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| Contents i       President's Message 1      Investor Information 2      Common Stock Prices & Dividends 4      Selected Consolidated Financial and Other Data 5      Management's Discussion and Analysis of Financial Condition and Results of Operations 17    Consolidated Financial Statements 49    Report of Independent Registered Public Accounting Firm 50    Directors and Officers  |   | Investor Information ANNUAL MEETING OF STOCKHOLDERS:The Annual Meeting of Stockholders of the Company will be held Wednesday, May 26, 2010 at 6:00 p.m., local time, at the Guaranty Bank Operations Center, 1414 W. Elfindale, Springfield, Missouri. ANNUAL REPORT ON FORM 10-K:Copies of the Company's Annual Report on Form 10-K, including the financial statements, filed with the Securities and Exchange Commission are available without charge upon written request to:Lorene Thomas, SecretaryGuaranty Federal Bancshares, Inc.,1341 W. Battlefield St., Springfield, MO  65807-4181 TRANSFER AGENT:Registrar and Transfer Company10 Commerce DriveCranford, NJ  07016 STOCK TRADING INFORMATION:Symbol: GFED SPECIAL LEGAL COUNSEL:Husch Blackwell Sanders LLP901 St. Louis St., Suite 1900Springfield, MO  65806 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:BKD, LLP910 St. Louis St.PO Box 1190Springfield, MO  65801-1190 STOCKHOLDER AND FINANCIAL INFORMATION:Carter Peters,Executive Vice President, Chief Financial Officer417-520-4333 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Common Stock Prices & Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The common stock of Guaranty Federal Bancshares, Inc. (the "Company") is listed for trading on the NASDAQ Global Market under the symbol "GFED".  As of March 18, 2010, there were approximately 1410 holders of shares of the Company's common stock.  At that date the Company had 6,779,800 shares of common stock issued and 2,638,440 shares of common stock outstanding.                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | During the year ended December 31, 2009, the Company did not declare a cash dividend.  During the year ended December 31, 2008, the Company paid dividends of (i) $0.18 per share on April 18, 2008, to stockholders of record as of April 7, 2008, (ii) $0.18 per share on July 18, 2008 to stockholders of record as of July 7, 2008.  The Company did not declare a cash dividend in the third or fourth quarters of 2008.  Any future dividends, if any, will be at the discretion of the Company's Board of Directors and will depend on, among other things, the Company's results of operations, cash requirements and surplus, financial condition and other factors that the Company's Board of Directors may consider relevant. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The table below reflects the range of common stock high and low closing prices per the NASDAQ Global Market by quarter for the years ended December 31, 2009 and 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|           |   | Year ended             |   |   | Year ended             |   |
|----------------|--------|------------------------|--------|--------|------------------------|--------|
|           |   | December 31, 2009 |   |   | December 31, 2008 |   |
|           |   | High                   |   |   | Low                    |   |   | High |   |   | Low |   |
| Quarter ended: |   |                   |   |   |                   |   |   |   |   |   |   |   |
| March 31       |   | $                      | 5.95   |   |                   |   | 3.85 |   |   | $ | 28.78 |   |   |   | 24.94 |   |
| June 30        |   |                   | 7.50   |   |                   |   | 4.61 |   |   |   | 26.43 |   |   |   | 20.25 |   |
| September 30   |   |                   | 7.00   |   |                   |   | 5.05 |   |   |   | 19.75 |   |   |   | 11.40 |   |
| December 31    |   |                   | 6.74   |   |                   |   | 5.04 |   |   |   | 11.50 |   |   |   | 4.25 |   |

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|   | Set forth below is a stock performance graph comparing the cumulative total shareholder return on the Common Stock with (a) the cumulative total stockholder return on stocks included in The Nasdaq – Total U.S. Index and (b) the cumulative total stockholder return on stocks included in The Nasdaq Bank Index.  All three investment comparisons assume the investment of $100 as of the close of business on December 31, 2004 and the hypothetical value of that investment as of the Company's fiscal years ended December 31, 2005, 2006, 2007, 2008, and 2009, assuming that all dividends were reinvested.  The graph reflects the historical performance of the Common Stock, and, as a result, may not be indicative of possible future performance of the Common Stock.  The data used to compile this graph was obtained from NASDAQ. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                              |   | Period Ending |   |
|-----------------------------------|--------|---------------|--------|
| Index                             |   | 12/31/04      |   |   | 12/31/05 |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |
| Guaranty Federal Bancshares, Inc. |   |          | 100.00 |   |   |   | 119.13 |   |   |   | 125.48 |   |   |   | 128.49 |   |   |   | 24.31 |   |   |   | 23.26 |   |
| NASDAQ – Total US           |   |          | 100.00 |   |   |   | 103.01 |   |   |   | 113.10 |   |   |   | 121.91 |   |   |   | 55.28 |   |   |   | 94.16 |   |
| NASDAQ Bank Index                 |   |          | 100.00 |   |   |   | 98.21 |   |   |   | 109.88 |   |   |   | 87.40 |   |   |   | 59.99 |   |   |   | 48.02 |   |

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| Summary Balance Sheets                         |   | As of December 31, |    |
|------------------------------------------------|--------|-------------------------|---------|
|                                           |   | 2009                    |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| ASSETS                                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |   | $                       | 33,017  |   |   | $ | 15,097 |   |   | $ | 12,046 |   |   | $ | 14,881 |   |   | $ | 20,506 |   |
| Investments and interest-bearing deposits      |   |                    | 119,693 |   |   |   | 66,062 |   |   |   | 15,385 |   |   |   | 8,669 |   |   |   | 7,702 |   |
| Loans receivable, net                          |   |                    | 528,503 |   |   |   | 558,327 |   |   |   | 516,242 |   |   |   | 480,269 |   |   |   | 435,528 |   |
| Accrued interest receivable                    |   |                    | 2,671   |   |   |   | 2,632 |   |   |   | 3,323 |   |   |   | 2,910 |   |   |   | 2,089 |   |
| Prepaids and other assets                      |   |                    | 25,249  |   |   |   | 16,573 |   |   |   | 8,613 |   |   |   | 10,075 |   |   |   | 7,696 |   |
| Foreclosed assets                              |   |                    | 6,760   |   |   |   | 5,655 |   |   |   | 727 |   |   |   | 173 |   |   |   | 27 |   |
| Premises and equipment                         |   |                    | 11,818  |   |   |   | 11,324 |   |   |   | 9,442 |   |   |   | 7,868 |   |   |   | 7,453 |   |
| Bank owned life insurance                      |   |                    | 10,069  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                           |   | $                       | 737,780 |   |   | $ | 675,670 |   |   | $ | 565,778 |   |   | $ | 524,845 |   |   | $ | 481,001 |   |
| LIABILITIES                                    |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                       |   | $                       | 513,051 |   |   | $ | 447,079 |   |   | $ | 418,191 |   |   | $ | 352,230 |   |   | $ | 320,059 |   |
| Federal Home Loan Bank advances                |   |                    | 116,050 |   |   |   | 132,436 |   |   |   | 76,086 |   |   |   | 108,000 |   |   |   | 100,000 |   |
| Securities sold under agreements to repurchase |   |                    | 39,750  |   |   |   | 39,750 |   |   |   | 9,849 |   |   |   | 1,703 |   |   |   | 1,594 |   |
| Subordinated debentures                        |   |                    | 15,465  |   |   |   | 15,465 |   |   |   | 15,465 |   |   |   | 15,465 |   |   |   | 15,465 |   |
| Other liabilities                              |   |                    | 2,053   |   |   |   | 3,627 |   |   |   | 3,500 |   |   |   | 2,548 |   |   |   | 1,791 |   |
|                                           |   |                    | 686,369 |   |   |   | 638,357 |   |   |   | 523,091 |   |   |   | 479,946 |   |   |   | 438,909 |   |
|                                           |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                           |   |                    | 51,411  |   |   |   | 37,313 |   |   |   | 42,687 |   |   |   | 44,899 |   |   |   | 42,092 |   |
|                                           |   | $                       | 737,780 |   |   | $ | 675,670 |   |   | $ | 565,778 |   |   | $ | 524,845 |   |   | $ | 481,001 |   |
|                                           |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Data                              |   | As of December 31,      |    |
|                                           |   | 2009                    |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Number of full-service offices                 |   |                    | 9       |   |   |   | 10 |   |   |   | 8 |   |   |   | 8 |   |   |   | 7 |   |
| Cash dividends per common share                |   | $                       | -       |   |   | $ | 0.36 |   |   | $ | 0.70 |   |   | $ | 0.67 |   |   | $ | 0.65 |   |

| Summary Statements of Operations                    |   | Years ended December 31, |   |
|-----------------------------------------------------|--------|-------------------------------|--------|
|                                                |   | 2009                          |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                     |   | $                             | 33,873 |   |   | $ | 36,363 |   |   | $ | 37,972 |   |   | $ | 35,204 |   |   | $ | 27,413 |   |
| Interest expense                                    |   |                          | 20,527 |   |   |   | 19,524 |   |   |   | 20,519 |   |   |   | 17,386 |   |   |   | 11,860 |   |
| Net interest income                                 |   |                          | 13,346 |   |   |   | 16,839 |   |   |   | 17,453 |   |   |   | 17,818 |   |   |   | 15,553 |   |
| Provision for loan losses                           |   |                          | 6,900  |   |   |   | 14,744 |   |   |   | 840 |   |   |   | 750 |   |   |   | 945 |   |
| Net interest income after provision for loan losses |   |                          | 6,446  |   |   |   | 2,095 |   |   |   | 16,613 |   |   |   | 17,068 |   |   |   | 14,608 |   |
| Noninterest income                                  |   |                          | 4,288  |   |   |   | 2,316 |   |   |   | 4,729 |   |   |   | 3,660 |   |   |   | 3,468 |   |
| Noninterest expense                                 |   |                          | 14,710 |   |   |   | 12,760 |   |   |   | 11,842 |   |   |   | 10,177 |   |   |   | 8,670 |   |
| Income (loss) before income taxes                   |   |                          | (3,976 | ) |   |   | (8,349 | ) |   |   | 9,500 |   |   |   | 10,551 |   |   |   | 9,406 |   |
| Provision (credit) for income taxes                 |   |                          | (1,635 | ) |   |   | (2,989 | ) |   |   | 3,400 |   |   |   | 4,042 |   |   |   | 3,507 |   |
|                                                |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                   |   | $                             | (2,341 | ) |   | $ | (5,360 | ) |   | $ | 6,100 |   |   | $ | 6,509 |   |   | $ | 5,899 |   |
| Preferred stock dividends and discount accretion    |   |                          | 1,032  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net income (loss) available to common shareholders  |   | $                             | (3,373 | ) |   | $ | (5,360 | ) |   | $ | 6,100 |   |   | $ | 6,509 |   |   | $ | 5,899 |   |
|                                                |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic income (loss) per common share                |   | $                             | (1.29  | ) |   | $ | (2.06 | ) |   | $ | 2.25 |   |   | $ | 2.34 |   |   | $ | 2.12 |   |
| Diluted income (loss) per common share              |   | $                             | (1.29  | ) |   | $ | (2.06 | ) |   | $ | 2.19 |   |   | $ | 2.25 |   |   | $ | 2.03 |   |

