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

| For the fiscal year ended |   | Commission File No. 000-25917 |
|---------------------------|--------|-------------------------------|
| December 31, 2010         |   |                          |

| Delaware                        |   | 63-0833573                          |
|---------------------------------|--------|-------------------------------------|
| (State or other jurisdiction of |   | (I.R.S.Employer Identification No.) |
| incorporation or organization)  |   |                                |

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

| Common Stock                                                        | Par Value |   |   Outstanding at March 29, 2011 |
|---------------------------------------------------------------------|-----------|--------|--------------------------------------|
|  Class A         $.01  |      |   |                                 | 2,325,162 |   | Shares* |
|  Class B.         $.01 |      |   |                                 | 0 |   | Shares |

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|   | · | The Dodd-Frank Act made permanent the general $250,000 deposit insurance limit for insured deposits. The Dodd-Frank Act also extended until January 1, 2013, federal deposit coverage for the full net amount held by depositors in non-interest bearing transaction accounts. Amendments to the FDIC Act also revised the assessment base against which an insured depository institution’s deposit insurance premiums paid to DIF will be calculated. Under the amendments, the assessment base would no longer be the institution’s deposit base, but would become its average consolidated total assets less its average tangible equity. Additionally, the Dodd-Frank Act changed the minimum designated reserve ratio of the DIF.  The minimum reserve ratio increased from 1.15 percent to 1.35 percent of the estimated amount of total insured deposits, and eliminated the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Several of these provisions could increase the FDIC deposit insurance premiums paid by the Bank. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Dodd-Frank Act authorized the establishment of the Consumer Financial Protection Bureau (“the CFPB”), which was given the power to issue rules governing all financial institutions that offer financial services and products to consumers. The CFPB was also given the authority to monitor markets for consumer financial products to ensure that consumers would be protected from abusive practices. Financial institutions expect to be subject to increased compliance and enforcement costs associated with regulations established by the CFPB. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Dodd-Frank Act addressed many investor protection, corporate governance and executive compensation matters that may affect most U.S. registered companies. The Dodd-Frank Act (1) granted stockholders of U.S. publicly traded companies an advisory vote on executive compensation; (2) enhanced independence requirements for compensation committee members; (3) required companies listed on national securities exchanges to adopt incentive-based compensation clawback policies for executive officers; (4) provided the SEC with authority to adopt proxy access rules that would allow stockholders of publicly traded companies to nominate candidates for election as a director and have those nominees included in a company’s proxy materials; (5) prohibited uninstructed broker votes on election of directors, executive compensation matters (including say on pay advisory votes), and other significant matters, and (6) required disclosure on board leadership structure |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

|                                                        |   | Average Balance |    |   | Interest IncomeExpense |   |   | Average RatesEarned Paid |   |
|-------------------------------------------------------------|--------|-----------------|---------|--------|------------------------|--------|--------|--------------------------|--------|
| 2010                                                        |   |            |    |   |                   |   |   |                     |   |
| Loans, net (1)                                              |   | $               | 278,792 |   |                   | $      | 16,581 |                     |   |   | 5.98 | % |
| Taxable securities                                          |   |            | 67,354  |   |                   |   | 1,692  |                     |   |   | 2.51 | % |
| Tax exempt securities (2)                                   |   |            | 18,463  |   |                   |   | 741    |                     |   |   | 5.90 | % |
| Federal funds sold and repurchase agreements                |   |            | 74      |   |                   |   | 1      |                     |   |   | 0.19 | % |
| Interest-bearing deposits with other financial institutions |   |            | 61,910  |   |                   |   | 156    |                     |   |   | 0.25 | % |
| Total interest-earning assets                               |   | $               | 426,593 |   |                   | $      | 19,171 |                     |   |   | 4.60 | % |
|                                                        |   |            |    |   |                   |   |   |                     |   |   |   |   |
| Saving deposits and demand deposits interest-bearing        |   | $               | 99,398  |   |                   | $      | 534    |                     |   |   | 0.54 | % |
| Time deposits                                               |   |            | 184,045 |   |                   |   | 3,914  |                     |   |   | 2.13 | % |
| Other borrowed funds                                        |   |            | 12,206  |   |                   |   | 289    |                     |   |   | 2.35 | % |
| Total interest-bearing liabilities                          |   | $               | 295,649 |   |                   | $      | 4,737  |                     |   |   | 1.60 | % |
| Net interest income/net yield on interest earning assets    |   |            |    |   |                   | $      | 14,434 |                     |   |   | 3.47 | % |
|                                                        |   | Average Balance |    |   | Interest IncomeExpense |   |   | Average RatesEarned Paid |   |
|-------------------------------------------------------------|--------|-----------------|---------|--------|------------------------|--------|--------|--------------------------|--------|
| 2009                                                        |   |            |    |   |                   |   |   |                     |   |   |   |   |
| Loans, net (1)                                              |   | $               | 286,548 |   |                   | $      | 17,014 |                     |   |   | 5.96 | % |
| Taxable securities                                          |   |            | 65,760  |   |                   |   | 2,284  |                     |   |   | 3.47 | % |
| Tax exempt securities (2)                                   |   |            | 30,579  |   |                   |   | 1,232  |                     |   |   | 6.10 | % |
| Federal funds sold and repurchase agreements                |   |            | 14,141  |   |                   |   | 39     |                     |   |   | 0.28 | % |
| Interest-bearing deposits with other financial institutions |   |            | 38,594  |   |                   |   | 208    |                     |   |   | 0.54 | % |
| Total interest-earning assets                               |   | $               | 435,622 |   |                   | $      | 20,777 |                     |   |   | 4.93 | % |
|                                                        |   |            |    |   |                   |   |   |                     |   |   |   |   |
| Saving deposits and demand deposits interest-bearing        |   | $               | 106,441 |   |                   | $      | 703    |                     |   |   | 0.66 | % |
| Time deposits                                               |   |            | 196,591 |   |                   |   | 6,067  |                     |   |   | 3.09 | % |
| Repurchase agreements                                       |   |            | 5       |   |                   |   | -      |                     |   |   | 0.00 | % |
| Other borrowed funds                                        |   |            | 12,210  |   |                   |   | 359    |                     |   |   | 2.94 | % |
| Total interest-bearing liabilities                          |   | $               | 315,247 |   |                   | $      | 7,129  |                     |   |   | 2.26 | % |
| Net interest income/net yield on interest earning assets    |   |            |    |   |                   | $      | 13,648 |                     |   |   | 3.28 | % |

----

|                                                        |   | Average Balance |    |   | Interest IncomeExpense |   |   | Average RatesEarned Paid |   |
|-------------------------------------------------------------|--------|-----------------|---------|--------|------------------------|--------|--------|--------------------------|--------|
| 2008                                                        |   |            |    |   |                   |   |   |                     |   |
| Loans, net (1)                                              |   | $               | 287,491 |   |                   | $      | 19,557 |                     |   |   | 6.80 | % |
| Taxable securities                                          |   |            | 84,813  |   |                   |   | 3,062  |                     |   |   | 3.61 | % |
| Tax exempt securities (2)                                   |   |            | 33,903  |   |                   |   | 1,360  |                     |   |   | 6.08 | % |
| Federal funds sold and repurchase agreements                |   |            | 9,204   |   |                   |   | 179    |                     |   |   | 1.94 | % |
| Interest-bearing deposits with other financial institutions |   |            | 14,766  |   |                   |   | 343    |                     |   |   | 2.32 | % |
| Total interest-earning assets                               |   | $               | 430,177 |   |                   | $      | 24,501 |                     |   |   | 5.86 | % |
|                                                        |   |            |    |   |                   |   |   |                     |   |   |   |   |
| Saving deposits and demand deposits interest-bearing        |   | $               | 99,969  |   |                   | $      | 1,429  |                     |   |   | 1.43 | % |
| Time deposits                                               |   |            | 194,524 |   |                   |   | 7,944  |                     |   |   | 4.08 | % |
| Repurchase agreements                                       |   |            | 68,257  |   |                   |   | 834    |                     |   |   | 1.22 | % |
| Other borrowed funds                                        |   |            | 12,648  |   |                   |   | 672    |                     |   |   | 5.31 | % |
| Total interest-bearing liabilities                          |   | $               | 375,398 |   |                   | $      | 10,879 |                     |   |   | 2.90 | % |
| Net interest income/net yield on interest earning assets    |   |            |    |   |                   | $      | 13,622 |                     |   |   | 3.33 | % |

|  (1) | Loans on nonaccrual status have been included in the computation of average balances. |
|-----------|---------------------------------------------------------------------------------------|

| (2) | Yields on tax-exempt obligations have been computed on a full federal tax-equivalent basis using an income tax rate of 34% for 2010, 2009, and 2008 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Average Balances |    |   |   | Interest Income Expense |    |   |                               |   |   | Variance as to |   |
|------------------|---------|--------|--------|-------------------------|---------|--------|------------------------------------|--------|--------|----------------|--------|
| 2010             |    |   | 2009   |                    |    |   | 2010                               |   |   | 2009           |   |   | Variance |   |   | Rate |   |   | Volume |   |
| $                | 278,792 |   |   | $                       | 286,548 |   | Loans (Net)                        |   | $      | 16,581         |   |   | $ | 17,014 |   |   | $ | (433 | ) |   | $ | 133 |   |   | $ | (566 | ) |
|             | 67,354  |   |   |                    | 65,760  |   | Taxable Securities AFS (1)         |   |   | 1,692          |   |   |   | 2,284 |   |   |   | (592 | ) |   |   | (361 | ) |   |   | (231 | ) |
|             | 18,463  |   |   |                    | 30,579  |   | Tax Exempt Securities AFS (2)      |   |   | 741            |   |   |   | 1,232 |   |   |   | (491 | ) |   |   | (4 | ) |   |   | (487 | ) |
|             | 74      |   |   |                    | 14,141  |   | Fed Funds Sold                     |   |   | 1              |   |   |   | 39 |   |   |   | (38 | ) |   |   | (10 | ) |   |   | (28 | ) |
|             | 61,910  |   |   |                    | 38,594  |   | Interest Bearing Deposits          |   |   | 156            |   |   |   | 208 |   |   |   | (52 | ) |   |   | (143 | ) |   |   | 91 |   |
| $                | 426,593 |   |   | $                       | 435,622 |   | Total Earning Assets               |   | $      | 19,171         |   |   | $ | 20,777 |   |   | $ | (1,606 | ) |   | $ | (385 | ) |   | $ | (1,221 | ) |
|             |    |   |   |                    |    |   |                               |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             |    |   |   |                    |    |   | Savings and Interest Bearing       |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $                | 99,398  |   |   | $                       | 106,441 |   | Demand Deposits                    |   | $      | 534            |   |   | $ | 703 |   |   | $ | (169 | ) |   | $ | (115 | ) |   | $ | (54 | ) |
|             | 184,045 |   |   |                    | 196,591 |   | Time Deposits                      |   |   | 3,914          |   |   |   | 6,067 |   |   |   | (2,153 | ) |   |   | (1,866 | ) |   |   | (287 | ) |
|             | -       |   |   |                    | 5       |   | Repurchase Agreements              |   |   | -              |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|             | 12,206  |   |   |                    | 12,210  |   | Other Borrowed Funds               |   |   | 289            |   |   |   | 359 |   |   |   | (70 | ) |   |   | (60 | ) |   |   | (10 | ) |
| $                | 295,649 |   |   | $                       | 315,247 |   | Total Interest Bearing Liabilities |   | $      | 4,737          |   |   | $ | 7,129 |   |   | $ | (2,392 | ) |   | $ | (2,041 | ) |   | $ | (351 | ) |

| (1) | Available for Sale (AFS) |
|-----|--------------------------|

|  (2) | Yields on tax-exempt obligations have been computed on a full federal tax-equivalent basis using an income tax rate of 34% for 2010 and 2009. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

