| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| x | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-------------------------------------------------------------------------------------------|

| Delaware                                                       | 94-2563513                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |

| 160 Broadway, New York, New York         |   | 10038      |
|------------------------------------------|--------|------------|
| (Address of Principal Executive Offices) |   | (Zip Code) |

| Large accelerated filer o | Accelerated filer o         |
|---------------------------|-----------------------------|
|                      |                        |
| Non-accelerated filer o   | Smaller reporting company x |

----

----

|                                                                                                                                           |   | Page No. |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                                           |   |     |
| PART I. FINANCIAL INFORMATION                                                                                                                  |   |     |
|                                                                                                                                           |   |     |
| Item 1. Financial Statements                                                                                                                   |   |     |
|                                                                                                                                           |   |     |
| Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010 (unaudited)                                                             |   | 4        |
|                                                                                                                                           |   |     |
| Consolidated Statements of Operations For The Three Months Ended March 31, 2011 and 2010 (unaudited)                                           |   | 5        |
|                                                                                                                                           |   |     |
| Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) For The Three Months Ended March 31, 2011 and 2010 (unaudited) |   | 6        |
|                                                                                                                                           |   |     |
| Consolidated Statements of Cash Flows For The Three Months Ended March 31, 2011 and 2010 (unaudited)                                           |   | 7        |
|                                                                                                                                           |   |     |
| Notes to Consolidated Financial Statements (unaudited)                                                                                         |   | 8        |
|                                                                                                                                           |   |     |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations                                                  |   | 34       |
|                                                                                                                                           |   |     |
| Item 3. Quantitative and Qualitative Disclosure About Market Risk                                                                              |   | 47       |
|                                                                                                                                           |   |     |
| Item 4. Controls and Procedures                                                                                                                |   | 48       |
|                                                                                                                                           |   |     |
| PART II OTHER INFORMATION                                                                                                                      |   |     |
|                                                                                                                                           |   |     |
| Item 6. Exhibits                                                                                                                               |   | 48       |
|                                                                                                                                           |   |     |
| Signature                                                                                                                                      |   | 49       |
|                                                                                                                                           |   |     |
| Index of Exhibits                                                                                                                              |   | 50       |

----

|                                                                                                                                                                                                          |   | March 31,2011 |    |   | December 31,2010 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|------------------|--------|
| ASSETS                                                                                                                                                                                                        |   |          |    |   |             |   |
| Cash and due from banks                                                                                                                                                                                       |   | $             | 5,775   |   |             | $      | 4,920 |   |
| Interest bearing deposits                                                                                                                                                                                     |   |          | 58,665  |   |             |   | 74,197 |   |
| Total cash and cash equivalents                                                                                                                                                                               |   |          | 64,440  |   |             |   | 79,117 |   |
| Investment Securities:                                                                                                                                                                                        |   |          |    |   |             |   |   |   |
| Available-for-sale                                                                                                                                                                                            |   |          | 398,864 |   |             |   | 341,564 |   |
| Held-to-maturity, fair value of $322 in 2011 and $316 in 2010                                                                                                                                                 |   |          | 314     |   |             |   | 319 |   |
| Total investment securities                                                                                                                                                                                   |   |          | 399,178 |   |             |   | 341,883 |   |
| Loans, net of unearned income                                                                                                                                                                                 |   |          | 349,598 |   |             |   | 366,305 |   |
| Less: allowance for loan losses                                                                                                                                                                               |   |          | (17,324 | )      |             |   | (16,105 | ) |
| Net loans                                                                                                                                                                                                     |   |          | 332,274 |   |             |   | 350,200 |   |
| Accrued interest receivable                                                                                                                                                                                   |   |          | 3,841   |   |             |   | 3,578 |   |
| Premises and equipment, net                                                                                                                                                                                   |   |          | 7,720   |   |             |   | 7,815 |   |
| Other receivable                                                                                                                                                                                              |   |          | — |   |             |   | 10,047 |   |
| Other assets                                                                                                                                                                                                  |   |          | 35,109  |   |             |   | 37,257 |   |
| Total assets                                                                                                                                                                                                  |   | $             | 842,562 |   |             | $      | 829,897 |   |
|                                                                                                                                                                                                          |   |          |    |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                          |   |          |    |   |             |   |   |   |
| Deposits:                                                                                                                                                                                                     |   |          |    |   |             |   |   |   |
| Non-interest bearing                                                                                                                                                                                          |   | $             | 79,267  |   |             | $      | 73,609 |   |
| Interest bearing                                                                                                                                                                                              |   |          | 600,342 |   |             |   | 596,527 |   |
| Total deposits                                                                                                                                                                                                |   |          | 679,609 |   |             |   | 670,136 |   |
| Securities sold under agreements to repurchase                                                                                                                                                                |   |          | 50,000  |   |             |   | 50,000 |   |
| Borrowings                                                                                                                                                                                                    |   |          | 9,544   |   |             |   | 10,657 |   |
| Subordinated debt                                                                                                                                                                                             |   |          | 22,681  |   |             |   | 22,681 |   |
| Accrued interest payable                                                                                                                                                                                      |   |          | 2,954   |   |             |   | 2,743 |   |
| Other liabilities                                                                                                                                                                                             |   |          | 3,088   |   |             |   | 2,047 |   |
| Total liabilities                                                                                                                                                                                             |   |          | 767,876 |   |             |   | 758,264 |   |
|                                                                                                                                                                                                          |   |          |    |   |             |   |   |   |
| Stockholders' equity                                                                                                                                                                                          |   |          |    |   |             |   |   |   |
| Preferred stock - $.01 Par value: Authorized — 2,000,000 shares Issued —  60,000 shares Outstanding —  March 31, 2011, 60,000 shares December 31, 2010, 60,000 shares             |   |          | 1       |   |             |   | 1 |   |
| Common stock - $.10 par value Authorized —  25,000,000 shares Issued —  7,698,285 shares Outstanding —  March 31, 2011, 7,054,183 shares December 31, 2010, 7,054,183 shares |   |          | 770     |   |             |   | 770 |   |
| Additional paid-in capital                                                                                                                                                                                    |   |          | 150,985 |   |             |   | 150,985 |   |
| Accumulated Deficit                                                                                                                                                                                           |   |          | (64,843 | )      |             |   | (65,123 | ) |
| Accumulated other comprehensive loss, net                                                                                                                                                                     |   |          | (5,816  | )      |             |   | (8,589 | ) |
| Treasury Stock at cost March 31, 2011, 644,102 shares December 31, 2010, 644,102 shares                                                                                                                       |   |          | (6,411  | )      |             |   | (6,411 | ) |
| Total stockholders' equity                                                                                                                                                                                    |   |          | 74,686  |   |             |   | 71,633 |   |
| Total liabilities and stockholders' equity                                                                                                                                                                    |   | $             | 842,562 |   |             | $      | 829,897 |   |

----

|                                                          |   | For TheThree Months EndedMarch 31, |   |
|---------------------------------------------------------------|--------|------------------------------------|--------|
|                                                          |   | 2011                               |   |   | 2010 |   |
| INTEREST INCOME                                               |   |                               |   |   |   |   |
| Loans, including related fees                                 |   | $                                  | 5,679  |   |   | $ | 6,533 |   |
| Investment securities                                         |   |                               | 3,181  |   |   |   | 3,800 |   |
| Federal funds sold and interest bearing deposits              |   |                               | 61     |   |   |   | 51 |   |
| Total interest income                                         |   |                               | 8,921  |   |   |   | 10,384 |   |
| INTEREST EXPENSE                                              |   |                               |   |   |   |   |   |   |
| Deposits                                                      |   |                               | 1,566  |   |   |   | 2,260 |   |
| Securities sold under agreements to repurchase                |   |                               | 499    |   |   |   | 498 |   |
| Borrowings and subordinated debt                              |   |                               | 262    |   |   |   | 517 |   |
| Total interest expense                                        |   |                               | 2,327  |   |   |   | 3,275 |   |
| Net interest income                                           |   |                               | 6,594  |   |   |   | 7,109 |   |
| PROVISION FOR LOAN LOSSES                                     |   |                               | 1,200  |   |   |   | 1,250 |   |
| Net interest income after provision for loan losses           |   |                               | 5,394  |   |   |   | 5,859 |   |
| NON-INTEREST INCOME                                           |   |                               |   |   |   |   |   |   |
| Service charges on deposit accounts                           |   |                               | 127    |   |   |   | 126 |   |
| Investment securities gains                                   |   |                               | 55     |   |   |   | 155 |   |
| Other income                                                  |   |                               | 97     |   |   |   | 102 |   |
| Total non-interest income                                     |   |                               | 279    |   |   |   | 383 |   |
| NON-INTEREST EXPENSE                                          |   |                               |   |   |   |   |   |   |
| Salaries and employee benefits                                |   |                               | 2,435  |   |   |   | 2,341 |   |
| Net occupancy expense                                         |   |                               | 565    |   |   |   | 566 |   |
| Equipment expense                                             |   |                               | 82     |   |   |   | 91 |   |
| FDIC assessment                                               |   |                               | 384    |   |   |   | 468 |   |
| Data processing expense                                       |   |                               | 109    |   |   |   | 126 |   |
| Other                                                         |   |                               | 836    |   |   |   | 820 |   |
| Total non-interest expense                                    |   |                               | 4,411  |   |   |   | 4,412 |   |
| Income before provision for taxes                             |   |                               | 1,262  |   |   |   | 1,830 |   |
| (Benefit) provision for income taxes                          |   |                               | (218   | ) |   |   | 676 |   |
| Net income                                                    |   | $                                  | 1,480  |   |   | $ | 1,154 |   |
| Dividends on preferred stock                                  |   |                               | 1,200  |   |   |   | 1,200 |   |
| Income (loss) allocated to common stockholders                |   | $                                  | 280    |   |   | $ | (46 | ) |
| Net income (loss) per common share:                           |   |                               |   |   |   |   |   |   |
| Basic                                                         |   | $                                  | .04    |   |   | $ | (.01 | ) |
| Diluted                                                       |   | $                                  | .04    |   |   | $ | (.01 | ) |
| Number of shares used to compute net income (loss) per share: |   |                               |   |   |   |   |   |   |
| Basic                                                         |   |                               | 7,054  |   |   |   | 7,054 |   |
| Diluted                                                       |   |                               | 7,054  |   |   |   | 7,054 |   |