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|                                                                            |   | As of                  |    |   | Year Ended             |   |   | Year Ended             |   |   | Year Ended             |   |
|---------------------------------------------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------|--------|
|                                                                            |   | December 31, 2009 |    |   | December 31, 2009 |   |   | December 31, 2008 |   |   | December 31, 2007 |   |
|                                                                            |   |                   |    |   |                   |   |   |                   |   |   |                   |   |
|                                                                            |   | Balance                |    |   | Yield / Cost           |   |   | Average Balance        |   |   | Interest               |   |   | Yield / Cost |   |   | Average Balance |   |   | Interest |   |   | Yield / Cost |   |   | Average Balance |   |   | Interest |   |   | Yield / Cost |   |
|  ASSETS                                                                    |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-earning:                                                         |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Loans                                                                     |   | $                      | 542,579 |   |                   |   | 5.53   | %                      |   | $      | 548,847                |   |   | $ | 29,695 |   |   |   | 5.41 | % |   | $ | 555,828 |   |   | $ | 33,019 |   |   |   | 5.94 | % |   | $ | 482,806 |   |   | $ | 37,114 |   |   |   | 7.69 | % |
|  Investment securities                                                     |   |                   | 103,132 |   |                   |   | 2.95   | %                      |   |   | 102,096                |   |   |   | 3,744 |   |   |   | 3.67 | % |   |   | 58,727 |   |   |   | 3,125 |   |   |   | 5.32 | % |   |   | 10,688 |   |   |   | 537 |   |   |   | 5.02 | % |
|  Other assets                                                              |   |                   | 51,079  |   |                   |   | 0.93   | %                      |   |   | 65,853                 |   |   |   | 434 |   |   |   | 0.66 | % |   |   | 7,869 |   |   |   | 219 |   |   |   | 2.78 | % |   |   | 7,372 |   |   |   | 321 |   |   |   | 4.35 | % |
|  Total interest-earning                                          |   |                   | 696,790 |   |                   |   | 4.81   | %                      |   |   | 716,796                |   |   |   | 33,873 |   |   |   | 4.73 | % |   |   | 622,424 |   |   |   | 36,363 |   |   |   | 5.84 | % |   |   | 500,866 |   |   |   | 37,972 |   |   |   | 7.58 | % |
|  Noninterest-earning                                                       |   |                   | 40,990  |   |                   |   |   |                   |   |   | 25,294                 |   |   |   |   |   |   |   |   |   |   |   | 24,092 |   |   |   |   |   |   |   |   |   |   |   | 18,730 |   |   |   |   |   |   |   |   |   |
|                                                                            |   | $                      | 737,780 |   |                   |   |   |                   |   | $      | 742,090                |   |   |   |   |   |   |   |   |   |   | $ | 646,516 |   |   |   |   |   |   |   |   |   |   | $ | 519,596 |   |   |   |   |   |   |   |   |   |
|                                                                            |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                            |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing:                                                         |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Savings accounts                                                          |   | $                      | 14,644  |   |                   |   | 0.99   | %                      |   | $      | 13,069                 |   |   | $ | 121 |   |   |   | 0.93 | % |   | $ | 12,980 |   |   | $ | 143 |   |   |   | 1.10 | % |   | $ | 13,474 |   |   | $ | 320 |   |   |   | 2.37 | % |
|  Transaction accounts                                                      |   |                   | 255,420 |   |                   |   | 2.88   | %                      |   |   | 215,494                |   |   |   | 6,152 |   |   |   | 2.85 | % |   |   | 102,341 |   |   |   | 1,806 |   |   |   | 1.76 | % |   |   | 100,689 |   |   |   | 2,940 |   |   |   | 2.92 | % |
|  Certificates of deposit                                                   |   |                   | 214,056 |   |                   |   | 3.01   | %                      |   |   | 262,719                |   |   |   | 9,108 |   |   |   | 3.47 | % |   |   | 285,845 |   |   |   | 12,270 |   |   |   | 4.29 | % |   |   | 246,785 |   |   |   | 12,600 |   |   |   | 5.11 | % |
|  FHLB advances                                                             |   |                   | 116,050 |   |                   |   | 2.72   | %                      |   |   | 112,851                |   |   |   | 3,152 |   |   |   | 2.79 | % |   |   | 119,957 |   |   |   | 3,238 |   |   |   | 2.70 | % |   |   | 65,575 |   |   |   | 3,470 |   |   |   | 5.29 | % |
|  Subordinated debentures                                                   |   |                   | 15,465  |   |                   |   | 6.62   | %                      |   |   | 15,465                 |   |   |   | 1,024 |   |   |   | 6.62 | % |   |   | 15,465 |   |   |   | 1,024 |   |   |   | 6.62 | % |   |   | 15,465 |   |   |   | 1,024 |   |   |   | 6.62 | % |
|  Other borrowed funds                                                      |   |                   | 39,750  |   |                   |   | 2.91   | %                      |   |   | 39,750                 |   |   |   | 970 |   |   |   | 2.44 | % |   |   | 38,604 |   |   |   | 1,043 |   |   |   | 2.70 | % |   |   | 3,691 |   |   |   | 165 |   |   |   | 4.47 | % |
|  Total interest-bearing                                                    |   |                   | 655,385 |   |                   |   | 2.94   | %                      |   |   | 659,348                |   |   |   | 20,527 |   |   |   | 3.11 | % |   |   | 575,192 |   |   |   | 19,524 |   |   |   | 3.39 | % |   |   | 445,679 |   |   |   | 20,519 |   |   |   | 4.60 | % |
|  Noninterest-bearing                                                       |   |                   | 30,984  |   |                   |   |   |                   |   |   | 30,467                 |   |   |   |   |   |   |   |   |   |   |   | 30,516 |   |   |   |   |   |   |   |   |   |   |   | 28,401 |   |   |   |   |   |   |   |   |   |
|  Total liabilities                                                         |   |                   | 686,369 |   |                   |   |   |                   |   |   | 689,815                |   |   |   |   |   |   |   |   |   |   |   | 605,708 |   |   |   |   |   |   |   |   |   |   |   | 474,080 |   |   |   |   |   |   |   |   |   |
|  Stockholders' equity                                                      |   |                   | 51,411  |   |                   |   |   |                   |   |   | 52,275                 |   |   |   |   |   |   |   |   |   |   |   | 40,808 |   |   |   |   |   |   |   |   |   |   |   | 45,516 |   |   |   |   |   |   |   |   |   |
|                                                                            |   | $                      | 737,780 |   |                   |   |   |                   |   | $      | 742,090                |   |   |   |   |   |   |   |   |   |   | $ | 646,516 |   |   |   |   |   |   |   |   |   |   | $ | 519,596 |   |   |   |   |   |   |   |   |   |
|  Net earning balance                                                       |   | $                      | 41,405  |   |                   |   |   |                   |   | $      | 57,448                 |   |   |   |   |   |   |   |   |   |   | $ | 47,232 |   |   |   |   |   |   |   |   |   |   | $ | 55,187 |   |   |   |   |   |   |   |   |   |
|  Earning yield less costing rate                                           |   |                   |    |   |                   |   | 1.87   | %                      |   |   |                   |   |   |   |   |   |   |   | 1.62 | % |   |   |   |   |   |   |   |   |   |   | 2.45 | % |   |   |   |   |   |   |   |   |   |   | 2.98 | % |
| Net interest income, and net yield spread on  interest-earning assets |   |                   |    |   |                   |   |   |                   |   |   |                   |   |   | $ | 13,346 |   |   |   | 1.86 | % |   |   |   |   |   | $ | 16,839 |   |   |   | 2.71 | % |   |   |   |   |   | $ | 17,453 |   |   |   | 3.48 | % |
| Ratio of interest-earning assets to interest-bearing liabilities                |   |                   | 106     | %      |                   |   |   |                   |   |   | 109                    | %      |   |   |   |   |   |   |   |   |   |   | 108 | % |   |   |   |   |   |   |   |   |   |   | 112 | % |   |   |   |   |   |   |   |   |

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|                           |   | Year ended                                           |   |   | Year ended                                           |   |
|--------------------------------|--------|------------------------------------------------------|--------|--------|------------------------------------------------------|--------|
|                           |   | December 31, 2009 versus December 31, 2008 |   |   | December 31, 2008 versus December 31, 2007 |   |
|                           |   | Average Balance                                      |   |   | Interest Rate                                        |   |   | Rate & Balance |   |   | Total |   |   | Average Balance |   |   | Interest Rate |   |   | Rate & Balance |   |   | Total |   |
| Interest income:               |   |                                                 |   |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                          |   | $                                                    | (415   | )      |                                                 | $      | (2,946 | ) |   | $ | 37 |   |   | $ | (3,324 | ) |   | $ | 5,613 |   |   | $ | (8,433 | ) |   | $ | (1,275 | ) |   | $ | (4,095 | ) |
| Investment securities          |   |                                                 | 2,308  |   |                                                 |   | (972 | ) |   |   | (717 | ) |   |   | 619 |   |   |   | 2,414 |   |   |   | 32 |   |   |   | 142 |   |   |   | 2,588 |   |
| Other assets                   |   |                                                 | 1,614  |   |                                                 |   | (167 | ) |   |   | (1,232 | ) |   |   | 215 |   |   |   | 22 |   |   |   | (116 | ) |   |   | (8 | ) |   |   | (102 | ) |
| Net change in interest income  |   |                                                 | 3,507  |   |                                                 |   | (4,085 | ) |   |   | (1,912 | ) |   |   | (2,490 | ) |   |   | 8,049 |   |   |   | (8,517 | ) |   |   | (1,141 | ) |   |   | (1,609 | ) |
|                           |   |                                                 |   |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:              |   |                                                 |   |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts               |   |                                                 | 1      |   |                                                 |   | (23 | ) |   |   | - |   |   |   | (22 | ) |   |   | (12 | ) |   |   | (171 | ) |   |   | 6 |   |   |   | (177 | ) |
| Transaction accounts           |   |                                                 | 1,997  |   |                                                 |   | 1,115 |   |   |   | 1,234 |   |   |   | 4,346 |   |   |   | 48 |   |   |   | (1,163 | ) |   |   | (19 | ) |   |   | (1,134 | ) |
| Certificates of deposit        |   |                                                 | (993   | )      |                                                 |   | (2,360 | ) |   |   | 191 |   |   |   | (3,162 | ) |   |   | 1,994 |   |   |   | (2,006 | ) |   |   | (318 | ) |   |   | (330 | ) |
| FHLB advances                  |   |                                                 | (192   | )      |                                                 |   | 113 |   |   |   | (7 | ) |   |   | (86 | ) |   |   | 2,878 |   |   |   | (1,700 | ) |   |   | (1,410 | ) |   |   | (232 | ) |
| Subordinated debentures        |   |                                                 | -      |   |                                                 |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other borrowed funds           |   |                                                 | 31     |   |                                                 |   | (101 | ) |   |   | (3 | ) |   |   | (73 | ) |   |   | 1,561 |   |   |   | (65 | ) |   |   | (618 | ) |   |   | 878 |   |
| Net change in interest expense |   |                                                 | 844    |   |                                                 |   | (1,256 | ) |   |   | 1,415 |   |   |   | 1,003 |   |   |   | 6,469 |   |   |   | (5,105 | ) |   |   | (2,359 | ) |   |   | (995 | ) |
| Change in net interest income  |   | $                                                    | 2,663  |   |                                                 | $      | (2,829 | ) |   | $ | (3,327 | ) |   | $ | (3,493 | ) |   | $ | 1,580 |   |   | $ | (3,412 | ) |   | $ | 1,218 |   |   | $ | (614 | ) |

|              |   | Average for the Year Shown |   |
|-------------------|--------|----------------------------|--------|
|              |   | Prime                      |   |   | Ten-Year Treasury |   |   | One-Year Treasury |   |
| December 31, 2009 |   |                       | 3.25   | % |   |   | 3.26 | % |   |   | 0.47 | % |
| December 31, 2008 |   |                       | 5.09   | % |   |   | 3.66 | % |   |   | 1.83 | % |
| Change in rates   |   |                       | -1.84  | % |   |   | -0.40 | % |   |   | -1.36 | % |

----

----

|              |   | Average for the Year Shown |   |
|-------------------|--------|----------------------------|--------|
|              |   | Prime                      |   |   | Ten-Year Treasury |   | One-Year Treasury |   |
| December 31, 2008 |   |                       | 5.09   | % |   |   | 3.66 | % |   |   | 1.83 | % |
| December 31, 2007 |   |                       | 8.05   | % |   |   | 4.63 | % |   |   | 4.53 | % |
| Change in rates   |   |                       | -2.96  | % |   |   | -0.97 | % |   |   | -2.70 | % |

----

----

| BP Change       |   |   | Estimated Net Portfolio Value |   |   | NPV as % of PV of Assets |   |
|-----------------|--------|--------|-------------------------------|--------|--------|--------------------------|--------|
|   in Rates |   |   | $ Amount                      |   |   | $ Change                 |   |   | % Change |   |   | NPV Ratio |   |   | Change |   |
| +300            |   |   |                          | 57,416 |   |                     |   | (2,520 | ) |   |   | -4 | % |   |   | 8.01 | % |   |   | -0.10 | % |
| +200            |   |   |                          | 58,222 |   |                     |   | (1,714 | ) |   |   | -3 | % |   |   | 8.04 | % |   |   | -0.07 | % |
| +100            |   |   |                          | 58,996 |   |                     |   | (940 | ) |   |   | -2 | % |   |   | 8.07 | % |   |   | -0.04 | % |
|   NC       |   |   |                          | 59,936 |   |                     |   | - |   |   |   | 0 | % |   |   | 8.11 | % |   |   | 0.00 | % |
| -100            |   |   |                          | 61,320 |   |                     |   | 1,384 |   |   |   | 2 | % |   |   | 8.20 | % |   |   | 0.09 | % |
| -200            |   |   |                          | 64,410 |   |                     |   | 4,474 |   |   |   | 7 | % |   |   | 8.52 | % |   |   | 0.41 | % |

----

----

| Payments Due By Period                    |   |
|-------------------------------------------|--------|
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Contractual Obligations             |   | Total |   |   | One Year or less |   |   | One to Three Years |   |   | Three to Five Years |   |   | More than Five Years |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits without stated maturity          |   | $ | 298,995 |   |   |   | 298,995 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Time and brokered certificates of deposit |   |   | 214,056 |   |   |   | 140,286 |   |   |   | 66,621 |   |   |   | 6,352 |   |   |   | 797 |   |
| Other borrowings                          |   |   | 39,750 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 39,750 |   |
| Federal Home Loan Bank advances           |   |   | 116,050 |   |   |   | 23,000 |   |   |   | 25,000 |   |   |   | 15,700 |   |   |   | 52,350 |   |
| Subordinated debentures                   |   |   | 15,465 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,465 |   |
| Operating leases                          |   |   | 356 |   |   |   | 94 |   |   |   | 100 |   |   |   | 75 |   |   |   | 87 |   |
| Purchase obligations                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other long term obligations               |   |   | 248,671 |   |   |   | 248,671 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|      Total       |   | $ | 933,343 |   |   |   | 711,046 |   |   |   | 91,721 |   |   |   | 22,127 |   |   |   | 108,449 |   |