| Average Balances |    |   |   | Interest Income Expense |    |   |                               |   |   | Variance as to |   |
|------------------|---------|--------|--------|-------------------------|---------|--------|------------------------------------|--------|--------|----------------|--------|
| 2009             |    |   | 2008   |                    |    |   | 2009                               |   |   | 2008           |   |   | Variance |   |   | Rate |   |   | Volume |   |
| $                | 286,548 |   |   | $                       | 287,491 |   | Loans (Net)                        |   | $      | 17,014         |   |   | $ | 19,557 |   |   | $ | (2,543 | ) |   | $ | (219 | ) |   | $ | (2,324 | ) |
|             | 65,760  |   |   |                    | 84,813  |   | Taxable Securities AFS (1)         |   |   | 2,284          |   |   |   | 3,062 |   |   |   | (778 | ) |   |   | (801 | ) |   |   | 23 |   |
|             | 30,579  |   |   |                    | 33,903  |   | Tax Exempt Securities AFS (2)      |   |   | 1,232          |   |   |   | 1,360 |   |   |   | (128 | ) |   |   | (137 | ) |   |   | 9 |   |
|             | 14,141  |   |   |                    | 9,204   |   | Fed Funds Sold                     |   |   | 39             |   |   |   | 179 |   |   |   | (140 | ) |   |   | 59 |   |   |   | (199 | ) |
|             | 38,594  |   |   |                    | 14,766  |   | Interest Bearing Deposits          |   |   | 208            |   |   |   | 343 |   |   |   | (135 | ) |   |   | 281 |   |   |   | (416 | ) |
| $                | 435,622 |   |   | $                       | 430,177 |   | Total Earning Assets               |   | $      | 20,777         |   |   | $ | 24,501 |   |   | $ | (3,724 | ) |   | $ | (817 | ) |   | $ | (2,907 | ) |
|             |    |   |   |                    |    |   |                               |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             |    |   |   |                    |    |   | Savings and Interest Bearing       |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $                | 106,441 |   |   | $                       | 99,969  |   | Demand Deposits                    |   | $      | 703            |   |   | $ | 1,429 |   |   | $ | (726 | ) |   | $ | 56 |   |   | $ | (782 | ) |
|             | 196,591 |   |   |                    | 194,524 |   | Time Deposits                      |   |   | 6,067          |   |   |   | 7,944 |   |   |   | (1,877 | ) |   |   | 764 |   |   |   | (2,641 | ) |
|             | 5       |   |   |                    | 68,257  |   | Repurchase Agreements              |   |   | -              |   |   |   | 834 |   |   |   | (834 | ) |   |   | (416 | ) |   |   | (418 | ) |
|             | 12,210  |   |   |                    | 12,648  |   | Other Borrowed Funds               |   |   | 359            |   |   |   | 672 |   |   |   | (313 | ) |   |   | 3 |   |   |   | (316 | ) |
| $                | 315,247 |   |   | $                       | 375,398 |   | Total Interest Bearing Liabilities |   | $      | 7,129          |   |   | $ | 10,879 |   |   | $ | (3,750 | ) |   | $ | 407 |   |   | $ | (4,157 | ) |

|  (1) | Available for Sale (AFS) |
|-----------|--------------------------|

|  (2) | Yields on tax-exempt obligations have been computed on a full federal tax-equivalent basis using an income tax rate of 34% for 2009 and 2008. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

|                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | 4,036  |   |   |   | 0.98   | %      |   | $ | - |   |   |   | 0.00 | % |   | $ | - |   |   |   | 0.00 | % |
| 1-5 years                        |   |   | 11,238 |   |   |   | 1.24   | %      |   |   | 3,027 |   |   |   | 1.06 | % |   |   | - |   |   |   | 0.00 | % |
| 5-10 years                       |   |   | 3,955  |   |   |   | 2.04   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| After 10 years                   |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| Total                            |   | $      | 19,229 |   |   |   | 1.35   | %      |   | $ | 3,027 |   |   |   | 1.06 | % |   | $ | - |   |   |   | 0.00 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| US Government sponsored agencies |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | -      |   |   |   | 0.00   | %      |   | $ | - |   |   |   | 0.00 | % |   | $ | 16,520 |   |   |   | 0.99 | % |
| 1-5 years                        |   |   | 18,377 |   |   |   | 2.24   | %      |   |   | 24,997 |   |   |   | 3.12 | % |   |   | 7,662 |   |   |   | 4.63 | % |
| 5-10 years                       |   |   | 16,791 |   |   |   | 2.73   | %      |   |   | 11,472 |   |   |   | 3.93 | % |   |   | 15,371 |   |   |   | 5.35 | % |
| After 10 years                   |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| Total                            |   | $      | 35,168 |   |   |   | 2.47   | %      |   | $ | 36,469 |   |   |   | 3.37 | % |   | $ | 39,553 |   |   |   | 3.39 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage Backed Securities       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | -      |   |   |   | 0.00   | %      |   | $ | - |   |   |   | 0.00 | % |   | $ | 170 |   |   |   | 3.23 | % |
| 1-5 years                        |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | 4,302 |   |   |   | 3.93 | % |
| 5-10 years                       |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | 1,519 |   |   |   | 4.57 | % |
| After 10 years                   |   |   | 5,038  |   |   |   | 3.74   | %      |   |   | - |   |   |   | 0.00 | % |   |   | 6,860 |   |   |   | 4.57 | % |
| Total                            |   | $      | 5,038  |   |   |   | 3.74   | %      |   | $ | - |   |   |   | 0.00 | % |   | $ | 12,851 |   |   |   | 4.35 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State & Municipal (1)        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | 152    |   |   |   | 3.38   | %      |   | $ | 1,499 |   |   |   | 3.98 | % |   | $ | 1,460 |   |   |   | 3.51 | % |
| 1-5 years                        |   |   | 768    |   |   |   | 4.11   | %      |   |   | 6,727 |   |   |   | 3.86 | % |   |   | 7,063 |   |   |   | 3.88 | % |
| 5-10 years                       |   |   | 2,485  |   |   |   | 3.94   | %      |   |   | 11,275 |   |   |   | 4.03 | % |   |   | 13,118 |   |   |   | 4.08 | % |
| After 10 years                   |   |   | 5,962  |   |   |   | 4.04   | %      |   |   | 9,213 |   |   |   | 4.16 | % |   |   | 11,481 |   |   |   | 4.03 | % |
| Total                            |   | $      | 9,367  |   |   |   | 4.01   | %      |   | $ | 28,714 |   |   |   | 4.03 | % |   | $ | 33,122 |   |   |   | 3.99 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity Securities                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | 7      |   |   |   | 1.00   | %      |   | $ | 3 |   |   |   | 1.00 | % |   | $ | - |   |   |   | 0.00 | % |
| Total                            |   | $      | 7      |   |   |   | 1.00   | %      |   | $ | 3 |   |   |   | 1.00 | % |   | $ | - |   |   |   | 0.00 | % |
| Totals                           |   | $      | 68,809 |   |   |   | 2.19   | %      |   | $ | 68,213 |   |   |   | 3.55 | % |   | $ | 85,526 |   |   |   | 4.52 | % |

|  (1)  | Yields on tax-exempt obligations have been computed on a full federal tax-equivalent basis using an income tax rate of 34% for 2010, 2009 and 2008. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| US Government sponsored agencies |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | -      |   |   |   | 0.00   | %      |   | $ | - |   |   |   | 0.00 | % |   | $ | - |   |   |   | 0.00 | % |
| 1-5 years                        |   |   | 7,469  |   |   |   | 2.28   | %      |   |   | 6,025 |   |   |   | 2.97 | % |   |   | 3,050 |   |   |   | 4.34 | % |
| 5-10 years                       |   |   | 9,834  |   |   |   | 2.53   | %      |   |   | 9,399 |   |   |   | 3.52 | % |   |   | 3,000 |   |   |   | 4.48 | % |
| After 10 years                   |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| Total                            |   | $      | 17,303 |   |   |   | 2.42   | %      |   | $ | 15,424 |   |   |   | 3.31 | % |   | $ | 6,050 |   |   |   | 4.41 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other domestic debt securities   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                  |   | $      | -      |   |   |   | 0.00   | %      |   | $ | 235 |   |   |   | 5.25 | % |   | $ | - |   |   |   | 0.00 | % |
| 1-5 years                        |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | 500 |   |   |   | 5.25 | % |
| 5-10 years                       |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| After 10 years                   |   |   | -      |   |   |   | 0.00   | %      |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
| Total                            |   | $      | -      |   |   |   | 0.00   | %      |   | $ | 235 |   |   |   | 5.25 | % |   | $ | 500 |   |   |   | 5.25 | % |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Totals                           |   | $      | 17,303 |   |   |   | 2.42   | %      |   | $ | 15,659 |   |   |   | 3.33 | % |   | $ | 6,550 |   |   |   | 4.47 | % |

----

----

|                                                |   | One yearor less |   |   | One - fiveyears |   |    | After fiveyears |   |   | Total  |   |
|-----------------------------------------------------|--------|-----------------|--------|--------|-----------------|--------|---------|-----------------|--------|--------|--------|--------|
| Real estate:                                        |   |            |   |   |            |   |    |            |   |   |   |   |
| Construction, land developmnt, and other land loans |   | $               | 21,405 |   |            | $      | 15,185  |            |   | $      | 236    |   |   | $ | 36,826 |   |
| Farmland                                            |   |            | 10,694 |   |            |   | 18,058  |            |   |   | 1,518  |   |   |   | 30,270 |   |
| 1-4 family residential mortgage                     |   |            | 12,425 |   |            |   | 39,207  |            |   |   | 6,711  |   |   |   | 58,343 |   |
| Multifamily                                         |   |            | 1,022  |   |            |   | 864     |            |   |   | 1,196  |   |   |   | 3,082 |   |
| Commercial                                          |   |            | 23,249 |   |            |   | 48,182  |            |   |   | 2,369  |   |   |   | 73,800 |   |
| Agriculture                                         |   |            | 5,619  |   |            |   | 6,667   |            |   |   | 348    |   |   |   | 12,634 |   |
| Commercial                                          |   |            | 14,530 |   |            |   | 14,399  |            |   |   | 484    |   |   |   | 29,413 |   |
| Consumer                                            |   |            | 5,921  |   |            |   | 7,510   |            |   |   | 167    |   |   |   | 13,598 |   |
| States and political subdivisions                   |   |            | 1,553  |   |            |   | 819     |            |   |   | 1,363  |   |   |   | 3,735 |   |
| Other loans                                         |   |            | 52     |   |            |   | 18      |            |   |   |   |   |   |   | 70 |   |
|                                                |   |            |   |   |            |   |    |            |   |   |   |   |   |   |   |   |
| Totals                                              |   | $               | 96,470 |   |            | $      | 150,909 |            |   | $      | 14,392 |   |   | $ | 261,771 |   |

|                                                |   | Index  |   |   |   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                |   |   |   |   |   |   |   |   |   |
|                                                |   | Prime  |   |   | LIBOR  |   |   | Total |   |
|                                                |   |   |   |   |   |   |   |   |   |
| Real estate:                                        |   |   |   |   |   |   |   |   |   |
| Construction, land developmnt, and other land loans |   | $      | 19,885 |   |   | $      | - |   |   | $ | 19,885 |   |
| Farmland                                            |   |   | 10,341 |   |   |   | - |   |   |   | 10,341 |   |
| 1-4 family residential mortgage                     |   |   | 17,764 |   |   |   | - |   |   |   | 17,764 |   |
| Multifamily                                         |   |   | -      |   |   |   | - |   |   |   | - |   |
| Commercial                                          |   |   | 14,592 |   |   |   | 2,915 |   |   |   | 17,507 |   |
| Agriculture                                         |   |   | 4,420  |   |   |   | - |   |   |   | 4,420 |   |
| Commercial                                          |   |   | 12,994 |   |   |   | 2,230 |   |   |   | 15,224 |   |
| Consumer                                            |   |   | 100    |   |   |   | - |   |   |   | 100 |   |
| States and political subdivisions                   |   |   | 50     |   |   |   | 70 |   |   |   | 120 |   |
| Other loans                                         |   |   | 1      |   |   |   | - |   |   |   | 1 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Totals                                              |   | $      | 80,147 |   |   | $      | 5,215 |   |   | $ | 85,362 |   |

