                                                                                                                           |

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| Exhibit No. |   |   | Description                                                                                                                                                                                                           |
|-------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |   |                                                                                                                                                                                                                  |
| 14          |   |   | Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 to the Company’s Form 10-K (SEC File No. 000-32891) filed with the SEC on March 25, 2004)                                          |
|        |   |   |                                                                                                                                                                                                                  |
| 21          |   | *      | Subsidiaries of the Company                                                                                                                                                                                           |
|        |   |   |                                                                                                                                                                                                                  |
| 23          |   | *      | Consent of Independent Registered Public Accounting Firm                                                                                                                                                              |
|        |   |   |                                                                                                                                                                                                                  |
| 31.1        |   | *      | Certification of the principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                   |
|        |   |   |                                                                                                                                                                                                                  |
| 31.2        |   | *      | Certification of the principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                   |
|        |   |   |                                                                                                                                                                                                                  |
| 32          |   | *      | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer and the principal financial officer of the Company |
|        |   |   |                                                                                                                                                                                                                  |
| 99.1        |   | *      | Certification of principal executive officer of the Company, pursuant to Section 111(b) (4) of the Emergency Economic Stability Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009         |
|        |   |   |                                                                                                                                                                                                                  |
| 99.2        |   | *      | Certification of principal financial officer of the Company, pursuant to Section 111(b) (4) of the Emergency Economic Stability Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009         |

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|                                                                                                             | Page      |
|------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                             |      |
| Report of Independent Registered Public Accounting Firm                                                          | F-2       |
|                                                                                                             |      |
| Consolidated Balance Sheets – December 31, 2010 and 2009                                                   | F-3       |
|                                                                                                             |      |
| Consolidated Statements of Income – For the Years Ended December 31, 2010 and 2009                         | F-4       |
|                                                                                                             |      |
| Consolidated Statements of Changes in Shareholders’ Equity - For the YearsEnded December 31, 2010 and 2009 |  F-5 |
|                                                                                                             |      |
| Consolidated Statements of Cash Flows - For the Years Ended December 31, 2010 and 2009                           | F-6       |
|                                                                                                             |      |
| Notes to Consolidated Financial Statements                                                                       | F-7       |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Table of Contents

1st CONSTITUTION BANCORP

|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-------------|---------|--------|---------|
|                                                                                                                                                                                                                                                           |   | 2010    |        |    | 2009   |    |
| ASSETS                                                                                                                                                                                                                                                         |   |    |        |    |   |    |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |
| CASH AND DUE FROM BANKS                                                                                                                                                                                                                                   |   | $  | 17,699,103  |    |   | $  | 25,842,901 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| FEDERAL FUNDS SOLD / SHORT TERM INVESTMENTS                                                                                                                                                                                                               |   |    | 11,398      |    |   |    | 11,384 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| Total cash and cash equivalents                                                                                                                                                                                                                           |   |    | 17,710,501  |    |   |    | 25,854,285 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| INVESTMENT SECURITIES                                                                                                                                                                                                                                     |   |    |        |    |   |    |   |   |
| Available for sale, at fair value                                                                                                                                                                                                                         |   |    | 85,470,993  |    |   |    | 204,118,850 |   |
| Held to maturity (fair value of $81,712,004 and $24,215,530at December 31, 2010 and 2009, respectively)                                                                                                                                                   |   |    | 81,889,895  |    |   |    | 23,608,980 |   |
|             Total securities                                                                                                                                                                  |   |    | 167,360,888 |    |   |    | 227,727,830 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| LOANS HELD FOR SALE                                                                                                                                                                                                                                       |   |    | 21,219,230  |    |   |    | 21,514,785 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| LOANS                                                                                                                                                                                                                                                     |   |    | 411,987,339 |    |   |    | 379,945,735 |   |
| Less- Allowance for loan losses                                                                                                                                                                                                                           |   |    | (5,762,712  | )  |   |    | (4,505,387 | )  |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| Net loans                                                                                                                                                                                                                                                 |   |    | 406,224,627 |    |   |    | 375,440,348 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| PREMISES AND EQUIPMENT, net                                                                                                                                                                                                                               |   |    | 6,148,626   |    |   |    | 4,899,091 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| ACCRUED INTEREST RECEIVABLE                                                                                                                                                                                                                               |   |    | 2,405,741   |    |   |    | 2,274,087 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| BANK-OWNED LIFE INSURANCE                                                                                                                                                                                                                                 |   |    | 11,474,643  |    |   |    | 10,319,055 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| OTHER REAL ESTATE OWNED                                                                                                                                                                                                                                   |   |    | 4,850,818   |    |   |    | 1,362,621 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| OTHER ASSETS                                                                                                                                                                                                                                              |   |    | 7,000,155   |    |   |    | 8,604,378 |   |
| Total assets                                                                                                                                                                                                                                              |   | $  | 644,395,229 |    |   | $  | 677,996,480 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                                     |   |    |        |    |   |    |   |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| LIABILITIES:                                                                                                                                                                                                                                              |   |    |        |    |   |    |   |   |
| Deposits                                                                                                                                                                                                                                                  |   |    |        |    |   |    |   |   |
| Non-interest bearing                                                                                                                                                                                                                                      |   | $       | 92,023,123  |    |   | $       | 82,473,328 |   |
|         Interest bearing                                                                                                                                                                                               |   |    | 451,712,026 |    |   |    | 489,682,026 |   |
| Total deposits                                                                                                                                                                                                                                            |   |    | 543,735,149 |    |   |    | 572,155,354 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| BORROWINGS                                                                                                                                                                                                                                                |   |    | 25,900,000  |    |   |    | 22,500,000 |   |
| REDEEMABLE SUBORDINATED DEBENTURES                                                                                                                                                                                                                        |   |    | 18,557,000  |    |   |    | 18,557,000 |   |
| ACCRUED INTEREST PAYABLE                                                                                                                                                                                                                                  |   |    | 1,434,338   |    |   |    | 1,757,151 |   |
| ACCRUED EXPENSES AND OTHER LIABILITIES                                                                                                                                                                                                                    |   |    | 5,087,586   |    |   |    | 5,625,922 |   |
|                        Total liabilities                                                                                               |   |    | 594,714,073 |    |   |    | 620,595,427 |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                             |   |    |        |    |   |    |   |   |
|                                                                                                                                                                                                                                                           |   |    |        |    |   |    |   |   |
| SHAREHOLDERS’ EQUITY                                                                                                                                                                                                                                |   |    |        |    |   |    |   |   |
| Preferred Stock, no par value; 5,000,000 shares authorized, of which 12,000 shares ofSeries B, $1,000 liquidation preference, 5% cumulative increasing to 9% cumulative on February 15, 2014, were issued  and outstanding at December 31, 2009 |   |    | -           |    |   |    | 11,473,262 |   |
| Common stock, no par value; 30,000,000 shares authorized; 4,811,294 and 4,526,827 sharesissued  and 4,803,459 and 4,515,924 shares outstanding as of December 31, 2010 and 2009, respectively                                                   |   |    | 38,899,855  |    |   |    | 36,774,621 |   |
| Retained earnings                                                                                                                                                                                                                                         |   |    | 10,741,779  |    |   |    | 10,307,331 |   |
| Treasury Stock, at cost, 8,885 shares and 10,903 shares at December 31, 2010 and 2009, respectively                                                                                                                                                  |   |    | (58,652     | )  |   |    | (73,492 | )  |
|  Accumulated other comprehensive income (loss)                                                                                                                                                                                                            |   |    | 98,174      |    |   |    | (1,080,669 | )  |
| Total shareholders’ equity                                                                                                                                                                                                                          |   |    | 49,681,156  |    |   |    | 57,401,053 |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                                                          |   | $  | 644,395,229 |    |   | $  | 677,996,480 |   |

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Table of Contents

1st CONSTITUTION BANCORP

|                                                                                                                                                                               |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| INTEREST INCOME:                                                                                                                                                                   |   |   |       |   |   |   |
| Loans, including fees                                                                                                                                                              |   | $      | 24,019,866 |   |   | $      | 24,390,271 |   |
| Securities:                                                                                                                                                                        |   |   |       |   |   |   |   |   |
| Taxable                                                                                                                                                                            |   |   | 4,782,984  |   |   |   | 5,143,123 |   |
| Tax-exempt                                                                                                                                                                         |   |   | 453,146    |   |   |   | 486,652 |   |
| Federal funds sold and                                                                                                                                                             |   |   |       |   |   |   |   |   |
| short-term investments                                                                                                                                                             |   |   | 45,023     |   |   |   | 116,070 |   |
|  Total interest income                                                                                                                                                        |   |   | 29,301,019 |   |   |   | 30,136,116 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| INTEREST EXPENSE:                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Deposits                                                                                                                                                                           |   |   | 6,647,869  |   |   |   | 9,829,032 |   |
|     Borrowings                                                                                                                                                 |   |   | 1,100,354  |   |   |   | 1,353,489 |   |
| Redeemable subordinated debentures                                                                                                                                                 |   |   | 1,071,275  |   |   |   | 1,072,827 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Total interest expense                                                                                                                                                             |   |   | 8,819,498  |   |   |   | 12,255,348 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Net interest income                                                                                                                                                                |   |   | 20,481,521 |   |   |   | 17,880,768 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                                                                                                                          |   |   | 2,325,000  |   |   |   | 2,553,000 |   |
| Net interest income after provision                                                                                                                                                |   |   |       |   |   |   |   |   |
|        for loan losses                                                                                                                          |   |   | 18,156,521 |   |   |   | 15,327,768 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| NON-INTEREST INCOME:                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Service charges on deposit accounts                                                                                                                                                |   |   | 731,244    |   |   |   | 885,702 |   |
| Gain on sales of loans                                                                                                                                                             |   |   | 1,635,903  |   |   |   | 1,325,274 |   |
| Gain on sales of securities available for sale                                                                                                                                     |   |   | -          |   |   |   | 1,138,655 |   |
| Income on Bank-owned life insurance                                                                                                                                                |   |   | 405,588    |   |   |   | 389,851 |   |
|     Other-than temporary security impairment:                                                                                                                       |   |   |       |   |   |   |   |   |
|                     Total                                                           |   |   | -          |   |   |   | (864,727 | ) |
|                     Less:  Portion recognized in other comprehensive loss |   |   | -          |   |   |   | 500,944 |   |
|                     Portion recognized in earnings                                  |   |   | -          |   |   |   | (363,783 | ) |
| Other income                                                                                                                                                                       |   |   | 1,464,696  |   |   |   | 1,129,377 |   |
| Total other income                                                                                                                                                                 |   |   | 4,237,431  |   |   |   | 4,505,076 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| NON-INTEREST EXPENSES:                                                                                                                                                             |   |   |       |   |   |   |   |   |
| Salaries and employee benefits                                                                                                                                                     |   |   | 10,087,569 |   |   |   | 9,352,360 |   |
| Occupancy expense                                                                                                                                                                  |   |   | 1,903,702  |   |   |   | 1,783,031 |   |
| Data processing expenses                                                                                                                                                           |   |   | 1,121,519  |   |   |   | 1,085,257 |   |
| FDIC insurance expense                                                                                                                                                             |   |   | 816,125    |   |   |   | 1,193,309 |   |
| Other operating expenses                                                                                                                                                           |   |   | 3,890,208  |   |   |   | 3,701,844 |   |
| Total other expenses                                                                                                                                                               |   |   | 17,819,123 |   |   |   | 17,115,801 |   |
| Income before income taxes                                                                                                                                                         |   |   | 4,574,829  |   |   |   | 2,717,043 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| INCOME TAXES                                                                                                                                                                       |   |   | 1,267,038  |   |   |   | 156,282 |   |
| Net income                                                                                                                                                                         |   |   | 3,307,791  |   |   |   | 2,560,761 |   |
| Dividends and accretion on preferred stock                                                                                                                                         |   |   | 1,021,738  |   |   |   | 719,601 |   |
| Net income available to common shareholders                                                                                                                                        |   | $      | 2,286,053  |   |   | $      | 1,841,160 |   |
|                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| NET INCOME PER COMMON SHARE                                                                                                                                                        |   |   |       |   |   |   |   |   |
| Basic                                                                                                                                                                              |   | $      | 0.48       |   |   | $      | 0.39 |   |
| Diluted                                                                                                                                                                            |   | $      | 0.48       |   |   | $      | 0.39 |   |
| WEIGHTED AVERAGE SHARES                                                                                                                                                            |   |   |       |   |   |   |   |   |
| OUTSTANDING                                                                                                                                                                        |   |   |       |   |   |   |   |   |
| Basic                                                                                                                                                                              |   |   | 4,776,809  |   |   |   | 4,693,941 |   |
| Diluted                                                                                                                                                                            |   |   | 4,803,503  |   |   |   | 4,709,909 |   |