----

----

|   | · | the quoted price of an identical liability when traded as an asset, |
|--------|--------|---------------------------------------------------------------------|

|   | · | quoted prices of similar liabilities or similar liabilities when traded as assets, or |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | another valuation technique consistent with the principles of Topic 820 such as an income approach or a market approach. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|                                                   |   | Year Ended December 31, 2009, Quarter ended |      |
|--------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                   |   | Mar-09                                           |      |   | Jun-09 |   |   | Sep-09 |   |   | Dec-09 |   |
| Interest income                                        |   | $                                                | 8,323,301 |   |   | $ | 8,504,112 |   |   | $ | 8,534,335 |   |   | $ | 8,511,688 |   |
| Interest expense                                       |   |                                             | 5,307,991 |   |   |   | 5,204,374 |   |   |   | 5,086,082 |   |   |   | 4,928,138 |   |
| Net interest income                                    |   |                                             | 3,015,310 |   |   |   | 3,299,738 |   |   |   | 3,448,253 |   |   |   | 3,583,550 |   |
| Provision for loan losses                              |   |                                             | 980,000   |   |   |   | 3,300,000 |   |   |   | 670,000 |   |   |   | 1,950,000 |   |
| Gain on loans and investment securities                |   |                                             | 355,410   |   |   |   | 759,812 |   |   |   | 656,036 |   |   |   | 361,896 |   |
| Other noninterest income, net                          |   |                                             | 453,562   |   |   |   | 762,651 |   |   |   | 674,332 |   |   |   | 263,795 |   |
| Noninterest expense                                    |   |                                             | 3,744,565 |   |   |   | 4,035,322 |   |   |   | 3,391,956 |   |   |   | 3,537,840 |   |
| Income (loss) before income taxes                      |   |                                             | (900,283  | ) |   |   | (2,513,121 | ) |   |   | 716,665 |   |   |   | (1,278,599 | ) |
| Provision (credit) for income taxes                    |   |                                             | (308,163  | ) |   |   | (881,039 | ) |   |   | 142,202 |   |   |   | (587,620 | ) |
| Net income (loss)                                      |   |                                             | (592,120  | ) |   |   | (1,632,082 | ) |   |   | 574,463 |   |   |   | (690,979 | ) |
| Preferred stock dividends and discount accretion       |   |                                             | 187,594   |   |   |   | 281,390 |   |   |   | 281,391 |   |   |   | 281,391 |   |
| Net income (loss) available to common shareholders     |   | $                                                | (779,714  | ) |   | $ | (1,913,472 | ) |   | $ | 293,072 |   |   | $ | (972,370 | ) |
| Basic earnings (loss) per share                        |   | $                                                | (0.30     | ) |   | $ | (0.73 | ) |   | $ | 0.11 |   |   | $ | (0.37 | ) |
| Diluted earnings (loss) per share                      |   | $                                                | (0.30     | ) |   | $ | (0.73 | ) |   | $ | 0.11 |   |   | $ | (0.37 | ) |
|                                                   |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   | Year Ended December 31, 2008, Quarter ended |      |
|                                                   |   | Mar-08                                           |      |   | Jun-08 |   |   | Sep-08 |   |   | Dec-08 |   |
| Interest income                                        |   | $                                                | 9,231,033 |   |   | $ | 8,925,204 |   |   | $ | 9,267,799 |   |   | $ | 8,939,356 |   |
| Interest expense                                       |   |                                             | 5,201,066 |   |   |   | 4,811,710 |   |   |   | 4,747,203 |   |   |   | 4,764,245 |   |
| Net interest income                                    |   |                                             | 4,029,967 |   |   |   | 4,113,494 |   |   |   | 4,520,596 |   |   |   | 4,175,111 |   |
| Provision for loan losses                              |   |                                             | 820,000   |   |   |   | 5,684,079 |   |   |   | 1,675,000 |   |   |   | 6,565,000 |   |
| Gain (loss) on sale of loans and investment securities |   |                                             | 231,077   |   |   |   | 159,640 |   |   |   | 207,870 |   |   |   | (287,192 | ) |
| Other noninterest income, net                          |   |                                             | 650,774   |   |   |   | 660,770 |   |   |   | 641,024 |   |   |   | 52,188 |   |
| Noninterest expense                                    |   |                                             | 3,101,408 |   |   |   | 3,213,100 |   |   |   | 3,167,272 |   |   |   | 3,278,030 |   |
| Income (loss) before income taxes                      |   |                                             | 990,410   |   |   |   | (3,963,275 | ) |   |   | 527,218 |   |   |   | (5,902,923 | ) |
| Provision (credit) for income taxes                    |   |                                             | 373,552   |   |   |   | (1,466,995 | ) |   |   | 227,759 |   |   |   | (2,123,175 | ) |
| Net income (loss)                                      |   | $                                                | 616,858   |   |   | $ | (2,496,280 | ) |   | $ | 299,459 |   |   | $ | (3,779,748 | ) |
| Basic earnings (loss) per share                        |   | $                                                | 0.24      |   |   | $ | (0.96 | ) |   | $ | 0.11 |   |   | $ | (1.45 | ) |
| Diluted earnings (loss) per share                      |   | $                                                | 0.23      |   |   | $ | (0.96 | ) |   | $ | 0.11 |   |   | $ | (1.45 | ) |

----

|                                                                                                                                                                              |   | December 31, 2009 |        |   | December 31, 2008 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|
| ASSETS                                                                                                                                                                            |   |                   |        |   |                   |   |
| Cash and due from banks                                                                                                                                                           |   | $                      | 4,527,813   |   |                   | $      | 3,826,567 |   |
| Interest-bearing deposits in other financial institutions                                                                                                                         |   |                   | 28,488,884  |   |                   |   | 11,270,448 |   |
| Cash and cash equivalents                                                                                                                                                         |   |                   | 33,016,697  |   |                   |   | 15,097,015 |   |
| Interest-bearing deposits                                                                                                                                                         |   |                   | 16,560,802  |   |                   |   | - |   |
| Available-for-sale securities                                                                                                                                                     |   |                   | 102,659,251 |   |                   |   | 65,505,339 |   |
| Held-to-maturity securities                                                                                                                                                       |   |                   | 472,783     |   |                   |   | 556,465 |   |
| Stock in Federal Home Loan Bank, at cost                                                                                                                                          |   |                   | 5,976,600   |   |                   |   | 6,730,100 |   |
| Mortgage loans held for sale                                                                                                                                                      |   |                   | 3,465,080   |   |                   |   | 1,933,798 |   |
| Loans receivable, net of allowance for loan losses of December 31, 2009 and 2008 - $14,076,123 and $16,728,492, respectively                                                      |   |                   | 525,038,053 |   |                   |   | 556,393,243 |   |
| Accrued interest receivable:                                                                                                                                                      |   |                   |        |   |                   |   |   |   |
| Loans                                                                                                                                                                             |   |                   | 2,014,418   |   |                   |   | 2,310,062 |   |
| Investments                                                                                                                                                                       |   |                   | 657,145     |   |                   |   | 322,388 |   |
| Prepaid expenses and other assets                                                                                                                                                 |   |                   | 6,731,409   |   |                   |   | 4,065,359 |   |
| Prepaid FDIC deposit insurance premiums                                                                                                                                           |   |                   | 4,135,875   |   |                   |   | - |   |
| Foreclosed assets held for sale                                                                                                                                                   |   |                   | 6,759,648   |   |                   |   | 5,655,257 |   |
| Premises and equipment                                                                                                                                                            |   |                   | 11,817,516  |   |                   |   | 11,323,463 |   |
| Bank owned life insurance                                                                                                                                                         |   |                   | 10,069,540  |   |                   |   | - |   |
| Income taxes receivable                                                                                                                                                           |   |                   | 3,718,970   |   |                   |   | 9,091 |   |
| Deferred income taxes                                                                                                                                                             |   |                   | 4,686,065   |   |                   |   | 5,768,813 |   |
|                                                                                                                                                                              |   | $                      | 737,779,852 |   |                   | $      | 675,670,393 |   |
|                                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                              |   |                   |        |   |                   |   |   |   |
|                                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| LIABILITIES                                                                                                                                                                       |   |                   |        |   |                   |   |   |   |
| Deposits                                                                                                                                                                          |   | $                      | 513,051,102 |   |                   | $      | 447,079,469 |   |
| Federal Home Loan Bank advances                                                                                                                                                   |   |                   | 116,050,000 |   |                   |   | 132,436,000 |   |
| Securities sold under agreements to repurchase                                                                                                                                    |   |                   | 39,750,000  |   |                   |   | 39,750,000 |   |
| Subordinated debentures                                                                                                                                                           |   |                   | 15,465,000  |   |                   |   | 15,465,000 |   |
| Notes payable                                                                                                                                                                     |   |                   | -           |   |                   |   | 1,435,190 |   |
| Advances from borrowers for taxes and insurance                                                                                                                                   |   |                   | 135,610     |   |                   |   | 166,327 |   |
| Accrued expenses and other liabilities                                                                                                                                            |   |                   | 519,385     |   |                   |   | 448,226 |   |
| Accrued interest payable                                                                                                                                                          |   |                   | 1,398,122   |   |                   |   | 1,577,279 |   |
|                                                                                                                                                                              |   |                   | 686,369,219 |   |                   |   | 638,357,491 |   |
|                                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                     |   |                   | -           |   |                   |   | - |   |
|                                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| Capital Stock:                                                                                                                                                                    |   |                   |        |   |                   |   |   |   |
| Series A preferred stock, $0.01 par value; authorized 2,000,000 shares; issued and outstanding December 31, 2009 - 17,000 shares                                                  |   |                   | 15,874,788  |   |                   |   | - |   |
| Common stock, $0.10 par value; authorized 10,000,000 shares; issued December 31, 2009 and 2008 - 6,779,800 shares;                                                                |   |                   | 677,980     |   |                   |   | 677,980 |   |
| Common stock warrants; December 31, 2009 - 459,459 shares                                                                                                                         |   |                   | 1,377,811   |   |                   |   | - |   |
| Additional paid-in capital                                                                                                                                                        |   |                   | 58,523,646  |   |                   |   | 58,535,159 |   |
| Unearned ESOP shares                                                                                                                                                              |   |                   | (660,930    | )      |                   |   | (888,930 | ) |
| Retained earnings, substantially restricted                                                                                                                                       |   |                   | 35,741,705  |   |                   |   | 39,114,189 |   |
| Accumulated other comprehensive income                                                                                                                                            |   |                   |        |   |                   |   |   |   |
| Unrealized appreciation on available-for-sale securities and effect of interest rate swaps, net of income taxes; December 31, 2009 and 2008 - $996,342 and $991,281, respectively |   |                   | 1,696,502   |   |                   |   | 1,687,858 |   |
|                                                                                                                                                                              |   |                   | 113,231,502 |   |                   |   | 99,126,256 |   |
|                                                                                                                                                                              |   |                   |        |   |                   |   |   |   |
| Treasury stock, at cost; December 31, 2009 and December 31, 2008 -4,079,067 and 4,077,567 shares, respectively                                                                    |   |                   | (61,820,869 | )      |                   |   | (61,813,354 | ) |
|                                                                                                                                                                              |   |                   | 51,410,633  |   |                   |   | 37,312,902 |   |
|                                                                                                                                                                              |   | $                      | 737,779,852 |   |                   | $      | 675,670,393 |   |