----

----

|   |   |         |                                 |   |   |   |   |   |   |   |   |
|--------|--------|--------------|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   | Descriptions |                                 | 2010   |   |   | 2009   |   |   | 2008   |   |
|   |   |         |                                 |   |   |   |   |   |   |   |   |
|   | A      |         | Loans accounted for on               |   |   |   |   |   |   |   |   |   |
|   |   |         | a nonaccrual basis                   |   | $      | 17,545 |   |   | $      | 18,993 |   |   | $ | 14,700 |   |
|   |   |         |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   | B      |         | Loans which are contractually        |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | past due ninety days or more         |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | as to interest or principal payments |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | (excluding balances included in (A)  |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | above)                               |   |   | 538    |   |   |   | 210    |   |   |   | 28 |   |
|   |   |         |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   | C      |         | Loans, the terms of which have been  |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | renegotiated to provide a reduction  |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | or deferral of interest or principal |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | because of a deterioration in the    |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | financial position of the borrower.  |   |   | 383    |   |   |   | 1,657  |   |   |   | 1,106 |   |
|   |   |         |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   | D      |         | Other non-performing assets          |   |   | 10,164 |   |   |   | 7,611  |   |   |   | 5,524 |   |
|   |   |         |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |         | Total                                |   | $      | 28,630 |   |   | $      | 28,471 |   |   | $ | 21,358 |   |

----

|                                             |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Average amount of loans outstanding, net         |   | $      | 278,792 |   |   | $      | 286,548 |   |   | $ | 287,491 |   |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Reserve for loan losses:                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Beginning balance                                |   | $      | 7,435   |   |   | $      | 3,591   |   |   | $ | 3,981 |   |
| Loans charged off:                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Real estate:                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction and land loans                      |   |   | (3,201  | )      |   |   | (2,421  | )      |   |   | (1,627 | ) |
| Farmland                                         |   |   | (11     | )      |   |   | (26     | )      |   |   | (1 | ) |
| 1-4 family residential mortgage                  |   |   | (778    | )      |   |   | (512    | )      |   |   | (68 | ) |
| Multifamily                                      |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                       |   |   | (529    | )      |   |   | (101    | )      |   |   | (615 | ) |
| Agriculture                                      |   |   | (104    | )      |   |   | (246    | )      |   |   | (85 | ) |
| Commercial                                       |   |   | (2,055  | )      |   |   | (1,047  | )      |   |   | (179 | ) |
| Consumer                                         |   |   | (199    | )      |   |   | (165    | )      |   |   | (178 | ) |
| States and political subdivisions                |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Other loans                                      |   |   | (1      | )      |   |   | (9      | )      |   |   | (2 | ) |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Charged off                                |   |   | (6,878  | )      |   |   | (4,527  | )      |   |   | (2,755 | ) |
| Recoveries:                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Real estate:                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction and land loans                      |   |   | 11      |   |   |   | 3       |   |   |   | 18 |   |
| Farmland                                         |   |   | 2       |   |   |   | -       |   |   |   | - |   |
| 1-4 family residential mortgage                  |   |   | 41      |   |   |   | 4       |   |   |   | - |   |
| Multifamily                                      |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                       |   |   | -       |   |   |   | -       |   |   |   | 1 |   |
| Agriculture                                      |   |   | 18      |   |   |   | 46      |   |   |   | - |   |
| Commercial                                       |   |   | 45      |   |   |   | 3       |   |   |   | 11 |   |
| Consumer                                         |   |   | 26      |   |   |   | 46      |   |   |   | 31 |   |
| States and political subdivisions                |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Other loans                                      |   |   | 2       |   |   |   | 1       |   |   |   | 4 |   |
| Total Recoveries                                 |   |   | 145     |   |   |   | 103     |   |   |   | 65 |   |
| Loans Charged off, net                           |   |   | (6,733  | )      |   |   | (4,424  | )      |   |   | (2,690 | ) |
| Additions to the allowance charged to operations |   |   | 4,438   |   |   |   | 8,268   |   |   |   | 2,300 |   |
| Ending balance                                   |   | $      | 5,140   |   |   | $      | 7,435   |   |   | $ | 3,591 |   |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Net chage offs to average loans                  |   |   | 2.42    | %      |   |   | 1.54    | %      |   |   | 0.94 | % |

----

----

|                              |   | Allowance |   |   | Percentage of Loans toTotal Loans |   |
|-----------------------------------|--------|-----------|--------|--------|-----------------------------------|--------|
|                              |   | 2010      |   |   | 2009                              |   |   | 2008 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Real estate:                      |   |      |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction and land loans       |   | $         | 2,176  |   |                              | $      | 1,893 |   |   | $ | 1,777 |   |   |   | 14.1 | % |   |   | 17.4 | % |   |   | 21.1 | % |
| Farmland                          |   |      | 119    |   |                              |   | - |   |   |   | - |   |   |   | 11.6 | % |   |   | 10.7 | % |   |   | 13.8 | % |
| 1-4 family residential mortgage   |   |      | 576    |   |                              |   | 629 |   |   |   | 64 |   |   |   | 22.3 | % |   |   | 19.7 | % |   |   | 21.1 | % |
| Multifamily                       |   |      | 7      |   |                              |   | - |   |   |   | - |   |   |   | 1.2 | % |   |   | 1.5 | % |   |   | 1.4 | % |
| Commercial                        |   |      | 1,100  |   |                              |   | 3,329 |   |   |   | 205 |   |   |   | 28.2 | % |   |   | 21.6 | % |   |   | 19.3 | % |
| Agriculture                       |   |      | 201    |   |                              |   | 466 |   |   |   | 569 |   |   |   | 4.8 | % |   |   | 4.8 | % |   |   | 4.8 | % |
| Commercial                        |   |      | 772    |   |                              |   | 975 |   |   |   | 844 |   |   |   | 11.2 | % |   |   | 18.3 | % |   |   | 10.9 | % |
| Consumer                          |   |      | 178    |   |                              |   | 144 |   |   |   | 132 |   |   |   | 5.2 | % |   |   | 5.1 | % |   |   | 6.4 | % |
| States and political subdivisions |   |      | 9      |   |                              |   | - |   |   |   | - |   |   |   | 1.5 | % |   |   | 0.9 | % |   |   | 1.2 | % |
| Other loans                       |   |      | 2      |   |                              |   | - |   |   |   | - |   |   |   | 0.0 | % |   |   | 0.0 | % |   |   | 0.0 | % |
| Totals                            |   | $         | 5,140  |   |                              | $      | 7,436 |   |   | $ | 3,591 |   |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |

----

|                                |   | Deposits |    |   | Rate Paid |   |
|-------------------------------------|--------|----------|---------|--------|-----------|--------|
|                                |   | 2010     |    |   | 2009      |   |   | 2008 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Noninterest-bearing demand deposits |   | $        | 142,311 |   |      | $      | 140,782 |   |   | $ | 63,234 |   |   |   | 0 | % |   |   | 0 | % |   |   | 0 | % |
|                                |   |     |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest - bearing                  |   |     |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                              |   | $        | 79,376  |   |      | $      | 87,294 |   |   | $ | 82,357 |   |   |   | 0.62 | % |   |   | 0.76 | % |   |   | 1.68 | % |
| Savings                             |   |     | 20,022  |   |      |   | 19,147 |   |   |   | 17,612 |   |   |   | 0.21 | % |   |   | 0.20 | % |   |   | 0.24 | % |
| Time                                |   |     | 184,045 |   |      |   | 196,591 |   |   |   | 194,524 |   |   |   | 2.13 | % |   |   | 2.94 | % |   |   | 4.08 | % |
|                                |   | $        | 283,443 |   |      | $      | 303,032 |   |   | $ | 294,493 |   |   |   | 1.57 | % |   |   | 2.23 | % |   |   | 3.18 | % |

|                  |   | $100,000 or GreaterCertificates ofDeposit |   |   | Other TimeDeposits |   |
|-----------------------|--------|-------------------------------------------|--------|--------|--------------------|--------|
| Maturity              |   |                                      |   |   |               |   |
| Three months or less  |   | $                                         | 17,738 |   |               | $      | 23,972 |   |
| Three to six months   |   |                                      | 18,460 |   |               |   | 28,368 |   |
| Six to twelve months  |   |                                      | 19,605 |   |               |   | 27,179 |   |
| Twelve months or more |   |                                      | 15,991 |   |               |   | 23,192 |   |
| Totals                |   | $                                         | 71,794 |   |               | $      | 102,711 |   |

----

|                        |   | Maximum Outstanding at any month end |    |   | Average balance |   |   | Average interest rate |   |   | Ending balance |   |   | Average interest rate at year end |   |
|-----------------------------|--------|-------------------------------------------|---------|--------|-----------------|--------|--------|-----------------------|--------|--------|----------------|--------|--------|-----------------------------------|--------|
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |
| 2010                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |
| Securities sold under       |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |
| agreements to repurchase    |   | $                                         | -       |   |            | $      | 5      |                  |   |   | 0.00           | %      |   | $                                 | -      |   |   |   | 0.00 | % |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| Other short term borrowings |   | $                                         | 944     |   |            | $      | 540    |                  |   |   | 0.00           | %      |   | $                                 | 944    |   |   |   | 0.00 | % |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| 2009                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| Securities sold under       |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| agreements to repurchase    |   | $                                         | -       |   |            | $      | 5      |                  |   |   | 0.00           | %      |   | $                                 | -      |   |   |   | 0.00 | % |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| Other short term borrowings |   | $                                         | 947     |   |            | $      | 379    |                  |   |   | 0.00           | %      |   | $                                 | 624    |   |   |   | 0.00 | % |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| 2008                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| Securities sold under       |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| agreements to repurchase    |   | $                                         | 108,160 |   |            | $      | 68,257 |                  |   |   | 1.22           | %      |   | $                                 | 1,861  |   |   |   | 0.00 | % |
|                        |   |                                      |    |   |            |   |   |                  |   |   |           |   |   |                              |   |   |   |   |   |   |
| Other short term borrowings |   | $                                         | 661     |   |            | $      | 663    |                  |   |   | 1.59           | %      |   | $                                 | 496    |   |   |   | 0.19 | % |

|                                      |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |   |   |   |
| Return on average assets                  |   |   | -0.28  | %      |   |   | -0.91  | %      |   |   | 0.11 | % |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average equity                  |   |   | -2.36  | %      |   |   | -10.97 | %      |   |   | 1.67 | % |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend pay-out ratio                    |   |   | 0.00   | %      |   |   | 0.00   | %      |   |   | 125.00 | % |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average equity to average assets |   |   | 7.46   | %      |   |   | 8.31   | %      |   |   | 7.35 | % |

----

----

|                                          |   |                          |    |   | Percent ChangeInterest Income/Expense |   |
|-----------------------------------------------|--------|-------------------------------|---------|--------|---------------------------------------|--------|
|                                          |   | Ending Balancesas of 12/31/10 |    |   | Down 200Basis Points                  |   |   | Up 200Basis Points |   |
| Earning Assets:                               |   |                          |    |   |                                  |   |   |   |   |
| Cash & Short-term Investments             |   | $                             | 80,966  |   |                                  |   | -99.60 | % |   |   | 809.37 | % |
| Investment securities, held to maturity       |   |                          | 17,263  |   |                                  |   | -1.61 | % |   |   | 4.64 | % |
| Investment securities, available for sale     |   |                          | 68,808  |   |                                  |   | -4.32 | % |   |   | 7.15 | % |
| Loans                                         |   |                          | 256,631 |   |                                  |   | -2.70 | % |   |   | 15.91 | % |
| Total Assets                                  |   | $                             | 423,668 |   |                                  |   | -3.23 | % |   |   | 18.12 | % |
|                                          |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| Interest Bearing Liabilities:                 |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| Interest Bearing Deposits                     |   | $                             | 99,846  |   |                                  |   | -10.38 | % |   |   | 78.78 | % |
| Certificates of Deposit less than $100,000    |   |                          | 102,711 |   |                                  |   | -12.35 | % |   |   | 61.75 | % |
| Certificates of Deposit greater than $100,000 |   |                          | 71,794  |   |                                  |   | -11.37 | % |   |   | 56.86 | % |
| Total Interest Bearing Deposits               |   |                          | 274,351 |   |                                  |   | -11.72 | % |   |   | 62.41 | % |
|                                          |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| Federal funds sold & securities           |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| purchased under agreement to resale           |   |                          | 0       |   |                                  |   | 0.00 | % |   |   | 0.00 | % |
| Federal Home Loan Bank borrowings             |   |                          | 1,280   |   |                                  |   | -3.12 | % |   |   | 24.93 | % |
| Total Purchased Funds                         |   |                          | 1,280   |   |                                  |   |   |   |   |   |   |   |
|                                          |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| Total Liabilities                             |   | $                             | 275,631 |   |                                  |   | -11.52 | % |   |   | 61.53 | % |
|                                          |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| Net Interest Income                           |   |                          |    |   |                                  |   | -1.34 | % |   |   | 8.24 | % |
|                                          |   |                          |    |   |                                  |   |   |   |   |   |   |   |
| *Information pertains to the Bank only        |   |                          |    |   |                                  |   |   |   |   |   |   |   |