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Table of Contents

1st CONSTITUTION BANCORP

|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   | Accumulated   |    |   |          |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|--------|--------|------------|----------|--------|--------|------------|--------|--------|---------------|---------|--------|---------------|--------|
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   | Other         |    |   | Total         |   |
|                                                                                                                        |   | Preferred |        |   | Common |   |       | Retained |   |   | Treasury   |   |   | Comprehensive |    |   | Shareholders' |   |
|                                                                                                                        |   | Stock     |        |   | Stock  |   |       | Earnings |   |   | Stock      |   |   | Income/(loss) |    |   | Equity        |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |
| BALANCE, January 1, 2009                                                                                                    |   | $         | 11,387,828  |   |   | $      | 35,180,433 |     |   | $      | 9,653,923  |   |   | $             | (53,331 | )      |          | $      | (549,201 | ) |   | $ | 55,619,652 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Exercise of stock options, net and issuance of vested                                                                       |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|       shares under employee benefit programs                                                  |   |      |        |   |   |   | 295,320    |     |   |   |       |   |   |          | 58,305  |   |          |   |   |   |   |   | 353,625 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Share-based compensation                                                                                                    |   |      |        |   |   |   | 111,116    |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | 111,116 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Treasury Stock purchased (12,353 shares)                                                                                    |   |      |        |   |   |   |       |     |   |   |       |   |   |          | (78,466 | )      |          |   |   |   |   |   | (78,466 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| 5% stock dividend declared December 2009                                                                                    |   |      |        |   |   |   | 1,187,752  |     |   |   | (1,187,752 | )      |   |          |    |   |          |   |   |   |   |   | - |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Dividends on preferred stock                                                                                                |   |      |        |   |   |   |       |     |   |   | (611,667   | )      |   |          |    |   |          |   |   |   |   |   | (611,667 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Preferred stock issuance costs                                                                                              |   |      | (22,500     | )      |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | (22,500 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Accretion of discount on preferred stock                                                                                    |   |      | 107,934     |   |   |   |       |     |   |   | (107,934   | )      |   |          |    |   |          |   |   |   |   |   | - |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Comprehensive Income:                                                                                                       |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Net Income  - 2009                                                                        |   |      |        |   |   |   |       |     |   |   | 2,560,761  |   |   |          |    |   |          |   |   |   |   |   | 2,560,761 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Pension liability                                                                                   |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|       net of tax of $45,694                                                                   |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | 68,517 |   |   |   | 68,517 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Unrealized loss on securities available for sale                                                    |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|      net of tax of $235,686                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | (434,736 | ) |   |   | (434,736 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Unrealized gain on interest rate swap contract                                                      |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|       net of tax benefit of $109,976                                                          |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | 165,374 |   |   |   | 165,374 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|      Impairment loss on securities net of tax of       $170,321 |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | (330,623 | ) |   |   | (330,623 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Comprehensive Income                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | 2,029,293 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| BALANCE, December 31, 2009                                                                                                  |   |      | 11,473,262  |   |   |   | 36,774,621 |     |   |   | 10,307,331 |   |   |          | (73,492 | )      |          |   | (1,080,669 | ) |   |   | 57,401,053 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Redemption of preferred stock                                                                                               |   |      | (12,000,000 | )      |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | (12,000,000 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Exercise of stock options, net and issuance of vested                                                                       |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|    shares under employee benefit programs                                                                    |   |      |        |   |   |   | 211,213    |     |   |   |       |   |   |          | 19,304  |   |          |   |   |   |   |   | 230,517 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Treasury stock purchased (556 shares)                                                                                       |   |      |        |   |   |   |       |     |   |   |       |   |   |          | (4,464  | )      |          |   |   |   |   |   | (4,464 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Share-based compensation                                                                                                    |   |      |        |   |   |   | 62,416     |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | 62,416 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| 5% stock dividend declared December 2010                                                                                    |   |      |        |   |   |   | 1,851,605  |     |   |   | (1,851,605 | )      |   |          |    |   |          |   |   |   |   |   | 0 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Dividends on preferred stock                                                                                                |   |      |        |   |   |   |       |     |   |   | (495,000   | )      |   |          |    |   |          |   |   |   |   |   | (495,000 | ) |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Accretion of discount on preferred stock                                                                                    |   |      | 526,738     |   |   |   |       |     |   |   | (526,738   | )      |   |          |    |   |          |   |   |   |   |   | 0 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Comprehensive Income:                                                                                                       |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Net Income  - 2010                                                                        |   |      |        |   |   |   |       |     |   |   | 3,307,791  |   |   |          |    |   |          |   |   |   |   |   | 3,307,791 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Pension liability                                                                                   |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|       net of tax of $182,584                                                                  |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | 273,105 |   |   |   | 273,105 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Unrealized gain on securities available for sale                                                    |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|      net of tax of $302,530                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | 587,266 |   |   |   | 587,266 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|     Unrealized gain on interest rate swap contract                                                      |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|       net of tax benefit of $211,782                                                          |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   | 318,472 |   |   |   | 318,472 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| Comprehensive Income                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   | 4,486,634 |   |
|                                                                                                                        |   |      |        |   |   |   |       |     |   |   |       |   |   |          |    |   |          |   |   |   |   |   |   |   |
| BALANCE, December 31, 2010                                                                                                  |   | $         | 0           |   |   | $      | 38,899,855 |     |   | $      | 10,741,779 |   |   | $             | (58,652 | )      |          | $      | 98,174 |   |   | $ | 49,681,156 |   |

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|                                                                                  |   | 2010   |         |    | 2009   |   |
|---------------------------------------------------------------------------------------|--------|--------|--------------|---------|--------|--------|
| OPERATING ACTIVITIES:                                                                 |   |   |         |    |   |   |
| Net income                                                                            |   | $      | 3,307,791    |    |   | $      | 2,560,761 |   |
| Adjustments to reconcile net income                                                   |   |   |         |    |   |   |   |   |
|      to net cash provided by (used in) operating activities- |   |   |         |    |   |   |   |   |
| Provision for loan losses                                                             |   |   | 2,325,000    |    |   |   | 2,553,000 |   |
| Provision for loss on other real estate owned                                         |   |   | 159,612      |    |   |   | - |   |
| Depreciation and amortization                                                         |   |   | 648,388      |    |   |   | 628,407 |   |
| Net amortization of premiums on securities                                            |   |   | 1,090,932    |    |   |   | 51,773 |   |
| Other than temporary securities impairment loss                                       |   |   | -            |    |   |   | 363,783 |   |
| Gains on sales of securities available for sale                                       |   |   | -            |    |   |   | (1,138,655 | ) |
| Gains on sales of other real estate owned                                             |   |   | (151,532     | )       |   |   | (82,690 | ) |
| Gains on sales of loans held for sale                                                 |   |   | (1,635,903   | )       |   |   | (1,325,274 | ) |
| Originations of loans held for sale                                                   |   |   | (153,818,323 | )       |   |   | (159,468,307 | ) |
| Proceeds from sales of loans held for sale                                            |   |   | 155,749,781  |    |   |   | 144,980,878 |   |
| Income on bank-owned life insurance                                                   |   |   | (405,588     | )       |   |   | (389,851 | ) |
| Share-based compensation expense                                                      |   |   | 270,416      |    |   |   | 255,275 |   |
| Deferred tax benefit                                                                  |   |   | (969,932     | )  |   |   | (1,296,270 | ) |
| (Increase) in accrued interest receivable                                             |   |   | (131,654     | )       |   |   | (81,486 | ) |
| (Decrease) increase in other assets                                                   |   |   | 1,975,607    |    |   |   | (3,255,237 | ) |
| (Decrease) in accrued interest payable                                                |   |   | (322,813     | )       |   |   | (226,951 | ) |
| Increase in accrued expenses and other liabilities                                    |   |   | 179,550      |    |   |   | 1,855,280 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| Net cash provided by (used in) operating activities                                   |   |   | 8,271,329    |    |   |   | (14,015,564 | ) |
|                                                                                  |   |   |         |    |   |   |   |   |
| INVESTING ACTIVITIES:                                                                 |   |   |         |    |   |   |   |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| Purchases of securities -                                                             |   |   |         |    |   |   |   |   |
| Available for sale                                                                    |   |   | (40,266,910  | )       |   |   | (215,232,453 | ) |
| Held to maturity                                                                      |   |   | (121,763,811 | )       |   |   | (4,908,323 | ) |
| Proceeds from maturities and repayments                                               |   |   |         |    |   |   |   |   |
| of securities -                                                                       |   |   |         |    |   |   |   |   |
| Available for sale                                                                    |   |   | 158,903,787  |    |   |   | 87,005,097 |   |
| Held to maturity                                                                      |   |   | 63,292,740   |    |   |   | 16,884,855 |   |
|  Proceeds from sales of securities available for sale                            |   |   | -            |    |   |   | 18,102,327 |   |
|      Net increase in loans                                   |   |   | (38,433,491  | )       |   |   | (8,765,060 | ) |
|       Purchase of bank-owned life insurance             |   |   | (750,000     | )       |   |   | - |   |
| Capital expenditures                                                                  |   |   | (1,861,211   | )       |   |   | (581,620 | ) |
|      Additional investment in other real estate owned        |   |   | (83,737      | )       |   |   | (396,139 | ) |
|      Proceeds from sales of other real estate owned          |   |   | 1,911,672    |    |   |   | 5,241,431 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| Net cash provided by (used in) investing activities                                   |   |   | 20,949,039   |    |   |   | (102,649,885 | ) |
|                                                                                  |   |   |         |    |   |   |   |   |
| FINANCING ACTIVITIES:                                                                 |   |   |         |    |   |   |   |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| Exercise of stock options and issuance of treasury stock                              |   |   | 230,517      |    |   |   | 353,625 |   |
| Purchase of treasury stock                                                            |   |   | (4,464       | )       |   |   | (78,466 | ) |
| Dividends paid on preferred stock                                                     |   |   | (570,000     | )       |   |   | (536,667 | ) |
| Preferred stock issuance costs paid                                                   |   |   | -            |    |   |   | (22,500 | ) |
| Net (decrease) increase in demand, savings and time deposits                          |   |   | (28,420,205  | )       |   |   | 157,470,623 |   |
| Repayment of long-term borrowings                                                     |   |   | (12,500,000  | )       |   |   | (8,000,000 | ) |
| Net increase (decrease) in short-term borrowings                                      |   |   | 15,900,000   |    |   |   | (21,000,000 | ) |
| Repayment of preferred stock                                                          |   |   | (12,000,000  | )       |   |   | - |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| Net cash (used in) provided by financing activities                                   |   |   | (37,364,152  | )  |   |   | 128,186,615 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| (Decrease) increase in cash and cash equivalents                                      |   |   | (8,143,784)  |    |   |   | 11,521,166 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| CASH AND CASH EQUIVALENTS                                                             |   |   |         |    |   |   |   |   |
| AT BEGINNING OF YEAR                                                                  |   |   | 25,854,285   |    |   |   | 14,333,119 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| CASH AND CASH EQUIVALENTS                                                             |   |   |         |    |   |   |   |   |
| AT END OF YEAR                                                                        |   | $      | 17,710,501   |    |   | $      | 25,854,285 |   |
|                                                                                  |   |   |         |    |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES                                                              |   |   |         |    |   |   |   |   |
| OF CASH FLOW INFORMATION:                                                             |   |   |         |    |   |   |   |   |
| Cash paid during the year for -                                                       |   |   |         |    |   |   |   |   |
| Interest                                                                              |   | $      | 9,142,311    |    |   | $      | 12,482,299 |   |
| Income taxes                                                                          |   |   | 2,360,000    |    |   |   | 775,916 |   |
| Non-cash investing activities                                                         |   |   |         |    |   |   |   |   |
| Real estate acquired in full satisfaction of loans in foreclosure                     |   |   | 5,324,212    |    |   |   | 4,435,364 |   |
| Foreclosed real estate transferred to bank premises for bank use                      |   |   | -            |    |   |   | 2,606,677 |   |

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|   | · | Management judges the loan to be uncollectible; |
|--------|--------|-------------------------------------------------|

|   | · | Repayment is deemed to be protracted beyond reasonable time frames; |
|--------|--------|---------------------------------------------------------------------|

|   | · | The loan has been classified as a loss by either internal loan review process or external examiners; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | The customer has filed bankruptcy and the loss becomes evident owing to a lack of assets; or |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | The loan is significantly past due unless both well secured and in the process of collection. |
|--------|--------|-----------------------------------------------------------------------------------------------|

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|                                                                                                         |   | Year Ended December 31, 2010 |       |
|--------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                                         |   | Income                       |       |   | Weighted-averageshares |   |   | Per shareAmount |   |
| Basic EPS                                                                                                    |   |                         |       |   |   |   |   |   |   |
| Net income                                                                                                   |   | $                            | 3,307,791  |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                                                                      |   |                         | (1,021,738 | ) |   |   |   |   |   |   |   |   |
| Income available to common shareholders                                                                      |   |                         | 2,286,053  |   |   |   | 4,776,809 |   |   | $ | 0.48 |   |
|                                                                                                         |   |                         |       |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                                                                |   |                         |       |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                                                                      |   |                         | -          |   |   |   | 26,694 |   |   |   | - |   |
|                                                                                                         |   |                         |       |   |   |   |   |   |   |   |   |   |
| Diluted EPS                                                                                                  |   |                         |       |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders       plus assumed conversion |   | $                            | 2,286,053  |   |   |   | 4,803,503 |   |   | $ | 0.48 |   |

|                                                                |   | Year Ended December 31, 2009 |      |
|---------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                |   | Income                       |      |   | Weighted-averageshares |   |   | Per shareAmount |   |
| Basic EPS                                                           |   |                         |      |   |   |   |   |   |   |
| Net income available to common stockholders                         |   | $                            | 2,560,761 |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                             |   |                         | (719,601  | ) |   |   |   |   |   |   |   |   |
| Income available to common shareholders                             |   |                         | 1,841,160 |   |   |   | 4,693,941 |   |   | $ | 0.39 |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                       |   |                         |      |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                             |   |                         | -         |   |   |   | 15,968 |   |   |   | - |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Diluted EPS                                                         |   |                         |      |   |   |   |   |   |   |   |   |   |
| Net income available to common stockholders plus assumed conversion |   | $                            | 1,841,060 |   |   |   | 4,709,909 |   |   | $ | 0.39 |   |