----

|                                               |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|----------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                               |   |   |       |   |   |   |       |   |   |
| Interest Income                                    |   |   |       |   |   |   |       |   |   |
| Loans                                              |   | $      | 29,695,487 |   |   | $      | 33,019,217 |   |   | $ | 37,113,849 |   |
| Investment securities                              |   |   | 3,743,688  |   |   |   | 3,124,862  |   |   |   | 537,176 |   |
| Other                                              |   |   | 434,261    |   |   |   | 219,313    |   |   |   | 321,515 |   |
|                                               |   |   | 33,873,436 |   |   |   | 36,363,392 |   |   |   | 37,972,540 |   |
| Interest Expense                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Deposits                                           |   |   | 15,381,190 |   |   |   | 14,219,732 |   |   |   | 15,860,794 |   |
| Federal Home Loan Bank advances                    |   |   | 3,152,354  |   |   |   | 3,237,489  |   |   |   | 3,469,551 |   |
| Subordinated debentures                            |   |   | 1,023,783  |   |   |   | 1,023,783  |   |   |   | 1,023,783 |   |
| Other                                              |   |   | 969,258    |   |   |   | 1,043,220  |   |   |   | 165,175 |   |
|                                               |   |   | 20,526,585 |   |   |   | 19,524,224 |   |   |   | 20,519,303 |   |
| Net Interest Income                                |   |   | 13,346,851 |   |   |   | 16,839,168 |   |   |   | 17,453,237 |   |
| Provision for Loan Losses                          |   |   | 6,900,000  |   |   |   | 14,744,079 |   |   |   | 840,000 |   |
| Net Interest Income After                          |   |   |       |   |   |   |       |   |   |   |   |   |
| Provision for Loan Losses                          |   |   | 6,446,851  |   |   |   | 2,095,089  |   |   |   | 16,613,237 |   |
| Noninterest Income                                 |   |   |       |   |   |   |       |   |   |   |   |   |
| Service charges                                    |   |   | 1,802,288  |   |   |   | 2,027,691  |   |   |   | 2,215,641 |   |
| Other fees                                         |   |   | 52,233     |   |   |   | 40,129     |   |   |   | 90,360 |   |
| Gain (loss) on investment securities               |   |   | 689,769    |   |   |   | (563,615   | )      |   |   | 618,363 |   |
| Gain on sale of loans                              |   |   | 1,443,385  |   |   |   | 875,010    |   |   |   | 1,177,017 |   |
| Loss on foreclosed assets                          |   |   | (523,557   | )      |   |   | (783,831   | )      |   |   | (41,909 | ) |
| Other income                                       |   |   | 823,376    |   |   |   | 720,767    |   |   |   | 669,095 |   |
|                                               |   |   | 4,287,494  |   |   |   | 2,316,151  |   |   |   | 4,728,567 |   |
| Noninterest Expense                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Salaries and employee benefits                     |   |   | 7,952,105  |   |   |   | 7,517,285  |   |   |   | 7,074,249 |   |
| Occupancy                                          |   |   | 1,806,100  |   |   |   | 1,682,277  |   |   |   | 1,614,403 |   |
| FDIC deposit insurance premiums                    |   |   | 1,520,551  |   |   |   | 384,996    |   |   |   | 42,555 |   |
| Data processing                                    |   |   | 423,205    |   |   |   | 374,123    |   |   |   | 391,679 |   |
| Advertising                                        |   |   | 316,666    |   |   |   | 399,996    |   |   |   | 399,996 |   |
| Other expense                                      |   |   | 2,691,056  |   |   |   | 2,401,133  |   |   |   | 2,319,269 |   |
|                                               |   |   | 14,709,683 |   |   |   | 12,759,810 |   |   |   | 11,842,151 |   |
| Income (Loss) Before Income Taxes                  |   |   | (3,975,338 | )      |   |   | (8,348,570 | )      |   |   | 9,499,653 |   |
| Provision (Credit) for Income Taxes                |   |   | (1,634,620 | )      |   |   | (2,988,859 | )      |   |   | 3,399,771 |   |
| Net Income (Loss)                                  |   | $      | (2,340,718 | )      |   | $      | (5,359,711 | )      |   | $ | 6,099,882 |   |
| Preferred Stock Dividends and Discount Accretion   |   |   | 1,031,766  |   |   |   | -          |   |   |   | - |   |
| Net Income (Loss) Available to Common Shareholders |   | $      | (3,372,484 | )      |   | $      | (5,359,711 | )      |   | $ | 6,099,882 |   |
|                                               |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic Income (Loss) Per Common Share               |   | $      | (1.29      | )      |   | $      | (2.06      | )      |   | $ | 2.25 |   |
| Diluted Income (Loss) Per Common Share             |   | $      | (1.29      | )      |   | $      | (2.06      | )      |   | $ | 2.19 |   |

----

|                                                          |   | 2009   |        |   | 2008   |   |         | 2007   |   |
|---------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|--------------|--------|--------|
|                                                          |   |   |        |   |   |   |         |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                          |   |   |        |   |   |   |         |   |   |
| Net income (loss)                                             |   | $      | (2,340,718  | )      |   | $      | (5,359,711   | )      |   | $ | 6,099,882 |   |
| Items not requiring (providing) cash:                         |   |   |        |   |   |   |         |   |   |   |   |   |
| Deferred income taxes                                         |   |   | 701,199     |   |   |   | (4,143,816   | )      |   |   | (187,839 | ) |
| Depreciation                                                  |   |   | 965,504     |   |   |   | 934,941      |   |   |   | 902,322 |   |
| Provision for loan losses                                     |   |   | 6,900,000   |   |   |   | 14,744,079   |   |   |   | 840,000 |   |
| Gain on sale of loans and investment securities               |   |   | (2,133,154  | )      |   |   | (777,222     | )      |   |   | (1,795,380 | ) |
| Other than temporary impairment on investment securities      |   |   | -           |   |   |   | 465,827      |   |   |   | - |   |
| Loss (gain) on sale of foreclosed assets                      |   |   | 285,010     |   |   |   | 627,888      |   |   |   | (4,621 | ) |
| Accretion of gain on termination of interest rate swaps       |   |   | (1,017,492  | )      |   |   | (169,582     | )      |   |   | - |   |
| Amortization of deferred income, premiums and discounts, net  |   |   | 352,345     |   |   |   | (47,702      | )      |   |   | 108,733 |   |
| Stock award plans                                             |   |   | 95,268      |   |   |   | 92,846       |   |   |   | 71,325 |   |
| Origination of loans held for sale                            |   |   | (78,535,230 | )      |   |   | (51,082,040  | )      |   |   | (71,861,627 | ) |
| Proceeds from sale of loans held for sale                     |   |   | 78,447,333  |   |   |   | 52,165,250   |   |   |   | 73,901,281 |   |
| Release of ESOP shares                                        |   |   | 121,219     |   |   |   | 408,388      |   |   |   | 672,765 |   |
| Increase in cash surrender value of bank owned life insurance |   |   | (69,540     | )      |   |   | -            |   |   |   | - |   |
| Changes in:                                                   |   |   |        |   |   |   |         |   |   |   |   |   |
| Prepaid FDIC deposit insurance premiums                       |   |   | (4,135,875  | )      |   |   | -            |   |   |   | - |   |
| Accrued interest receivable                                   |   |   | (39,113     | )      |   |   | 690,998      |   |   |   | (413,139 | ) |
| Prepaid expenses and other assets                             |   |   | 767,817     |   |   |   | 372,439      |   |   |   | 114,073 |   |
| Accrued expenses and other liabilities                        |   |   | (214,248    | )      |   |   | (67,163      | )      |   |   | 235,832 |   |
| Income taxes payable                                          |   |   | (3,333,407  | )      |   |   | (519,838     | )      |   |   | 1,051,189 |   |
| Net cash provided by (used in) operating activities           |   |   | (3,183,082  | )      |   |   | 8,335,582    |   |   |   | 9,734,796 |   |
|                                                          |   |   |        |   |   |   |         |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                          |   |   |        |   |   |   |         |   |   |   |   |   |
| Net change in loans                                           |   |   | 18,959,641  |   |   |   | (64,369,071  | )      |   |   | (39,788,084 | ) |
| Principal payments on held-to-maturity securities             |   |   | 83,682      |   |   |   | 98,467       |   |   |   | 108,250 |   |
| Principal payments on available-for-sale securities           |   |   | 13,087,448  |   |   |   | 2,373,721    |   |   |   | 376,625 |   |
| Purchase of available-for-sale securities                     |   |   | (82,769,479 | )      |   |   | (55,463,436  | )      |   |   | (11,926,192 | ) |
| Proceeds from sales of available-for-sale securities          |   |   | 25,356,214  |   |   |   | -            |   |   |   | 1,128,153 |   |
| Proceeds from maturities of available-for-sale securities     |   |   | 8,500,000   |   |   |   | 2,100,000    |   |   |   | 2,580,000 |   |
| Purchase of premises and equipment                            |   |   | (1,459,557  | )      |   |   | (2,816,054   | )      |   |   | (2,476,863 | ) |
| Purchase of tax credit investments                            |   |   | (3,433,867  | )      |   |   | (1,596,387   | )      |   |   | - |   |
| Purchase of interest bearing deposits                         |   |   | (34,605,802 | )      |   |   | -            |   |   |   | - |   |
| Proceeds from maturities of interest bearing deposits         |   |   | 18,045,000  |   |   |   | -            |   |   |   | - |   |
| Purchase of bank owned life insurance                         |   |   | (10,000,000 | )      |   |   | -            |   |   |   | - |   |
| Proceeds from termination of interest rate swaps              |   |   | -           |   |   |   | 1,695,836    |   |   |   | - |   |
| (Purchase) redemption of FHLB stock                           |   |   | 753,500     |   |   |   | (2,715,400   | )      |   |   | 1,368,000 |   |
| Capitalized costs on foreclosed assets held for sale          |   |   | (122,162    | )      |   |   | -            |   |   |   | - |   |
| Proceeds from sale of foreclosed assets held for sale         |   |   | 4,268,852   |   |   |   | 1,827,560    |   |   |   | 1,453,674 |   |
| Net cash used in investing activities                         |   |   | (43,336,530 | )      |   |   | (118,864,764 | )      |   |   | (47,176,437 | ) |

----

|                                                           |   | 2009   |        |   | 2008   |   |           | 2007   |   |
|----------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|----------------|--------|--------|
|                                                           |   |   |        |   |   |   |           |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                           |   |   |        |   |   |   |           |   |   |
| Net increase (decrease) in demand deposits,                    |   |   |        |   |   |   |           |   |   |
| NOW accounts and savings accounts                              |   | $      | 160,490,510 |   |   | $      | (3,267,786     | )      |   | $ | 12,779,497 |   |
| Net increase (decrease) in certificates of deposit             |   |   | (94,518,877 | )      |   |   | 32,155,971     |   |   |   | 53,182,151 |   |
| Net increase in securities sold under agreements to repurchase |   |   | -           |   |   |   | 29,900,705     |   |   |   | 8,146,074 |   |
| Proceeds from FHLB advances                                    |   |   | 5,000,000   |   |   |   | 2,243,650,075  |   |   |   | 1,855,538,600 |   |
| Repayments of FHLB advances                                    |   |   | (21,386,000 | )      |   |   | (2,187,300,075 | )      |   |   | (1,887,452,600 | ) |
| Proceeds from issuance of notes payable                        |   |   | -           |   |   |   | 1,064,000      |   |   |   | 2,468,000 |   |
| Repayments of notes payable                                    |   |   | (1,435,190  | )      |   |   | (347,000       | )      |   |   | (1,749,810 | ) |
| Advances from borrowers for taxes and insurance                |   |   | (30,717     | )      |   |   | 8,516          |   |   |   | (65,058 | ) |
| Proceeds from issuance preferred stock and warrants            |   |   | 17,000,000  |   |   |   | -              |   |   |   | - |   |
| Stock options exercised                                        |   |   | -           |   |   |   | 578,661        |   |   |   | 1,118,762 |   |
| Common and preferred cash dividends paid                       |   |   | (672,917    | )      |   |   | (1,397,922     | )      |   |   | (1,879,256 | ) |
| Treasury stock purchased                                       |   |   | (7,515      | )      |   |   | (1,465,150     | )      |   |   | (7,479,118 | ) |
| Net cash provided by financing activities                      |   |   | 64,439,294  |   |   |   | 113,579,995    |   |   |   | 34,607,242 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               |   |   | 17,919,682  |   |   |   | 3,050,813      |   |   |   | (2,834,399 | ) |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                   |   |   | 15,097,015  |   |   |   | 12,046,202     |   |   |   | 14,880,601 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF YEAR                         |   | $      | 33,016,697  |   |   | $      | 15,097,015     |   |   | $ | 12,046,202 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Supplemental Cash Flows Information                            |   |   |        |   |   |   |           |   |   |   |   |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Real estate acquired in settlement of loans                    |   | $      | 5,536,091   |   |   | $      | 7,383,283      |   |   | $ | 2,003,838 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Interest paid                                                  |   | $      | 20,705,742  |   |   | $      | 19,740,608     |   |   | $ | 20,140,586 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Income taxes paid, net                                         |   | $      | 496,661     |   |   | $      | 1,525,017      |   |   | $ | 2,563,603 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Common stock dividends declared and unpaid                     |   | $      | -           |   |   | $      | -              |   |   | $ | 469,373 |   |
|                                                           |   |   |        |   |   |   |           |   |   |   |   |   |
| Sale and financing of foreclosed assets held for sale          |   | $      | 315,000     |   |   | $      | -              |   |   | $ | - |   |