----

----

----

|   | · | The Bank expects to face increased regulation of the industry, including the Dodd-Frank Act. Compliance with such regulations may increase the Bank’s costs and limit our ability to pursue business opportunities. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Regulatory changes have introduced price controls on products or services offered by the Bank.  There is no assurance that the maximum price allowed under such regulation will be in excess of the Bank’s cost of providing the product or service. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Government stimulus packages and other responses to the financial crises may not stabilize the economy or financial system. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | The ability to assess the creditworthiness of the Bank’s customers may be impaired if the approaches used to select, manage, and underwrite our customers become less predictive of future behaviors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The process used to estimate losses requires difficult, subjective, and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of the Bank’s borrowers to repay their loans.  The current economic conditions may make accurate estimation more difficult and negatively impact the reliability of this process. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The Bank may be required to pay higher Federal Deposit Insurance Corporation premiums because of its performance or because market developments significantly deplete the DIF of the FDIC and reduce the ratio of reserves to insured deposits below the statutory requirement. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions and government sponsored entities. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (1) | 5,000,000 shares of Class A common stock, $.01 par value per share, of which 2,389,127 shares are issued and 2,325,162 are outstanding and held by approximately 864 shareholders of record, as of March 29, 2011. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | 250,000 shares of Class B common stock, $.01 par value per share, none of which were issued, as of March 29, 2011. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                                                                          |   | 2010   |   |   | 2009   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Interest income (1)                                                           |   | $      | 19,552 |   |   | $      | 21,411 |   |
| Interest expense                                                              |   |   | 4,737  |   |   |   | 7,129 |   |
| Net interest income                                                           |   |   | 14,815 |   |   |   | 14,282 |   |
| Provision for loan losses                                                     |   |   | 4,438  |   |   |   | 8,268 |   |
| Net interest income after provision for loan losses on a tax equivalent basis |   |   | 10,377 |   |   |   | 6,014 |   |
| Less: tax equivalent adjustment                                               |   |   | 382    |   |   |   | 634 |   |
| Net interest income after provision for loan losses                           |   | $      | 9,995  |   |   | $      | 5,380 |   |

----

|                               |   | 2010   |      |   | 2009   |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|
| Service Charge Income              |   | $      | 1,386,816 |   |   | $      | 1,364,164 |   |
| Nonsufficient Fund Charges, net    |   |   | 1,924,441 |   |   |   | 2,170,331 |   |
| Mortgage Origination Fees          |   |   | 357,756   |   |   |   | 159,552 |   |
| Investment Securities Gains, (net) |   |   | 1,046,575 |   |   |   | 176,316 |   |
| Other                              |   |   | 652,031   |   |   |   | 813,233 |   |
|                               |   | $      | 5,367,619 |   |   | $      | 4,683,596 |   |

----

|                  |   | 2010   |       |   | 2009   |   |
|-----------------------|--------|--------|------------|--------|--------|--------|
| Salaries and benefits |   | $      | 8,617,345  |   |   | $      | 8,517,858 |   |
| Net occupancy         |   |   | 2,219,242  |   |   |   | 2,418,913 |   |
| Other                 |   |   | 6,467,501  |   |   |   | 6,384,435 |   |
| Total                 |   | $      | 17,304,088 |   |   | $      | 17,321,206 |   |

----

|                                                |   | 2010   |        |   | 2009   |   |
|-----------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Real estate:                                        |   |   |        |   |   |   |
| Construction, land developmnt, and other land loans |   | $      | 36,825,855  |   |   | $      | 49,321,129 |   |
| Farmland                                            |   |   | 30,269,876  |   |   |   | 30,391,410 |   |
| 1-4 family residential mortgage                     |   |   | 58,342,993  |   |   |   | 55,820,121 |   |
| Multifamily                                         |   |   | 3,082,066   |   |   |   | 4,374,432 |   |
| Commercial                                          |   |   | 73,800,481  |   |   |   | 61,073,450 |   |
| Agriculture                                         |   |   | 12,633,816  |   |   |   | 13,566,243 |   |
| Commercial                                          |   |   | 29,413,147  |   |   |   | 51,989,325 |   |
| Consumer                                            |   |   | 13,597,817  |   |   |   | 14,323,775 |   |
| States and political subdivisions                   |   |   | 3,735,144   |   |   |   | 2,378,040 |   |
| Other loans                                         |   |   | 69,620      |   |   |   | 108,246 |   |
|                                                |   | $      | 261,770,815 |   |   | $      | 283,346,171 |   |

----

----

| Index to Financial Statements                                                                                               |   | Page(s) |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|
|                                                                                                                        |   |    |   |
| Report of Independent Registered Public Accounting Firm                                                                     |   |    | F1     |   |
|                                                                                                                        |   |    |   |   |
| Consolidated Balance Sheets as of December 31, 2010 and 2009                                                                |   |    | F2     |   |
|                                                                                                                        |   |    |   |   |
| Consolidated Statements of Operations for the years ended December 31, 2010 and 2009                                        |   |    | F3     |   |
|                                                                                                                        |   |    |   |   |
| Consolidated Statements of Stockholders' Equity and Other Comprehensive Loss for the years ended December 31, 2010 and 2009 |   |    | F4     |   |
|                                                                                                                        |   |    |   |   |
| Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009                                        |   |    | F5     |   |
|                                                                                                                        |   |    |   |   |
| Notes to Consolidated Financial Statements - December 31, 2010 and 2009                                                     |   |    | F6     |   |

----

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

----

UNITED BANCORPORATION 

| Assets                                                                                                                                                                         |   | 2010   |        |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Cash and due from banks                                                                                                                                                        |   | $      | 18,179,566  |   |   | $      | 13,858,726 |   |
| Interest bearing deposits in banks                                                                                                                                             |   |   | 62,786,543  |   |   |   | 40,809,385 |   |
| Cash and short-term investments                                                                                                                                                |   |   | 80,966,109  |   |   |   | 54,668,111 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Interest bearing deposits with other                                                                                                                                           |   |   |        |   |   |   |   |   |
| Securities available for sale, at fair value (amortized cost of $69,518,789 and $67,627,174 at December 31, 2010 and 2009,respectively)                                        |   |   | 68,808,624  |   |   |   | 68,212,662 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Securities held to maturity (market values of  $17,302,864 and $15,715,993 at December 31, 2010 and 2009  respectively)                                    |   |   |        |   |   |   |   |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Loans                                                                                                                                                                          |   |   | 261,770,815 |   |   |   | 283,346,171 |   |
| Less: Allowance for loan losses                                                                                                                                                |   |   | 5,139,998   |   |   |   | 7,435,509 |   |
| Net Loans                                                                                                                                                                      |   |   | 256,630,817 |   |   |   | 275,910,662 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Premises and equipment, net                                                                                                                                                    |   |   | 16,472,056  |   |   |   | 17,589,236 |   |
| Interest receivable                                                                                                                                                            |   |   | 2,192,768   |   |   |   | 2,858,122 |   |
| Intangible assets                                                                                                                                                              |   |   | -           |   |   |   | 934,763 |   |
| Other assets                                                                                                                                                                   |   |   | 24,887,714  |   |   |   | 21,149,520 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Total assets                                                                                                                                                                   |   | $      | 467,220,694 |   |   | $      | 456,982,406 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                                           |   |   |        |   |   |   |   |   |
| Deposits:                                                                                                                                                                      |   |   |        |   |   |   |   |   |
| Non-interest bearing                                                                                                                                                           |   | $      | 142,681,749 |   |   | $      | 121,753,295 |   |
| Interest bearing                                                                                                                                                               |   |   | 274,350,971 |   |   |   | 283,056,954 |   |
| Total deposits                                                                                                                                                                 |   |   | 417,032,720 |   |   |   | 404,810,249 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Advances from Federal Home Loan Bank of Atlanta                                                                                                                                |   |   | 1,280,300   |   |   |   | 1,445,100 |   |
| Treasury, tax, and loan account                                                                                                                                                |   |   | 944,078     |   |   |   | 624,143 |   |
| Interest payable                                                                                                                                                               |   |   | 402,953     |   |   |   | 620,867 |   |
| Accrued expenses and other liabilities                                                                                                                                         |   |   | 1,731,437   |   |   |   | 1,608,243 |   |
| Note payable to Trust                                                                                                                                                          |   |   | 10,310,000  |   |   |   | 10,310,000 |   |
| Total liabilities                                                                                                                                                              |   |   | 431,701,488 |   |   |   | 419,418,602 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Stockholders' equity:                                                                                                                                                          |   |   |        |   |   |   |   |   |
| Preferred stock of $.01 par value.  Authorized 250,000 shares; 10,300 shares issued in 2010 and 2009  respectively                                         |   |   | 10,080,227  |   |   |   | 10,014,985 |   |
| Class A common stock, $0.01 par value. Authorized 5,000,000 shares; issued and outstanding,2,389,127 and  2,388,992 shares in 2010 and 2009,  respectively |   |   | 23,891      |   |   |   | 23,890 |   |
| Class B common stock, $0.01 par value. Authorized 250,000 shares; no shares issued or outstanding                                                                              |   |   | -           |   |   |   | - |   |
| Additional paid in capital                                                                                                                                                     |   |   | 6,815,176   |   |   |   | 6,544,079 |   |
| Accumulated other comprehensive income (loss), net of tax                                                                                                                      |   |   | (426,105    | )      |   |   | 351,289 |   |
| Retained earnings                                                                                                                                                              |   |   | 19,721,667  |   |   |   | 21,685,478 |   |
|                                                                                                                                                                           |   |   | 36,214,856  |   |   |   | 38,619,721 |   |
|                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Less:  86,757 and 131,678 treasury shares, at cost, respectively                                                                                                     |   |   | 695,650     |   |   |   | 1,055,917 |   |
| Total stockholders' equity                                                                                                                                                     |   |   | 35,519,206  |   |   |   | 37,563,804 |   |
| Total liabilities and stockholders' equity                                                                                                                                     |   | $      | 467,220,694 |   |   | $      | 456,982,406 |   |

----

UNITED BA

|                                                |   | 2010   |       |   | 2009   |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                |   |   |       |   |   |   |
| Interest income:                                    |   |   |       |   |   |   |
| Interest and fees on loans                          |   | $      | 16,580,519 |   |   | $      | 17,013,596 |   |
| Interest on investment securities:                  |   |   |       |   |   |   |   |   |
| Taxable                                             |   |   | 1,692,469  |   |   |   | 2,283,501 |   |
| Nontaxable                                          |   |   | 741,167    |   |   |   | 1,231,617 |   |
| Total investment income                             |   |   | 2,433,636  |   |   |   | 3,515,118 |   |
| Other interest income                               |   |   | 156,447    |   |   |   | 247,903 |   |
| Total interest income                               |   |   | 19,170,602 |   |   |   | 20,776,617 |   |
|                                                |   |   |       |   |   |   |   |   |
| Interest expense:                                   |   |   |       |   |   |   |   |   |
| Interest on deposits                                |   |   | 4,447,947  |   |   |   | 6,770,052 |   |
| Interest on other borrowed funds                    |   |   | 289,476    |   |   |   | 358,980 |   |
| Total interest expense                              |   |   | 4,737,423  |   |   |   | 7,129,032 |   |
|                                                |   |   |       |   |   |   |   |   |
| Net interest income                                 |   |   | 14,433,179 |   |   |   | 13,647,585 |   |
|                                                |   |   |       |   |   |   |   |   |
| Provision for loan losses                           |   |   | 4,438,000  |   |   |   | 8,267,561 |   |
|                                                |   |   |       |   |   |   |   |   |
|                                                |   |   |       |   |   |   |   |   |
| Net interest income after provision for loan losses |   |   | 9,995,179  |   |   |   | 5,380,024 |   |
|                                                |   |   |       |   |   |   |   |   |
| Noninterest income:                                 |   |   |       |   |   |   |   |   |
| Service charge on deposits                          |   |   | 3,311,257  |   |   |   | 3,534,495 |   |
| Investment securities gains, net                    |   |   | 1,046,575  |   |   |   | 176,316 |   |
| Mortgage loan and related fees                      |   |   | 357,756    |   |   |   | 159,552 |   |
| Other                                               |   |   | 652,031    |   |   |   | 813,233 |   |
| Total noninterest income                            |   |   | 5,367,619  |   |   |   | 4,683,596 |   |
|                                                |   |   |       |   |   |   |   |   |
| Noninterest expense:                                |   |   |       |   |   |   |   |   |
| Salaries and benefits                               |   |   | 8,617,345  |   |   |   | 8,517,858 |   |
| Net occupancy expense                               |   |   | 2,219,242  |   |   |   | 2,418,913 |   |
| Other                                               |   |   | 6,467,501  |   |   |   | 6,384,435 |   |
| Total noninterest expense                           |   |   | 17,304,088 |   |   |   | 17,321,206 |   |
|                                                |   |   |       |   |   |   |   |   |
| Loss before income tax benefits                     |   |   | (1,941,290 | )      |   |   | (7,257,586 | ) |
| Income tax benefits                                 |   |   | (1,101,432 | )      |   |   | (3,228,241 | ) |
| Net losses                                          |   |   | (839,858   | )      |   |   | (4,029,345 | ) |
| Preferred stock dividends                           |   |   | 453,200    |   |   |   | 460,639 |   |
| Accretion on preferred stock discount               |   |   | 65,242     |   |   |   | 61,604 |   |
| Net losses available to common shareholders         |   | $      | (1,358,300 | )      |   | $      | (4,551,588 | ) |
|                                                |   |   |       |   |   |   |   |   |
|                                                |   |   |       |   |   |   |   |   |
| Basic losses per share                              |   | $      | (0.37      | )      |   | $      | (1.79 | ) |
|                                                |   |   |       |   |   |   |   |   |
| Basic weighted average shares outstanding           |   |   | 2,288,829  |   |   |   | 2,245,098 |   |
|                                                |   |   |       |   |   |   |   |   |
| Diluted losses per share                            |   | $      | (0.37      | )      |   | $      | (1.79 | ) |
|                                                |   |   |       |   |   |   |   |   |
| Diluted weighted average shares outstanding         |   |   | 2,288,829  |   |   |   | 2,245,098 |   |