----

|                                    |   |    CommonShares |   |   |    Preferred Shares |   |   |  CommonStockPar Value |   |   |  PreferredStockPar Value |   |   |   Additionalpaid-in capital |   |   |  Accumulatedothercomprehensive (loss), net |   |    |  RetainedEarnings(Accumulated deficit) |   |   |    Treasury stock |   |   |   Comprehensiveincome (loss) |    |   |   Totalstockholders' equity |   |
|-----------------------------------------|--------|--------------------------------|--------|--------|-----------------------------------------|--------|--------|---------------------------------|--------|--------|------------------------------------|--------|--------|--------------------------------------------|--------|--------|------------------------------------------------------|--------|---------|--------------------------------------------------|--------|--------|---------------------------------------|--------|--------|---------------------------------------------|---------|--------|--------------------------------------------|--------|
| Balance at December 31, 2009            |   |                           | 7,698  |   |                                    |   | 60     |                            |   | $      | 770                                |   |   | $                                          | 1      |   |                                                 | $      | 150,985 |                                             |   | $      | (13,276                               | )      |   | $                                           | (46,833 | )      |                                       | $      | (6,411 | ) |   |   |   |   | $ | 85,236 |   |
| Net income                              |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        | 1,154   |   |                                       |   |   |   |   | $ | 1,154 |   |   |   | 1,154 |   |
| Other comprehensive income net of taxes |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   | 3,174                                 |   |   |                                        |    |   |                                       |   |   |   |   |   |  3,174 |   |   |   | 3,174 |   |
| Comprehensive income                    |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        |    |   |                                       |   |   |   |   | $ | 4,328 |   |   |   |   |   |
| Cash dividends - Preferred Stock        |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        | (1,200  | )      |                                       |   |   |   |   |   |   |   |   |   | (1,200 | ) |
|                                    |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        |    |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Balance at March 31, 2010               |   |                           | 7,698  |   |                                    |   | 60     |                            |   | $      | 770                                |   |   | $                                          | 1      |   |                                                 | $      | 150,985 |                                             |   | $      | (10,102                               | )      |   | $                                           | (46,879 | )      |                                       | $      | (6,411 | ) |   |   |   |   |   | $ | 88,364 |   |
|                                    |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        |    |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010            |   |                           | 7,698  |   |                                    |   | 60     |                            |   | $      | 770                                |   |   | $                                          | 1      |   |                                                 | $      | 150,985 |                                             |   | $      | (8,589                                | )      |   | $                                           | (65,123 | )      |                                       | $      | (6,411 | ) |   |   |   |   |   | $ | 71,633 |   |
| Net income                              |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        | 1,480   |   |                                       |   |   |   |   | $ | 1,480 |   |   |   | 1,480 |   |
| Other comprehensive income net of taxes |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   | 2,773                                 |   |   |                                        |    |   |                                       |   |   |   |   |   |  2,773 |   |   |   | 2,773 |   |
| Comprehensive income                    |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        |    |   |                                       |   |   |   |   | $ | 4,253 |   |   |   |   |   |
| Cash dividends - Preferred Stock        |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        | (1,200  | )      |                                       |   |   |   |   |   |   |   |   |   | (1,200 | ) |
|                                    |   |                           |   |   |                                    |   |   |                            |   |   |                               |   |   |                                       |   |   |                                                 |   |    |                                             |   |   |                                  |   |   |                                        |    |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Balance at March 31, 2011               |   |                           | 7,698  |   |                                    |   | 60     |                            |   | $      | 770                                |   |   | $                                          | 1      |   |                                                 | $      | 150,985 |                                             |   | $      | (5,816                                | )      |   | $                                           | (64,843 | )      |                                       | $      | (6,411 | ) |   |   |   |   |   | $ | 74,686 |   |

----

|                                                                              |   | For The Three Months EndedMarch 31, |     |
|-----------------------------------------------------------------------------------|--------|-------------------------------------|----------|
|                                                                              |   | 2011                                |     |   | 2010 |   |
| Cash flows from operating activities:                                             |   |                                |     |   |   |   |
| Net income                                                                        |   | $                                   | 1,480    |   |   | $ | 1,154 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                                |     |   |   |   |   |   |
| Realized gains on investment securities                                           |   |                                | (55      | ) |   |   | (155 | ) |
| Net amortization of premiums of investment securities                             |   |                                | 430      |   |   |   | 646 |   |
| Depreciation and amortization                                                     |   |                                | 123      |   |   |   | 130 |   |
| Provision for loan losses                                                         |   |                                | 1,200    |   |   |   | 1,250 |   |
| Increase in accrued interest receivable                                           |   |                                | (263     | ) |   |   | (61 | ) |
| Decrease in other assets                                                          |   |                                | 12,195   |   |   |   | 2,809 |   |
| Increase in accrued interest payable and other liabilities                        |   |                                |  52 |   |   |   |  2,650 |   |
| Net cash provided by operating activities                                         |   |                                | 15,162   |   |   |   | 8,423 |   |
|                                                                              |   |                                |     |   |   |   |   |   |
| Cash flows from investing activities:                                             |   |                                |     |   |   |   |   |   |
| Investment securities available for sale                                          |   |                                |     |   |   |   |   |   |
| Purchases                                                                         |   |                                | (110,782 | ) |   |   | (59,706 | ) |
| Sales, maturities and calls                                                       |   |                                | 55,880   |   |   |   | 50,779 |   |
| Investment securities held to maturity                                            |   |                                |     |   |   |   |   |   |
| Maturities                                                                        |   |                                | 5        |   |   |   | 6 |   |
| Net decrease in loans                                                             |   |                                | 16,726   |   |   |   | 13,454 |   |
| Acquisition of premises and equipment                                             |   |                                | (28      | ) |   |   | (19 | ) |
| Net cash (used in) provided by investing activities                               |   |                                | (38,199  | ) |   |   | 4,514 |   |
|                                                                              |   |                                |     |   |   |   |   |   |
| Cash flows from financing activities:                                             |   |                                |     |   |   |   |   |   |
| Net increase in non interest bearing deposits                                     |   |                                | 5,658    |   |   |   | 7,342 |   |
| Net increase (decrease) in interest bearing deposits                              |   |                                | 3,815    |   |   |   | (4,291 | ) |
| Repayment of borrowings                                                           |   |                                | (1,113   | ) |   |   | (3,071 | ) |
| Dividends paid on preferred stock                                                 |   |                                | —  |   |   |   | (1,200 | ) |
| Net cash provided by (used in) financing activities                               |   |                                | 8,360    |   |   |   | (1,220 | ) |
|                                                                              |   |                                |     |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                              |   |                                | (14,677  | ) |   |   | 11,717 |   |
| Cash and cash equivalents at beginning of period                                  |   |                                | 79,117   |   |   |   | 60,803 |   |
| Cash and cash equivalents at end of period                                        |   | $                                   | 64,440   |   |   | $ | 72,520 |   |
|                                                                              |   |                                |     |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                |   |                                |     |   |   |   |   |   |
| Cash used to pay interest                                                         |   | $                                   | 2,116    |   |   | $ | 2,838 |   |
| Cash used to pay income taxes, net of refunds                                     |   | $                                   | —  |   |   | $ | — |   |
| Schedule of non-cash investing activities:                                        |   |                                |     |   |   |   |   |   |
| Transfer from loans to real estate owned                                          |   | $                                   | —  |   |   | $ | 12,318 |   |
| Schedule of non-cash financing activities:                                        |   |                                |     |   |   |   |   |   |
| Dividends declared and not paid                                                   |   | $                                   | 1,200    |   |   | $ | — |   |