----

|                                                                                                                        |   | Preferred Stock |       |   | Common Stock |   |    | Common Stock Warrants |   |   | Additional Paid-In Capital |   |   | Unearned ESOP Shares |       |   | Treasury Stock |   |       | Retained Earnings |   |   | Accumulated Other Comprehensive Income |   |   | Total  |       |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-----------------|------------|--------|--------------|--------|---------|-----------------------|--------|--------|----------------------------|--------|--------|----------------------|------------|--------|----------------|--------|------------|-------------------|--------|--------|----------------------------------------|--------|--------|--------|------------|
| Balance, January 1, 2007                                                                                               |   | $               | -          |   |         | $      | 665,353 |                  |   | $      | -                          |   |   | $                    | 55,730,352 |   |           | $      | (1,344,930 | )                 |   | $      | (52,869,086                            | )      |   | $      | 41,183,006 |   |   | $ | 1,534,548 |   |   | $ | 44,899,243 |   |
| Comprehensive income                                                                                                        |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                  |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | 6,099,882  |   |   |   | - |   |   |   | 6,099,882 |   |
| Change in unrealized appreciation on available-for-sale securities,net of income taxes of ($605,380)                        |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | (1,030,781 | ) |   |   | (1,030,781 | ) |
| Total comprehensive income                                                                                                  |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   | 5,069,101 |   |
| Dividends ($0.70 per share)                                                                                                 |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (1,880,439 | ) |   |   | - |   |   |   | (1,880,439 | ) |
| Stock award plans                                                                                                           |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | 286,346    |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 286,346 |   |
| Stock options exercised                                                                                                     |   |            | -          |   |         |   | 8,296   |                  |   |   | -                          |   |   |                 | 1,110,466  |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 1,118,762 |   |
| Release of ESOP shares                                                                                                      |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | 444,765    |   |           |   | 228,000    |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 672,765 |   |
| Treasury stock purchased                                                                                                    |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | (7,479,118                             | )      |   |   | -          |   |   |   | - |   |   |   | (7,479,118 | ) |
| Balance, December 31, 2007                                                                                             |   |            | -          |   |         |   | 673,649 |                  |   |   | -                          |   |   |                 | 57,571,929 |   |           |   | (1,116,930 | )                 |   |   | (60,348,204                            | )      |   |   | 45,402,449 |   |   |   | 503,767 |   |   |   | 42,686,660 |   |
| Comprehensive income (loss)                                                                                                 |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                    |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (5,359,711 | ) |   |   | - |   |   |   | (5,359,711 | ) |
| Change in unrealized appreciation on available-for-sale securities and interest rate swaps, net of income taxes of $695,418 |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | 1,184,091 |   |   |   | 1,184,091 |   |
| Total comprehensive loss                                                                                                    |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   | (4,175,620 | ) |
| Dividends ($0.36 per share)                                                                                                 |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (928,549   | ) |   |   | - |   |   |   | (928,549 | ) |
| Stock award plans                                                                                                           |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | 208,512    |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 208,512 |   |
| Stock options exercised                                                                                                     |   |            | -          |   |         |   | 4,331   |                  |   |   | -                          |   |   |                 | 574,330    |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 578,661 |   |
| Release of ESOP shares                                                                                                      |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | 180,388    |   |           |   | 228,000    |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 408,388 |   |
| Treasury stock purchased                                                                                                    |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | (1,465,150                             | )      |   |   | -          |   |   |   | - |   |   |   | (1,465,150 | ) |
| Balance, December 31, 2008                                                                                             |   |            | -          |   |         |   | 677,980 |                  |   |   | -                          |   |   |                 | 58,535,159 |   |           |   | (888,930   | )                 |   |   | (61,813,354                            | )      |   |   | 39,114,189 |   |   |   | 1,687,858 |   |   |   | 37,312,902 |   |
| Comprehensive income (loss)                                                                                                 |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                    |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (2,340,718 | ) |   |   | - |   |   |   | (2,340,718 | ) |
| Change in unrealized appreciation on available-for-sale securities and interest rate swaps, net of income taxes of $5,061   |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | 8,644 |   |   |   | 8,644 |   |
| Total comprehensive loss                                                                                                    |   |            |       |   |         |   |    |                  |   |   |                       |   |   |                 |       |   |           |   |       |              |   |   |                                   |   |   |   |       |   |   |   |   |   |   |   | (2,332,074 | ) |
| Preferred stock issued                                                                                                      |   |            | 15,622,189 |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 15,622,189 |   |
| Common stock warrants issued                                                                                                |   |            | -          |   |         |   | -       |                  |   |   | 1,377,811                  |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 1,377,811 |   |
| Preferred stock discount accretion                                                                                          |   |            | 252,599    |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (252,599   | ) |   |   | - |   |   |   | - |   |
| Preferred stock dividends                                                                                                   |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | -                                      |   |   |   | (779,167   | ) |   |   | - |   |   |   | (779,167 | ) |
| Stock award plans                                                                                                           |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | 95,268     |   |           |   | -          |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 95,268 |   |
| Release of ESOP shares                                                                                                      |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | (106,781   | )      |           |   | 228,000    |              |   |   | -                                      |   |   |   | -          |   |   |   | - |   |   |   | 121,219 |   |
| Treasury stock purchased                                                                                                    |   |            | -          |   |         |   | -       |                  |   |   | -                          |   |   |                 | -          |   |           |   | -          |              |   |   | (7,515                                 | )      |   |   | -          |   |   |   | - |   |   |   | (7,515 | ) |
| Balance, December 31, 2009                                                                                             |   | $               | 15,874,788 |   |         | $      | 677,980 |                  |   | $      | 1,377,811                  |   |   | $                    | 58,523,646 |   |           | $      | (660,930   | )                 |   | $      | (61,820,869                            | )      |   | $      | 35,741,705 |   |   | $ | 1,696,502 |   |   | $ | 51,410,633 |   |

----

----

----

| Buildings and improvements          | 35-40 years |
|-------------------------------------|-------------|
| Furniture and fixtures and vehicles | 3-10 years  |

----

----

|                                                        |   | Actual |   |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|-------------------------------------------------------------|--------|--------|--------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                                        |   | Amount |   |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2009                                |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (core) capital, and ratio to adjusted total assets   |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 64,678 |   |                          |   | 8.8    | %                                                                |   | $ | 29,354 |   |   |   | 4.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 61,224 |   |                          |   | 8.4    | %                                                                |   | $ | 29,311 |   |   |   | 4.0 | % |   | $ | 36,639 |   |   |   | 5.0 | % |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (core) capital, and ratio to risk-weighted assets    |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 64,678 |   |                          |   | 11.2   | %                                                                |   | $ | 23,116 |   |   |   | 4.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 61,224 |   |                          |   | 10.6   | %                                                                |   | $ | 23,074 |   |   |   | 4.0 | % |   | $ | 34,611 |   |   |   | 6.0 | % |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital, and ratio to risk-weighted assets |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 71,973 |   |                          |   | 12.5   | %                                                                |   | $ | 46,233 |   |   |   | 8.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 68,519 |   |                          |   | 11.9   | %                                                                |   | $ | 46,148 |   |   |   | 8.0 | % |   | $ | 57,685 |   |   |   | 10.0 | % |

|                                                        |   | Actual |   |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|-------------------------------------------------------------|--------|--------|--------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                                        |   | Amount |   |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2008                                |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (core) capital, and ratio to adjusted total assets   |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 50,619 |   |                          |   | 7.5    | %                                                                |   | $ | 26,963 |   |   |   | 4.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 49,833 |   |                          |   | 7.4    | %                                                                |   | $ | 26,914 |   |   |   | 4.0 | % |   | $ | 33,642 |   |   |   | 5.0 | % |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (core) capital, and ratio to risk-weighted assets    |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 50,619 |   |                          |   | 8.9    | %                                                                |   | $ | 22,697 |   |   |   | 4.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 49,833 |   |                          |   | 8.8    | %                                                                |   | $ | 22,697 |   |   |   | 4.0 | % |   | $ | 34,046 |   |   |   | 6.0 | % |
|                                                        |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital, and ratio to risk-weighted assets |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                                     |   | $      | 57,838 |   |                          |   | 10.2   | %                                                                |   | $ | 45,394 |   |   |   | 8.0 | % |   |   | n/a |   |   |   | n/a |   |
| Bank                                                        |   | $      | 57,045 |   |                          |   | 10.1   | %                                                                |   | $ | 45,394 |   |   |   | 8.0 | % |   | $ | 56,743 |   |   |   | 10.0 | % |

----

|                                               |   | Year Ended             |       |   | Year Ended             |   |       | Year Ended             |   |
|----------------------------------------------------|--------|------------------------|------------|--------|------------------------|--------|------------|------------------------|--------|
|                                               |   | December 31, 2009 |       |   | December 31, 2008 |   |       | December 31, 2007 |   |
|                                               |   |                   |       |   |                   |   |       |                   |   |
| Net income (loss) available to common shareholders |   | $                      | (3,372,484 | )      |                   | $      | (5,359,711 | )                      |   | $ | 6,099,882 |   |
| Average common shares outstanding                  |   |                   | 2,622,895  |   |                   |   | 2,604,440  |                   |   |   | 2,713,384 |   |
| Effect of dilutive securities                      |   |                   | -          |   |                   |   | -          |                   |   |   | 77,998 |   |
| Average diluted shares outstanding                 |   |                   | 2,622,895  |   |                   |   | 2,604,440  |                   |   |   | 2,791,382 |   |
| Basic income (loss) per common share               |   | $                      | (1.29      | )      |                   | $      | (2.06      | )                      |   | $ | 2.25 |   |
| Diluted income (loss) per common share             |   | $                      | (1.29      | )      |                   | $      | (2.06      | )                      |   | $ | 2.19 |   |

----

|                                            |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized (Losses) |   |   | Approximate Fair Value |   |
|-------------------------------------------------|--------|----------------|-------------|--------|------------------------|--------|-----------|---------------------------|--------|--------|------------------------|--------|
| As of December 31, 2009                    |   |           |        |   |                   |   |      |                      |   |   |                   |   |
| Equity Securities                               |   | $              | 102,212     |   |                   | $      | 4,055     |                      |   | $      | (41,219                | )      |   | $ | 65,048 |   |
| Debt Securities:                                |   |           |        |   |                   |   |      |                      |   |   |                   |   |   |   |   |   |
| U. S. government agencies                       |   |           | 30,528,386  |   |                   |   | 98,160    |                      |   |   | (86,326                | )      |   |   | 30,540,220 |   |
| Government sponsored mortgage-backed securities |   |           | 69,844,555  |   |                   |   | 2,209,428 |                      |   |   | -                      |   |   |   | 72,053,983 |   |
|                                            |   | $              | 100,475,153 |   |                   | $      | 2,311,643 |                      |   | $      | (127,545               | )      |   | $ | 102,659,251 |   |
|                                            |   |           |        |   |                   |   |      |                      |   |   |                   |   |   |   |   |   |
|                                            |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized (Losses) |   |   | Approximate Fair Value |   |
| As of December 31, 2008                    |   |           |        |   |                   |   |      |                      |   |   |                   |   |   |   |   |   |
| Equity Securities:                              |   |           |        |   |                   |   |      |                      |   |   |                   |   |   |   |   |   |
| FHLMC stock                                     |   | $              | 26,057      |   |                   | $      | -         |                      |   | $      | (6,639                 | )      |   | $ | 19,418 |   |
| Other                                           |   |           | 572,087     |   |                   |   | 4,157     |                      |   |   | (34,611                | )      |   |   | 541,633 |   |
| Debt Securities:                                |   |           |        |   |                   |   |      |                      |   |   |                   |   |   |   |   |   |
| U. S. government agencies                       |   |           | 2,450,000   |   |                   |   | 24,130    |                      |   |   | -                      |   |   |   | 2,474,130 |   |
| Government sponsored mortgage-backed securities |   |           | 61,304,310  |   |                   |   | 1,173,274 |                      |   |   | (7,426                 | )      |   |   | 62,470,158 |   |
|                                            |   | $              | 64,352,454  |   |                   | $      | 1,201,561 |                      |   | $      | (48,676                | )      |   | $ | 65,505,339 |   |

|                                                                              |   | Amortized Cost |        |   | Approximate Fair Value |   |
|-----------------------------------------------------------------------------------|--------|----------------|-------------|--------|------------------------|--------|
| Within one year                                                                   |   | $              | 5,500,000   |   |                   | $      | 5,517,631 |   |
| 1-5 years                                                                         |   |           | 22,578,386  |   |                   |   | 22,638,073 |   |
| After ten years                                                                   |   |           | 2,450,000   |   |                   |   | 2,384,516 |   |
| Government sponsored mortgage-backed securities not due on a single maturity date |   |           | 69,844,555  |   |                   |   | 72,053,983 |   |
|                                                                              |   | $              | 100,372,941 |   |                   | $      | 102,594,203 |   |

----

|                                            |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized (Losses) |   |   | Approximate Fair Value |   |
|-------------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|
| As of December 31, 2009                    |   |           |    |   |                   |   |   |                      |   |   |                   |   |
| Debt Securities:                                |   |           |    |   |                   |   |   |                      |   |   |                   |   |
| U. S. government agencies                       |   | $              | 114,119 |   |                   | $      | -      |                      |   | $      | (535                   | )      |   | $ | 113,584 |   |
| Government sponsored mortgage-backed securities |   |           | 358,664 |   |                   |   | 27,470 |                      |   |   | -                      |   |   |   | 386,134 |   |
|                                            |   | $              | 472,783 |   |                   | $      | 27,470 |                      |   | $      | (535                   | )      |   | $ | 499,718 |   |
|                                            |   |           |    |   |                   |   |   |                      |   |   |                   |   |
|                                            |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized (Losses) |   |   | Approximate Fair Value |   |
| As of December 31, 2008                    |   |           |    |   |                   |   |   |                      |   |   |                   |   |   |   |   |   |
| Debt Securities:                                |   |           |    |   |                   |   |   |                      |   |   |                   |   |   |   |   |   |
| U. S. government agencies                       |   | $              | 135,538 |   |                   | $      | -      |                      |   | $      | (3,236                 | )      |   | $ | 132,302 |   |
| Government sponsored mortgage-backed securities |   |           | 420,927 |   |                   |   | 24,565 |                      |   |   | (1,395                 | )      |   |   | 444,097 |   |
|                                            |   | $              | 556,465 |   |                   | $      | 24,565 |                      |   | $      | (4,631                 | )      |   | $ | 576,399 |   |

|                                                                              |   | Amortized Cost |    |   | Approximate Fair Value |   |
|-----------------------------------------------------------------------------------|--------|----------------|---------|--------|------------------------|--------|
| After ten years                                                                   |   | $              | 114,119 |   |                   | $      | 113,584 |   |
| Government sponsored mortgage-backed securities not due on a single maturity date |   |           | 358,664 |   |                   |   | 386,134 |   |
|                                                                              |   | $              | 472,783 |   |                   | $      | 499,718 |   |