----

UNITED

|                                                 |   | Preferred Stock |       |   | CommonShares |   |      | Commonstock |   |   | Additionalpaid incapital |   |   | Retainedearnings |      |   | Accumulatedothercomprehensiveincome (loss) |   |       | Treasurystock |   |   | Totalstockholders'equity |   |   | Comprehensiveloss |       |
|------------------------------------------------------|--------|-----------------|------------|--------|--------------|--------|-----------|-------------|--------|--------|--------------------------|--------|--------|------------------|-----------|--------|--------------------------------------------|--------|------------|---------------|--------|--------|--------------------------|--------|--------|-------------------|------------|
| Balance December 31, 2008                            |   | $               | 9,953,381  |   |         |   | 2,388,125 |        |   | $      | 23,881                   |   |   | $                | 6,342,423 |   |                                       | $      | 26,572,188 |          |   | $      | 480,584                  |   |   | $                 | (1,249,816 | ) |   | $ | 42,122,641 |   |   |   |   |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |
| Net losses                                           |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (4,029,345 | )             |   |   |                     |   |   |              |       |   |   |   | (4,029,345 | ) |   | $ | (4,029,345 | ) |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss (Note 18)                   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   | (129,295                 | )      |   |              |       |   |   |   | (129,295 | ) |   |   | (129,295 | ) |
| Comprehensive loss                                   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   | $ | (4,158,640 | ) |
| Sale of common stock  (ESPP)               |   |            |       |   |         |   | 425       |        |   |   | 4                        |   |   |             | 5,126     |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   | 5,130 |   |   |   |   |   |
| Treasury shares issued to dividend reinvestment plan |   |            |       |   |         |   |      |        |   |   |                     |   |   |             | 13,770    |   |                                       |   |       |          |   |   |                     |   |   |              | 16,168     |   |   |   | 29,938 |   |   |   |   |   |
| Treasury shares issued as stock dividend             |   |            |       |   |         |   |      |        |   |   |                     |   |   |             | 151,360   |   |                                       |   | (329,091   | )             |   |   |                     |   |   |              | 177,731    |   |   |   | - |   |   |   |   |   |
| Cash portion of stock dividend (fractional shares)   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (6,031     | )             |   |   |                     |   |   |              |       |   |   |   | (6,031 | ) |   |   |   |   |
| Stock-based compensation                             |   |            |       |   |         |   | 442       |        |   |   | 5                        |   |   |             | 31,400    |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   | 31,405 |   |   |   |   |   |
| Accretion on preferred stock discount                |   |            | 61,604     |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (61,604    | )             |   |   |                     |   |   |              |       |   |   |   | - |   |   |   |   |   |
| Preferred stock dividends paid                       |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (460,639   | )             |   |   |                     |   |   |              |       |   |   |   | (460,639 | ) |   |   |   |   |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |   |
| Balance December 31, 2009                            |   | $               | 10,014,985 |   |         |   | 2,388,992 |        |   | $      | 23,890                   |   |   | $                | 6,544,079 |   |                                       | $      | 21,685,478 |          |   | $      | 351,289                  |   |   | $                 | (1,055,917 | ) |   | $ | 37,563,804 |   |   |   |   |   |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |   |
| Net losses                                           |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (839,858   | )             |   |   |                     |   |   |              |       |   |   |   | (839,858 | ) |   | $ | (839,858 | ) |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss (Note 18)                   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   | (777,394                 | )      |   |              |       |   |   |   | (777,394 | ) |   |   | (777,394 | ) |
| Comprehensive loss                                   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   | $ | (1,617,252 | ) |
| Treasury shares issued as stock dividend             |   |            |       |   |         |   |      |        |   |   |                     |   |   |             | 242,496   |   |                                       |   | (602,763   | )             |   |   |                     |   |   |              | 360,267    |   |   |   | - |   |   |   |   |   |
| Cash portion of stock dividend (fractional shares)   |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (2,748     | )             |   |   |                     |   |   |              |       |   |   |   | (2,748 | ) |   |   |   |   |
| Stock-based compensation                             |   |            |       |   |         |   | 135       |        |   |   | 1                        |   |   |             | 28,601    |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   | 28,602 |   |   |   |   |   |
| Accretion on preferred stock discount                |   |            | 65,242     |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (65,242    | )             |   |   |                     |   |   |              |       |   |   |   | - |   |   |   |   |   |
| Preferred stock dividends paid                       |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   | (453,200   | )             |   |   |                     |   |   |              |       |   |   |   | (453,200 | ) |   |   |   |   |
|                                                 |   |            |       |   |         |   |      |        |   |   |                     |   |   |             |      |   |                                       |   |       |          |   |   |                     |   |   |              |       |   |   |   |   |   |   |   |   |   |
| Balance December 31, 2010                            |   | $               | 10,080,227 |   |         |   | 2,389,127 |        |   | $      | 23,891                   |   |   | $                | 6,815,176 |   |                                       | $      | 19,721,667 |          |   | $      | (426,105                 | )      |   | $                 | (695,650   | ) |   | $ | 35,519,206 |   |   |   |   |   |

----

UNITE

|                                                                                                  |   | 2010   |        |   | 2009   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                  |   |   |        |   |   |   |
| Cash flows from operating activities                                                                  |   |   |        |   |   |   |
| Net losses                                                                                            |   | $      | (839,858    | )      |   | $      | (4,029,345 | ) |
| Adjustments to reconcile net losses to net cash provided by operating activities                      |   |   |        |   |   |   |   |   |
| Provision for loan losses                                                                             |   |   | 4,438,000   |   |   |   | 8,267,561 |   |
| Depreciation of premises and equipment                                                                |   |   | 1,172,648   |   |   |   | 1,318,646 |   |
| Net amortization of premuim on investment securities available for sale                               |   |   | 323,775     |   |   |   | 138,424 |   |
| Net amortization of premium on investment securities held to maturity                                 |   |   | 90,699      |   |   |   | 178,013 |   |
| Gain on sales of investment securities available for sale, net                                        |   |   | (1,046,575  | )      |   |   | (176,316 | ) |
| (Gain) loss on sale of other real estate                                                              |   |   | 24,091      |   |   |   | (8,797 | ) |
| Stock-based compensation                                                                              |   |   | 28,602      |   |   |   | 31,405 |   |
| Loss on disposal of equipment                                                                         |   |   | -           |   |   |   | 9,790 |   |
| Increase in deferred income taxes                                                                     |   |   | (1,194,038  | )      |   |   | (2,738,799 | ) |
| Provision for other real estate losses                                                                |   |   | -           |   |   |   | 1,032,000 |   |
| Writedown of other real estate                                                                        |   |   | 175,908     |   |   |   | 4,500 |   |
| Writeoff of intangible assets                                                                         |   |   | 934,763     |   |   |   | - |   |
| Decrease in interest receivable                                                                       |   |   | 665,354     |   |   |   | 395,482 |   |
| Increase (decrease) in other assets                                                                   |   |   | (400,349    | )      |   |   | 1,290,510 |   |
| (Increase) decrease in Federal Deposit Insurance Corporation prepaid deposit assessment               |   |   | 852,099     |   |   |   | (2,294,324 | ) |
| Decrease in interest payable                                                                          |   |   | (217,914    | )      |   |   | (291,703 | ) |
| Increase in accrued expenses and other liabilities                                                    |   |   | 123,194     |   |   |   | 30,782 |   |
| Net cash provided by operating activities                                                             |   |   | 5,130,399   |   |   |   | 3,157,829 |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Cash flows from investing activities                                                                  |   |   |        |   |   |   |   |   |
| Proceeds from maturities, calls, and principal repayments of investment securities available for sale |   |   | 22,709,629  |   |   |   | 41,456,614 |   |
| Proceeds from maturities, calls, and principal repayments of investment securities held to maturity   |   |   | 6,235,925   |   |   |   | 13,315,000 |   |
| Proceeds from sales of investment securities available for sale                                       |   |   | 36,069,589  |   |   |   | 10,849,262 |   |
| Purchases of investment securities available for sale                                                 |   |   | (59,948,033 | )      |   |   | (35,187,842 | ) |
| Purchases of investment securities held to maturity                                                   |   |   | (7,929,900  | )      |   |   | (22,602,343 | ) |
| Net (increase) decrease in loans                                                                      |   |   | 10,554,356  |   |   |   | (11,874,427 | ) |
| Purchases of premises and equipment, net                                                              |   |   | (55,468     | )      |   |   | (69,345 | ) |
| Proceeds from sale of premises and equipmet                                                           |   |   | -           |   |   |   | 8,000 |   |
| Proceeds from sale of other real estate                                                               |   |   | 1,609,843   |   |   |   | 767,310 |   |
| Net cash provided by (used in) investing activities                                                   |   |   | 9,245,941   |   |   |   | (3,337,771 | ) |
|                                                                                                  |   |   |        |   |   |   |   |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Cash flows from financing activities                                                                  |   |   |        |   |   |   |   |   |
| Net increase (decrease) in deposits                                                                   |   |   | 12,222,471  |   |   |   | (86,345,377 | ) |
| Net decrease in securities sold under agreements to repurchase                                        |   |   | -           |   |   |   | (1,861,237 | ) |
| Cash dividends - preferred stock                                                                      |   |   | (453,200    | )      |   |   | (460,639 | ) |
| Cash dividends - common stock                                                                         |   |   | (2,748      | )      |   |   | (6,031 | ) |
| Proceeds from sale of common stock                                                                    |   |   | -           |   |   |   | 5,130 |   |
| Proceeds from sale of treasury stock                                                                  |   |   | -           |   |   |   | 29,938 |   |
| Repayments of advances from FHLB Atlanta                                                              |   |   | (164,800    | )      |   |   | (164,800 | ) |
| Increase in other borrowed funds                                                                      |   |   | 319,935     |   |   |   | 128,571 |   |
| Net cash  provided by (used in) financing activities                                        |   |   | 11,921,658  |   |   |   | (88,674,445 | ) |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Net increase (decrease) in cash and short-term investments                                            |   |   | 26,297,998  |   |   |   | (88,854,387 | ) |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Cash and short-term investments, beginning of period                                                  |   |   | 54,668,111  |   |   |   | 143,522,498 |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Cash and short-term investments, end of period                                                        |   | $      | 80,966,109  |   |   | $      | 54,668,111 |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Supplemental disclosures                                                                              |   |   |        |   |   |   |   |   |
| Cash paid during the period for:                                                                      |   |   |        |   |   |   |   |   |
| Interest                                                                                              |   | $      | 4,955,337   |   |   | $      | 7,420,735 |   |
| Income taxes                                                                                          |   |   | 52,705      |   |   |   | 55,984 |   |
|                                                                                                  |   |   |        |   |   |   |   |   |
| Noncash transactions                                                                                  |   |   |        |   |   |   |   |   |
| Transfer of loans to other real estate through foreclosure                                            |   | $      | 4,287,489   |   |   | $      | 3,884,523 |   |