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|                                                                                                                                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   |     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|----------|--------|
|                                                                                                                                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair     |   |
| 2010                                                                                                                                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value    |   |
|                                                                                                                                                                                        |   |      |       |   |       |   |      |       |   |   |     |   |
| Available for sale-                                                                                                                                                                         |   |      |       |   |       |   |      |       |   |   |
| U. S. Treasury securities and                                                                                                                                                               |   |      |       |   |       |   |      |       |   |   |     |   |
| obligations of U.S. Government                                                                                                                                                              |   |      |       |   |       |   |      |       |   |   |     |   |
| Sponsored corporations (“GSE”) and agencies                                                                                                                                     |   | $         | 34,299,374 |   |       | $      | 60,189    |       |   | $      | 0        |   |   | $ | 34,359,563 |   |
|          Residential collateralized mortgage obligations- GSE                                                                                  |   |      | 18,653,850 |   |       |   | 483,908   |       |   |   | 0        |   |   |   | 19,137,758 |   |
|          Residential collateralized mortgage obligations-             non GSE |   |      | 5,677,577  |   |       |   | 113,496   |       |   |   | (29,751  | )      |   |   | 5,761,322 |   |
| Residential mortgage backed securities – GSE                                                                                                                                          |   |      | 16,963,589 |   |       |   | 1,206,146 |       |   |   | 0        |   |   |   | 18,169,735 |   |
| Obligations of State and                                                                                                                                                                    |   |      |       |   |       |   |      |       |   |   |     |   |   |   |   |   |
| Political subdivisions                                                                                                                                                                      |   |      | 3,110,145  |   |       |   | 23,768    |       |   |   | (112,485 | )      |   |   | 3,021,428 |   |
|          Trust preferred debt securities – single issuer                                                                                 |   |      | 2,460,380  |   |       |   | 0         |       |   |   | (602,877 | )      |   |   | 1,857,503 |   |
|          Corporate debt securities                                                                                                             |   |      | 1,495,438  |   |       |   | 4,973     |       |   |   | (1,827   | )      |   |   | 1,498,584 |   |
|          Restricted Stock                                                                                                                      |   |      | 1,640,100  |   |       |   | 0         |       |   |   | 0        |   |   |   | 1,640,100 |   |
|          Mutual Fund                                                                                                                           |   |      | 25,000     |   |       |   | 0         |       |   |   | 0        |   |   |   | 25,000 |   |
|                                                                                                                                                                                        |   |      |       |   |       |   |      |       |   |   |     |   |   |   |   |   |
|                                                                                                                                                                                        |   | $         | 84,325,453 |   |       | $      | 1,892,480 |       |   | $      | (746,940 | )      |   | $ | 85,470,993 |   |

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|                                                                                                                                                                                             |   | Amortized Cost |       |   | Other-Than-TemporaryImpairment Recognized InAccumulated Other ComprehensiveLoss |   |     | CarryingValue |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |    |   | FairValue |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|---------------------------------------------------------------------------------|--------|----------|---------------|--------|--------|----------------------|--------|--------|-----------------------|---------|--------|-----------|--------|
| Held to maturity-                                                                                                                                                                                |   |           |       |   |                                                                            |   |     |          |   |   |                 |   |   |                  |    |   |      |   |
|     U. S. Treasury securities and                                                                                                                                            |   |           |       |   |                                                                            |   |     |          |   |   |                 |   |   |                  |    |   |      |   |
|          obligations of U.S. Government                                                                                                             |   |           |       |   |                                                                            |   |     |          |   |   |                 |   |   |                  |    |   |      |   |
|          sponsored corporations (“GSE”) and              agencies |   | $              | 23,170,741 |   |                                                                            | $      | 0        |          |   | $      | 23,170,741           |   |   | $                     | 93,600  |   |      | $      | (50,721 | ) |   | $ | 23,213,620 |   |
|     Residential collateralized        mortgage obligations – GSE                                                               |   |           | 2,520,690  |   |                                                                            |   | 0        |          |   |   | 2,520,690            |   |   |                  | 84,253  |   |      |   | 0 |   |   |   | 2,604,943 |   |
|     Residential mortgage backed        securities – GSE                                                                        |   |           | 9,344,517  |   |                                                                            |   | 0        |          |   |   | 9,344,517            |   |   |                  | 131,443 |   |      |   | (41,711 | ) |   |   | 9,434,249 |   |
| Obligations of State and                                                                                                                                                                         |   |           |       |   |                                                                            |   |     |          |   |   |                 |   |   |                  |    |   |      |   |   |   |   |   |   |   |
|       Political subdivisions                                                                                                                                       |   |           | 19,467,404 |   |                                                                            |   | 0        |          |   |   | 19,467,404           |   |   |                  | 245,290 |   |      |   | (352,534 | ) |   |   | 19,360,160 |   |
| Trust preferred debt securities - pooled                                                                                                                                                         |   |           | 642,478    |   |                                                                            |   | (500,944 | )             |   |   | 141,534              |   |   |                  | 0       |   |      |   | (137,361 | ) |   |   | 4,173 |   |
| Corporate debt securities                                                                                                                                                                        |   |           | 27,245,009 |   |                                                                            |   | 0        |          |   |   | 27,245,009           |   |   |                  | 67,696  |   |      |   | (217,846 | ) |   |   | 27,094,859 |   |
|                                                                                                                                                                                             |   |           |       |   |                                                                            |   |     |          |   |   |                 |   |   |                  |    |   |      |   |   |   |   |   |   |   |
|                                                                                                                                                                                             |   | $              | 82,390,839 |   |                                                                            | $      | (500,944 | )             |   | $      | 81,889,895           |   |   | $                     | 622,282 |   |      | $      | (800,173 | ) |   | $ | 81,712,004 |   |

|                                                                                                                                                                                                      |   |      |        |   | Gross      |   |      | Gross      |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                                                                                                                                                                                      |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair       |   |
| 2009                                                                                                                                                                                                      |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | Value      |   |
|                                                                                                                                                                                                      |   |      |        |   |       |   |      |       |   |   |       |   |
| Available for sale-                                                                                                                                                                                       |   |      |        |   |       |   |      |       |   |   |
| U. S. Treasury securities and                                                                                                                                                                             |   |      |        |   |       |   |      |       |   |   |       |   |
| obligations of U.S. Government                                                                                                                                                                            |   |      |        |   |       |   |      |       |   |   |       |   |
| sponsored corporations (“GSE”) and agencies                                                                                                                                                   |   | $         | 138,351,028 |   |       | $      | 291,906   |       |   | $      | (673,252   | )      |   | $ | 137,969,682 |   |
|          Residential collateralized mortgage obligations - GSE                                                                                               |   |      | 26,541,021  |   |       |   | 141,061   |       |   |   | (158,696   | )      |   |   | 26,523,387 |   |
|          Residential collateralized mortgage obligations –              non- GSE |   |      | 8,208,102   |   |       |   | 31,637    |       |   |   | (93,327    | )      |   |   | 8,146,411 |   |
| Residential mortgage backed securities – GSE                                                                                                                                                        |   |      | 24,182,584  |   |       |   | 1,449,071 |       |   |   | 0          |   |   |   | 25,631,655 |   |
| Obligations of State and                                                                                                                                                                                  |   |      |        |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Political subdivisions                                                                                                                                                                                    |   |      | 2,633,210   |   |       |   | 45,644    |       |   |   | (91,212    | )      |   |   | 2,587,642 |   |
|          Trust preferred debt securities – single issuer                                                                                               |   |      | 2,457,262   |   |       |   | 0         |       |   |   | (687,089   | )      |   |   | 1,770,173 |   |
|          Restricted Stock                                                                                                                                    |   |      | 1,464,900   |   |       |   | 0         |       |   |   | 0          |   |   |   | 1,464,900 |   |
|          Mutual Fund                                                                                                                                         |   |      | 25,000      |   |       |   | 0         |       |   |   | 0          |   |   |   | 25,000 |   |
|                                                                                                                                                                                                      |   |      |        |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                                                                                                                                                                                      |   | $         | 203,863,107 |   |       | $      | 1,959,319 |       |   | $      | (1,703,576 | )      |   | $ | 204,118,850 |   |

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|                                                                                                                                  |   | Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveLoss |   |     | CarryingValue |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |    |   | FairValue |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|----------------------------------------------------------------------------------|--------|----------|---------------|--------|--------|----------------------|--------|--------|-----------------------|---------|--------|-----------|--------|
| Held to maturity-                                                                                                                     |   |           |       |   |                                                                             |   |     |          |   |   |                 |   |   |                  |    |   |      |   |
|     Residential collateralized        mortgage obligations – GSE    |   | $              | 4,881,475  |   |                                                                             | $      | -        |          |   | $      | 4,881,475            |   |   | $                     | 150,055 |   |      | $      | 0 |   |   | $ | 5,031,530 |   |
|     Residential mortgage backed          securities – GSE |   |           | 6,111,131  |   |                                                                             |   | -        |          |   |   | 6,111,131            |   |   |                  | 97,782  |   |      |   | (29,521 | ) |   |   | 6,179,392 |   |
| Obligations of State and                                                                                                              |   |           |       |   |                                                                             |   |     |          |   |   |                 |   |   |                  |    |   |      |   |   |   |   |   |   |   |
|       Political subdivisions                                                                            |   |           | 8,600,596  |   |                                                                             |   | -        |          |   |   | 8,600,596            |   |   |                  | 270,947 |   |      |   | 0 |   |   |   | 8,871,543 |   |
| Trust preferred debt securities - pooled                                                                                              |   |           | 633,998    |   |                                                                             |   | (500,944 | )             |   |   | 133,054              |   |   |                  | 0       |   |      |   | 0 |   |   |   | 133,054 |   |
| Corporate debt securities                                                                                                             |   |           | 3,882,724  |   |                                                                             |   | -        |          |   |   | 3,882,724            |   |   |                  | 117,287 |   |      |   | 0 |   |   |   | 4,000,011 |   |
|                                                                                                                                  |   |           |       |   |                                                                             |   |     |          |   |   |                 |   |   |                  |    |   |      |   |   |   |   |   |   |   |
|                                                                                                                                  |   | $              | 24,109,924 |   |                                                                             | $      | (500,944 | )             |   | $      | 23,608,980           |   |   | $                     | 636,071 |   |      | $      | (29,521 | ) |   | $ | 24,215,530 |   |

|                                                     |   | CarryingValue |       |   | FairValue |   |
|----------------------------------------------------------|--------|---------------|------------|--------|-----------|--------|
| Available for sale-                                      |   |          |       |   |      |   |
|    Due in one year or less                |   | $             | 35,978,738 |   |      | $      | 36,039,903 |   |
|    Due after one year through five years  |   |          | 3,021,270  |   |      |   | 3,087,164 |   |
|    Due after five years through ten years |   |          | 5,855,939  |   |      |   | 6,167,604 |   |
|    Due after ten years                    |   |          | 39,469,506 |   |      |   | 40,176,322 |   |
|                                                     |   |          |       |   |      |   |   |   |
| Total                                                    |   | $             | 84,325,453 |   |      | $      | 85,470,993 |   |
|                                                     |   |          |       |   |      |   |   |   |
| Held to maturity-                                        |   |          |       |   |      |   |   |   |
|    Due in one year or less                |   | $             | 1,268,643  |   |      | $      | 1,264,678 |   |
|    Due after one year through five years  |   |          | 48,663,237 |   |      |   | 48,622,175 |   |
|    Due after five years through ten years |   |          | 12,653,167 |   |      |   | 12,825,064 |   |
|    Due after ten years                    |   |          | 19,805,792 |   |      |   | 19,000,087 |   |
|                                                     |   |          |       |   |      |   |   |   |
| Total                                                    |   | $             | 82,390,839 |   |      | $      | 81,712,004 |   |