----

|                                            |   | December 31, 2009 |      |
|-------------------------------------------------|--------|------------------------|-----------|
|                                            |   | Less than 12 Months    |      |   | 12 Months or More |   |   | Total |   |
| Description of Securities                       |   | Fair Value             |      |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                            |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity Securities                               |   | $                      | -         |   |   | $ | - |   |   | $ | 30,315 |   |   | $ | (41,219 | ) |   | $ | 30,315 |   |   | $ | (41,219 | ) |
| U. S. government agencies                       |   |                   | 7,021,911 |   |   |   | (86,861 | ) |   |   | - |   |   |   | - |   |   |   | 7,021,911 |   |   |   | (86,861 | ) |
|                                            |   | $                      | 7,021,911 |   |   | $ | (86,861 | ) |   | $ | 30,315 |   |   | $ | (41,219 | ) |   | $ | 7,052,226 |   |   | $ | (128,080 | ) |
|                                            |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   | December 31, 2008 |      |
|                                            |   | Less than 12 Months    |      |   | 12 Months or More |   |   | Total |   |
| Description of Securities                       |   | Fair Value             |      |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                            |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity Securities                               |   | $                      | 56,342    |   |   | $ | (41,250 | ) |   | $ | - |   |   | $ | - |   |   | $ | 56,342 |   |   | $ | (41,250 | ) |
| U. S. government agencies                       |   |                   | -         |   |   |   | - |   |   |   | 132,302 |   |   |   | (3,236 | ) |   |   | 132,302 |   |   |   | (3,236 | ) |
| Government sponsored mortgage-backed securities |   |                   | 1,440,742 |   |   |   | (8,821 | ) |   |   | - |   |   |   | - |   |   |   | 1,440,742 |   |   |   | (8,821 | ) |
|                                            |   | $                      | 1,497,084 |   |   | $ | (50,071 | ) |   | $ | 132,302 |   |   | $ | (3,236 | ) |   | $ | 1,629,386 |   |   | $ | (53,307 | ) |

----

|                                |   | 2009   |        |   | 2008   |   |
|-------------------------------------|--------|--------|-------------|--------|--------|--------|
| Real estate - residential mortgage: |   |   |        |   |   |   |
| One to four family units            |   | $      | 108,673,726 |   |   | $      | 107,753,766 |   |
| Multi-family                        |   |   | 34,498,240  |   |   |   | 31,757,153 |   |
| Real estate - construction          |   |   | 21,579,167  |   |   |   | 85,072,577 |   |
| Real estate - commercial            |   |   | 236,980,868 |   |   |   | 204,218,526 |   |
| Commercial loans                    |   |   | 114,497,545 |   |   |   | 118,468,028 |   |
| Installment loans                   |   |   | 23,016,687  |   |   |   | 26,024,283 |   |
| Total loans                         |   |   | 539,246,233 |   |   |   | 573,294,333 |   |
| Less:                               |   |   |        |   |   |   |   |   |
| Allowance for loan losses           |   |   | (14,076,123 | )      |   |   | (16,728,492 | ) |
| Deferred loan fees/costs, net       |   |   | (132,057    | )      |   |   | (172,598 | ) |
| Net loans                           |   | $      | 525,038,053 |   |   | $      | 556,393,243 |   |

----

|                                                         |   | Years ended       |       |
|--------------------------------------------------------------|--------|-------------------|------------|
|                                                         |   | December 31, |       |
|                                                         |   | 2009              |       |   | 2008 |   |
|                                                         |   |              |       |   |   |   |
| Impaired loans without a valuation allowance                 |   | $                 | 13,234,984 |   |   | $ | 5,407,045 |   |
| Impaired loans with a valuation allowance                    |   |              | 26,774,139 |   |   |   | 34,481,620 |   |
| Total impaired loans                                         |   | $                 | 40,009,123 |   |   | $ | 39,888,665 |   |
|                                                         |   |              |       |   |   |   |   |   |
| Valuation allowance related to impaired loans                |   | $                 | 7,240,708  |   |   | $ | 9,135,248 |   |
|                                                         |   |              |       |   |   |   |   |   |
| Total nonaccrual loans                                       |   | $                 | 34,284,778 |   |   | $ | 20,694,465 |   |
|                                                         |   |              |       |   |   |   |   |   |
| Total loans past due 90 days or more and still accruing      |   | $                 | -          |   |   | $ | 442,850 |   |
|                                                         |   |              |       |   |   |   |   |   |
|                                                         |   |              |       |   |   |   |   |   |
|                                                         |   | 2009              |       |   | 2008 |   |
| Average investment in impaired loans                         |   | $                 | 39,642,406 |   |   | $ | 22,220,454 |   |
|                                                         |   |              |       |   |   |   |   |   |
| Interest income recognized on impaired loans                 |   | $                 | 1,223,789  |   |   | $ | 960,075 |   |
|                                                         |   |              |       |   |   |   |   |   |
| Interest income recognized on a cash basis on impaired loans |   | $                 | 582,506    |   |   | $ | 144,615 |   |

|                                                                                        |   | Years ended       |       |
|---------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                        |   | December 31, |       |
|                                                                                        |   | 2009              |       |   | 2008 |   |   | 2007 |   |
|                                                                                        |   |              |       |   |   |   |   |   |   |
| Balance, beginning of year                                                                  |   | $                 | 16,728,492 |   |   | $ | 5,962,923 |   |   | $ | 5,783,477 |   |
| Provision charged to expense                                                                |   |              | 6,900,000  |   |   |   | 14,744,079 |   |   |   | 840,000 |   |
| Losses charged off, net of recoveries of $217,888, $135,274 and $70,990 for the years ended |   |              |       |   |   |   |   |   |   |   |   |   |
| December 31, 2009, 2008 and 2007 respectively                                               |   |              | (9,552,369 | ) |   |   | (3,978,510 | ) |   |   | (660,554 | ) |
| Balance, end of year                                                                        |   | $                 | 14,076,123 |   |   | $ | 16,728,492 |   |   | $ | 5,962,923 |   |

----

|                              |   | December 31, |       |   | December 31, |   |
|-----------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                              |   | 2009              |       |   | 2008              |   |
| Land                              |   | $                 | 2,250,789  |   |              | $      | 2,250,789 |   |
| Buildings and improvements        |   |              | 11,489,655 |   |              |   | 10,742,945 |   |
| Automobile                        |   |              | 16,479     |   |              |   | 16,479 |   |
| Furniture, fixtures and equipment |   |              | 7,563,573  |   |              |   | 6,850,726 |   |
| Leasehold improvements            |   |              | 271,799    |   |              |   | 271,799 |   |
|                              |   |              | 21,592,295 |   |              |   | 20,132,738 |   |
| Less accumulated depreciation     |   |              | (9,774,779 | )      |              |   | (8,809,275 | ) |
| Net premises and equipment        |   | $                 | 11,817,516 |   |              | $      | 11,323,463 |   |

|                                                                                             |   | Year ended        |       |
|--------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                             |   | December 31, |       |
|                                                                                             |   | 2009              |       |   | 2008 |   |   | 2007 |   |
|                                                                                             |   |              |       |   |   |   |   |   |   |
| Unrealized gains (losses) on available-for-sale securities                                       |   | $                 | 1,720,966  |   |   | $ | (210,360 | ) |   | $ | (1,017,798 | ) |
| Unrealized gains on interest rate swaps                                                          |   |              | -          |   |   |   | 1,695,836 |   |   |   | - |   |
| Accretion of gains on interest rate swaps                                                        |   |              | (1,017,492 | ) |   |   | (169,582 | ) |   |   | - |   |
| Less: Reclassification adjustment for realized (gains) losses and write-downs included in income |   |              | (689,769   | ) |   |   | 563,615 |   |   |   | (618,363 | ) |
| Other comprehensive income (loss) before tax effect                                              |   |              | 13,705     |   |   |   | 1,879,509 |   |   |   | (1,636,161 | ) |
| Tax expense (benefit)                                                                            |   |              | 5,061      |   |   |   | 695,418 |   |   |   | (605,380 | ) |
| Other comprehensive income (loss)                                                                |   | $                 | 8,644      |   |   | $ | 1,184,091 |   |   | $ | (1,030,781 | ) |

----

|                                             |   | 2009   |      |   | 2008   |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                             |   |   |      |   |   |   |
| Unrealized gain on available-for-sale securities |   | $      | 2,184,098 |   |   | $      | 1,152,885 |   |
| Unrealized gain on interest rate swaps           |   |   | 508,746   |   |   |   | 1,526,254 |   |
|                                             |   |   | 2,692,844 |   |   |   | 2,679,139 |   |
| Tax effect                                       |   |   | 996,342   |   |   |   | 991,281 |   |
| Net of tax amount                                |   | $      | 1,696,502 |   |   | $      | 1,687,858 |   |

|           |   | December 31, 2009     |   |   | December 31, 2008 |   |
|----------------|--------|-----------------------|--------|--------|-------------------|--------|
|           |   | Weighted Average Rate |   |   | Balance           |   |   | Percentage of Deposits |   |   | Weighted Average Rate |   |   | Balance |   |   | Percentage of Deposits |   |
|           |   |                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand         |   |                  | 0.00   | %      |              | $      | 28,931,387 |   |   |   | 5.6 | % |   |   | 0.00 | % |   | $ | 31,219,635 |   |   |   | 7.0 | % |
| NOW            |   |                  | 1.19   | %      |              |   | 55,453,004 |   |   |   | 10.8 | % |   |   | 1.13 | % |   |   | 42,949,458 |   |   |   | 9.6 | % |
| Money market   |   |                  | 3.32   | %      |              |   | 199,967,347 |   |   |   | 39.0 | % |   |   | 1.85 | % |   |   | 52,082,723 |   |   |   | 11.7 | % |
| Savings        |   |                  | 0.99   | %      |              |   | 14,643,695 |   |   |   | 2.9 | % |   |   | 0.94 | % |   |   | 12,253,106 |   |   |   | 2.7 | % |
|           |   |                  | 2.49   | %      |              |   | 298,995,433 |   |   |   | 58.3 | % |   |   | 1.13 | % |   |   | 138,504,922 |   |   |   | 31.0 | % |
| Certificates:  |   |                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 0% - 3.99%     |   |                  | 2.16   | %      |              |   | 137,610,825 |   |   |   | 26.8 | % |   |   | 3.25 | % |   |   | 182,335,203 |   |   |   | 40.8 | % |
| 4.00% - 5.99%  |   |                  | 4.51   | %      |              |   | 76,421,540 |   |   |   | 14.9 | % |   |   | 4.79 | % |   |   | 126,209,344 |   |   |   | 28.2 | % |
| 6.00% - 7.99%  |   |                  | 7.77   | %      |              |   | 23,304 |   |   |   | 0.0 | % |   |   | 7.77 | % |   |   | 30,000 |   |   |   | 0.0 | % |
|           |   |                  | 3.00   | %      |              |   | 214,055,669 |   |   |   | 41.7 | % |   |   | 3.88 | % |   |   | 308,574,547 |   |   |   | 69.0 | % |
| Total Deposits |   |                  | 2.70   | %      |              | $      | 513,051,102 |   |   |   | 100.0 | % |   |   | 3.03 | % |   | $ | 447,079,469 |   |   |   | 100.0 | % |

| 2010             |   | $      | 140,285,863 |   |
|------------------|--------|--------|-------------|--------|
| 2011             |   |   | 50,621,981  |   |
| 2012             |   |   | 15,998,647  |   |
| 2013             |   |   | 4,518,230   |   |
| 2014             |   |   | 1,833,659   |   |
|  Thereafter |   |   | 797,289     |   |
|             |   | $      | 214,055,669 |   |

----

|                          |   | Years ended       |       |
|-------------------------------|--------|-------------------|------------|
|                          |   | December 31, |       |
|                          |   | 2009              |       |   | 2008 |   |   | 2007 |   |
|                          |   |              |       |   |   |   |   |   |   |
| NOW and Money Market accounts |   | $                 | 6,151,371  |   |   | $ | 1,806,564 |   |   | $ | 2,940,311 |   |
| Savings accounts              |   |              | 121,362    |   |   |   | 142,739 |   |   |   | 320,172 |   |
| Certificate accounts          |   |              | 9,140,075  |   |   |   | 12,341,918 |   |   |   | 12,657,119 |   |
| Early withdrawal penalties    |   |              | (31,618    | ) |   |   | (71,489 | ) |   |   | (56,808 | ) |
|                          |   | $                 | 15,381,190 |   |   | $ | 14,219,732 |   |   | $ | 15,860,794 |   |

|          |   | December 31, 2009 |        |   | December 31, 2008 |   |
|---------------|--------|------------------------|-------------|--------|------------------------|--------|
| Maturity Date |   | Amount                 |        |   | Weighted Average Rate  |   |   | Amount |   |   | Weighted Average Rate |   |
| 2009          |   |                   | -           |   |                   |   | - |   |   |   | 21,386,000 |   |   |   | 1.01 | % |
| 2010          |   |                   | 23,000,000  |   |                   |   | 3.10 | % |   |   | 18,000,000 |   |   |   | 3.77 | % |
| 2011          |   |                   | 25,000,000  |   |                   |   | 3.53 | % |   |   | 25,000,000 |   |   |   | 3.53 | % |
| 2013          |   |                   | 15,700,000  |   |                   |   | 2.14 | % |   |   | 15,700,000 |   |   |   | 2.14 | % |
| Thereafter    |   |                   | 52,350,000  |   |                   |   | 2.26 | % |   |   | 52,350,000 |   |   |   | 2.26 | % |
|          |   | $                      | 116,050,000 |   |                   |   | 2.68 | % |   | $ | 132,436,000 |   |   |   | 2.49 | % |