----

----

|                                               |   | For The Three Months Ended            |   |
|----------------------------------------------------|--------|---------------------------------------|--------|
|                                               |   | March 31, 2011                        |   |   | March 31, 2010 |   |
|                                               |   | Income (numerator)                    |   |   | Shares(denominator) |   |   | Per shareamount |   |   | Income(numerator) |   |   | Shares(denominator) |   |   | Per shareamount |   |
|                                               |   | (In thousands, except per share data) |   |
| Basic earnings (loss) per common share             |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                         |   | $                                     | 1,480  |   |   |   |   |   |   |   |   | $ | 1,154 |   |   |   |   |   |   |   |
| Dividends paid to preferred shareholders           |   |                                  | (1,200 | ) |   |   |   |   |   |   |   |   | (1,200 | ) |   |   |   |   |   |   |
| Net income (loss) available to common stockholders |   | $                                     | 280    |   |   |   | 7,054 |   |   | $ | .04 |   |   | $ | (46 | ) |   |   | 7,054 |   |   | $ | (.01 | ) |

----

|                                         |   | March 31, 2011         |    |   | December 31, 2010 |   |
|----------------------------------------------|--------|------------------------|---------|--------|-------------------|--------|
|                                         |   | Amount                 |    |   | % ofTotal         |   |   | Amount |   |   | % of Total |   |
|                                         |   | (Dollars in thousands) |    |
| Commercial and Industrial and Finance Leases |   | $                      | 16,473  |   |              |   | 4.7 | % |   | $ | 19,321 |   |   |   | 5.3 | % |
| Secured by real estate                       |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                  |   |                   | 113,413 |   |              |   | 32.4 |   |   |   | 114,594 |   |   |   | 31.2 |   |
| Multi family                                 |   |                   | 8,645   |   |              |   | 2.5 |   |   |   | 5,865 |   |   |   | 1.6 |   |
| Commercial real estate and construction      |   |                   | 211,240 |   |              |   | 60.2 |   |   |   | 226,667 |   |   |   | 61.7 |   |
| Consumer                                     |   |                   | 728     |   |              |   | 0.2 |   |   |   | 795 |   |   |   | 0.2 |   |
| Total loans                                  |   |                   | 350,499 |   |              |   | 100.0 | % |   |   | 367,242 |   |   |   | 100.0 | % |
| Deferred loan fees                           |   |                   | (901    | )      |              |   |   |   |   |   | (937 | ) |   |   |   |   |
| Allowance for loan losses                    |   |                   | (17,324 | )      |              |   |   |   |   |   | (16,105 | ) |   |   |   |   |
| Loans, net                                   |   | $                      | 332,274 |   |              |   |   |   |   | $ | 350,200 |   |   |   |   |   |

|                            |   | For The Three Months Ended |   |
|---------------------------------|--------|----------------------------|--------|
|                            |   | March 31, 2011             |   |   | March 31, 2010 |   |
|                            |   | (In thousands)             |   |
| Balance at beginning of period  |   | $                          | 16,105 |   |   | $ | 11,416 |   |
| Provision charged to operations |   |                       | 1,200  |   |   |   | 1,250 |   |
| Loans charged off               |   |                       | (2     | ) |   |   | (766 | ) |
| Recoveries                      |   |                       | 21     |   |   |   | — |   |
| Balance at end of period        |   | $                          | 17,324 |   |   | $ | 11,900 |   |

----

----

----

|                                                  |   | Commercial &Industrial |   |   | CommercialReal Estate |   |    | Construction |   |   | Multi Family |   |   | ResidentialReal Estate |   |   | Consumer |   |    | Finance Leases |   |   | Unallocated |   |   |  Total |   |
|-------------------------------------------------------|--------|----------------------------|--------|--------|-----------------------|--------|---------|--------------|--------|--------|--------------|--------|--------|------------------------|--------|--------|----------|--------|---------|---------------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                                  |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |
| Allowance for credit losses:                          |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |
| Beginning balance                                     |   | $                          | 417    |   |                  | $      | 8,610   |         |   | $      | 2,784        |   |   | $                      | 147    |   |     | $      | 2,066   |                |   | $      | 25          |   |   | $           | 419    |   |   | $ | 1,637 |   |   | $ | 16,105 |   |
| Charge-offs                                           |   |                       | (2     | )      |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   | (2 | ) |
| Recoveries                                            |   |                       | 21     |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   | 21 |   |
| Provision                                             |   |                       | (111   | )      |                  |   | (827    | )            |   |   | (1,410       | )      |   |                   | 69     |   |     |   | 507     |                |   |   | (1          | )      |   |        | (56    | ) |   |   | 3,029 |   |   |   | 1,200 |   |
| Ending balance                                        |   | $                          | 325    |   |                  | $      | 7,783   |         |   | $      | 1,374        |   |   | $                      | 216    |   |     | $      | 2,573   |                |   | $      | 24          |   |   | $           | 363    |   |   | $ | 4,666 |   |   | $ | 17,324 |   |
| Ending balance: individually evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 0 |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 17,324 |   |
|                                                  |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Financing Receivables:                                |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                          | 8,838  |   |                  | $      | 189,239 |         |   | $      | 22,001       |   |   | $                      | 8,645  |   |     | $      | 113,413 |                |   | $      | 728         |   |   | $           | 7,635  |   |   | $ | 0 |   |   | $ | 350,499 |   |
| Ending balance: individually evaluated for impairment |   | $                          | 0      |   |                  | $      | 1,361   |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 2,269   |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 3,630 |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 346,869 |   |

----

|                                                  |   | Commercial &Industrial |   |   | CommercialReal Estate |   |    | Construction |   |   | Multi Family |   |   | ResidentialReal Estate |   |   | Consumer |   |    | Finance Leases |   |   | Unallocated |   |   |  Total |   |
|-------------------------------------------------------|--------|----------------------------|--------|--------|-----------------------|--------|---------|--------------|--------|--------|--------------|--------|--------|------------------------|--------|--------|----------|--------|---------|---------------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                                  |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |
| Allowance for credit losses:                          |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |
| Beginning balance                                     |   | $                          | 1,349  |   |                  | $      | 2,592   |         |   | $      | 3,211        |   |   | $                      | 30     |   |     | $      | 763     |                |   | $      | 57          |   |   | $           | 115    |   |   | $ | 3,299 |   |   | $ | 11,416 |   |
| Charge-offs                                           |   |                       | (300   | )      |                  |   | (766    | )            |   |   |         |   |   |                   |   |   |     |   |    |                |   |   | (1          | )      |   |        |   |   |   |   |   |   |   |   | (1,067 | ) |
| Recoveries                                            |   |                       | 6      |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   | 6 |   |
| Provision                                             |   |                       | (638   | )      |                  |   | 6,784   |         |   |   | (427         | )      |   |                   | 117    |   |     |   | 1,303   |                |   |   | (31         | )      |   |        | 304    |   |   |   | (1,662 | ) |   |   | 5,750 |   |
| Ending balance                                        |   | $                          | 417    |   |                  | $      | 8,610   |         |   | $      | 2,784        |   |   | $                      | 147    |   |     | $      | 2,066   |                |   | $      | 25          |   |   | $           | 419    |   |   | $ | 1,637 |   |   | $ | 16,105 |   |
| Ending balance: individually evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 0 |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 16,105 |   |
|                                                  |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Financing Receivables:                                |   |                       |   |   |                  |   |    |         |   |   |         |   |   |                   |   |   |     |   |    |                |   |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                          | 10,498 |   |                  | $      | 193,500 |         |   | $      | 33,167       |   |   | $                      | 5,865  |   |     | $      | 114,594 |                |   | $      | 795         |   |   | $           | 8,823  |   |   | $ | 0 |   |   | $ | 367,242 |   |
| Ending balance: individually evaluated for impairment |   | $                          | 0      |   |                  | $      | 816     |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 1,998   |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 2,814 |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 0      |   |                  | $      | 0       |         |   | $      | 0            |   |   | $                      | 0      |   |     | $      | 0       |                |   | $      | 0           |   |   | $           | 0      |   |   | $ | 0 |   |   | $ | 364,428 |   |