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Table of Contents

|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|------------|---------------------|--------|--------|------------|--------|
| 2010                                                                                                 |   |                |   |   | Less than 12 months |   |       | 12 months or longer |   |   | Total      |   |
|                                                                                                 |   | Number ofSecurities |   |   | Fair Value          |   |       | Unrealized Losses   |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
| U.S. Government sponsored     corporations and agencies                     |   |                | 6      |   |                | $      | 5,120,020  |                |   | $      | (50,721    | )      |   | $ | - |   |   | $ | - |   |   | $ | 5,120,020 |   |   | $ | (50,721 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential collateralized mortgage     Obligations – Non-GSE         |   |                | 2      |   |                |   | 2,035,105  |                |   |   | (21,478    | )      |   |   | 372,747 |   |   |   | (8,273 | ) |   |   | 2,407,852 |   |   |   | (29,751 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage backed securities     GSE                              |   |                | 4      |   |                |   | 4,393,707  |                |   |   | (41,711    | )      |   |   | - |   |   |   | - |   |   |   | 4,393,707 |   |   |   | (41,711 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of State and Political     subdivisions                         |   |                | 31     |   |                |   | 11,124,090 |                |   |   | (378,918   | )      |   |   | 927,538 |   |   |   | (86,101 | ) |   |   | 12,051,628 |   |   |   | (465,019 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities –        Single issuer |   |                | 4      |   |                |   | 0          |                |   |   | 0          |   |   |   | 1,857,503 |   |   |   | (602,877 | ) |   |   | 1,857,503 |   |   |   | (602,877 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities –        pooled        |   |                | 1      |   |                |   | 0          |                |   |   | 0          |   |   |   | 4,173 |   |   |   | (638,305 | ) |   |   | 4,173 |   |   |   | (638,305 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt securities                                                                            |   |                | 45     |   |                |   | 24,917,591 |                |   |   | (219,673   | )      |   |   | 0 |   |   |   | 0 |   |   |   | 24,917,591 |   |   |   | (219,673 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total temporarily impaired securities                                                    |   |                | 93     |   |                | $      | 47,590,513 |                |   | $      | (712,501   | )      |   | $ | 3,161,961 |   |   | $ | (1,335,556 | ) |   | $ | 50,752,474 |   |   | $ | (2,048,057 | ) |
|                                                                                                 |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |
|------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------------|--------|------------|---------------------|--------|--------|------------|--------|
|  2009                                                                                     |   |                |   |   |  Less than 12 months |   |       | 12 months or longer |   |   | Total      |   |
|                                                                                           |   | Number ofSecurities |   |   | Fair Value                |   |       | Unrealized Losses   |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
| U.S. Government sponsored       Corporations and agencies   |   |                | 33     |   |                      | $      | 73,177,106 |                |   | $      | (673,252   | )      |   | $ | - |   |   | $ | - |   |   | $ | 73,177,106 |   |   | $ | (673,252 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential collateralized mortgage      obligations – GSE |   |                | 4      |   |                      |   | 9,399,574  |                |   |   | (158,696   | )      |   |   | - |   |   |   | - |   |   |   | 9,399,524 |   |   |   | (158,696 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential collateralized mortgage     obligations - Non-GSE         |   |                | 1      |   |                      |   | -          |                |   |   | -          |   |   |   | 428,264 |   |   |   | (93,127 | ) |   |   | 428,264 |   |   |   | (93,127 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage backed securities      GSE                  |   |                | 1      |   |                      |   | 2,885,660  |                |   |   | (29,521    | )      |   |   | - |   |   |   | - |   |   |   | 2,885,660 |   |   |   | (29,521 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of State and Political    Subdivisions                         |   |                | 1      |   |                      |   | 924,549    |                |   |   | (91,212    | )      |   |   | - |   |   |   | - |   |   |   | 924,549 |   |   |   | (91,212 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities –       single issue  |   |                | 4      |   |                      |   | -          |                |   |   | -          |   |   |   | 1,770,172 |   |   |   | (687,089 | ) |   |   | 1,770,172 |   |   |   | (687,089 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities –       pooled        |   |                | 1      |   |                      |   | -          |                |   |   | -          |   |   |   | 133,054 |   |   |   | (500,944 | ) |   |   | 133,054 |   |   |   | (500,944 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total temporarily impaired securities                                              |   |                | 45     |   |                      | $      | 86,386,889 |                |   | $      | (952,681   | )      |   | $ | 2,331,490 |   |   | $ | (1,281,360 | ) |   | $ | 88,718,379 |   |   | $ | (2,234,041 | ) |
|                                                                                           |   |                |   |   |                      |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

| Pooled Trust Preferred Security Detail |
|----------------------------------------|
|    Security             |    Class |   BookValue |   FairValue |  UnrealizedGain (Loss) | Percent ofUnderlyingCollateralPerforming | Percent ofUnderlyingCollateralIn Deferral | Percent ofUnderlying CollateralIn Default |  Moody’s/S & PRatings |
| PreTSL XXV                             | B-1 | $141,534 | $4,273 | $(137,261) | 64.1% | 23.3% | 12.6% | Caa2/NR |

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Table of Contents

|                           |   | 2010   |        |   | 2009   |   |
|--------------------------------|--------|--------|-------------|--------|--------|--------|
|       |   |   |        |   |   |   |
| Commercial business            |   | $      | 54,733,172  |   |   | $      | 57,925,392 |   |
| Commercial real estate         |   |   | 95,277,814  |   |   |   | 96,306,097 |   |
| Mortgage warehouse lines       |   |   | 169,575,899 |   |   |   | 119,382,078 |   |
| Construction loans             |   |   | 67,890,703  |   |   |   | 79,805,278 |   |
| Residential real estate loans  |   |   | 10,435,038  |   |   |   | 10,253,895 |   |
| Loans to individuals           |   |   | 13,349,036  |   |   |   | 15,554,027 |   |
| All other loans           |   |   | 181,924     |   |   |   | 229,159 |   |
| Gross Loans                    |   |   | 411,443,586 |   |   |   | 379,435,926 |   |
| Deferred loan fees   |   |   | 543,753     |   |   |   | 489,809 |   |
|                           |   | $      | 411,987,339 |   |   | $      | 379,945,735 |   |

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Table of Contents

|                            |   | 2010   |       |   | 2009   |   |
|---------------------------------|--------|--------|------------|--------|--------|--------|
| Balance, beginning of year      |   | $      | 4,505,387  |   |   | $      | 3,684,764 |   |
| Provision charged to operations |   |   | 2,325,000  |   |   |   | 2,553,000 |   |
| Loans charged off               |   |   | (1,081,555 | )      |   |   | (1,740,518 | ) |
| Recoveries of loans charged off |   |   | 13,880     |   |   |   | 8,141 |   |
| Balance, end of year            |   | $      | 5,762,712  |   |   | $      | 4,505,387 |   |

|                                       |   | 30-59 Days |      |   | 60-89 Days |   |   | Greater than 90 Days |   |   | Total Past Due |   |   | Current |       |   | TotalLoans Receivable |   |        | RecordedInvestment > 90 Days Accruing |   |   | Nonaccrual Loans |   |
|--------------------------------------------|--------|------------|-----------|--------|------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|---------|------------|--------|-----------------------|--------|-------------|-----------------------------------------------|--------|--------|------------------|--------|
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |
| Commercial                                 |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |
|    Construction             |   | $          | 0         |   |       | $      | 0      |                 |   | $      | 6,569,296      |   |   | $       | 6,569,296  |   |                  | $      | 61,321,407  |                                          |   | $      | 67,890,703       |   |   | $ | 0 |   |   | $ | 6,569,296 |   |
|    Commercial Business      |   |       | 113,801   |   |       |   | 60,526 |                 |   |   | 605,208        |   |   |    | 779,335    |   |                  |   | 53,953,637  |                                          |   |   | 54,733,172       |   |   |   | 0 |   |   |   | 750,623 |   |
|    Commercial Real Estate   |   |       | 3,179,541 |   |       |   | 0      |                 |   |   | 1,411,390      |   |   |    | 4,590,931  |   |                  |   | 90,686,883  |                                          |   |   | 95,277,814       |   |   |   | 0 |   |   |   | 1,411,390 |   |
|    Mortgage Warehouse Lines |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |    | 0          |   |                  |   | 169,575,899 |                                          |   |   | 169,575,899      |   |   |   | 0 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |
|    Residential Real Estate  |   |       | 173,708   |   |       |   | 0      |                 |   |   | 0              |   |   |    | 173,708    |   |                  |   | 10,261,330  |                                          |   |   | 10,435,038       |   |   |   | 0 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |
| Consumer                                   |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |
|    Loans to Individuals     |   |       | 0         |   |       |   | 0      |                 |   |   | 77,858         |   |   |    | 77,858     |   |                  |   | 13,271,178  |                                          |   |   | 13,349,036       |   |   |   | 0 |   |   |   | 77,858 |   |
|    Other                    |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |    | 0          |   |                  |   | 181,924     |                                          |   |   | 181,924          |   |   |   | 0 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |
| Deferred Loan Fees                         |   |       | 0         |   |       |   | 0      |                 |   |   | 0              |   |   |    | 0          |   |                  |   | 543,753     |                                          |   |   | 543,753          |   |   |   | 0 |   |   |   | 0 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |
| Total                                      |   | $          | 3,467,050 |   |       | $      | 60,526 |                 |   | $      | 8,663,752      |   |   | $       | 12,191,328 |   |                  | $      | 399,796,011 |                                          |   | $      | 411,987,339      |   |   | $ | 0 |   |   | $ | 8,809,167 |   |
|                                       |   |       |      |   |       |   |   |                 |   |   |           |   |   |    |       |   |                  |   |        |                                          |   |   |             |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|   | · | General economic conditions. |
|--------|--------|------------------------------|

|   | · | Trends in charge-offs. |
|--------|--------|------------------------|

|   | · | Trends and levels of delinquent loans. |
|--------|--------|----------------------------------------|

|   | · | Trends and levels of non-performing loans, including loans over 90 days delinquent. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Trends in volume and terms of loans. |
|--------|--------|--------------------------------------|

|   | · | Levels of allowance for specific classified loans. |
|--------|--------|----------------------------------------------------|

|   | · | Credit concentrations. |
|--------|--------|------------------------|

----

Table of Contents

|   | · | Consumer credit scores |
|--------|--------|------------------------|

|   | · | Internal credit risk grades |
|--------|--------|-----------------------------|

|   | · | Loan-to-value ratios |
|--------|--------|----------------------|

|   | · | Collateral |
|--------|--------|------------|

|   | · | Collection experience |
|--------|--------|-----------------------|

----

Table of Contents

| Commercial Credit Exposure - By Internally Assigned Grade |   | Construction         |       |   | Commercial Business |   |       | Commercial Real Estate |   |   | Mortgage Warehouse Lines |   |   | Residential Real Estate |        |
|-----------------------------------------------------------|--------|----------------------|------------|--------|---------------------|--------|------------|------------------------|--------|--------|--------------------------|--------|--------|-------------------------|-------------|
|                                                      |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |
| Grade:                                                    |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |
| Pass                                                      |   | $                    | 52,445,421 |   |                | $      | 52,587,444 |                   |   | $      | 85,122,509               |   |   | $                       | 169,575,899 |   |   | $ | 10,435,038 |   |
| Special Mention                                           |   |                 | 4,482,569  |   |                |   | 433,377    |                   |   |   | 3,668,243                |   |   |                    | 0           |   |   |   | 0 |   |
| Substandard                                               |   |                 | 10,962,713 |   |                |   | 1,499,461  |                   |   |   | 5,823,312                |   |   |                    | 0           |   |   |   | 0 |   |
| Doubtful                                                  |   |                 | 0          |   |                |   | 212,890    |                   |   |   | 663,750                  |   |   |                    | 0           |   |   |   | 0 |   |
| Total                                                     |   | $                    | 67,890,703 |   |                | $      | 54,733,172 |                   |   | $      | 95,277,814               |   |   | $                       | 169,575,899 |   |   | $ | 10,435,038 |   |
|                                                      |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Consumer Credit Exposure -  By Payment Activity |   | Loans To Individuals |       |   | Other               |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |
|                                                      |   |                 |       |   |                |   |       |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Performing                                                |   | $                    | 13,271,178 |   |                | $      | 181,924    |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Nonperforming                                             |   |                 | 77,858     |   |                |   | 0          |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |
| Total                                                     |   | $                    | 13,349,036 |   |                | $      | 181,924    |                   |   |   |                     |   |   |                    |        |   |   |   |   |   |