----

UNITED 

| (1) | Summary of Significant Accounting Policies |
|-----|--------------------------------------------|

----

----

----

----

----

|  (2) | Cash and Due From Banks |
|-----------|-------------------------|

----

| (3) | Investment Securities |
|-----|-----------------------|

|                               |   | Amortizedcost |       |   | Grossunrealizedgains |   |    | Grossunrealizedlosses |   |   | Fairvalue  |   |
|------------------------------------|--------|---------------|------------|--------|----------------------|--------|---------|-----------------------|--------|--------|------------|--------|
| 2010:                              |   |          |       |   |                 |   |    |                  |   |   |       |   |
|                               |   |          |       |   |                 |   |    |                  |   |   |       |   |
| U.S. Treasury securities           |   | $             | 19,207,231 |   |                 | $      | 157,497 |                  |   | $      | (135,666   | )      |   | $ | 19,229,062 |   |
| U.S. government sponsored agencies |   |          | 35,391,603 |   |                 |   | 273,654 |                  |   |   | (497,372   | )      |   |   | 35,167,885 |   |
| State and political subdivisions   |   |          | 9,744,841  |   |                 |   | 69,416  |                  |   |   | (447,406   | )      |   |   | 9,366,851 |   |
| Mortgage–backed securities   |   |          | 5,164,961  |   |                 |   | -       |                  |   |   | (126,710   | )      |   |   | 5,038,251 |   |
| Equity securities                  |   |          | 10,153     |   |                 |   | -       |                  |   |   | (3,578     | )      |   |   | 6,575 |   |
|                               |   | $             | 69,518,789 |   |                 | $      | 500,567 |                  |   | $      | (1,210,732 | )      |   | $ | 68,808,624 |   |
| 2009:                              |   |          |       |   |                 |   |    |                  |   |   |       |   |   |   |   |   |
|                               |   |          |       |   |                 |   |    |                  |   |   |       |   |   |   |   |   |
| U.S. Treasury securities           |   | $             | 3,024,364  |   |                 | $      | 3,132   |                  |   | $      | (777       | )      |   | $ | 3,026,719 |   |
| U.S. government sponsored agencies |   |          | 36,040,571 |   |                 |   | 444,446 |                  |   |   | (16,504    | )      |   |   | 36,468,513 |   |
| State and political subdivisions   |   |          | 28,552,086 |   |                 |   | 517,459 |                  |   |   | (355,405   | )      |   |   | 28,714,140 |   |
| Mortgage–backed securities   |   |          | -          |   |                 |   | -       |                  |   |   | -          |   |   |   | - |   |
| Equity securities                  |   |          | 10,153     |   |                 |   | -       |                  |   |   | (6,863     | )      |   |   | 3,290 |   |
|                               |   | $             | 67,627,174 |   |                 | $      | 965,037 |                  |   | $      | (379,549   | )      |   | $ | 68,212,662 |   |

----

|                                        |   | Amortizedcost |       |   | Grossunrealizedgains |   |    | Grossunrealizedlosses |   |   | Fairvalue |   |
|---------------------------------------------|--------|---------------|------------|--------|----------------------|--------|---------|-----------------------|--------|--------|-----------|--------|
| 2010:                                       |   |          |       |   |                 |   |    |                  |   |   |      |   |
|                                        |   |          |       |   |                 |   |    |                  |   |   |      |   |
| U.S. government sponsored agency securities |   | $             | 17,262,606 |   |                 | $      | 290,222 |                  |   | $      | (249,964  | )      |   | $ | 17,302,864 |   |
|                                        |   | $             | 17,262,606 |   |                 | $      | 290,222 |                  |   | $      | (249,964  | )      |   | $ | 17,302,864 |   |

|                                        |   | Amortizedcost |       |   | Grossunrealizedgains |   |    | Grossunrealizedlosses |   |   | Fairvalue |   |
|---------------------------------------------|--------|---------------|------------|--------|----------------------|--------|---------|-----------------------|--------|--------|-----------|--------|
| 2009:                                       |   |          |       |   |                 |   |    |                  |   |   |      |   |
|                                        |   |          |       |   |                 |   |    |                  |   |   |      |   |
| U.S. government sponsored agency securities |   | $             | 15,424,330 |   |                 | $      | 105,554 |                  |   | $      | (48,891   | )      |   | $ | 15,480,993 |   |
| Other domestic debt securties               |   |          | 235,000    |   |                 |   | -       |                  |   |   | -         |   |   |   | 235,000 |   |
|                                        |   | $             | 15,659,330 |   |                 | $      | 105,554 |                  |   | $      | (48,891   | )      |   | $ | 15,715,993 |   |

----

| 2010                                  |   |                |       |   |              |   |       |       |   |
|---------------------------------------|--------|---------------------|------------|--------|-------------------|--------|------------|------------|--------|
|                                  |   | Less than 12 months |       |   | 12 months or more |   |       | Total      |   |
| Description of Securities             |   | Fair Value          |       |   | Unrealized losses |   |       | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                  |   |                |       |   |              |   |       |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities              |   | $                   | 3,954,531  |   |              | $      | (135,666   | )          |   | $ | - |   |   | $ | - |   |   | $ | 3,954,531 |   |   | $ | (135,666 | ) |
| U.S. government sponsored agencies    |   |                | 17,681,269 |   |              |   | (497,372   | )          |   |   | - |   |   |   | - |   |   |   | 17,681,269 |   |   |   | (497,372 | ) |
| State and political subdivdisions     |   |                | 4,537,904  |   |              |   | (289,375   | )          |   |   | 636,830 |   |   |   | (158,031 | ) |   |   | 5,174,734 |   |   |   | (447,406 | ) |
| Mortgage-backed securities            |   |                | 5,038,251  |   |              |   | (126,710   | )          |   |   | - |   |   |   | - |   |   |   | 5,038,251 |   |   |   | (126,710 | ) |
| Equity securities                     |   |                | -          |   |              |   | -          |       |   |   | 6,575 |   |   |   | (3,578 | ) |   |   | 6,575 |   |   |   | (3,578 | ) |
| Total temporarily impaired securities |   | $                   | 31,211,955 |   |              | $      | (1,049,123 | )          |   | $ | 643,405 |   |   | $ | (161,609 | ) |   | $ | 31,855,360 |   |   | $ | (1,210,732 | ) |

| 2009                                                   |   |                |       |   |              |   |    |       |   |
|--------------------------------------------------------|--------|---------------------|------------|--------|-------------------|--------|---------|------------|--------|
|                                                   |   | Less than 12 months |       |   | 12 months or more |   |    | Total      |   |
| Description of Securities                              |   | Fair Value          |       |   | Unrealized losses |   |    | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                                   |   |                |       |   |              |   |    |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                               |   | $                   | 2,025,312  |   |              | $      | (777    | )          |   | $ | - |   |   | $ | - |   |   | $ | 2,025,312 |   |   | $ | (777 | ) |
| U.S. government sponsored agencies                     |   |                | 5,035,326  |   |              |   | (16,504 | )          |   |   | - |   |   |   | - |   |   |   | 5,035,326 |   |   |   | (16,504 | ) |
| State and political subdivdisions                      |   |                | 4,412,702  |   |              |   | (75,555 | )          |   |   | 2,204,792 |   |   |   | (279,850 | ) |   |   | 6,617,494 |   |   |   | (355,405 | ) |
| Equity securities                                      |   |                | 3,290      |   |              |   | (6,863  | )          |   |   | - |   |   |   | - |   |   |   | 3,290 |   |   |   | (6,863 | ) |
| Total temporarily impaired   securities |   | $                   | 11,476,630 |   |              | $      | (99,699 | )          |   | $ | 2,204,792 |   |   | $ | (279,850 | ) |   | $ | 13,681,422 |   |   | $ | (379,549 | ) |

----

| 2010                                  |   |                |      |   |              |   |     |       |   |   |              |   |   |       |   |   |              |   |
|---------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|----------|------------|--------|--------|-------------------|--------|--------|------------|--------|--------|-------------------|--------|
|                                  |   | Less than 12 months |      |   | 12 months or more |   |     | Total      |
| Description of Securities             |   | Fair Value          |      |   | Unrealized losses |   |     | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                  |   |                |      |   |              |   |     |       |   |   |              |   |   |       |   |   |              |   |
| U.S. Government sponsored agencies    |   | $                   | 7,640,567 |   |              | $      | (249,964 | )          |   | $      | -                 |   |   | $          | -      |   |              | $      | 7,640,567 |   |   | $ | (249,964 | ) |
| Total temporarily impaired securities |   | $                   | 7,640,567 |   |              | $      | (249,964 | )          |   | $      | -                 |   |   | $          | -      |   |              | $      | 7,640,567 |   |   | $ | (249,964 | ) |

| 2009                                  |   |                |      |   |              |   |    |       |   |   |              |   |   |       |   |   |              |   |
|---------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|---------|------------|--------|--------|-------------------|--------|--------|------------|--------|--------|-------------------|--------|
|                                  |   | Less than 12 months |      |   | 12 months or more |   |    | Total      |   |
| Description of Securities             |   | Fair Value          |      |   | Unrealized losses |   |    | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                  |   |                |      |   |              |   |    |       |   |   |              |   |   |       |   |   |              |   |
| U.S. Government sponsored agencies    |   | $                   | 2,967,310 |   |              | $      | (48,891 | )          |   | $      | -                 |   |   | $          | -      |   |              | $      | 2,967,310 |   |   | $ | (48,891 | ) |
| Total temporarily impaired securities |   | $                   | 2,967,310 |   |              | $      | (48,891 | )          |   | $      | -                 |   |   | $          | -      |   |              | $      | 2,967,310 |   |   | $ | (48,891 | ) |

----

|                                   |   | Available for sale |       |   | Held to maturity |   |
|----------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                   |   | Amortizedcost      |       |   | Fairvalue        |   |   | Amortizedcost |   |   | Fairvalue |   |
| Investment securities due in or after: |   |               |       |   |             |   |   |   |   |   |   |   |
| Due in one year or less                |   | $                  | 4,175,108  |   |             | $      | 4,195,333 |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | 30,256,227 |   |             |   | 30,382,745 |   |   |   | 7,345,885 |   |   |   | 7,468,697 |   |
| Due after five years through ten years |   |               | 23,587,332 |   |             |   | 23,230,788 |   |   |   | 9,916,721 |   |   |   | 9,834,167 |   |
| Due after ten years                    |   |               | 11,500,122 |   |             |   | 10,999,758 |   |   |   | - |   |   |   | - |   |
| Total                                  |   | $                  | 69,518,789 |   |             | $      | 68,808,624 |   |   | $ | 17,262,606 |   |   | $ | 17,302,864 |   |

|                  |   | 2010   |      |   | 2009   |   |
|-----------------------|--------|--------|-----------|--------|--------|--------|
|                  |   |   |      |   |   |   |
| Gross gains realized  |   | $      | 1,133,279 |   |   | $      | 193,603 |   |
| Gross losses realized |   |   | (86,704   | )      |   |   | (17,287 | ) |
| Net gain realized     |   | $      | 1,046,575 |   |   | $      | 176,316 |   |

----

|                               |   | 2010   |      |   | 2009   |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|
|                               |   |   |      |   |   |   |
| Federal Home Loan Bank stock       |   | $      | 1,046,700 |   |   | $      | 1,064,400 |   |
| First National Bankers' Bank stock |   |   | 825,000   |   |   |   | 825,000 |   |
|                               |   | $      | 1,871,700 |   |   | $      | 1,889,400 |   |

| (4) | Loans and Allowance for Loan Losses |
|-----|-------------------------------------|

|                              |   | 2010   |        |   | 2009   |   |
|-----------------------------------|--------|--------|-------------|--------|--------|--------|
| Real estate:                      |   |   |        |   |   |   |
| Construction and land loans       |   | $      | 36,825,855  |   |   | $      | 49,321,129 |   |
| Farmland                          |   |   | 30,269,876  |   |   |   | 30,391,410 |   |
| 1-4 family residential mortgage   |   |   | 58,342,993  |   |   |   | 55,820,121 |   |
| Multifamily                       |   |   | 3,082,066   |   |   |   | 4,374,432 |   |
| Commercial                        |   |   | 73,800,481  |   |   |   | 61,073,450 |   |
| Agriculture                       |   |   | 12,633,816  |   |   |   | 13,566,243 |   |
| Commercial                        |   |   | 29,413,147  |   |   |   | 51,989,325 |   |
| Consumer                          |   |   | 13,597,817  |   |   |   | 14,323,775 |   |
| States and political subdivisions |   |   | 3,735,144   |   |   |   | 2,378,040 |   |
| Other loans                       |   |   | 69,620      |   |   |   | 108,246 |   |
| Totals                            |   | $      | 261,770,815 |   |   | $      | 283,346,171 |   |