----

|                        |   |  30-59 Days Past Due |    |   |  60-89 Days Past Due |   |    | GreaterThan 90 Days |   |   |  Total Past Due |   |   |    Current |    |   |  TotalLoans |   |    | RecordedLoans >90 Days and Accruing |   |
|-----------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|---------|--------------------------|--------|--------|---------------------------|--------|--------|---------------------------|---------|--------|------------------|--------|---------|---------------------------------------------|--------|
|                        |   |                           |    |   |                           |   |    |                     |   |   |                      |   |   |                      |    |   |             |   |    |                                        |   |
| Commercial & industrial |   | $                              | — |   |                           | $      | 227     |                     |   | $      | —                   |   |   | $                         | 227     |   |             | $      | 8,611   |                                        |   | $ | 8,838 |   |   | $ | — |   |
| Construction                |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 22,001  |                                        |   |   | 22,001 |   |   |   | — |   |
| Commercial real estate      |   |                           | 14      |   |                           |   | 30      |                     |   |   | 2,000                     |   |   |                      | 2,044   |   |             |   | 187,195 |                                        |   |   | 189,239 |   |   |   | 2,000 |   |
| Consumer                    |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 657     |                                        |   |   | 657 |   |   |   | — |   |
| Overdrafts                  |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 71      |                                        |   |   | 71 |   |   |   | — |   |
| Residential - prime         |   |                           | 6,583   |   |                           |   | — |                     |   |   | —                   |   |   |                      | 6,583   |   |             |   | 106,830 |                                        |   |   | 113,413 |   |   |   | — |   |
| Residential - multi family  |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 8,645   |                                        |   |   | 8,645 |   |   |   | — |   |
| Finance leases              |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 7,635   |                                        |   |   | 7,635 |   |   |   | — |   |
| Total                       |   | $                              | 6,597   |   |                           | $      | 257     |                     |   | $      | 2,000                     |   |   | $                         | 8,854   |   |             | $      | 341,645 |                                        |   | $ | 350,499 |   |   | $ | 2,000 |   |

|                        |   |  30-59 Days Past Due |    |   |  60-89 Days Past Due |   |    | GreaterThan 90 Days |   |   |  Total Past Due |   |   |    Current |    |   |  TotalLoans |   |    | RecordedLoans >90 Days and Accruing |   |
|-----------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|---------|--------------------------|--------|--------|---------------------------|--------|--------|---------------------------|---------|--------|------------------|--------|---------|---------------------------------------------|--------|
| Commercial & industrial |   | $                              | 251     |   |                           | $      | — |                     |   | $      | 166                       |   |   | $                         | 417     |   |             | $      | 10,081  |                                        |   | $ | 10,498 |   |   | $ | 29 |   |
| Construction                |   |                           | 900     |   |                           |   | — |                     |   |   | —                   |   |   |                      | 900     |   |             |   | 32,267  |                                        |   |   | 33,167 |   |   |   | — |   |
| Commercial real estate      |   |                           | 1,356   |   |                           |   | 2,000   |                     |   |   | —                   |   |   |                      | 3,356   |   |             |   | 190,144 |                                        |   |   | 193,500 |   |   |   | — |   |
| Consumer                    |   |                           | — |   |                           |   | — |                     |   |   | 15                        |   |   |                      | 15      |   |             |   | 780     |                                        |   |   | 795 |   |   |   | 11 |   |
| Residential - prime         |   |                           | 404     |   |                           |   | 387     |                     |   |   | 695                       |   |   |                      | 1,486   |   |             |   | 113,108 |                                        |   |   | 114,594 |   |   |   | 451 |   |
| Residential - multi family  |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 5,865   |                                        |   |   | 5,865 |   |   |   | — |   |
| Finance leases              |   |                           | — |   |                           |   | — |                     |   |   | —                   |   |   |                      | — |   |             |   | 8,823   |                                        |   |   | 8,823 |   |   |   | — |   |
| Total                       |   | $                              | 2,911   |   |                           | $      | 2,387   |                     |   | $      | 876                       |   |   | $                         | 6,174   |   |             | $      | 361,068 |                                        |   | $ | 367,242 |   |   | $ | 495 |   |

----

|                                |   |  Recorded Loan |    |   | UnpaidPrincipal Balance |   |    |  RelatedAllowance |   |   | AverageRecorded Loan |   |   | InterestIncomeRecognized |    |   | InterestIncomeForegone |   |
|-------------------------------------|--------|--------------------------|---------|--------|------------------------------|--------|---------|------------------------|--------|--------|---------------------------|--------|--------|--------------------------|---------|--------|------------------------|--------|
|                                |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |
| With no related allowance recorded: |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |
| Commercial & industrial         |   | $                        | — |   |                         | $      | — |                   |   | $      | —                   |   |   | $                        | — |   |                   | $      | — |   |   | $ | — |   |
| Construction                        |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Commercial real estate              |   |                     | 1,361   |   |                         |   | 1,361   |                   |   |   | —                   |   |   |                     | 1,342   |   |                   |   | 23 |   |   |   | — |   |
| Consumer                            |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Residential - prime                 |   |                     | 2,269   |   |                         |   | 2,269   |                   |   |   | —                   |   |   |                     | 2,274   |   |                   |   | 32 |   |   |   | — |   |
| Residential - multi family          |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Finance leases                      |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
|                                |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |   |   |   |   |   |   |
| Total                               |   | $                        | 3,630   |   |                         | $      | 3,630   |                   |   | $      | —                   |   |   | $                        | 3,616   |   |                   | $      | 55 |   |   | $ | 0 |   |
| Commercial                          |   |                     | 1,361   |   |                         |   | 1,361   |                   |   |   | —                   |   |   |                     | 1,342   |   |                   |   | 23 |   |   |   | — |   |
| Consumer                            |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Residential                         |   |                     | 2,269   |   |                         |   | 2,269   |                   |   |   | —                   |   |   |                     | 2,274   |   |                   |   | 32 |   |   |   | — |   |

----

|                                |   |  Recorded Loan |    |   | UnpaidPrincipal Balance |   |    |  RelatedAllowance |   |   | AverageRecorded Loan |   |   | InterestIncomeRecognized |    |   | InterestIncomeForegone |   |
|-------------------------------------|--------|--------------------------|---------|--------|------------------------------|--------|---------|------------------------|--------|--------|---------------------------|--------|--------|--------------------------|---------|--------|------------------------|--------|
|                                |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |
| With no related allowance recorded: |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |
| Commercial & industrial         |   | $                        | — |   |                         | $      | — |                   |   | $      | —                   |   |   | $                        | 292     |   |                   | $      | — |   |   | $ | 22 |   |
| Construction                        |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | 4,211   |   |                   |   | — |   |   |   | 303 |   |
| Commercial real estate              |   |                     | 816     |   |                         |   | 816     |                   |   |   | —                   |   |   |                     | 400     |   |                   |   | 99 |   |   |   | — |   |
| Consumer                            |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Residential - prime                 |   |                     | 1,998   |   |                         |   | 1,998   |                   |   |   | —                   |   |   |                     | 963     |   |                   |   | 125 |   |   |   | — |   |
| Residential - multi family          |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Finance leases                      |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
|                                |   |                     |    |   |                         |   |    |                   |   |   |                      |   |   |                     |    |   |                   |   |   |   |   |   |   |   |
| Total                               |   | $                        | 2,814   |   |                         | $      | 2,814   |                   |   | $      | —                   |   |   | $                        | 5,866   |   |                   | $      | 224 |   |   | $ | 325 |   |
| Commercial                          |   |                     | 816     |   |                         |   | 816     |                   |   |   | —                   |   |   |                     | 4,903   |   |                   |   | 99 |   |   |   | 325 |   |
| Consumer                            |   |                     | — |   |                         |   | — |                   |   |   | —                   |   |   |                     | — |   |                   |   | — |   |   |   | — |   |
| Residential                         |   |                     | 1,998   |   |                         |   | 1,998   |                   |   |   | —                   |   |   |                     | 963     |   |                   |   | 67 |   |   |   | — |   |