----

Table of Contents

| Period-End Balances By Impairment Method                                                                                                 |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|------------|-------------|--------|--------|------------|--------|--------|-------------|-------------|--------|----------|--------|------------|
|                                                                                                                                     |   |         |       |   |       |   |       | Commercial  |   |   | Mortgage   |   |   | Residential |        |   |     |   |       |   |   |   |   |   |   | Deferred |   |   | Total |   |
|                                                                                                                                     |   | Construction |       |   | Commercial |   |       | Real Estate |   |   | Warehouse  |   |   | Real Estate |        |   | Consumer |   |       | Other |   |   | Unallocated |   |   | Fees |   |   |   |   |
| Allowance for credit losses:                                                                                                             |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   | $            | 1,744,068  |   |       | $      | 971,994    |        |   | $      | 1,723,865  |   |   | $           | 763,092     |   |     | $      | 67,828     |   |   | $ | 192,457 |   |   | $ | 1,910 |   |   | $ | 297,498 |   |   | $ | 0 |   |   | $ | 5,762,712 |   |
|                                                                                                                                     |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated     for impairment                                                           |   |         | 45,000     |   |       |   | 180,525    |        |   |   | 271,382    |   |   |        | 0           |   |     |   | 0          |   |   |   | 77,858 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 574,765 |   |
|   Collectively evaluated      for impairment                                                     |   |         | 1,699,068  |   |       |   | 791,469    |        |   |   | 1,452,483  |   |   |        | 763,092     |   |     |   | 67,828     |   |   |   | 114,599 |   |   |   | 1,910 |   |   |   | 297,498 |   |   |   | 0 |   |   |   | 5,187,947 |   |
|                                                                                                                                     |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivables:                                                                                                                       |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                                                                                                           |   | $            | 67,890,703 |   |       | $      | 54,733,172 |        |   | $      | 95,277,814 |   |   | $           | 169,575,899 |   |     | $      | 10,435,038 |   |   | $ | 13,271,178 |   |   | $ | 181,924 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 411,987,339 |   |
|   Individually evaluated        for impairment                                         |   |         | 4,142,137  |   |       |   | 3,177,782  |        |   |   | 1,411,390  |   |   |        | 0           |   |     |   | 0          |   |   |   | 77,858 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 8,809,167 |   |
|   Collectively evaluated       for impairment                                               |   |         | 63,748,566 |   |       |   | 51,555,390 |        |   |   | 93,866,424 |   |   |        | 169,575,899 |   |     |   | 10,435,038 |   |   |   | 13,271,178 |   |   |   | 181,924 |   |   |   | 0 |   |   |   | 543,753 |   |   |   | 403,178,172 |   |
|    Loans acquired with            deteriorated credit quality |   |         | 0          |   |       |   | 0          |        |   |   | 0          |   |   |        | 0           |   |     |   | 0          |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                                                                                                     |   |         |       |   |       |   |       |        |   |   |       |   |   |        |        |   |     |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

| Impaired Loans Receivables (By Class)      |   |               |      |   |                    |   |      |
|--------------------------------------------|--------|--------------------|-----------|--------|-------------------------|--------|-----------|
|                                       |   |               |      |   |                    |   |      |   |   |
|                                       |   | RecordedInvestment |      |   | UnpaidPrincipal Balance |   |      | RelatedAllowance |   |
|                                       |   |               |      |   |                    |   |      |   |   |
| With no related allowance:                 |   |               |      |   |                    |   |      |   |   |
|                                       |   |               |      |   |                    |   |      |   |   |
| Commercial                                 |   |               |      |   |                    |   |      |   |   |
|    Construction             |   | $                  | 4,409,296 |   |                    | $      | 4,453,796 |   |   | $ | -- |   |
|    Commercial Business      |   |               | 385,370   |   |                    |   | 394,654   |   |   |   | -- |   |
|    Commercial Real Estate   |   |               | 554,986   |   |                    |   | 554,986   |   |   |   | -- |   |
|    Mortgage Warehouse Lines |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Residential Real Estate                    |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Consumer                                   |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Loans to Individuals     |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|    Other                    |   |               | 0         |   |                    |   | 0         |   |   |   | -- |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| With an allowance:                         |   |               |      |   |                    |   |      |   |   |   |   |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Commercial                                 |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Construction             |   |               | 2,160,000 |   |                    |   | 2,160,000 |   |   |   | 45,000 |   |
|    Commercial Business      |   |               | 365,253   |   |                    |   | 365,253   |   |   |   | 180,525 |   |
|    Commercial Real Estate   |   |               | 856,404   |   |                    |   | 856,404   |   |   |   | 271,382 |   |
|    Mortgage Warehouse Lines |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Residential Real Estate                    |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Consumer                                   |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Loans to Individuals     |   |               | 77,858    |   |                    |   | 77,858    |   |   |   | 77,858 |   |
|    Other                    |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|                                       |   |               |      |   |                    |   |      |   |   |   |   |   |
| Total:                                     |   |               |      |   |                    |   |      |   |   |   |   |   |
|    Commercial               |   | $                  | 8,731,309 |   |                    | $      | 8,785,093 |   |   | $ | 496,907 |   |
|    Residential Real Estate  |   |               | 0         |   |                    |   | 0         |   |   |   | 0 |   |
|    Consumer                 |   |               | 77,858    |   |                    |   | 77,858    |   |   |   | 77,858 |   |

|                       |   | 2010   |        |   | 2009   |   |
|----------------------------|--------|--------|-------------|--------|--------|--------|
| Balance, beginning of year |   | $      | 4,371,039   |   |   | $      | 4,795,649 |   |
| Loans granted              |   |   | 101,954     |   |   |   | 68,252 |   |
| Repayments of loans        |   |   | (1,104,207) |   |   |   | (492,862) |   |
|                       |   |   |        |   |   |   |   |   |
| Balance, end of year       |   | $      | 3,368,786   |   |   | $      | 4,371,039 |   |

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Table of Contents

|                          | EstimatedUseful Lives |   | 2010    |       |   | 2009   |   |
|-------------------------------|-----------------------|--------|---------|------------|--------|--------|--------|
| Land                          |                  |   |  $ | 241,784    |   |   | $      | 241,784 |   |
| Construction in progress      |                  |   |    | 3,897      |   |   |   | 2,929,011 |   |
| Building                      | 40 Years              |   |    | 4,143,798  |   |   |   | 735,579 |   |
| Leasehold improvements        | 10 Years              |   |    | 3,101,081  |   |   |   | 2,287,324 |   |
| Furniture and equipment       | 3 – 15 Years    |   |    | 3,182,512  |   |   |   | 2,907,147 |   |
|                          |                  |   |    | 10,673,072 |   |   |   | 9,100,854 |   |
| Less Accumulated depreciation |                  |   |    | (4,524,446 | )      |   |   | (4,201,754 | ) |
|                          |                  |   | $       | 6,148,626  |   |   | $      | 4,899,091 |   |

|                     |   | 2010   |    |   | 2009   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|
| Goodwill                 |   | $      | 472,726 |   |   | $      | 472,726 |   |
| Core deposits intangible |   |   | 136,935 |   |   |   | 173,647 |   |
| Total                    |   | $      | 609,661 |   |   | $      | 646,373 |   |

| 2011   |   | $      | 36,712  |   |
|--------|--------|--------|---------|--------|
| 2012   |   |   | 36,712  |   |
| 2013   |   |   | 36,712  |   |
| 2014   |   |   | 26,799  |   |
|   |   | $      | 136,935 |   |

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Table of Contents

|                 |   | 2010   |        |   | 2009   |   |
|----------------------|--------|--------|-------------|--------|--------|--------|
| Demand               |   |   |        |   |   |   |
| Non-interest bearing |   | $      | 92,023,123  |   |   | $      | 82,473,328 |   |
| Interest bearing     |   |   | 129,869,045 |   |   |   | 125,529,223 |   |
| Savings              |   |   | 165,388,564 |   |   |   | 193,369,640 |   |
| Time                 |   |   | 156,454,417 |   |   |   | 170,783,163 |   |
|                 |   | $      | 543,735,149 |   |   | $      | 572,155,354 |   |

| Year   |   | Amount |        |
|--------|--------|--------|-------------|
| 2011   |   | $      | 107,952,166 |   |
| 2012   |   |   | 29,890,786  |   |
| 2013   |   |   | 8,533,143   |   |
| 2014   |   |   | 2,066,993   |   |
| 2015   |   |   | 8,011,329   |   |
|   |   | $      | 156,454,417 |   |

| Maturity Range                        |   | Amount |       |
|---------------------------------------|--------|--------|------------|
| Three months or less                  |   | $      | 18,836,294 |   |
| Over three months through six months  |   |   | 12,034,755 |   |
| Over six months through twelve months |   |   | 26,363,274 |   |
| Over twelve months                    |   |   | 26,322,815 |   |
|                                  |   | $      | 83,557,138 |   |

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Table of Contents

|                                      |   | 2010   |      |    | 2009   |   |
|-------------------------------------------|--------|--------|-----------|---------|--------|--------|
| Federal-                             |   |   |      |    |   |   |
|        Current   |   | $      | 2,048,673 |    |   | $      | 1,338,992 |   |
|        Deferred  |   |   | (773,914  | )  |   |   | (1,015,655 | )  |
|                                      |   |   | 1,274,759 |    |   |   | 323,337 |   |
| State-                               |   |   |      |    |   |   |   |   |
|        Current   |   |   | 188,297   |    |   |   | 113,560 |   |
|        Deferred  |   |   | (196,018  | )  |   |   | (280,615 | )  |
|                                      |   |   | (7,721    | )  |   |   | (167,055 | ) |
|                                      |   | $      | 1,267,038 |    |   | $      | 156,282 |   |

|                                                                   |   | 2010   |      |    | 2009   |   |
|------------------------------------------------------------------------|--------|--------|-----------|---------|--------|--------|
|                                                                   |   |   |      |    |   |   |   |   |
| Federal income tax                                                |   | $      | 1,555,442 |    |   | $      | 923,795 |   |
| Add (deduct) effect of:                                           |   |   |      |    |   |   |   |   |
|    State income taxes net of federal income tax effect  |   |   | (5,096    | )  |   |   | (110,257 | ) |
|    Tax-exempt interest income                           |   |   | (154,070  | )  |   |   | (165,462 | )  |
|    Bank-owned life insurance                            |   |   | (137,900  | )  |   |   | (132,549 | )  |
|    Other items, net                                     |   |   | 8,662     |    |   |   | (359,245 | ) |
| Provision for income taxes                                        |   | $      | 1,267,038 |    |   | $      | 156,282 |   |

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Table of Contents

|                                                   |   | 2010    |      |    | 2009   |    |
|--------------------------------------------------------|--------|---------|-----------|---------|--------|---------|
| Deferred tax assets (liabilities):                |   |    |      |    |   |    |
| Write down of OREO                                     |   | $       | 63,749    |    |   | $       | - |   |
| Allowance for loan losses                         |   |    | 2,301,627 |    |   |    | 1,799,452 |   |
| Unrealized gain on securities available for sale  |   |    | (389,483  | )  |   |    | (86,953 | )  |
| SERP Liability                                    |   |    | 1,279,855 |    |   |    | 1,171,736 |   |
| Unrealized loss on interest rate swap                  |   |    | 141,990   |    |   |    | 353,772 |   |
| State net operating loss carryover                     |   |    | -         |    |   |    | 45,319 |   |
| Other than temporary impairment loss                   |   |    | 294,007   |    |   |    | 294,007 |   |
| Depreciation                                           |   |    | 383,700   |    |   |    | 310,523 |   |
| Nonaccrual interest                                    |   |    | 478,435   |    |   |    | 249,315 |   |
| FAS 158 pension liability                              |   |    | 75,841    |    |   |    | 258,425 |   |
| Other                                             |   |    | 20,422    |    |   |    | 26,830 |   |
| Subtotal                                               |   |    | 4,650,142 |    |   |    | 4,422,426 |   |
| Valuation allowance                                    |   |    | -         |    |   |    | (45,319 | ) |
| Net deferred tax assets                                |   | $  | 4,650,142 |    |   | $  | 4,377,107 |   |

|                                                      |   | December 31,2010 |      |   | December 31,2009 |   |
|-----------------------------------------------------------|--------|------------------|-----------|--------|------------------|--------|
| Unrealized holding gains on securities available for sale |   | $                | 1,145,540 |   |             | $      | 255,744 |   |
| Related income tax effect                                 |   |             | (389,483  | )      |             |   | (86,953 | ) |
|                                                      |   |             | 756,057   |   |             |   | 168,791 |   |
|                                                      |   |             |      |   |             |   |   |   |
| Unrealized impairment loss on held to maturity security   |   |             | (500,944  | )      |             |   | (500,944 | ) |
| Related income tax effect                                 |   |             | 170,321   |   |             |   | 170,321 |   |
|                                                      |   |             | (330,623  | )      |             |   | (330,623 | ) |
|                                                      |   |             |      |   |             |   |   |   |
| Unrealized holding loss interest rate swap contract       |   |             | (353,552  | )      |             |   | (883,806 | ) |
| Related income tax effect                                 |   |             | 141,990   |   |             |   | 353,772 |   |
|                                                      |   |             | (211,562  | )      |             |   | (530,034 | ) |
|                                                      |   |             |      |   |             |   |   |   |
| Pension Liability                                         |   |             | (191,539  | )      |             |   | (647,228 | ) |
| Related income tax effect                                 |   |             | 75,841    |   |             |   | 258,425 |   |
|                                                      |   |             | (115,698  | )      |             |   | (388,803 | ) |
|                                                      |   |             |      |   |             |   |   |   |
| Accumulated other comprehensive income (loss)             |   | $                | 98,174    |   |             | $      | (1,080,669 | ) |

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Table of Contents

|                       |   | Net UnrealizedGains (Losses)On Available forSale Securities |     |   | Net UnrealizedImpairment LossOn Held toMaturity Security |   |     | Net Change inFair Value ofInterest RateSwap Contract |   |   | Net ChangeRelated toDefined BenefitPension Plans |   |   | AccumulatedOtherComprehensiveIncome (Loss) |     |
|----------------------------|--------|-------------------------------------------------------------|----------|--------|----------------------------------------------------------|--------|----------|------------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|--------------------------------------------|----------|
| Balance, December 31, 2008 |   | $                                                           | 603,527  |   |                                                     | $      | -        |                                                 |   | $      | (695,408                                         | )      |   | $                                          | (457,320 | ) |   | $ | (549,201 | ) |
|                       |   |                                                        |     |   |                                                     |   |     |                                                 |   |   |                                             |   |   |                                       |     |   |   |   |   |   |
| Net Change                 |   |                                                        | (434,736 | )      |                                                     |   | (330,623 | )                                                    |   |   | 165,374                                          |   |   |                                       | 68,517   |   |   |   | (531,468 | ) |
|                       |   |                                                        |     |   |                                                     |   |     |                                                 |   |   |                                             |   |   |                                       |     |   |   |   |   |   |
| Balance, December 31, 2009 |   |                                                        | 168,791  |   |                                                     |   | (330,623 | )                                                    |   |   | (530,034                                         | )      |   |                                       | (388,803 | ) |   |   | (1,080,669 | ) |
|                       |   |                                                        |     |   |                                                     |   |     |                                                 |   |   |                                             |   |   |                                       |     |   |   |   |   |   |
| Net Change                 |   |                                                        | 587,266  |   |                                                     |   | -        |                                                 |   |   | 318,472                                          |   |   |                                       | 273,105  |   |   |   | 1,178,843 |   |
|                       |   |                                                        |     |   |                                                     |   |     |                                                 |   |   |                                             |   |   |                                       |     |   |   |   |   |   |
| Balance, December 31, 2010 |   | $                                                           | 756,057  |   |                                                     | $      | (330,623 | )                                                    |   | $      | (211,562                                         | )      |   | $                                          | (115,698 | ) |   | $ | 98,174 |   |