----

|                    |   | Years Ended       |       |
|-------------------------|--------|-------------------|------------|
|                    |   | December 31, |       |
|                    |   | 2009              |       |   | 2008 |   |   | 2007 |   |
|                    |   |              |       |   |   |   |   |   |   |
| Taxes currently payable |   | $                 | (2,335,819 | ) |   | $ | 1,154,957 |   |   | $ | 3,587,610 |   |
| Deferred income taxes   |   |              | 701,199    |   |   |   | (4,143,816 | ) |   |   | (187,839 | ) |
|                    |   | $                 | (1,634,620 | ) |   | $ | (2,988,859 | ) |   | $ | 3,399,771 |   |

----

|                                                                |   | December 31, |       |   | December 31, |   |
|---------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                                                                |   | 2009              |       |   | 2008              |   |
| Deferred tax assets:                                                |   |              |       |   |              |   |
| Allowances for loan losses                                          |   | $                 | 5,208,165  |   |              | $      | 6,189,542 |   |
| Accrued compensated absences                                        |   |              | 18,500     |   |              |   | 18,500 |   |
| Interest on non-accrual loans                                       |   |              | -          |   |              |   | 10,494 |   |
| Impairment loss on available-for-sale securities                    |   |              | -          |   |              |   | 158,381 |   |
| Writedowns on foreclosed assets held for sale                       |   |              | 360,952    |   |              |   | - |   |
| State low income housing tax credits                                |   |              | 1,021,332  |   |              |   | - |   |
| Deferred loan fees/costs                                            |   |              | 48,861     |   |              |   | 63,861 |   |
|                                                                |   |              | 6,657,810  |   |              |   | 6,440,778 |   |
| Deferred tax liabilities:                                           |   |              |       |   |              |   |   |   |
| FHLB stock dividends                                                |   |              | (120,632   | )      |              |   | (120,632 | ) |
| Unrealized appreciation on available-for-sale securities            |   |              | (808,116   | )      |              |   | (426,567 | ) |
| Accumulated depreciation                                            |   |              | (164,223   | )      |              |   | (62,580 | ) |
| Other                                                               |   |              | (93,078    | )      |              |   | (62,186 | ) |
|                                                                |   |              | (1,186,049 | )      |              |   | (671,965 | ) |
| Deferred tax asset before valuation allowance                       |   |              | 5,471,761  |   |              |   | 5,768,813 |   |
| Valuation allowance:                                                |   |              |       |   |              |   |   |   |
| Beginning balance                                                   |   |              | -          |   |              |   | - |   |
| Increase for state low income housing tax credits during the period |   |              | (785,696   | )      |              |   | - |   |
| Ending balance                                                      |   |              | (785,696   | )      |              |   | - |   |
| Net deferred tax asset                                              |   | $                 | 4,686,065  |   |              | $      | 5,768,813 |   |

|                                          |   | Years ended       |   |
|-----------------------------------------------|--------|-------------------|--------|
|                                          |   | December 31, |   |
|                                          |   |              |   |   |   |   |   |   |   |
|                                          |   | 2009              |   |   | 2008 |   |   | 2007 |   |
| Computed at statutory rate                    |   |              | (34.0  | %) |   |   | (34.0 | %) |   |   | 34.0 | % |
| Increase (reduction) in taxes resulting from: |   |              |   |   |   |   |   |   |   |   |   |   |
| State financial institution tax and credits   |   |              | (30.6  | %) |   |   | 0.1 | % |   |   | 0.8 | % |
| ESOP                                          |   |              | (1.9   | %) |   |   | 0.5 | % |   |   | 3.1 | % |
| Valuation allowance                           |   |              | 19.8   | % |   |   | - |   |   |   | - |   |
| Other                                         |   |              | 5.6    | % |   |   | (2.4 | %) |   |   | (2.1 | %) |
| Actual tax provision (credit)                 |   |              | (41.1  | %) |   |   | (35.8 | %) |   |   | 35.8 | % |

----

| Financial Assets:                               |   |           |   |   |           |   |    |           |   |   |             |   |
|-------------------------------------------------|--------|----------------|--------|--------|----------------|--------|---------|----------------|--------|--------|------------------|--------|
|                                            |   | Level 1 inputs |   |   | Level 2 inputs |   |    | Level 3 inputs |   |   | Total fair value |   |
| Equity Securities:                              |   |           |   |   |           |   |    |           |   |   |             |   |
| Other                                           |   | $              | 65     |   |           | $      | -       |           |   | $      | -                |   |   | $ | 65 |   |
| Debt Securities:                                |   |           |   |   |           |   |    |           |   |   |             |   |   |   |   |   |
| U.S. government agencies                        |   |           | -      |   |           |   | 30,540  |           |   |   | -                |   |   |   | 30,540 |   |
| Government sponsored mortgage-backed securities |   |           | -      |   |           |   | 72,054  |           |   |   | -                |   |   |   | 72,054 |   |
| Available-for-sale securities                   |   | $              | 65     |   |           | $      | 102,594 |           |   | $      | -                |   |   | $ | 102,659 |   |

----

| Impaired loans:                  |   |           |   |   |           |   |   |           |   |   |             |   |
|----------------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|--------|------------------|--------|
|                             |   | Level 1 inputs |   |   | Level 2 inputs |   |   | Level 3 inputs |   |   | Total fair value |   |
| December 31, 2009                |   | $              | -      |   |           | $      | -      |           |   | $      | 17,186           |   |   | $ | 17,186 |   |
|                             |   |           |   |   |           |   |   |           |   |   |             |   |   |   |   |   |
| December 31, 2008                |   | $              | -      |   |           | $      | -      |           |   | $      | 32,706           |   |   | $ | 32,706 |   |
|                             |   |           |   |   |           |   |   |           |   |   |             |   |   |   |   |   |
| Foreclosed assets held for sale: |   |           |   |   |           |   |   |           |   |   |             |   |   |   |   |   |
|                             |   | Level 1 inputs |   |   | Level 2 inputs |   |   | Level 3 inputs |   |   | Total fair value |   |
| December 31, 2009                |   | $              | -      |   |           | $      | -      |           |   | $      | 3,897            |   |   | $ | 3,897 |   |

----

|                                                           |   | December 31, 2009 |        |   | December 31, 2008 |   |
|----------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|
|                                                           |   | Carrying Amount        |        |   | Fair Value             |   |   | Carrying Amount |   |   | Fair Value |   |
| Financial assets:                                              |   |                   |        |   |                   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                      |   | $                      | 33,016,697  |   |                   |   | 33,016,697 |   |   | $ | 15,097,015 |   |   |   | 15,097,015 |   |
| Interest-bearing deposits                                      |   |                   | 16,560,802  |   |                   |   | 16,560,802 |   |   | $ | - |   |   |   | - |   |
| Held-to-maturity securities                                    |   |                   | 472,783     |   |                   |   | 499,718 |   |   |   | 556,465 |   |   |   | 576,399 |   |
| Federal Home Loan Bank stock                                   |   |                   | 5,976,600   |   |                   |   | 5,976,600 |   |   |   | 6,730,100 |   |   |   | 6,730,100 |   |
| Mortgage loans held for sale                                   |   |                   | 3,465,080   |   |                   |   | 3,465,080 |   |   |   | 1,933,798 |   |   |   | 1,933,798 |   |
| Loans, net                                                     |   |                   | 525,038,053 |   |                   |   | 529,941,646 |   |   |   | 556,393,243 |   |   |   | 575,444,855 |   |
| Interest receivable                                            |   |                   | 2,671,563   |   |                   |   | 2,671,563 |   |   |   | 2,632,450 |   |   |   | 2,632,450 |   |
| Financial liabilities:                                         |   |                   |        |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                       |   |                   | 513,051,102 |   |                   |   | 517,380,184 |   |   |   | 447,079,469 |   |   |   | 456,127,421 |   |
| Federal Home Loan Bank advances                                |   |                   | 116,050,000 |   |                   |   | 112,377,239 |   |   |   | 132,436,000 |   |   |   | 134,713,550 |   |
| Securities sold under agreements to repurchase                 |   |                   | 39,750,000  |   |                   |   | 40,198,606 |   |   |   | 39,750,000 |   |   |   | 40,622,942 |   |
| Subordinated debentures                                        |   |                   | 15,465,000  |   |                   |   | 15,465,000 |   |   |   | 15,465,000 |   |   |   | 15,465,000 |   |
| Notes payable                                                  |   |                   | -           |   |                   |   | - |   |   |   | 1,435,190 |   |   |   | 1,435,190 |   |
| Interest payable                                               |   |                   | 1,398,122   |   |                   |   | 1,398,122 |   |   |   | 1,577,279 |   |   |   | 1,577,279 |   |
| Unrecognized financial instruments (net of contractual value): |   |                   |        |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit                                   |   |                   | -           |   |                   |   | - |   |   |   | - |   |   |   | - |   |
| Unused lines of credit                                         |   |                   | -           |   |                   |   | - |   |   |   | - |   |   |   | - |   |

----

|                                             |   | Number of shares       |    |   |                       |   |
|--------------------------------------------------|--------|------------------------|---------|--------|----------------------------|--------|
|                                             |   | Incentive Stock Option |    |   | Non-Incentive Stock Option |   |   | Weighted Average Exercise Price |   |
| Balance outstanding as of January 1, 2007   |   |                   | 155,491 |   |                       |   | 115,206 |   |   | $ | 17.30 |   |
| Granted                                          |   |                   | 19,500  |   |                       |   | 25,000 |   |   |   | 29.48 |   |
| Exercised                                        |   |                   | (56,958 | )      |                       |   | (26,000 | ) |   |   | 13.49 |   |
| Forfeited                                        |   |                   | -       |   |                       |   | - |   |   |   | - |   |
| Balance outstanding as of December 31, 2007 |   |                   | 118,033 |   |                       |   | 114,206 |   |   |   | 20.48 |   |
| Granted                                          |   |                   | 34,000  |   |                       |   | 20,000 |   |   |   | 26.72 |   |
| Exercised                                        |   |                   | (28,313 | )      |                       |   | (15,002 | ) |   |   | 13.36 |   |
| Forfeited                                        |   |                   | (15,470 | )      |                       |   | (2,500 | ) |   |   | 21.17 |   |
| Balance outstanding as of December 31, 2008 |   |                   | 108,250 |   |                       |   | 116,704 |   |   |   | 23.29 |   |
| Granted                                          |   |                   | 41,500  |   |                       |   | 20,000 |   |   |   | 5.31 |   |
| Exercised                                        |   |                   | -       |   |                       |   | - |   |   |   | - |   |
| Forfeited                                        |   |                   | (1,000  | )      |                       |   | - |   |   |   | 28.43 |   |
| Balance outstanding as of December 31, 2009 |   |                   | 148,750 |   |                       |   | 136,704 |   |   |   | 19.40 |   |
| Options exercisable as of December 31, 2009 |   |                   | 57,650  |   |                       |   | 87,704 |   |   |   | 20.98 |   |

----

|                                                       |   | December 31, 2009 |   |   | December 31, 2008 |   |   | December 31, 2007 |   |
|------------------------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------|--------|
| Dividends per share                                        |   | $                      | -      |   |                   | $      | 0.36   |                   |   | $ | 0.70 |   |
| Risk-free interest rate                                    |   |                   | 1.75   | %      |                   |   | 3.25   | %                      |   |   | 4.54 | % |
| Expected life of options                                   |   | 5 years                |   |   | 5 years                |   |   | 5 years                |   |
| Weighted-average volatility                                |   |                   | 57.58  | %      |                   |   | 7.17   | %                      |   |   | 4.62 | % |
| Weighted-average fair value of options granted during year |   | $                      | 1.31   |   |                   | $      | 1.72   |                   |   | $ | 2.95 |   |

| Beginning ESOP shares           |   |   | 344,454  |   |
|---------------------------------|--------|--------|----------|--------|
| Released shares                 |   |   | (253,981 | )      |
| Shares committed for release    |   |   | (22,618  | )      |
| Unreleased shares               |   |   | 67,855   |   |
|                            |   |   |     |   |
| Fair value of unreleased shares |   | $      | 344,703  |   |