----

|                        |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-----------------------------|--------|----------------|---------|--------|-------------------|--------|
|                        |   | (In thousands) |    |
| Commercial & industrial |   | $              | 133     |   |              | $      | 137 |   |
| Construction                |   |           | — |   |              |   | — |   |
| Commercial real estate      |   |           | — |   |              |   | — |   |
| Consumer                    |   |           | 18      |   |              |   | — |   |
| Residential                 |   |           | 1,278   |   |              |   | 1,380 |   |
| Residential - multi family  |   |           | — |   |              |   | — |   |
| Finance leases              |   |           | — |   |              |   | — |   |
| Total                       |   | $              | 1,429   |   |              | $      | 1,517 |   |

|            |   | Commercial&Industrial |    |   | CommercialReal EstateConstruction |   |    | CommercialReal Estate Other |   |
|-----------------|--------|---------------------------|---------|--------|-----------------------------------|--------|---------|----------------------------------|--------|
| Grade:          |   |                      |    |   |                              |   |    |                             |   |
| Pass            |   | $                         | 8,681   |   |                              | $      | 15,362  |                             |   | $ | 148,891 |   |
| Watch           |   |                      | 24      |   |                              |   | — |                             |   |   | 8,561 |   |
| Special Mention |   |                      | — |   |                              |   | 5,649   |                             |   |   | 15,099 |   |
| Substandard     |   |                      | 133     |   |                              |   | 990     |                             |   |   | 16,688 |   |
| Total           |   | $                         | 8,838   |   |                              | $      | 22,001  |                             |   | $ | 189,239 |   |
|            |   |                      |    |   |                              |   |    |                             |   |   |   |   |
|            |   |  Residential         |    |   | ResidentialMulti Family           |   |    |                             |   |   |
| Grade:          |   |                      |    |   |                              |   |    |                             |   |   |   |   |
| Pass            |   | $                         | 104,935 |   |                              | $      | 8,645   |                             |   |   |   |   |
| Watch           |   |                      | 860     |   |                              |   | — |                             |   |   |   |   |
| Special Mention |   |                      | 5,768   |   |                              |   | — |                             |   |   |   |   |
| Substandard     |   |                      | 1,850   |   |                              |   | — |                             |   |   |   |   |
| Total           |   | $                         | 113,413 |   |                              | $      | 8,645   |                             |   |   |   |   |

|          |   | ConsumerOverdrafts |    |   | Consumer Other |   |   | FinanceLeases |   |
|---------------|--------|--------------------|---------|--------|---------------------|--------|--------|---------------|--------|
| Performing    |   | $                  | 71      |   |                | $      | 639    |          |   | $ | 7,635 |   |
| Nonperforming |   |               | — |   |                |   | 18     |          |   |   | — |   |
| Total         |   | $                  | 71      |   |                | $      | 657    |          |   | $ | 7,635 |   |

----

|            |   | Commercial&Industrial |    |   | CommercialReal EstateConstruction |   |    | CommercialReal Estate Other |   |
|-----------------|--------|---------------------------|---------|--------|-----------------------------------|--------|---------|----------------------------------|--------|
| Grade:          |   |                      |    |   |                              |   |    |                             |   |
| Pass            |   | $                         | 10,344  |   |                              | $      | 23,085  |                             |   | $ | 151,200 |   |
| Watch           |   |                      | — |   |                              |   | — |                             |   |   | 8,624 |   |
| Special Mention |   |                      | — |   |                              |   | 10,082  |                             |   |   | 15,344 |   |
| Substandard     |   |                      | 154     |   |                              |   | — |                             |   |   | 18,332 |   |
| Total           |   | $                         | 10,498  |   |                              | $      | 33,167  |                             |   | $ | 193,500 |   |
|            |   |                      |    |   |                              |   |    |                             |   |   |   |   |
|            |   |  Residential         |    |   | ResidentialMulti Family           |   |    |                             |   |   |
| Grade:          |   |                      |    |   |                              |   |    |                             |   |   |   |   |
| Pass            |   | $                         | 106,165 |   |                              | $      | 5,865   |                             |   |   |   |   |
| Watch           |   |                      | 336     |   |                              |   | — |                             |   |   |   |   |
| Special Mention |   |                      | 5,929   |   |                              |   | — |                             |   |   |   |   |
| Substandard     |   |                      | 2,164   |   |                              |   | — |                             |   |   |   |   |
| Total           |   | $                         | 114,594 |   |                              | $      | 5,865   |                             |   |   |   |   |
|            |   |                      |    |   |                              |   |    |                             |   |   |   |   |

|          |   | ConsumerOverdrafts |   |   | Consumer Other |   |   | FinanceLeases |   |
|---------------|--------|--------------------|--------|--------|---------------------|--------|--------|---------------|--------|
| Performing    |   | $                  | 61     |   |                | $      | 719    |          |   | $ | 8,823 |   |
| Nonperforming |   |               | 4      |   |                |   | 11     |          |   |   | — |   |
| Total         |   | $                  | 65     |   |                | $      | 730    |          |   | $ | 8,823 |   |

----

|                     |   | March 31, 2011 |   |
|--------------------------|--------|----------------|--------|
|                     |   | Amortized Cost |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                     |   |           |   |   | (In thousands) |   |   |   |   |
| U.S. Government Agencies |   | $              | 314    |   |   | $ | 8 |   |   | $ | — |   |   | $ | 322 |   |

|                     |   | December 31, 2010 |   |
|--------------------------|--------|-------------------|--------|
|                     |   | Amortized Cost    |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                     |   |              |   |   | (In thousands) |   |   |   |   |
| U.S. Government Agencies |   | $                 | 319    |   |   | $ | 1 |   |   | $ | (4 | ) |   | $ | 316 |   |

----

|                                   |   | March 31, 2011 |        |
|----------------------------------------|--------|----------------|-------------|
|                                   |   | Amortized Cost |        |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                                   |   |           |        |   | (In thousands) |   |   |   |   |
| U.S. Treasury Notes                    |   | $              | 80,034      |   |   | $ | 50 |   |   | $ | (19 | ) |   | $ | 80,065 |   |
| U.S. Government Agencies               |   |           | 99,050      |   |   |   | 532 |   |   |   | (1,854 | ) |   |   | 97,728 |   |
| Mortgage-backed securities             |   |           | 129,158     |   |   |   | 3,819 |   |   |   | (636 | ) |   |   | 132,341 |   |
| Corporate notes                        |   |           | 14,264      |   |   |   | 25 |   |   |   | (419 | ) |   |   | 13,870 |   |
| Single Issuer Trust Preferred CDO      |   |           | 1,024       |   |   |   | 462 |   |   |   | — |   |   |   | 1,486 |   |
| Pooled Trust Preferred CDO             |   |           | 6,459       |   |   |   | — |   |   |   | (4,949 | ) |   |   | 1,510 |   |
| Municipal securities                   |   |           | 2,645       |   |   |   | — |   |   |   | (150 | ) |   |   | 2,495 |   |
| Auction rate securities                |   |           | 73,993      |   |   |   | 2,304 |   |   |   | (9,760 | ) |   |   | 66,537 |   |
| Marketable equity securities and other |   |           |  2,855 |   |   |   |  23 |   |   |   | (46 | ) |   |   |  2,832 |   |
| Totals                                 |   | $              | 409,482     |   |   | $ | 7,215 |   |   | $ | (17,833 | ) |   | $ | 398,864 |   |

|                                        |   | December 31, 2010 |        |
|---------------------------------------------|--------|-------------------|-------------|
|                                        |   | Amortized Cost    |        |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                                        |   |              |        |   | (In thousands) |   |   |   |   |
| U.S. Treasury Notes                         |   | $                 | 50,015      |   |   | $ | 61 |   |   | $ | — |   |   | $ | 50,076 |   |
| U.S. Government Agencies                    |   |              | 88,469      |   |   |   | 591 |   |   |   | (1,533 | ) |   |   | 87,527 |   |
| Mortgage-backed securities                  |   |              | 117,724     |   |   |   | 4,099 |   |   |   | (686 | ) |   |   | 121,137 |   |
| Corporate notes                             |   |              | 13,773      |   |   |   | 44 |   |   |   | (639 | ) |   |   | 13,178 |   |
| Single Issuer Trust Preferred CDO           |   |              | 1,023       |   |   |   | 271 |   |   |   | — |   |   |   | 1,294 |   |
| Pooled Trust Preferred CDO                  |   |              | 6,459       |   |   |   | — |   |   |   | (6,000 | ) |   |   | 459 |   |
| Municipal securities                        |   |              | 2,632       |   |   |   | 102 |   |   |   | (46 | ) |   |   | 2,688 |   |
| Auction rate securities                     |   |              | 73,993      |   |   |   | 397 |   |   |   | (12,311 | ) |   |   | 62,079 |   |
| Marketable equity securities and other |   |              |  2,810 |   |   |   |  316 |   |   |   |  — |   |   |   |  3,126 |   |
|  Totals                                |   | $                 | 356,898     |   |   | $ | 5,881 |   |   | $ | (21,215 | ) |   | $ | 341,564 |   |

----

|   *   | The length of time and the extent to which the market value has been less than cost; |
|----------------------|--------------------------------------------------------------------------------------|

|   *   | The financial condition of the issuer of the security as well as the near and long-term prospect for the issuer; |
|----------------------|------------------------------------------------------------------------------------------------------------------|

|   *   | The rating of the security by a national rating agency; |
|----------------------|---------------------------------------------------------|

|   *   | Historical volatility and movement in the fair market value of the security; and |
|----------------------|----------------------------------------------------------------------------------|

|   *   | Adverse conditions relative to the security, issuer or industry. |
|----------------------|------------------------------------------------------------------|

|                                                    |   | March 31, 2011 |   |   | December 31, 2010 |   |
|---------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                    |   | Amortized Cost |   |   | Fair Value        |   |   | AmortizedCost |   |   | Fair Value |   |
|                                                    |   |           |   |   | (In thousands)    |   |   |   |   |
| Federal Home Loan Mortgage Corporation Preferred Shares |   | $              | 693    |   |              | $      | 2,997 |   |   | $ | 693 |   |   | $ | 1,089 |   |
| Preferred Shares of Money Center Banks                  |   |           | 71,300 |   |              |   | 61,540 |   |   |   | 71,300 |   |   |   | 58,990 |   |
| Public Utility Debt and Equity Securities               |   |           | 2,000  |   |              |   | 2,000 |   |   |   | 2,000 |   |   |   | 2,000 |   |
| Totals                                                  |   | $              | 73,993 |   |              | $      | 66,537 |   |   | $ | 73,993 |   |   | $ | 62,079 |   |