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Table of Contents

|                                                                                               |   | 2010   |       |   | 2009   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Change in Benefit Obligation                                                                       |   |   |       |   |   |   |
| Liability for pension, beginning                                                                   |   | $      | 3,609,184  |   |   | $      | 3,045,192 |   |
| Service cost                                                                                       |   |   | 250,739    |   |   |   | 286,843 |   |
| Interest cost                                                                                      |   |   | 181,665    |   |   |   | 188,057 |   |
| Actuarial loss                                                                                     |   |   | (218,383)  |   |   |   | 89,092 |   |
| Benefits                                                                                           |   |   | (430,992)  |   |   |   | - |   |
| Liability for pension, ending                                                                      |   | $      | 3,392,213  |   |   | $      | 3,609,184 |   |
|                                                                                               |   |   |       |   |   |
|                                                                                               |   |   |       |   |   |
| Amount Recognized in Consolidated Balance Sheets                                                   |   |   |       |   |   |
| Liability for pension                                                                              |   | $      | (3,392,213 | )      |   | $      | (3,609,184 | ) |
| Net actuarial loss included in accumulated other comprehensive income                              |   |   | (25,743    | )      |   |   | 330,510 |   |
| Prior service cost included in accumulated other comprehensive income                              |   |   | 207,310    |   |   |   | 306,742 |   |
| Net recognized pension expense                                                                     |   | $      | (3,210,646 | )      |   | $      | (2,971,932 | ) |
|                                                                                               |   |   |       |   |   |   |   |   |
| Information for pension plans with an accumulated benefit obligation in excess of plan assets |   |   |       |   |
| Projected benefit obligation                                                                       |   | $      | 3,392,213  |   |   | $      | 3,609,184 |   |
| Accumulated benefit obligation                                                                     |   |   | 3,173,092  |   |   |   | 3,393,837 |   |
|                                                                                               |   |   |       |   |   |   |   |   |
|  Components of Net Periodic Benefit Cost                                                      |   | 2010   |       |   | 2009   |   |
| Service cost                                                                                       |   | $      | 250,739    |   |   | $      | 286,843 |   |
| Interest cost                                                                                      |   |   | 181,665    |   |   |   | 188,057 |   |
| Amortization of prior service cost                                                                 |   |   | 99,432     |   |   |   | 99,432 |   |
| Recognized net actuarial gain                                                                      |   |   | 137,870    |   |   |   | 113,847 |   |
| Net periodic benefit expense                                                                       |   | $      | 669,706    |   |   | $      | 688,179 |   |

| Weighted-Average Assumptions, December 31 |   | 2010   |   | 2009 |
|-------------------------------------------|--------|--------|--------|------|
| Discount Rate                             |   |   | 6.00   | %    |   |   | 6.00 | % |
| Salary Scale                              |   |   | 4.00   | %    |   |   | 4.00 | % |

| Projected Annual Benefit Payments |   |   |
|-----------------------------------|--------|--------|
| 2011                              |   | $      | 288,860 |   |
| 2012                              |   | $      | 288,860 |   |
| 2013                              |   | $      | 349,603 |   |
| 2014                              |   | $      | 349,603 |   |
| 2015                              |   | $      | 349,603 |   |
| 2016-2020                         |   | $      | 2,020,411 |   |

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Table of Contents

|  Stock Options         |   | Shares |    |   | WeightedAverageExercise Price |   |   | WeightedAverageRemainingContractualTerm (years) |   | AggregateIntrinsicValue |
|----------------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|-------------------------------------------------|--------|-------------------------|
| Outstanding at January 1, 2009   |   |   | 180,855 |   |                          | $      | 9.00   |                                            |   |                    |   |   |   |
| Granted                          |   |   | 40,264  |   |                          |   | 8.23   |                                            |   |                    |   |   |   |
| Exercised                        |   |   | (58,674 | )      |                          |   | 4.27   |                                            |   |                    |   |   |   |
| Forfeited                        |   |   | -       |   |                          |   | -      |                                            |   |                    |   |   |   |
| Expired                          |   |   | -       |   |                          |   | -      |                                            |   |                    |   |   |   |
| Outstanding at December 31, 2009 |   |   | 162,445 |   |                          |   | 10.51  |                                            |   | 6.1                     |   | $ | 11,274 |
| Granted                          |   |   | -       |   |                          |   | -      |                                            |   |                    |   |   |   |
| Exercised                        |   |   | (3,793  | )      |                          |   | 3.05   |                                            |   |                    |   |   |   |
| Forfeited                        |   |   | (2,408  | )      |                          |   | 9.02   |                                            |   |                    |   |   |   |
| Expired                          |   |   | -       |   |                          |   | -      |                                            |   |                    |   |   |   |
| Outstanding at December 31, 2010 |   |   | 156,244 |   |                          | $      | 10.74  |                                            |   |                    | 5.3 |   | $ | 56,467 |
|                             |   |   |    |   |                          |   |   |                                            |   |                    |   |   |   |   |
| Exercisable at December 31, 2010 |   |   | 128,075 |   |                          | $      | 11.18  |                                            |   |                    | 4.6 |   | $ | 47,662 |

|                 |   |   | Outstanding Options |    |   | Exercisable Options  |   |
|----------------------|--------|--------|---------------------|---------|--------|----------------------|--------|
| Exercise Price Range |   |   | Number              |    |   | Average Life inYears |   |   | Average ExercisePrice |   |   | Number |   |   | Average Life inYears |   |   | AverageExercisePrice |   |
| $5.81 to $6.27       |   |   |                | 18,415  |   |                 | 1.0    |   |   | $ | 5.86 |   |   |   | 18,415 |   |   | 1.0 |   |   | $ | 5.86 |   |
| $7.49 to $11.85      |   |   |                | 75,261  |   |                 | 6.5    |   |   | $ | 9.23 |   |   |   | 47,901 |   |   | 5.5 |   |   | $ | 9.59 |   |
| $12.69 to $15.18     |   |   |                | 62,568  |   |                 | 5.1    |   |   | $ | 13.99 |   |   |   | 61,759 |   |   | 5.1 |   |   | $ | 14.01 |   |
|                 |   |   |                | 156,244 |   |                 | 5.3    |   |   | $ | 10.74 |   |   |   | 128,075 |   |   | 4.6 |   |   | $ | 11.18 |   |

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Table of Contents

|                          |   | January 2009 |   |   | August 2009 |   |
|-------------------------------|--------|--------------|--------|--------|-------------|--------|
| Number of options granted     |   |         | 18,984 |   |        |   | 21,279 |   |
| Fair value of options granted |   | $            | 3.26   |   |        | $      | 2.89 |   |
| Risk-free rate of return      |   |         | 1.60   | %      |        |   | 2.57 | % |
| Expected option life in years |   |         | 7      |   |        |   | 7 |   |
| Expected volatility           |   |         | 27.58  | %      |        |   | 27.58 | % |
| Expected dividends (1)        |   |         | -      |   |        |   | - |   |

|   Nonvested Shares   |   | Number ofShares |    |   | Average Grant-DateFair Value |   |
|--------------------------------|--------|-----------------|---------|--------|------------------------------|--------|
| Nonvested at January 1, 2009   |   |            | 33,594  |   |                         | $      | 13.34 |   |
|    Granted      |   |            | 62,578  |   |                         |   | 8.10 |   |
|    Vested       |   |            | (16,613 | )      |                         |   | 12.94 |   |
|    Forfeited    |   |            | -       |   |                         |   | - |   |
| Nonvested at December 31, 2009 |   |            | 79,559  |   |                         |   | 9.08 |   |
|    Granted      |   |            | 56,359  |   |                         |   | 6.85 |   |
|    Vested       |   |            | (23,325 | )      |                         |   | 10.07 |   |
|    Forfeited    |   |            | (3,075  | )      |                         |   | 9.63 |   |
| Nonvested at December 31, 2010 |   |            | 109,518 |   |                         | $      | 7.70 |   |

| 2011       |   | $      | 940,670   |   |
|------------|--------|--------|-----------|--------|
| 2012       |   |   | 914,336   |   |
| 2013       |   |   | 937,037   |   |
| 2014       |   |   | 698,628   |   |
| 2015       |   |   | 454,530   |   |
| Thereafter |   |   | 1,459,977 |   |
|       |   | $      | 5,405,178 |   |

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|                                                                                  |   | 2010   |      |   | 2009   |   |
|---------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                  |   |   |      |   |   |   |
| Equipment expense                                                                |   | $      | 657,905   |   |   | $      | 631,677 |   |
| Advertising                                                                      |   |   | 140,975   |   |   |   | 130,393 |   |
| Regulatory, professional and other     consulting fees  |   |   | 1,087,314 |   |   |   | 1,006,830 |   |
| Office expense                                                                   |   |   | 657,430   |   |   |   | 572,477 |   |
| Directors’ fees                                                                 |   |   | 104,375   |   |   |   | 105,700 |   |
| Other real estate owned expenses, net                                                 |   |   | 336,307   |   |   |   | 123,795 |   |
| All other expenses                                                               |   |   | 905,902   |   |   |   | 1,130,972 |   |
|                                                                                  |   | $      | 3,890,208 |   |   | $      | 3,701,844 |   |

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|                                                        |   |   |       |   |              |   |   |              |   |   |       |   |   | To Be Well Capitalized |   |
|-------------------------------------------------------------|--------|--------|------------|--------|-------------------|--------|--------|-------------------|--------|--------|------------|--------|--------|------------------------|--------|
|                                                        |   |   |       |   |              |   |   |              |   |   |       |   |   | Under Prompt           |   |
|                                                        |   |   |       |   |              |   |   | For Capital       |   |   | Corrective |   |
|                                                        |   | Actual |       |   | Adequacy Purposes |   |   | Action Provisions |   |
|                                                        |   | Amount |       |   | Ratio             |   |   | Amount            |   |   | Ratio      |   |   | Amount                 |   |   | Ratio |   |
| As of December 31, 2010 -                                   |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |
| Company                                                |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |
|    Total Capital (to Risk Weighted Assets)   |   | $      | 72,736,033 |   |              |   | 14.43  | %            |   | $      | 40,335,354 |   |   |                   | >8  | %  |   |   | N/A |   |   |   |  N/A |   |
|    Tier I Capital (to Risk Weighted Assets)  |   |   | 65,484,454 |   |              |   | 12.99  | %            |   |   | 20,167,677 |   |   |                   | >4  | %  |   |   | N/A |   |   |   | N/A |   |
|    Tier I Capital (to Average Assets)        |   |   | 65,484,454 |   |              |   | 9.63   | %            |   |   | 27,196,758 |   |   |                   | >4  | %  |   |   | N/A |   |   |   | N/A |   |
| Bank                                                   |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
|    Total Capital (to Risk Weighted Assets)   |   | $      | 70,084,660 |   |              |   | 13.92  | %            |   | $      | 40,272,800 |   |   |                   | >8  | %  |   | $ | 50,341,000 |   |   |   | >10 | % |
|    Tier I Capital (to Risk Weighted Assets)  |   |   | 64,321,948 |   |              |   | 12.78  | %            |   |   | 20,136,400 |   |   |                   | >4  | %  |   |   | 30,204,600 |   |   |   | >6 | % |
|    Tier I Capital (to Average Assets)        |   |   | 64,321,948 |   |              |   | 9.51   | %            |   |   | 27,054,854 |   |   |                   | >4  | %  |   |   | 33,818,567 |   |   |   | >5 | % |
|                                                        |   |
| As of December 31, 2009                                     |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Company                                                |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
|    Total Capital (to Risk Weighted Assets)   |   | $      | 79,091,277 |   |              |   | 17.23  | %            |   | $      | 36,713,599 |   |   |                   | >8  | %  |   |   | N/A |   |   |   |  N/A |   |
|    Tier I Capital (to Risk Weighted Assets)  |   |   | 74,585,890 |   |              |   | 16.25  | %            |   |   | 18,356,800 |   |   |                   | >4  | %  |   |   | N/A |   |   |   | N/A |   |
|    Tier I Capital (to Average Assets)        |   |   | 74,585,890 |   |              |   | 10.99  | %            |   |   | 27,143,523 |   |   |                   | >4  | %  |   |   | N/A |   |   |   | N/A |   |
| Bank                                                   |   |   |       |   |              |   |   |              |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
|    Total Capital (to Risk Weighted Assets)   |   | $      | 77,370,821 |   |              |   | 16.90  | %            |   | $      | 36,633,760 |   |   |                   | >8  | %  |   | $ | 45,792,200 |   |   |   | >10 | % |
|    Tier I Capital (to Risk Weighted Assets)  |   |   | 72,865,434 |   |              |   | 15.91  | %            |   |   | 18,316,040 |   |   |                   | >4  | %  |   |   | 27,475,320 |   |   |   | >6 | % |
|    Tier I Capital (to Average Assets)        |   |   | 72,865,434 |   |              |   | 10.78  | %            |   |   | 27,043,305 |   |   |                   | >4  | %  |   |   | 33,804,131 |   |   |   | >5 | % |