----

----

|                              |   | Pass   |    |   | SpecialMention |   |   | Substandard/ Doubtful |   |   | Total  |   |
|-----------------------------------|--------|--------|---------|--------|----------------|--------|--------|-----------------------|--------|--------|--------|--------|
| Real estate:                      |   |   |    |   |           |   |   |                  |   |   |   |   |
| Construction and land loans       |   | $      | 19,306  |   |           | $      | 4,250  |                  |   | $      | 13,270 |   |   | $ | 36,826 |   |
| Farmland                          |   |   | 18,438  |   |           |   | 6,352  |                  |   |   | 5,480  |   |   |   | 30,270 |   |
| 1-4 family residential mortgage   |   |   | 52,544  |   |           |   | 3,538  |                  |   |   | 2,261  |   |   |   | 58,343 |   |
| Multifamily                       |   |   | 3,082   |   |           |   | -      |                  |   |   | -      |   |   |   | 3,082 |   |
| Commercial                        |   |   | 53,704  |   |           |   | 12,026 |                  |   |   | 8,070  |   |   |   | 73,800 |   |
| Agriculture                       |   |   | 8,807   |   |           |   | 2,110  |                  |   |   | 1,717  |   |   |   | 12,634 |   |
| Commercial                        |   |   | 21,853  |   |           |   | 3,223  |                  |   |   | 4,337  |   |   |   | 29,413 |   |
| Consumer                          |   |   | 13,335  |   |           |   | 65     |                  |   |   | 198    |   |   |   | 13,598 |   |
| States and political subdivisions |   |   | 3,735   |   |           |   | -      |                  |   |   | -      |   |   |   | 3,735 |   |
| Other loans                       |   |   | 65      |   |           |   | -      |                  |   |   | 5      |   |   |   | 70 |   |
| Total                             |   | $      | 194,869 |   |           | $      | 31,564 |                  |   | $      | 35,338 |   |   | $ | 261,771 |   |

| Non-accrual loans:                                   |   |   |   |
|------------------------------------------------------|--------|--------|--------|
| Real estate:                                         |   |   |   |
| Construction, land development, and other land loans |   | $      | 8,966  |   |
| Farmland                                             |   |   | 1,210  |   |
| 1-4 family residential mortgage                      |   |   | 801    |   |
| Multifamily                                          |   |   | -      |   |
| Commercial                                           |   |   | 2,803  |   |
| Agriculture                                          |   |   | 1,603  |   |
| Commercial                                           |   |   | 2,162  |   |
| Consumer                                             |   |   | -      |   |
| States and political subdivisions                    |   |   | -      |   |
| Other loans                                          |   |   | -      |   |
| Total nonaccrual loans                               |   | $      | 17,545 |   |

----

|                                             |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Average amount of loans outstanding, net         |   | $      | 278,792 |   |   | $      | 286,548 |   |   | $ | 287,491 |   |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Reserve for loan losses:                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Beginning balance                                |   | $      | 7,435   |   |   | $      | 3,591   |   |   | $ | 3,981 |   |
| Loans charged off:                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Real estate:                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction and  land loans           |   |   | (3,201  | )      |   |   | (2,421  | )      |   |   | (1,627 | ) |
| Farmland                                         |   |   | (11     | )      |   |   | (26     | )      |   |   | (1 | ) |
| 1-4 family residential mortgage                  |   |   | (778    | )      |   |   | (512    | )      |   |   | (68 | ) |
| Multifamily                                      |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                       |   |   | (529    | )      |   |   | (101    | )      |   |   | (615 | ) |
| Agriculture                                      |   |   | (104    | )      |   |   | (246    | )      |   |   | (85 | ) |
| Commercial                                       |   |   | (2,055  | )      |   |   | (1,047  | )      |   |   | (179 | ) |
| Consumer                                         |   |   | (199    | )      |   |   | (165    | )      |   |   | (178 | ) |
| States and political subdivisions                |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Other loans                                      |   |   | (1      | )      |   |   | (9      | )      |   |   | (2 | ) |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Charged off                                |   |   | (6,878  | )      |   |   | (4,527  | )      |   |   | (2,755 | ) |
| Recoveries:                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Real estate:                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction and  land loans           |   |   | 11      |   |   |   | 3       |   |   |   | 18 |   |
| Farmland                                         |   |   | 2       |   |   |   | -       |   |   |   | - |   |
| 1-4 family residential mortgage                  |   |   | 41      |   |   |   | 4       |   |   |   | - |   |
| Multifamily                                      |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                       |   |   | -       |   |   |   | -       |   |   |   | 1 |   |
| Agriculture                                      |   |   | 18      |   |   |   | 46      |   |   |   | - |   |
| Commercial                                       |   |   | 45      |   |   |   | 3       |   |   |   | 11 |   |
| Consumer                                         |   |   | 26      |   |   |   | 46      |   |   |   | 31 |   |
| States and political subdivisions                |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Other loans                                      |   |   | 2       |   |   |   | 1       |   |   |   | 4 |   |
| Total Recoveries                                 |   |   | 145     |   |   |   | 103     |   |   |   | 65 |   |
| Loans Charged off, net                           |   |   | (6,733  | )      |   |   | (4,424  | )      |   |   | (2,690 | ) |
| Additions to the allowance charged to operations |   |   | 4,438   |   |   |   | 8,268   |   |   |   | 2,300 |   |
| Ending balance                                   |   | $      | 5,140   |   |   | $      | 7,435   |   |   | $ | 3,591 |   |
|                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Net chage offs to average loans                  |   |   | 2.42    | %      |   |   | 1.54    | %      |   |   | 0.94 | % |

----

|                                   |   | RecordedInvestment |   |   | UnpaidPrincipalBalance |   |   | RelatedAllowance |   |   | InterestIncomeRecognized |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|--------|--------------------------|--------|
| With no specific allowance reserved    |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Real estate:                           |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Construction and  land loans |   | $                  | 2,748  |   |                   | $      | 3,948  |             |   | $      | -                        |   |   | $ | 2 |   |
| Farmland                               |   |               | 3,485  |   |                   |   | 3,485  |             |   |   | -                        |   |   |   | 55 |   |
| 1-4 family residential mortgage        |   |               | 1,320  |   |                   |   | 1,320  |             |   |   | -                        |   |   |   | 42 |   |
| Multifamily                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Commercial                             |   |               | 256    |   |                   |   | 256    |             |   |   | -                        |   |   |   | 11 |   |
| Agriculture                            |   |               | 1,338  |   |                   |   | 1,338  |             |   |   | -                        |   |   |   | 45 |   |
| Commercial                             |   |               | 1,157  |   |                   |   | 3,168  |             |   |   | -                        |   |   |   | 12 |   |
| Consumer                               |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| States and political subdivisions      |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Other loans                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Total                                  |   | $                  | 10,304 |   |                   | $      | 13,515 |             |   | $      | -                        |   |   | $ | 167 |   |

|                                   |   | RecordedInvestment |   |   | UnpaidPrincipalBalance |   |   | RelatedAllowance |   |   | InterestIncomeRecognized |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|--------|--------------------------|--------|
|                                   |   |               |   |   |                   |   |   |             |   |   |                     |   |
| With specific allowance reserved       |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Real estate:                           |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Construction and  land loans |   | $                  | 6,813  |   |                   | $      | 7,315  |             |   | $      | 1,029                    |   |   | $ | 95 |   |
| Farmland                               |   |               | 150    |   |                   |   | 150    |             |   |   | 33                       |   |   |   | 5 |   |
| 1-4 family residential mortgage        |   |               | 223    |   |                   |   | 223    |             |   |   | 129                      |   |   |   | 9 |   |
| Multifamily                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Commercial                             |   |               | 2,871  |   |                   |   | 2,871  |             |   |   | 565                      |   |   |   | 61 |   |
| Agriculture                            |   |               | 252    |   |                   |   | 252    |             |   |   | 74                       |   |   |   | 14 |   |
| Commercial                             |   |               | 987    |   |                   |   | 987    |             |   |   | 445                      |   |   |   | 8 |   |
| Consumer                               |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| States and political subdivisions      |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Other loans                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Total                                  |   | $                  | 11,296 |   |                   | $      | 11,798 |             |   | $      | 2,275                    |   |   | $ | 192 |   |

----

|                                   |   | RecordedInvestment |   |   | UnpaidPrincipalBalance |   |   | RelatedAllowance |   |   | InterestIncomeRecognized |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|--------|--------------------------|--------|
| Total Impaired Loans                   |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Real estate:                           |   |               |   |   |                   |   |   |             |   |   |                     |   |
| Construction and  land loans |   | $                  | 9,561  |   |                   | $      | 11,263 |             |   | $      | 1,029                    |   |   | $ | 97 |   |
| Farmland                               |   |               | 3,635  |   |                   |   | 3,635  |             |   |   | 33                       |   |   |   | 60 |   |
| 1-4 family residential mortgage        |   |               | 1,543  |   |                   |   | 1,543  |             |   |   | 129                      |   |   |   | 51 |   |
| Multifamily                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Commercial                             |   |               | 3,127  |   |                   |   | 3,127  |             |   |   | 565                      |   |   |   | 72 |   |
| Agriculture                            |   |               | 1,590  |   |                   |   | 1,590  |             |   |   | 74                       |   |   |   | 59 |   |
| Commercial                             |   |               | 2,144  |   |                   |   | 4,155  |             |   |   | 445                      |   |   |   | 20 |   |
| Consumer                               |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| States and political subdivisions      |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Other loans                            |   |               | -      |   |                   |   | -      |             |   |   | -                        |   |   |   | - |   |
| Total                                  |   | $                  | 21,600 |   |                   | $      | 25,313 |             |   | $      | 2,275                    |   |   | $ | 359 |   |

----

|                              |   | ALLEndingBalance |   |   | IndividuallyEvaluated |   |   | CollectivelyEvaluated |   |
|-----------------------------------|--------|------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|
|                              |   |             |   |   |                  |   |   |                  |   |
| Real estate:                      |   |             |   |   |                  |   |   |                  |   |
| Construction and land loans       |   | $                | 1,029  |   |                  | $      | 12,891 |                  |   | $ | - |   |
| Farmland                          |   |             | 33     |   |                  |   | 5,034  |                  |   |   | - |   |
| 1-4 family residential mortgage   |   |             | 129    |   |                  |   | 1,619  |                  |   |   | - |   |
| Multifamily                       |   |             | -      |   |                  |   | -      |                  |   |   | - |   |
| Commercial                        |   |             | 565    |   |                  |   | 7,916  |                  |   |   | - |   |
| Agriculture                       |   |             | 74     |   |                  |   | 1,590  |                  |   |   | - |   |
| Commercial                        |   |             | 445    |   |                  |   | 4,017  |                  |   |   | - |   |
| Consumer                          |   |             | -      |   |                  |   | -      |                  |   |   | - |   |
| States and political subdivisions |   |             | -      |   |                  |   | -      |                  |   |   | - |   |
| Other loans                       |   |             | -      |   |                  |   | -      |                  |   |   | - |   |
| Total                             |   | $                | 2,275  |   |                  | $      | 33,067 |                  |   | $ | - |   |