----

----

|                                   |   | Less than 12 months |    |   | 12 months or longer |   |    | Total      |   |
|----------------------------------------|--------|---------------------|---------|--------|---------------------|--------|---------|------------|--------|
|                                   |   | Fair Value          |    |   | UnrealizedLosses    |   |    | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| Description of Securities              |   |                |    |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury Notes                    |   | $                   | 9,977   |   |                | $      | 19      |       |   | $ | — |   |   | $ | — |   |   | $ | 9,977 |   |   | $ | 19 |   |
| U.S. Government Agencies               |   |                | 53,391  |   |                |   | 1,854   |       |   |   | 31 |   |   |   | — |   |   |   | 53,422 |   |   |   | 1,854 |   |
| Mortgage-backed securities             |   |                | 36,077  |   |                |   | 320     |       |   |   | 10,747 |   |   |   | 316 |   |   |   | 46,824 |   |   |   | 636 |   |
| Corporate notes                        |   |                | 2,652   |   |                |   | 17      |       |   |   | 8,291 |   |   |   | 402 |   |   |   | 10,943 |   |   |   | 419 |   |
| Pooled Trust Preferred CDO             |   |                | — |   |                |   | — |       |   |   | 1,510 |   |   |   | 4,949 |   |   |   | 1,510 |   |   |   | 4,949 |   |
| Auction rate securities                |   |                | 4,534   |   |                |   | 466     |       |   |   | 57,006 |   |   |   | 9,294 |   |   |   | 61,540 |   |   |   | 9,760 |   |
| Municipal securities                   |   |                | 2,495   |   |                |   | 150     |       |   |   | — |   |   |   | — |   |   |   | 2,495 |   |   |   | 150 |   |
| Subtotal, debt securities              |   |                | 109,126 |   |                |   | 2,826   |       |   |   | 77,585 |   |   |   | 14,961 |   |   |   | 186,711 |   |   |   | 17,787 |   |
| Marketable equity securities and other |   |                | 816     |   |                |   | 46      |       |   |   | — |   |   |   |  — |   |   |   | 816 |   |   |   | 46 |   |
| Total temporarily impaired securities  |   | $                   | 109,942 |   |                | $      | 2,872   |       |   | $ | 77,585 |   |   | $ | 14,961 |   |   | $ | 187,527 |   |   | $ | 17,833 |   |

----

|                                   |   | March 31, 2011     |        |
|----------------------------------------|--------|--------------------|-------------|
|                                   |   | Available for Sale |        |   | Held to Maturity |   |
|                                   |   | AmortizedCost      |        |   | FairValue |   |   | Amortized Cost |   |   | FairValue |   |
|                                   |   | (In thousands)     |        |
| Due in one year or less                |   | $                  | 30,789      |   |   | $ | 30,821 |   |   | $ | — |   |   | $ | — |   |
| Due after one through five years       |   |               | 72,983      |   |   |   | 72,764 |   |   |   | — |   |   |   | — |   |
| Due after five through ten years       |   |               | 51,628      |   |   |   | 52,134 |   |   |   |  — |   |   |   |  — |   |
| Due after ten years                    |   |               | 177,234     |   |   |   | 173,776 |   |   |   | 314 |   |   |   | 322 |   |
| Auction rate securities                |   |               | 73,993      |   |   |   | 66,537 |   |   |   | — |   |   |   | — |   |
| Marketable equity securities and other |   |               |  2,855 |   |   |   |  2,832 |   |   |   |  — |   |   |   |  — |   |
| Totals                                 |   | $                  | 409,482     |   |   | $ | 398,864 |   |   | $ | 314 |   |   | $ | 322 |   |

----

|                 |   | Three Months Ended March 31, 2011 |    |   | Twelve Months Ended December 31, 2010 |   |
|----------------------|--------|----------------------------------------|---------|--------|--------------------------------------------|--------|
|                 |   | AverageAmount                          |    |   | Average Yield                              |   |   | AverageAmount |   |   | AverageYield |   |
|                 |   | (Dollars in thousands)                 |    |
| Demand deposits      |   | $                                      | 76,333  |   |                                       |   | — |   |   | $ | 69,963 |   |   |   | — |   |
| NOW and money market |   |                                   | 23,995  |   |                                       |   | 0.51 | % |   |   | 22,274 |   |   |   | 0.30 | % |
| Savings deposits     |   |                                   | 184,182 |   |                                       |   | 0.46 |   |   |   | 196,598 |   |   |   | 0.71 |   |
| Time deposits        |   |                                   | 385,293 |   |                                       |   | 1.37 |   |   |   | 400,586 |   |   |   | 1.52 |   |
| Total deposits       |   | $                                      | 669,803 |   |                                       |   | 0.93 | % |   | $ | 689,421 |   |   |   | 1.09 | % |

|                                                                    |   | For The Three Months Ended |            |
|-------------------------------------------------------------------------|--------|----------------------------|-----------------|
|                                                                    |   | March 31, 2011             |            |   | March 31, 2010 |   |
|                                                                    |   | Before taxamount           |            |   | Tax(expense)benefit |   |   | Net of taxAmount |   |   | Before taxamount |   |   | Tax(expense)benefit |   |   | Net of taxamount |   |
|                                                                    |   | (In thousands)             |            |
| Unrealized gains (losses) on investment securities:                     |   |                       |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period                     |   | $                          | 4,677           |   |   | $ | (1,871 | ) |   | $ | 2,806 |   |   | $ | 5,445 |   |   | $ | (2,178 | ) |   | $ | 3,267 |   |
|  Less reclassification adjustment for gains realized in net income |   |                       |    55 |   |   |   | (22 | ) |   |   |    33 |   |   |   |    155 |   |   |   | (62 | ) |   |   |    93 |   |
| Unrealized gain on investment securities                                |   |                       |  4,622     |   |   |   | (1,849 | ) |   |   |  2,773 |   |   |   |  5,290 |   |   |   | (2,116 | ) |   |   |  3,174 |   |
| Other comprehensive income, net                                         |   | $                          | 4,622           |   |   | $ | (1,849 | ) |   | $ | 2,773 |   |   | $ | 5,290 |   |   | $ | (2,116 | ) |   | $ | 3,174 |   |

----

|                          |   | March 31, 2011 |    |   | December 31, 2010   |   |
|-------------------------------|--------|----------------|---------|--------|---------------------|--------|
|                          |   | Carryingamount |    |   | Estimatedfair value |   |   | Carryingamount |   |   | Estimatedfair value |   |
|                          |   | (In thousands) |    |
| Investment securities         |   | $              | 399,178 |   |                | $      | 399,186 |   |   | $ | 341,883 |   |   | $ | 341,880 |   |
| Loans, net of unearned income |   |           | 349,598 |   |                |   | 357,133 |   |   |   | 366,305 |   |   |   | 371,110 |   |
| Time Deposits                 |   |           | 387,363 |   |                |   | 389,885 |   |   |   | 384,301 |   |   |   | 386,446 |   |
| Repurchase Agreements         |   |           | 50,000  |   |                |   | 51,205 |   |   |   | 50,000 |   |   |   | 51,661 |   |
| Borrowings                    |   |           | 9,544   |   |                |   | 9,777 |   |   |   | 10,657 |   |   |   | 10,876 |   |
| Subordinated debt             |   |           | 22,681  |   |                |   | 22,681 |   |   |   | 22,681 |   |   |   | 22,681 |   |