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|   | Level 1: | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Level 2: | Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                      |   | Level 1 Inputs |   |   | Level 2 Inputs |   |        | Level 3 Inputs |   |   | Total Fair Value |   |
|-------------------------------------------|--------|----------------|--------|--------|----------------|--------|-------------|----------------|--------|--------|------------------|--------|
| December 31, 2010:                        |   |           |   |   |           |   |        |           |   |   |             |   |
|   Securities available for sale |   |           | -      |   |           | $      | 85,470,993  |           |   |   | -                |   |   | $ | 85,470,993 |   |
|   Derivative liabilities        |   |           | -      |   |           |   | (353,552    | )              |   |   | -                |   |   |   | (353,552 | ) |
|                                      |   |           |   |   |           |   |        |           |   |   |             |   |   |   |   |   |
| December 31, 2009:                        |   |           |   |   |           |   |        |           |   |   |             |   |   |   |   |   |
|   Securities available for sale |   |           | -      |   |           | $      | 204,118,850 |           |   |   | -                |   |   | $ | 204,118,850 |   |
|   Derivative liabilities        |   |           | -      |   |           |   | (883,806    | )              |   |   | -                |   |   |   | (883,806 | ) |

|                      |   | Level 1 Inputs |   |   | Level 2 Inputs |   |    | Level 3 Inputs |   |   | Total Fair Value |   |
|---------------------------|--------|----------------|--------|--------|----------------|--------|---------|----------------|--------|--------|------------------|--------|
| December 31, 2010:        |   |           |   |   |           |   |    |           |   |   |             |   |
| Impaired loans            |   |           | -      |   |           |   | -       |           |   | $      | 2,884,750        |   |   | $ | 2,884,750 |   |
| Other real estate owned   |   |           | -      |   |           |   | -       |           |   |   | 243,023          |   |   |   | 243,023 |   |
|                      |   |           |   |   |           |   |    |           |   |   |             |   |   |   |   |   |
| December 31, 2009:        |   |           |   |   |           |   |    |           |   |   |             |   |   |   |   |   |
| Impaired loans            |   |           | -      |   |           |   | -       |           |   | $      | 1,116,129        |   |   | $ | 1,116,129 |   |
| Other real estate owned   |   |           | -      |   |           |   | -       |           |   |   | 1,362,621        |   |   |   | 1,362,621 |   |
| Security held to maturity |   |           | -      |   |           |   | 133,054 |           |   |   | -                |   |   |   | 133,054 |   |

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|                                     |   | December 31, 2010 |         |    | December 31, 2009 |   |
|------------------------------------------|--------|-------------------|--------------|---------|-------------------|--------|
|                                     |   | Carrying          |         |    | Estimated         |   |   | Carrying |   |   | Estimated |   |
|                                     |   | Value             |         |    | Fair Value        |   |   | Value |   |   | Fair Value |   |
|                                     |   |              |         |    |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                |   | $                 | 17,710,501   |    |              | $      | 17,710,501 |   |   | $ | 25,854,285 |   |   | $ | 25,854,285 |   |
| Securities available for sale       |   |              | 85,470,993   |    |              |   | 85,470,993 |   |   |   | 204,118,850 |   |   |   | 204,118,850 |   |
| Securities held to maturity         |   |              | 81,889,895   |    |              |   | 81,712,004 |   |   |   | 23,608,980 |   |   |   | 24,215,530 |   |
| Loans held for sale                 |   |              | 21,219,230   |    |              |   | 21,219,230 |   |   |   | 21,514,785 |   |   |   | 21,514,785 |   |
| Gross loans                         |   |              | 411,987,339  |    |              |   | 410,144,000 |   |   |   | 379,945,735 |   |   |   | 379,617,000 |   |
| Accrued interest receivable              |   |              | 2,405,741    |    |              |   | 2,405,741 |   |   |   | 2,274,087 |   |   |   | 2,274,087 |   |
| Deposits                            |   |              | (543,735,149 | )  |              |   | (545,225,000 | ) |   |   | (572,155,354 | )  |   |   | (573,596,000 | )  |
| Other borrowings                    |   |              | (25,900,000  | )  |              |   | (27,979,000 | ) |   |   | (22,500,000 | )  |   |   | (25,321,000 | )  |
| Redeemable subordinated debentures  |   |              | (18,557,000  | )  |              |   | (18,557,000 | )  |   |   | (18,557,000 | )  |   |   | (18,557,000 | )  |
| Interest rate swap contract         |   |              | (353,552     | )  |              |   | (353,552 | )  |   |   | (883,806 | ) |   |   | (883,806 | ) |
| Accrued interest payable                 |   |              | (1,434,338   | )       |              |   | (1,434,338 | ) |   |   | (1,757,151 | ) |   |   | (1,757,151 | ) |

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|                                                                                       |   | December 31, 2010 |       |   | December 31, 2009 |    |
|--------------------------------------------------------------------------------------------|--------|------------------------|------------|--------|------------------------|---------|
| Assets:                                                                                    |   |                   |       |   |                   |    |
|   Cash                                                                           |   | $                      | 727,417    |   |                   | $       | 690,968 |   |
|   Investment securities available for sale                                       |   |                   | 557,000    |   |                   |    | 557,000 |   |
|   Investment in subsidiaries                                                     |   |                   | 65,241,346 |   |                   |    | 73,681,106 |   |
|   Other assets                                                                   |   |                   | 2,114,369  |   |                   |    | 1,961,198 |   |
|        Total Assets                                     |   | $                      | 68,640,132 |   |                   | $       | 76,890,272 |   |
|                                                                                       |   |                   |       |   |                   |    |   |   |
| Liabilities And Shareholders’ Equity                                                 |   |                   |       |   |                   |    |   |   |
|   Subordinated debentures                                                        |   |  $                | 18,557,000 |   |                   |  $ | 18,557,000 |   |
|   Other liabilities                                                              |   |                   | 401,977    |   |                   |    | 932,219 |   |
|   Shareholders’ equity                                                     |   |                   | 49,681,155 |   |                   |    | 57,401,053 |   |
|        Total Liabilities and Shareholders’ Equity |   | $                      | 68,640,132 |   |                   | $       | 76,890,272 |   |

|                                                                                   |   | Year ended December 31, |       |
|----------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                   |   | 2010                    |       |   | 2009 |   |
| Income:                                                                                |   |                    |       |   |   |   |
|   Interest                                                                   |   | $                       | 12,642     |   |   | $ | 15,796 |   |
|         Total Income                           |   |                    | 12,642     |   |   |   | 15,796 |   |
|                                                                                   |   |                    |       |   |   |   |   |   |
| Expense:                                                                               |   |                    |       |   |   |   |   |   |
|   Interest                                                                   |   |                    | 1,082,500  |   |   |   | 1,087,748 |   |
|        Total Expense                                |   |                    | 1,082,500  |   |   |   | 1,087,748 |   |
|                                                                                   |   |                    |       |   |   |   |   |   |
| Loss before income taxes and equity in undistributed income of  Subsidiaries |   |                    | (1,069,858 | ) |   |   | (1,071,952 | ) |
| Federal income tax benefit                                                             |   |                    | (364,432   | ) |   |   | (364,661 | ) |
|                                                                                   |   |                    |       |   |   |   |   |   |
| Loss before equity in undistributed income of subsidiaries                             |   |                    | (705,426   | ) |   |   | (707,291 | ) |
| Equity in undistributed income of subsidiaries                                         |   |                    | 4,013,217  |   |   |   | 3,268,052 |   |
|        Net Income                                   |   | $                       | 3,307,791  |   |   | $ | 2,560,761 |   |

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|                                                                               |   | Year ended December 31, |        |
|------------------------------------------------------------------------------------|--------|-------------------------|-------------|
|                                                                               |   | 2010                    |        |   | 2009 |   |
| Operating Activities:                                                              |   |                    |        |   |   |   |
|    Net Income                                                       |   | $                       | 3,307,791   |   |   | $ | 2,560,761 |   |
|    Adjustments:                                                     |   |                    |        |   |   |   |   |   |
|        (Increase) decrease in other assets      |   |                    | (153,171    | ) |   |   | 307,870 |   |
|        (Decrease) increase in other liabilities |   |                    | (530,242    | ) |   |   | (274,181 | ) |
|   Equity in undistributed income of subsidiaries                         |   |                    | (4,013,217  | ) |   |   | (3,268,052 | ) |
| Net cash used in operating activities                                              |   |                    | (1,388,839  | ) |   |   | (673,602 | ) |
|                                                                               |   |                    |        |   |   |   |   |   |
| Investing Activities:                                                              |   |                    |        |   |   |   |   |   |
|   Investment in subsidiaries                                             |   |                    | 0           |   |   |   | 0 |   |
|   Repayment of investment in subsidiaries                                |   |                    | 13,769,235  |   |   |   | 967,985 |   |
| Net cash provided by investing activities                                          |   |                    | 13,769,235  |   |   |   | 967,985 |   |
|                                                                               |   |                    |        |   |   |   |   |   |
| Financing Activities:                                                              |   |                    |        |   |   |   |   |   |
|   Repayment of common stock, net                                         |   |                    | 230,517     |   |   |   | 353,625 |   |
|   Purchase of treasury stock                                             |   |                    | (4,464      | ) |   |   | (78,466 | ) |
|   Repayment of preferred stock                                           |   |                    | (12,000,000 | ) |   |   | 0 |   |
|   Dividend paid on preferred stock                                       |   |                    | (570,000    | ) |   |   | (536,667 | ) |
| Net cash used in financing activities                                              |   |                    | (12,343,947 | ) |   |   | (261,508 | ) |
|                                                                               |   |                    |        |   |   |   |   |   |
| Net increase in cash                                                               |   |                    | 36,449      |   |   |   | 32,875 |   |
| Cash at beginning of year                                                          |   |                    | 690,968     |   |   |   | 658,093 |   |
| Cash at end of year                                                                |   | $                       | 727,417     |   |   | $ | 690,968 |   |

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|                                                                  |   | 2010    |      |
|-----------------------------------------------------------------------|--------|---------|-----------|
|                                                                  |   | Dec. 31 |      |   | Sept. 30 |   |   | June 30 |   |   | March 31 |   |
| Summary of Operations                                                 |   |    |      |   |   |   |   |   |   |   |   |   |
| Interest income                                                       |   | $       | 7,685,272 |   |   | $ | 7,690,074 |   |   | $ | 7,075,283 |   |   | $ | 6,850,390 |   |
| Interest expense                                                      |   |    | 2,034,546 |   |   |   | 2,146,827 |   |   |   | 2,226,892 |   |   |   | 2,411,233 |   |
|    Net interest income                                 |   |    | 5,650,726 |   |   |   | 5,543,247 |   |   |   | 4,848,391 |   |   |   | 4,439,157 |   |
| Provision for loan losses                                             |   |    | 600,000   |   |   |   | 875,000 |   |   |   | 550,000 |   |   |   | 300,000 |   |
|    Net interest income after provision                 |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          for loan losses |   |    | 5,050,726 |   |   |   | 4,668,247 |   |   |   | 4,298,391 |   |   |   | 4,139,157 |   |
| Non-interest income                                                   |   |    | 1,284,868 |   |   |   | 996,697 |   |   |   | 1,007,020 |   |   |   | 948,846 |   |
| Non-interest expense                                                  |   |    | 5,033,790 |   |   |   | 4,372,297 |   |   |   | 4,279,090 |   |   |   | 4,133,946 |   |
|    Income before income taxes                          |   |    | 1,301,804 |   |   |   | 1,292,647 |   |   |   | 1,026,321 |   |   |   | 954,057 |   |
| Income taxes                                                          |   |    | 370,429   |   |   |   | 411,048 |   |   |   | 230,762 |   |   |   | 254,799 |   |
|    Net  income                               |   |    | 931,375   |   |   |   | 881,599 |   |   |   | 795,559 |   |   |   | 699,258 |   |
| Dividends and accretion on preferred stock                            |   |    | 490,786   |   |   |   | 176,984 |   |   |   | 176,984 |   |   |   | 176,984 |   |
|    Net income available to common shareholders         |   | $       | 440,589   |   |   | $ | 704,615 |   |   | $ | 618,575 |   |   | $ | 522,274 |   |
|                                                                  |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per common share :                                         |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                                               |   | $       | 0.09      |   |   | $ | 0.15 |   |   | $ | 0.13 |   |   | $ | 0.11 |   |
|    Diluted                                             |   | $       | 0.09      |   |   | $ | 0.15 |   |   | $ | 0.13 |   |   | $ | 0.11 |   |