----

----

|                          |   | December 31,2009 |      |   | December 31, 2008 |   |      | December 31, 2007 |   |
|-------------------------------|--------|-----------------------|-----------|--------|------------------------|--------|-----------|-----------------------------|--------|
| Directors compensation        |   | $                     | 167,749   |   |                   | $      | 165,407   |                        |   | $ | 161,263 |   |
| Outside services              |   |                  | 86,730    |   |                   |   | 110,012   |                        |   |   | 70,484 |   |
| Legal expense                 |   |                  | 370,988   |   |                   |   | 123,346   |                        |   |   | 76,018 |   |
| Miscellaneous deposit expense |   |                  | 103,752   |   |                   |   | 58,483    |                        |   |   | 137,930 |   |
| Office supplies               |   |                  | 126,844   |   |                   |   | 120,329   |                        |   |   | 96,257 |   |
| Telephone                     |   |                  | 104,166   |   |                   |   | 81,328    |                        |   |   | 148,718 |   |
| Postage                       |   |                  | 175,017   |   |                   |   | 191,374   |                        |   |   | 184,985 |   |
| Insurance                     |   |                  | 62,971    |   |                   |   | 70,318    |                        |   |   | 59,808 |   |
| Supervisory exam              |   |                  | 57,271    |   |                   |   | 46,013    |                        |   |   | 41,145 |   |
| Accounting                    |   |                  | 187,389   |   |                   |   | 164,672   |                        |   |   | 297,699 |   |
| Organization dues             |   |                  | 98,853    |   |                   |   | 98,617    |                        |   |   | 87,570 |   |
| Loan expense                  |   |                  | 285,078   |   |                   |   | 232,565   |                        |   |   | 272,248 |   |
| Contributions                 |   |                  | 40,302    |   |                   |   | 40,147    |                        |   |   | 36,500 |   |
| ATM expense                   |   |                  | 260,375   |   |                   |   | 229,356   |                        |   |   | 211,044 |   |
| Other operating               |   |                  | 563,571   |   |                   |   | 669,166   |                        |   |   | 437,600 |   |
|                          |   |                  |      |   |                   |   |      |                        |   |   |   |   |
|                          |   | $                     | 2,691,056 |   |                   | $      | 2,401,133 |                        |   | $ | 2,319,269 |   |

|                       |   | Year ended December 31, |      |
|----------------------------|--------|------------------------------|-----------|
|                       |   | 2009                         |      |   | 2008 |   |   | 2007 |   |
|                       |   |                         |      |   |   |   |   |   |   |
| Balance, beginning of year |   | $                            | 6,800,439 |   |   | $ | 3,590,630 |   |   | $ | 3,508,387 |   |
| New Loans                  |   |                         | 688,200   |   |   |   | 4,460,569 |   |   |   | 100,000 |   |
| Repayments                 |   |                         | (659,141  | ) |   |   | (1,250,760 | ) |   |   | (17,757 | ) |
|                       |   |                         |      |   |   |   |   |   |   |   |   |   |
| Balance, end of year       |   | $                            | 6,829,498 |   |   | $ | 6,800,439 |   |   | $ | 3,590,630 |   |

----

----

| Balance Sheets                                                                        |   |              |        |   |   |   |
|---------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|--------|--------|
|                                                                                  |   | December 31, |        |
|                                                                                  |   | 2009              |        |   | 2008   |   |
| Assets                                                                                |   |              |        |   |   |   |
| Cash                                                                                  |   | $                 | 2,813,094   |   |   | $      | 1,050,726 |   |
| Available-for-sale securities                                                         |   |              | 65,048      |   |   |   | 541,633 |   |
| Due from subsidiary                                                                   |   |              | 22,195      |   |   |   | 22,195 |   |
| Investment in subsidiary                                                              |   |              | 62,944,398  |   |   |   | 51,546,714 |   |
| Investment in Capital Trust I & II                                                |   |              | 465,000     |   |   |   | 465,000 |   |
| Prepaid expenses and other assets                                                     |   |              | 391,471     |   |   |   | 402,565 |   |
| Refundable income taxes                                                               |   |              | 395,344     |   |   |   | 204,136 |   |
| Deferred income taxes                                                                 |   |              | 43,596      |   |   |   | 169,649 |   |
|                                                                                  |   | $                 | 67,140,146  |   |   | $      | 54,402,618 |   |
| Liabilities                                                                           |   |              |        |   |   |   |   |   |
| Notes payable                                                                         |   | $                 | -           |   |   | $      | 1,435,190 |   |
| Subordinated debentures                                                               |   |              | 15,465,000  |   |   |   | 15,465,000 |   |
| Accrued expenses and other liabilities                                                |   |              | 264,513     |   |   |   | 189,526 |   |
| Stockholders' equity                                                                  |   |              |        |   |   |   |   |   |
| Series A preferred stock                                                              |   |              | 15,874,788  |   |   |   | - |   |
| Common stock                                                                          |   |              | 677,980     |   |   |   | 677,980 |   |
| Common stock warrants                                                                 |   |              | 1,377,811   |   |   |   | - |   |
| Additional paid-in capital                                                            |   |              | 58,523,646  |   |   |   | 58,535,159 |   |
| Unearned ESOP shares                                                                  |   |              | (660,930    | )      |   |   | (888,930 | ) |
| Retained earnings                                                                     |   |              | 35,741,705  |   |   |   | 39,114,189 |   |
| Unrealized appreciation on available-for-sale securities and interest rate swaps, net |   |              | 1,696,502   |   |   |   | 1,687,858 |   |
| Treasury stock                                                                        |   |              | (61,820,869 | )      |   |   | (61,813,354 | ) |
|                                                                                  |   | $                 | 67,140,146  |   |   | $      | 54,402,618 |   |

----

| Statements of Operations                                                             |   | Years ended December 31, |       |
|--------------------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                                 |   | 2009                          |       |   | 2008 |   |   | 2007 |   |
|                                                                                 |   |                          |       |   |   |   |   |   |   |
| Income                                                                               |   |                          |       |   |   |   |   |   |   |
| Dividends from subsidiary bank                                                       |   | $                             | -          |   |   | $ | 2,537,098 |   |   | $ | 8,487,268 |   |
| Gain (loss) on investment securities                                                 |   |                          | 365,077    |   |   |   | (563,615 | ) |   |   | - |   |
| Interest income:                                                                     |   |                          |       |   |   |   |   |   |   |   |   |   |
| Related party                                                                        |   |                          | 36,726     |   |   |   | 70,165 |   |   |   | 135,015 |   |
| Other                                                                                |   |                          | 55,425     |   |   |   | 78,865 |   |   |   | 30,783 |   |
|                                                                                 |   |                          | 457,228    |   |   |   | 2,122,513 |   |   |   | 8,653,066 |   |
| Expense                                                                              |   |                          |       |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                                    |   |                          |       |   |   |   |   |   |   |   |   |   |
| Other                                                                                |   |                          | 2,556      |   |   |   | 53,132 |   |   |   | 13,037 |   |
| Related party                                                                        |   |                          | 1,023,783  |   |   |   | 1,023,783 |   |   |   | 1,023,783 |   |
| Occupancy                                                                            |   |                          | -          |   |   |   | 2,200 |   |   |   | 2,400 |   |
| Other                                                                                |   |                          | 458,947    |   |   |   | 686,676 |   |   |   | 953,200 |   |
|                                                                                 |   |                          | 1,485,286  |   |   |   | 1,765,791 |   |   |   | 1,992,420 |   |
| Income (loss) before income taxes and equity in undistributed losses of subsidiaries |   |                          | (1,028,058 | ) |   |   | 356,722 |   |   |   | 6,660,646 |   |
| Credit for income taxes                                                              |   |                          | (302,528   | ) |   |   | (595,913 | ) |   |   | (349,935 | ) |
| Income (loss) before equity in undistributed earnings of subsidiaries                |   |                          | (725,530   | ) |   |   | 952,635 |   |   |   | 7,010,581 |   |
| Equity in undistributed losses of subsidiaries                                       |   |                          | (1,615,188 | ) |   |   | (6,312,346 | ) |   |   | (910,699 | ) |
| Net income (loss)                                                                    |   | $                             | (2,340,718 | ) |   | $ | (5,359,711 | ) |   | $ | 6,099,882 |   |

----

| Statements of Cash Flows                               |   | Years ended December 31, |        |
|--------------------------------------------------------|--------|-------------------------------|-------------|
|                                                   |   | 2009                          |        |   | 2008 |   |   | 2007 |   |
|                                                   |   |                          |        |   |   |   |   |   |   |
| Cash Flows From Operating Activities                   |   |                          |        |   |   |   |   |   |   |
|                                                   |   |                          |        |   |   |   |   |   |   |
| Net income (loss)                                      |   | $                             | (2,340,718  | ) |   | $ | (5,359,711 | ) |   | $ | 6,099,882 |   |
| Items not requiring (providing) cash:                  |   |                          |        |   |   |   |   |   |   |   |   |   |
| Equity in undistributed loss of subsidiaries           |   |                          | 1,615,188   |   |   |   | 3,775,248 |   |   |   | - |   |
| Release of ESOP shares                                 |   |                          | 121,219     |   |   |   | 408,388 |   |   |   | 672,765 |   |
| Stock award plan expense                               |   |                          | 95,268      |   |   |   | 92,846 |   |   |   | 71,325 |   |
| (Gain) Loss on investment securities                   |   |                          | (365,077    | ) |   |   | 563,615 |   |   |   | - |   |
| Changes in:                                            |   |                          |        |   |   |   |   |   |   |   |   |   |
| Prepaid expenses and other assets                      |   |                          | 11,094      |   |   |   | 64,497 |   |   |   | 19,210 |   |
| Income taxes payable/refundable                        |   |                          | (62,672     | ) |   |   | 434,415 |   |   |   | 353,980 |   |
| Accrued expenses                                       |   |                          | (31,264     | ) |   |   | (34,475 | ) |   |   | (52,707 | ) |
| Net cash provided by (used in) operating activities    |   |                          | (956,962    | ) |   |   | (55,177 | ) |   |   | 7,164,455 |   |
|                                                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Cash Flows From Investing Activities                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Capital contributions to subsidiary bank               |   |                          | (13,000,000 | ) |   |   | - |   |   |   | - |   |
| Purchase of AFS securities                             |   |                          | -           |   |   |   | (717,512 | ) |   |   | (718,190 | ) |
| Maturities of AFS securities                           |   |                          | -           |   |   |   | 300,000 |   |   |   | - |   |
| Proceeds from sales of AFS securities                  |   |                          | 834,952     |   |   |   | - |   |   |   | - |   |
| Distributions in excess of net income of subsidiary    |   |                          | -           |   |   |   | 2,537,098 |   |   |   | 910,699 |   |
| Net decrease in advance to subsidiary                  |   |                          | -           |   |   |   | 5,932 |   |   |   | 769 |   |
| Net cash provided by (used in) investing activities    |   |                          | (12,165,048 | ) |   |   | 2,125,518 |   |   |   | 193,278 |   |
|                                                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Cash Flows From Financing Activities                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Stock options exercised                                |   |                          | -           |   |   |   | 578,661 |   |   |   | 1,118,762 |   |
| Cash dividends paid on common and preferred stock      |   |                          | (672,917    | ) |   |   | (1,397,922 | ) |   |   | (1,879,256 | ) |
| Treasury stock purchased                               |   |                          | (7,515      | ) |   |   | (1,465,150 | ) |   |   | (7,479,118 | ) |
| Proceeds from issuance of notes payable                |   |                          | -           |   |   |   | 1,064,000 |   |   |   | 2,468,000 |   |
| Repayment of notes payable                             |   |                          | (1,435,190  | ) |   |   | (347,000 | ) |   |   | (1,749,810 | ) |
| Proceeds from issuance of preferred stock and warrants |   |                          | 17,000,000  |   |   |   | - |   |   |   | - |   |
| Net cash provided by (used in) financing activities    |   |                          | 14,884,378  |   |   |   | (1,567,411 | ) |   |   | (7,521,422 | ) |
|                                                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash                            |   |                          | 1,762,368   |   |   |   | 502,930 |   |   |   | (163,689 | ) |
|                                                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Cash, beginning of year                                |   |                          | 1,050,726   |   |   |   | 547,796 |   |   |   | 711,485 |   |
|                                                   |   |                          |        |   |   |   |   |   |   |   |   |   |
| Cash, end of year                                      |   | $                             | 2,813,094   |   |   | $ | 1,050,726 |   |   | $ | 547,796 |   |

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| Board of Directors                                  |   | Officers                                         |
|-----------------------------------------------------|--------|--------------------------------------------------|
| Guaranty Federal Bancshares, Inc. and Guaranty Bank |   | Guaranty Federal Bancshares, Inc.                |
|                                                |   |                                             |
| Don M. Gibson                                       |   |                                             |
| Chairman of the Board                               |   |                                             |
| Guaranty Federal Bancshares and                     |   | Shaun A. Burke                                   |
| Guaranty Bank                                       |   | President,                                       |
|                                                |   | Chief Executive Officer                          |
| Jack L. Barham                                      |   |                                             |
| Vice Chairman of the Board                          |   | Carter M. Peters                                 |
| Guaranty Federal Bancshares                         |   | Executive Vice President,                        |
|                                                |   | Chief Financial Officer/Chief Operations Officer |
| Shaun A. Burke                                      |   |                                             |
| President and CEO                                   |   | H. Michael Mattson                               |
| Guaranty Federal Bancshares and                     |   | Executive Vice President,                        |
| Guaranty Bank                                       |   | Chief Lending Officer                            |
|                                                |   |                                             |
| James R. Batten, CPA                                |   | E. Lorene Thomas                                 |
| Executive Vice President                            |   | Corporate Secretary                              |

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