----

----

----

|                                           |   | At March 31, 2011 Fair Value Measurement Using                                     |         |
|------------------------------------------------|--------|------------------------------------------------------------------------------------|--------------|
|                                           |   | Quoted Prices inActive Marketsfor IdenticalAssets/Liabilities (Level 1)  |         |   | SignificantOtherObservableInputs (Level 2) |   |   | SignificantUnobservableInputs (Level 3) |   |   |  Balance March 31, 2011 |   |
|                                           |   | (Dollars in thousands)                                                             |         |
| Assets                                         |   |                                                                               |         |   |   |   |   |   |   |   |   |   |
| Impaired Loans (1)                             |   | $                                                                                  | —      |   |   | $ | — |   |   | $ | 3,630 |   |   | $ | 3,630 |   |
| Investment securities available for sale: (2)  |   |                                                                               |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury Notes                            |   |                                                                               | 80,065       |   |   |   | — |   |   |   | — |   |   |   | 80,065 |   |
| U.S. Government Agencies                       |   |                                                                               | —      |   |   |   | 97,728 |   |   |   | — |   |   |   | 97,728 |   |
| Mortgage-backed securities                     |   |                                                                               | —      |   |   |   | 132,341 |   |   |   | — |   |   |   | 132,341 |   |
| Corporate notes                                |   |                                                                               | 13,870       |   |   |   | — |   |   |   | — |   |   |   | 13,870 |   |
| Single Issuer Trust Preferred CDO              |   |                                                                               | —      |   |   |   | 1,486 |   |   |   | — |   |   |   | 1,486 |   |
| Pooled Trust Preferred CDO                     |   |                                                                               | —      |   |   |   | 1,510 |   |   |   | — |   |   |   | 1,510 |   |
| Municipal securities                           |   |                                                                               | 2,495        |   |   |   | — |   |   |   | — |   |   |   | 2,495 |   |
| Auction rate securities                        |   |                                                                               | —      |   |   |   | — |   |   |   | 66,537 |   |   |   | 66,537 |   |
| Marketable equity securities and other         |   |                                                                               |  1,147  |   |   |   |  1,685 |   |   |   |  — |   |   |   |  2,832 |   |
| Total Investment securities available for sale |   |                                                                               |  97,577 |   |   |   |  234,750 |   |   |   |  66,537 |   |   |   |  398,864 |   |
| Total assets                                   |   | $                                                                                  | 97,577       |   |   | $ | 234,750 |   |   | $ | 70,167 |   |   | $ | 402,494 |   |

----

----

|                                           |   | At December, 31, 2010 Fair Value Measurement Using                                 |          |
|------------------------------------------------|--------|------------------------------------------------------------------------------------|---------------|
|                                           |   | Quoted Prices inActive Marketsfor IdenticalAssets/Liabilities (Level 1)  |          |   | SignificantOtherObservableInputs (Level 2) |   |   | SignificantUnobservableInputs (Level 3) |   |   |  Balance December 31, 2010 |   |
|                                           |   | (Dollars in thousands)                                                             |          |
| Assets                                         |   |                                                                               |          |   |   |   |   |   |   |   |   |   |
| Impaired Loans (1)                             |   | $                                                                                  | —       |   |   | $ | — |   |   | $ | 2,814 |   |   | $ | 2,814 |   |
| Investment securities available for sale: (2)  |   |                                                                               |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury Notes                            |   |                                                                               | 50,076        |   |   |   | — |   |   |   | — |   |   |   | 50,076 |   |
| U.S. Government Agencies                       |   |                                                                               | 24,930        |   |   |   | 62,597 |   |   |   | — |   |   |   | 87,527 |   |
| Mortgage-backed securities                     |   |                                                                               | —       |   |   |   | 121,137 |   |   |   | — |   |   |   | 121,137 |   |
| Corporate notes                                |   |                                                                               | 10,246        |   |   |   | 2,932 |   |   |   | — |   |   |   | 13,178 |   |
| Single Issuer Trust Preferred CDO              |   |                                                                               | —       |   |   |   | 1,294 |   |   |   | — |   |   |   | 1,294 |   |
| Pooled Trust Preferred CDO                     |   |                                                                               | —       |   |   |   | 459 |   |   |   | — |   |   |   | 459 |   |
| Municipal securities                           |   |                                                                               | —       |   |   |   | 2,688 |   |   |   | — |   |   |   | 2,688 |   |
| Auction rate securities                        |   |                                                                               | —       |   |   |   | — |   |   |   | 62,079 |   |   |   | 62,079 |   |
| Marketable equity securities and other         |   |                                                                               |  — |   |   |   |  3,126 |   |   |   |  — |   |   |   |  3,126 |   |
| Total Investment securities available for sale |   |                                                                               |  85,252  |   |   |   |  194,233 |   |   |   |  62,079 |   |   |   |  341,564 |   |
| Total assets                                   |   | $                                                                                  | 85,252        |   |   | $ | 194,233 |   |   | $ | 64,893 |   |   | $ | 344,378 |   |

----

----

|    (Dollars in thousands)                                                                                                                                        |   | InvestmentSecuritiesAvailablefor Sale |                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|----------------------|
| Balance, January 1, 2011                                                                                                                                                        |   | $                                     | 62,079               |   |
| Total gains/losses (realized/unrealized)                                                                                                                                        |   |                                  |                 |   |
| Included in earnings                                                                                                                                                            |   |                                  | —              |   |
| Included in other comprehensive income                                                                                                                                          |   |                                  | 4,458                |   |
| Purchases, Sales, Issuances and Settlements                                                                                                                                     |   |                                  | —              |   |
| Redemptions (Transfer to Other Real Estate Owned)                                                                                                                               |   |                                  | —              |   |
| Interest                                                                                                                                                                        |   |                                  | —              |   |
| Other than temporary impairment expense                                                                                                                                         |   |                                  | —              |   |
| Capital deductions for operating expenses                                                                                                                                       |   |                                  | —              |   |
| Balance, March 31, 2011                                                                                                                                                         |   | $                                     | 66,537               |   |
|                                                                                                                                                                            |   |                                  |                 |   |
| The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2011 |   | $                                     |    — |   |

----

----

----

----

|                                                                             |   | For The Three Months Ended March 31, |          |
|----------------------------------------------------------------------------------|--------|--------------------------------------|---------------|
|                                                                             |   | 2011                                 |          |   | 2010 |   |
|                                                                             |   | Average Balance                      |          |   | Interestand Dividends |   |   | Average Yield/Rate |   |   | AverageBalance |   |   | InterestandDividends |   |   | AverageYield/Rate |   |
|                                                                             |   |                                 |          |   |   |   |   | (Dollars in Thousands) |   |   |   |   |   |   |   |
| INTEREST-EARNING ASSETS:                                                         |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                                                                        |   | $                                    | 352,867       |   |   | $ | 5,679 |   |   |   | 6.44 | % |   | $ | 419,820 |   |   | $ | 6,533 |   |   |   | 6.22 | % |
| Investment securities                                                            |   |                                 | 365,875       |   |   |   | 3,181 |   |   |   | 3.48 |   |   |   | 363,083 |   |   |   | 3,800 |   |   |   | 4.19 |   |
| Other (2)(5)                                                                     |   |                                 | 75,931        |   |   |   | 61 |   |   |   | 0.32 |   |   |   | 59,780 |   |   |   | 51 |   |   |   | 0.34 |   |
| Total interest-earning assets                                                    |   |                                 | 794,673       |   |   |   | 8,921 |   |   |   | 4.49 |   |   |   | 842,683 |   |   |   | 10,384 |   |   |   | 4.93 |   |
| Noninterest-earning assets                                                       |   |                                 | 34,687        |   |   |   |   |   |   |   |   |   |   |   | 62,539 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                                     |   | $                                    | 829,360       |   |   |   |   |   |   |   |   |   |   | $ | 905,222 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST-BEARING LIABILITIES:                                                    |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                        |   |                                 | 208,177       |   |   |   | 244 |   |   |   | 0.47 | % |   |   | 224,372 |   |   |   | 508 |   |   |   | 0.91 | % |
| Time deposits                                                                    |   |                                 | 385,293       |   |   |   | 1,322 |   |   |   | 1.37 |   |   |   | 419,678 |   |   |   | 1,752 |   |   |   | 1.67 |   |
| Other borrowings                                                                 |   |                                 | 82,706        |   |   |   | 761 |   |   |   | 3.68 |   |   |   | 101,168 |   |   |   | 1,015 |   |   |   | 4.01 |   |
| Total interest-bearing liabilities                                               |   |                                 |  676,176 |   |   |   |  2,327 |   |   |   | 1.38 |   |   |   |  745,218 |   |   |   |  3,275 |   |   |   | 1.76 |   |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                  |   |                                 | 76,333        |   |   |   |   |   |   |   |   |   |   |   | 66,323 |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities                                                  |   |                                 | 4,998         |   |   |   |   |   |   |   |   |   |   |   | 7,682 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity (5)                                                         |   |                                 | 71,853        |   |   |   |   |   |   |   |   |   |   |   | 85,999 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                       |   | $                                    | 829,360       |   |   |   |   |   |   |   |   |   |   | $ | 905,222 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                              |   |                                 |          |   |   | $ | 6,594 |   |   |   |   |   |   |   |   |   |   | $ | 7,109 |   |   |   |   |   |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-rate spread (3)                                                         |   |                                 |          |   |   |   |   |   |   |   | 3.11 | % |   |   |   |   |   |   |   |   |   |   | 3.17 | % |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin (4)                                                          |   |                                 |          |   |   |   |   |   |   |   | 3.32 | % |   |   |   |   |   |   |   |   |   |   | 3.37 | % |
|                                                                             |   |                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average interest-earning assets to average interest bearing liabilities |   |                                 | 1.18          |   |   |   |   |   |   |   |   |   |   |   | 1.13 |   |   |   |   |   |   |   |   |   |