|                                                                     |   | 2009    |      |
|--------------------------------------------------------------------------|--------|---------|-----------|
|                                                                     |   | Dec. 31 |      |   | Sept. 30 |   |   | June 30 |   |   | March 31 |   |
| Summary of Operations                                                    |   |    |      |   |   |   |   |   |   |   |   |   |
| Interest income                                                          |   | $       | 7,663,197 |   |   | $ | 7,467,175 |   |   | $ | 7,591,339 |   |   | $ | 7,414,405 |   |
| Interest expense                                                         |   |    | 2,851,147 |   |   |   | 3,117,646 |   |   |   | 3,072,139 |   |   |   | 3,214,416 |   |
|    Net interest income                                    |   |    | 4,812,050 |   |   |   | 4,349,529 |   |   |   | 4,519,200 |   |   |   | 4,199,989 |   |
| Provision for loan losses                                                |   |    | 1,260,000 |   |   |   | 505,000 |   |   |   | 325,000 |   |   |   | 463,000 |   |
|    Net interest income after provision                    |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          For loan losses    |   |    | 3,552,050 |   |   |   | 3,844,529 |   |   |   | 4,194,200 |   |   |   | 3,736,989 |   |
| Non-interest income                                                      |   |    | 1,482,026 |   |   |   | 1,233,197 |   |   |   | 942,801 |   |   |   | 847,052 |   |
| Non-interest expense                                                     |   |    | 3,953,516 |   |   |   | 4,350,106 |   |   |   | 4,791,566 |   |   |   | 4,020,613 |   |
|    Income before income taxes                             |   |    | 1,080,560 |   |   |   | 727,620 |   |   |   | 345,435 |   |   |   | 563,428 |   |
| Income taxes (benefit)                                                   |   |    | 152,333   |   |   |   | 106,386 |   |   |   | (189,175) |   |   |   | 86,738 |   |
|    Net  income                                  |   |    | 928,227   |   |   |   | 621,234 |   |   |   | 534,610 |   |   |   | 476,690 |   |
| Dividends and accretion on preferred stock                               |   |    | 176,983   |   |   |   | 176,983 |   |   |   | 176,985 |   |   |   | 188,650 |   |
|    Net  income available to common shareholders |   | $       | 751,244   |   |   | $ | 444,251 |   |   | $ | 357,625 |   |   | $ | 288,040 |   |
|                                                                     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per common share :                                            |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                                                  |   | $       | 0.16      |   |   | $ | 0.09 |   |   | $ | 0.08 |   |   | $ | 0.06 |   |
|    Diluted                                                |   | $       | 0.16      |   |   | $ | 0.09 |   |   | $ | 0.08 |   |   | $ | 0.06 |   |

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Table of Contents

|  Maturity |  Hedged Liability     | NotionalAmounts | Swap FixedInterest Rates | Swap VariableInterest Rates        |
|----------------|----------------------------|-----------------|--------------------------|------------------------------------|
|           |                       |            |                     |                               |
| June 15, 2011  | Trust Preferred Securities | $18,000,000     | 5.87%                    | 3 month LIBOR plus165 basis points |

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Table of Contents

SIGNATURES

|                            | 1st CONSTITUTION BANCORP |                                  |
|---------------------------------|--------------------------|---------------------------------------|
|                            |                     |                                  |   |
|                            |                     |                                  |   |
| Date:  March 23, 2011 | By:                      | /s/ ROBERT F. MANGANO            |   |
|                            |                     | Robert F. Mangano                     |   |
|                            |                     | President and Chief Executive Officer |   |
|                            |                     | (Principal Executive Officer)         |   |

| Signature                                       |   | Capacity                                                 |   | Date           |
|-------------------------------------------------|--------|----------------------------------------------------------|--------|----------------|
|  /s/ ROBERT F. MANGANO                     |   | President, Chief Executive Officer and Director          |   | March 23, 2011 |
| Robert F. Mangano /s/ CHARLES S. CROW, III |   | (Principal Executive Officer) Chairman of the Board |   | March 23, 2011 |
| Charles S. Crow, III /s/ DAVID C. REED     |   | Director                                                 |   | March 23, 2011 |
| David C. Reed /s/ WILLIAM M. RUE           |   | Director                                                 |   | March 23, 2011 |
| William M. Rue /s/ FRANK E. WALSH, III     |   | Director                                                 |   | March 23, 2011 |
| Frank E. Walsh, III /s/ JOSEPH M. REARDON  |   | Senior Vice President and Treasurer                      |   | March 23, 2011 |
| Joseph M. Reardon                          |   | (Principal Accounting and Financial Officer)             |   |           |

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Table of Contents

| Exhibit No. |                                  | Description |
|-------------|---------------------------------------|-------------|
|        |                                  |        |   |
| 3           | (i)(A)                                |        | Certificate of Incorporation of the Company (conformed copy) (incorporated by reference to Exhibit 3(i)(A) to the Company’s Form 10-K filed with the SEC on March 27, 2009) |
|        |                                  |        |   |
| 3           | (i)(B)                                |        | Certificate of Amendment to the Certificate of Incorporation increasing the number of shares designated as Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |                                  |        |   |
| 3           | (i)(C)                                |        | Certificate of Amendment to the Certificate of Incorporation establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series B (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |                                  |        |   |
| 3           | (ii)(A)      |        | Bylaws of the Company (conformed copy) (incorporated by reference to Exhibit 3(ii)(A) to the Company’s Form 8-K filed with the SEC on October 22, 2007) |
|        |                                  |        |   |
| 3           | (ii)(B)                               |        | Amendment No. 2 to By-laws of the Company (incorporated by reference to Exhibit 3(ii)(B) to the Company’s Form 8-K filed with the SEC on October 22, 2007) |
|        |                                  |        |   |
| 4.1         |                                  |        | Specimen Share of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-KSB (SEC File No. 000-32891) filed with the SEC on March 22, 2002) |
|        |                                  |        |   |
| 4.2         |                                  |        | Amended and Restated Declaration of Trust of 1st Constitution Capital Trust I dated as of April 10, 2002 among the Registrant, as sponsor, Wilmington Trust Company, as Delaware and institutional trustee, and the Administrators named therein (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002) |
|        |                                  |        |   |
| 4.3         |                                  |        | Indenture dated as of April 10, 2002 between the Registrant, as issuer, and Wilmington Trust Company, as trustee, relating to the Floating Rate Junior Subordinated Debt Securities due 2032 (incorporated by reference to Exhibit 4.3 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002) |
|        |                                  |        |   |
| 4.4         |                                  |        | Guarantee Agreement dated as of April 10, 2002 between the Registrant and the Wilmington Trust Company, as guarantee trustee (incorporated by reference to Exhibit 4.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on May 8, 2002) |
|        |                                  |        |   |
| 4.5         |                                  |        | Rights Agreement, dated as of March 18, 2004, between 1st Constitution Bancorp and Registrar and Transfer Company, as Rights Agent, (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-A12G (SEC File No. 000-32891) filed with the SEC on March 18, 2004) |
|        |                                  |        |   |
| 4.6         |                                  |        | Warrant, dated December 23, 2008, to purchase shares of 1st Constitution Bancorp common stock (incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |                                  |        |   |
| 10.1        |                                  | #           | 1st Constitution Bancorp Supplemental Executive Retirement Plan, dated as of October 1, 2002 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002) |
|        |                                  |        |   |
| 10.2        |                                  | #           | Amended and Restated 1st Constitution Bancorp Directors’ Insurance Plan, effective as of June 16, 2005 (incorporated by reference to Exhibit No. 10 to the Company’s Form 8-K filed with the SEC on March 24, 2006) |
|        |                                  |        |   |
| 10.3        |                                  | #           | 1st Constitution Bancorp Form of Executive Life Insurance Agreement (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002) |

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Table of Contents

| Exhibit No. |   | Description |
|-------------|--------|-------------|
|        |   |        |   |
| 10.4        |   | #           | 2000 Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.3 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001) |
|        |   |        |   |
| 10.5        |   | #           | Directors Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.4 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001) |
|        |   |        |   |
| 10.6        |   | #           | Employment Agreement between the Company and Robert F. Mangano dated April 22, 1999 (incorporated by reference to Exhibit No. 6.5 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001) |
|        |   |        |   |
| 10.7        |   | #           | Amendment No. 1 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective January 1, 2004 (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004) |
|        |   |        |   |
| 10.8        |   | #           | Change of Control Agreement, effective as of April 1, 2004, by and between the Company and Joseph M. Reardon (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004) |
|        |   |        |   |
| 10.9        |   | #           | Form of Stock Option Agreement under the 1st Constitution Bancorp  Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.14 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004) |
|        |   |        |   |
| 10.10       |   | #           | Form of Restricted Stock Agreement under the 1st Constitution Bancorp  Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004) |
|        |   |        |   |
| 10.11       |   | #           | Employment Agreement between the Company and Robert F. Mangano dated February 22, 2005 (incorporated by reference to Exhibit No. 10.16 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on February 24, 2005) |
|        |   |        |   |
| 10.12       |   | #           | The 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Appendix A of the Company's proxy statement (SEC File No. 000-32891) filed with the SEC on April 15, 2005) |
|        |   |        |   |
| 10.13       |   | #           | Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005) |
|        |   |        |   |
| 10.14       |   | #           | Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005) |
|        |   |        |   |
| 10.15       |   | #           | Form of Incentive Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005) |
|        |   |        |   |
| 10.16       |   | #           | 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006) |

----

| Exhibit No. |   | Description |
|-------------|--------|-------------|
|        |   |        |   |
| 10.17       |   | #           | Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006) |
|        |   |        |   |
| 10.18       |   | #           | Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006) |
|        |   |        |   |
| 10.19       |   |        | Amended and Restated Declaration of Trust of 1st Constitution Capital Trust II, dated as of June 15, 2006, among 1st Constitution Bancorp, as sponsor, the Delaware and institutional trustee named therein, and the administrators named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006) |
|        |   |        |   |
| 10.20       |   |        | Indenture, dated as of June 15, 2006, between 1st Constitution Bancorp, as issuer, and the trustee named therein, relating to the Floating Rate Junior Subordinated Debt Securities due 2036 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006) |
|        |   |        |   |
| 10.21       |   |        | Guarantee Agreement, dated as of June 15, 2006, between 1st Constitution Bancorp and the guarantee trustee named therein (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006) |
|        |   |        |   |
| 10.22       |   | #           | Amendment No. 2 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective as of December 31, 2004 (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K filed with the SEC on April 15, 2008) |
|        |   |        |   |
| 10.23       |   | #           | 1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 28, 2006) |
|        |   |        |   |
| 10.24       |   |        | Letter Agreement, dated December 23, 2008, including Securities Purchase Agreement – Standard Terms incorporated by reference therein, between 1st Constitution Bancorp and the U.S. Department of the Treasury (incorporated by reference to Exhibit 10 to the Company’s Form S-3 filed with the SEC on January 29, 2009) |
|        |   |        |   |
| 10.25       |   | #           | Form of Waiver, executed by each of Messrs. Robert Mangano and Joseph M. Reardon (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |   |        |   |
| 10.26       |   | #           | Form of Senior Executive Officer Agreement, executed by each of Messrs. Robert Mangano and Joseph M. Reardon (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008) |
|        |   |        |   |
| 10.27       |   | #           | Letter Agreement with Robert F. Mangano dated November 5, 2009 and executed by Mr. Mangano on November 7, 2009 (incorporated by reference to Exhibit 10.27 to the Company’s Form 10-K filed with the SEC on March 26, 2010) |
|        |   |        |   |
| 10.28       |   | #           | Letter Agreement with Joseph M. Reardon dated November 5, 2009 and executed by Mr. Reardon on November 7, 2009 (incorporated by reference to Exhibit 10.28 to the Company’s Form 10-K filed with the SEC on March 26, 2010) |
|        |   |        |   |
| 10.29       |   | #           | Amended and Restated Employment Agreement between the Company and Robert F. Mangano dated as of July 1, 2010 (incorporated by reference to Exhibit 10 to the Company’s Form 8-K filed with the SEC on July 14, 2010) |
|        |   |        |   |
| 10.30       |   |        | Branch Purchase and Assumption Agreement and Agreement for Purchase between Amboy Bank and 1st Constitution Bank dated  as of December 31, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 3, 2011) |

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Table of Contents

| Exhibit No. |   | Description |
|-------------|--------|-------------|
|        |   |        |   |
| 14          |   |        | Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 to the Company’s Form 10-K (SEC File No. 000-32891) filed with the SEC on March 25, 2004) |
|        |   |        |   |
| 21          |   | *           | Subsidiaries of the Company |
|        |   |        |   |
| 23          |   | *           | Consent of Independent Registered Public Accounting Firm |
|        |   |        |   |
| 31.1        |   | *           | Certification of the principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a) |
|        |   |        |   |
| 31.2        |   | *           | Certification of the principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a) |
|        |   |        |   |
| 32          |   | *           | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer and the principal financial officer of the Company |
|        |   |        |   |
| 99.1        |   | *           | Certification of principal executive officer of the Company, pursuant to Section 111(b) (4) of the Emergency Economic Stability Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009 |
|        |   |        |   |
| 99.2        |   | *           | Certification of principal financial officer of the Company, pursuant to Section 111(b) (4) of the Emergency Economic Stability Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009 |

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