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| (1)  | Includes nonaccrual loans. |
|-----------|----------------------------|

| (2)  | Includes interest-bearing deposits, federal funds sold and securities purchased under agreements to resell. |
|-----------|-------------------------------------------------------------------------------------------------------------|

| (3)  | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest bearing liabilities. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Net interest margin is net interest income as a percentage of average interest-earning assets. |
|-----|------------------------------------------------------------------------------------------------|

| (5)  | Average balances are daily average balances except for the parent company which have been calculated on a monthly basis. |
|-----------|--------------------------------------------------------------------------------------------------------------------------|

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|                  |   | Three Months Ended March 31,       |   |
|-----------------------|--------|------------------------------------|--------|
|                  |   | 2011                               |   |   | 2010 |   |
|                  |   | InterestIncome                     |   |   | % ofTotal |   |   | InterestIncome |   |   | % ofTotal |   |
|                  |   | (In thousands, except percentages) |   |
| Loans                 |   | $                                  | 5,679  |   |   |   | 63.66 | % |   | $ | 6,533 |   |   |   | 62.92 | % |
| Investment Securities |   |                               | 3,181  |   |   |   | 35.66 |   |   |   | 3,800 |   |   |   | 36.59 |   |
| Other                 |   |                               | 61     |   |   |   | 0.68 |   |   |   | 51 |   |   |   | 0.49 |   |
| Total Interest Income |   | $                                  | 8,921  |   |   |   | 100.00 | % |   | $ | 10,384 |   |   |   | 100.00 | % |

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|                             |   | Three Months Ended March 31,       |   |
|----------------------------------|--------|------------------------------------|--------|
|                             |   | 2011                               |   |   | 2010 |   |
|                             |   | InterestExpense                    |   |   | % ofTotal |   |   | InterestExpense |   |   | % ofTotal |   |
|                             |   | (In thousands, except percentages) |   |
| Interest-Bearing Deposits        |   | $                                  | 244    |   |   |   | 10.49 | % |   | $ | 508 |   |   |   | 15.51 | % |
| Time Deposits                    |   |                               | 1,322  |   |   |   | 56.81 |   |   |   | 1,752 |   |   |   | 53.50 |   |
| Borrowings and Subordinated Debt |   |                               | 761    |   |   |   | 32.70 |   |   |   | 1,015 |   |   |   | 30.99 |   |
| Total Interest Expense           |   | $                                  | 2,327  |   |   |   | 100.00 | % |   | $ | 3,275 |   |   |   | 100.00 | % |

|                           |   | Three Months Ended March 31,       |   |
|--------------------------------|--------|------------------------------------|--------|
|                           |   | 2011                               |   |   | 2010 |   |
|                           |   | Non-InterestExpense                |   |   | % ofTotal |   |   | Non-InterestExpense |   |   | % ofTotal |   |
|                           |   | (In thousands, except percentages) |   |
| Salaries and Employee Benefits |   | $                                  | 2,435  |   |   |   | 55.20 |   |   | $ | 2,341 |   |   |   | 53.05 | % |
| Net Occupancy Expense          |   |                               | 565    |   |   |   | 12.81 |   |   |   | 566 |   |   |   | 12.83 |   |
| Equipment Expense              |   |                               | 82     |   |   |   | 1.86 |   |   |   | 91 |   |   |   | 2.06 |   |
| FDIC Assessment                |   |                               | 384    |   |   |   | 8.71 |   |   |   | 468 |   |   |   | 10.61 |   |
| Data Processing Expense        |   |                               | 109    |   |   |   | 2.47 |   |   |   | 126 |   |   |   | 2.86 |   |
| Other                          |   |                               | 836    |   |   |   | 18.95 |   |   |   | 820 |   |   |   | 18.59 |   |
| Total Non-Interest Expense     |   | $                                  | 4,411  |   |   |   | 100.00 | % |   | $ | 4,412 |   |   |   | 100.00 | % |

----

----

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|                                                               |   | Three Months EndedMarch 31, |        |
|--------------------------------------------------------------------|--------|-----------------------------|-------------|
|                                                               |   | 2011                        |        |   | 2010 |   |
| Average loans outstanding                                          |   | $                           | 352,867     |   |   | $ | 419,820 |   |
| Allowance at beginning of period                                   |   |                        | 16,105      |   |   |   | 11,416 |   |
| Charge-offs:                                                       |   |                        |        |   |   |   |   |   |
| Commercial and other loans                                         |   |                        | 2           |   |   |   | — |   |
| Real estate loans                                                  |   |                        | —     |   |   |   | 766 |   |
|                                                               |   |                        |        |   |   |   |   |   |
| Total loans charged-off                                            |   |                        | 2           |   |   |   | 766 |   |
| Recoveries:                                                        |   |                        |        |   |   |   |   |   |
| Commercial and other loans                                         |   |                        | 21          |   |   |   | — |   |
| Total loans recovered                                              |   |                        | 21          |   |   |   | — |   |
| Net (charge-offs) recoveries                                       |   |                        | 19          |   |   |   | (766 | ) |
| Provision for loan losses charged to operating expenses            |   |                        |  1,200 |   |   |   |  1,250 |   |
| Allowance at end of period                                         |   | $                           | 17,324      |   |   | $ | 11,900 |   |
| Ratio of net (charge-offs) recoveries to average loans outstanding |   |                        | 0.01        | % |   |   | (0.18 | )% |
| Allowance as a percent of total loans                              |   |                        | 4.94        | % |   |   | 2.94 | % |
| Total loans at end of period                                       |   | $                           | 350,499     |   |   | $ | 404,883 |   |

----

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|                                     |   | Actual |    |   | For capitaladequacy purposes |   | To be wellcapitalized underprompt correctiveaction provisions |   |
|------------------------------------------|--------|--------|---------|--------|------------------------------|--------|---------------------------------------------------------------|--------|
|                                     |   | Amount |    |   | Ratio                        |   |                                                          | Amount |   | Ratio |   | Amount |   |   | Ratio |   |
| March 31, 2011                           |   |   |    |   |                         |   |                                                          |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk-Weighted Assets)  |   |   |    |   |                         |   |                                                          |   |   |   |   |   |   |   |   |   |
| Company                                  |   | $      | 106,226 |   |                         |   | 23.7                                                          | %      |   | $ | 35,829 |   | >8.0% |   |   | — |   |   |   | N/A |   |
| Bank                                     |   |   | 91,442  |   |                         |   | 20.9                                                          | %      |   |   | 35,091 |   | >8.0% |   | $ | 43,864 |   |   | >10.0% |   |
| Tier I Capital (to Risk-Weighted Assets) |   |   |    |   |                         |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                  |   |   | 100,628 |   |                         |   | 22.5                                                          | %      |   |   | 17,915 |   | >4.0% |   |   | — |   |   |   | N/A |   |
| Bank                                     |   |   | 85,813  |   |                         |   | 19.6                                                          | %      |   |   | 17,546 |   | >4.0% |   |   | 26,318 |   |   | >6.0% |   |
| Tier I Capital (to Average Assets)       |   |   |    |   |                         |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                  |   |   | 100,628 |   |                         |   | 12.1                                                          | %      |   |   | 33,174 |   | >4.0% |   |   | — |   |   |   | N/A |   |
| Bank                                     |   |   | 85,813  |   |                         |   | 10.5                                                          | %      |   |   | 32,809 |   | >4.0% |   |   | 41,011 |   |   | >5.0% |   |

----

----

| ExhibitNumber |   | Description                                                                                                           |
|---------------|--------|-----------------------------------------------------------------------------------------------------------------------|
| 31            |   | Certification of Principal Executive and Financial Officer pursuant to Section 302 Of The Sarbanes-Oxley Act of 2002. |
|          |   |                                                                                                                  |
| 32            |   | Certification of Principal Executive and Financial Officer pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002. |

----

|                          | BERKSHIRE BANCORP INC.      (Registrant) |                                                  |
|-------------------------------|------------------------------------------------------------------------|-------------------------------------------------------|
|                          |                                                                   |                                                  |   |
| Date:  May 11, 2011 | By:                                                                    | /s/ Steven Rosenberg                                  |   |
|                          |                                                                   | Steven Rosenberg President and ChiefFinancial Officer |   |

----

| ExhibitNumber  |   | Description                                                                                                           |
|---------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
| 31                  |   | Certification of Principal Executive and Financial Officer pursuant to Section 302 Of The Sarbanes-Oxley Act of 2002. |
|                |   |                                                                                                                  |
| 32                  |   | Certification of Principal Executive and Financial Officer pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002. |

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