|                              |   | Past Due Loans |   |   |       |   |   |     |   |   | Past Due  |   |
|-----------------------------------|--------|----------------|--------|--------|------------|--------|--------|----------|--------|--------|-----------|--------|
|                              |   |           |   |   |       |   |   |     |   |   | Total     |   |   |   |   |   | Total |   |   | 90+ days |   |
|                              |   | 30-59 days     |   |   | 60-89 days |   |   | 90+ days |   |   | Past Dues |   |   | Current |   |   | Loans |   |   | & Accruing |   |
|                              |   |           |   |   |       |   |   |     |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Real estate:                      |   |           |   |   |       |   |   |     |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Construction and land loans       |   | $              | 860    |   |       | $      | 106    |     |   | $      | -         |   |   | $ | 966 |   |   | $ | 26,894 |   |   | $ | 27,860 |   |   | $ | - |   |
| Farmland                          |   |           | 2,527  |   |       |   | 18     |     |   |   | 519       |   |   |   | 3,064 |   |   |   | 25,996 |   |   |   | 29,060 |   |   |   | 519 |   |
| 1-4 family residential mortgage   |   |           | 155    |   |       |   | 51     |     |   |   | -         |   |   |   | 206 |   |   |   | 57,336 |   |   |   | 57,542 |   |   |   | - |   |
| Multifamily                       |   |           | -      |   |       |   | -      |     |   |   | -         |   |   |   | - |   |   |   | 3,082 |   |   |   | 3,082 |   |   |   | - |   |
| Commercial                        |   |           | 880    |   |       |   | 610    |     |   |   | -         |   |   |   | 1,490 |   |   |   | 69,507 |   |   |   | 70,997 |   |   |   | - |   |
| Agriculture                       |   |           | -      |   |       |   | -      |     |   |   | -         |   |   |   | - |   |   |   | 11,031 |   |   |   | 11,031 |   |   |   | - |   |
| Commercial                        |   |           | 119    |   |       |   | -      |     |   |   | -         |   |   |   | 119 |   |   |   | 27,132 |   |   |   | 27,251 |   |   |   | - |   |
| Consumer                          |   |           | 100    |   |       |   | 15     |     |   |   | 19        |   |   |   | 134 |   |   |   | 13,463 |   |   |   | 13,597 |   |   |   | 19 |   |
| States and political subdivisions |   |           | -      |   |       |   | -      |     |   |   | -         |   |   |   | - |   |   |   | 3,735 |   |   |   | 3,735 |   |   |   | - |   |
| Other loans                       |   |           | 1      |   |       |   | -      |     |   |   | -         |   |   |   | 1 |   |   |   | 69 |   |   |   | 70 |   |   |   | - |   |
| Totals                            |   | $              | 4,642  |   |       | $      | 800    |     |   | $      | 538       |   |   | $ | 5,980 |   |   | $ | 238,245 |   |   | $ | 244,225 |   |   | $ | 538 |   |

----

| (5) | Foreclosed Assets |
|-----|-------------------|

|                          |   | 2010   |       |   | 2009   |   |
|-------------------------------|--------|--------|------------|--------|--------|--------|
| Balance, beginning of year    |   | $      | 7,610,689  |   |   | $      | 5,523,501 |   |
| Additions                     |   |   | 4,287,489  |   |   |   | 3,884,523 |   |
| Disposals                     |   |   | (1,558,278 | )      |   |   | (760,835 | ) |
| Provision for losses          |   |   | -          |   |   |   | (1,032,000 | ) |
| Writedowns                    |   |   | (175,908   | )      |   |   | (4,500 | ) |
| Balance, end of year          |   | $      | 10,163,992 |   |   | $      | 7,610,689 |   |
|                          |   |   |       |   |   |   |   |   |
| Internally financed disposals |   | $      | 315,771    |   |   | $      | 237,060 |   |

|                                          |   | 2010   |    |   | 2009   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|
| Net (gain) loss on sales of other real estate |   | $      | 24,091  |   |   | $      | (8,797 | ) |
| Provision for other real estate losses        |   |   | -       |   |   |   | 1,032,000 |   |
| Writedown of other real estate                |   |   | 175,908 |   |   |   | 4,500 |   |
| Operating expenses, net of lease income       |   |   | 321,165 |   |   |   | 174,449 |   |
|                                          |   | $      | 521,164 |   |   | $      | 1,202,152 |   |

| (6) | Premises and Equipment |
|-----|------------------------|

|                                                                  |   | 2010   |       |   | 2009   |   |
|-----------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Land                                                                  |   | $      | 5,278,831  |   |   | $      | 5,278,831 |   |
| Buildings and leasehold improvements (depreciated over 5 to 50 years) |   |   | 15,694,277 |   |   |   | 15,694,277 |   |
| Furniture, fixtures, and equipment (depreciated over 3 to 10 years)   |   |   | 8,125,712  |   |   |   | 8,070,244 |   |
| Automobiles (depreciated over 3 years)                                |   |   | 104,883    |   |   |   | 104,883 |   |
|                                                                  |   |   | 29,203,703 |   |   |   | 29,148,235 |   |
| Less accumulated depreciation                                         |   |   | 12,731,647 |   |   |   | 11,558,999 |   |

----

|  (7) | Intangible Assets |
|-----------|-------------------|

| (8) | Deposits |
|-----|----------|

|                                |   | 2010   |        |   | 2009   |   |
|-------------------------------------|--------|--------|-------------|--------|--------|--------|
| Noninterest bearing accounts        |   | $      | 142,681,749 |   |   | $      | 121,753,295 |   |
| NOW accounts                        |   |   | 63,829,840  |   |   |   | 61,964,769 |   |
| Money market investment accounts    |   |   | 15,684,673  |   |   |   | 15,031,727 |   |
| Savings account                     |   |   | 20,332,065  |   |   |   | 19,180,797 |   |
| Time deposits:                      |   |   |        |   |   |   |   |   |
| Time deposits less than $100,000    |   |   | 102,710,739 |   |   |   | 112,479,478 |   |
| Time deposits greater than $100,000 |   |   | 71,793,654  |   |   |   | 74,400,183 |   |
| Total deposits                      |   | $      | 417,032,720 |   |   | $      | 404,810,249 |   |

|                               |   | 2010   |      |   | 2009   |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|
| NOW accounts                       |   | $      | 424,604   |   |   | $      | 531,382 |   |
| Money market investment accounts   |   |   | 67,902    |   |   |   | 132,407 |   |
| Savings accounts                   |   |   | 41,074    |   |   |   | 39,152 |   |
| Time deposits:                     |   |   |      |   |   |   |   |   |
| Time deposit less than $100,000    |   |   | 2,303,692 |   |   |   | 3,458,253 |   |
| Time deposit greater than $100,000 |   |   | 1,610,675 |   |   |   | 2,608,858 |   |
| Total interst expense on deposits  |   | $      | 4,447,947 |   |   | $      | 6,770,052 |   |

----

| Due in 2011 |   | $      | 135,212,521 |   |
|-------------|--------|--------|-------------|--------|
| Due in 2012 |   |   | 23,440,124  |   |
| Due in 2013 |   |   | 8,977,543   |   |
| Due in 2014 |   |   | 3,614,165   |   |
| Due in 2015 |   |   | 3,260,040   |   |
|        |   | $      | 174,504,393 |   |

|  (9) | Participation in U.S. Treasury Programs |
|-----------|-----------------------------------------|

----

| (10) | Borrowed Funds |
|------|----------------|

| 2010                                   |   |          |   |           |   |   |
|----------------------------------------|--------|---------------|--------|----------------|--------|--------|
| Maturity date                          |   | Interest rate |   |           |   |   |
|                                   |   |          |   |           |   |   |
| May 2012                               |   |          | 7.41   | %    |   | $      | 17,600 |   |
| July 2017                              |   |          | 6.93   | %    |   |   | 455,000 |   |
| August 2017                            |   |          | 6.84   | %    |   |   | 73,575 |   |
| June 2020                              |   |          | 4.62   | %    |   |   | 614,334 |   |
| July 2020                              |   |          | 7.54   | %    |   |   | 119,791 |   |
|                                   |   |          |   |           |   |   |   |   |
| Total (weighted average rate of 5.88%) |   |          |   |           |   | $      | 1,280,300 |   |

| 2009                                   |   |          |   |           |   |   |
|----------------------------------------|--------|---------------|--------|----------------|--------|--------|
| Maturity date                          |   | Interest rate |   |           |   |   |
|                                   |   |          |   |           |   |   |
| May 2012                               |   |          | 7.41   | %    |   | $      | 29,334 |   |
| July 2017                              |   |          | 6.93   | %    |   |   | 520,000 |   |
| August 2017                            |   |          | 6.84   | %    |   |   | 84,475 |   |
| June 2020                              |   |          | 4.62   | %    |   |   | 679,000 |   |
| July 2020                              |   |          | 7.54   | %    |   |   | 132,291 |   |
|                                   |   |          |   |           |   |   |   |   |
| Total (weighted average rate of 5.90%) |   |          |   |           |   | $      | 1,445,100 |   |

----

|  (11) | Note Payable to Trust |
|------------|-----------------------|

| (12) | Income Taxes |
|------|--------------|

|                     |   | 2010   |       |   | 2009   |   |
|--------------------------|--------|--------|------------|--------|--------|--------|
| Current:                 |   |   |       |   |   |   |
| Federal                  |   | $      | -          |   |   | $      | (381,542 | ) |
| State                    |   |   | 1,378      |   |   |   | (107,900 | ) |
| Total                    |   |   | 1,378      |   |   |   | (489,442 | ) |
| Deferred:                |   |   |       |   |   |   |   |   |
| Federal                  |   |   | (944,228   | )      |   |   | (2,391,858 | ) |
| State                    |   |   | (158,582   | )      |   |   | (346,941 | ) |
| Total                    |   |   | (1,102,810 | )      |   |   | (2,738,799 | ) |
| Total income tax expense |   | $      | (1,101,432 | )      |   | $      | (3,228,241 | ) |

----

|                                                     |   | 2010   |       |   | 2009   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Income tax at statutory rate                             |   | $      | (660,039   | )      |   | $      | (2,467,679 | ) |
| Increase (decrease) resulting from:                      |   |   |       |   |   |   |   |   |
| Tax exempt interest                                      |   |   | (320,022   | )      |   |   | (468,605 | ) |
| Interest disallowance                                    |   |   | 14,242     |   |   |   | 31,110 |   |
| State income tax net of federal benefit                  |   |   | (103,755   | )      |   |   | (300,195 | ) |
| Premium amortization on tax exempt investment securities |   |   | 9,684      |   |   |   | 13,950 |   |
| Cash surrendered value of life insurance                 |   |   | (39,359    | )      |   |   | (43,661 | ) |
| GoZone tax credits                                       |   |   | -          |   |   |   | - |   |
| Other, net                                               |   |   | (2,183     | )      |   |   | 6,739 |   |
|                                                     |   | $      | (1,101,432 | )      |   | $      | (3,228,341 | ) |

|                                                                  |   | 2010   |      |   | 2009   |   |
|-----------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred tax assets:                                                  |   |   |      |   |   |   |
| Loans, principally due to the allowance for loan losses               |   | $      | 1,264,575 |   |   | $      | 2,376,315 |   |
| Net operating loss carry forward                                      |   |   | 2,947,985 |   |   |   | 1,211,842 |   |
| Other real estate, principally due to differences in carrying value   |   |   | 1,005,639 |   |   |   | 978,967 |   |
| Intangible assets                                                     |   |   | 195,410   |   |   |   | - |   |
| Deferred compensation                                                 |   |   | 342,781   |   |   |   | 294,581 |   |
| Investment securities available for sale                              |   |   | 284,060   |   |   |   | - |   |
| Other                                                                 |   |   | 40,140    |   |   |   | 17,701 |   |
| Total deferred tax assets                                             |   |   | 6,080,590 |   |   |   | 4,879,406 |   |
| Deferred tax liabilities:                                             |   |   |      |   |   |   |   |   |
| Premises and equipment, principally due to difference in depreciation |   |   | 99,303    |   |   |   | 269,850 |   |
| Investment securities available for sale                              |   |   | -         |   |   |   | 234,199 |   |
| Discount accretion                                                    |   |   | 3,162     |   |   |   | 9,041 |   |
| Other                                                                 |   |   | 48,071    |   |   |   | 162,904 |   |
| Total deferred tax liabilities                                        |   |   | 150,536   |   |   |   | 675,994 |   |
| Net deferred tax asset                                                |   | $      | 5,930,054 |   |   | $      | 4,203,412 |   |

----

|  (13) | Stock Based Compensation |
|------------|--------------------------|

|                         |   | Shares underoption |   |   | Weightedaverageexercise priceper share |   |
|------------------------------|--------|--------------------|--------|--------|----------------------------------------|--------|
| Balance at December 31, 2008 |   |               | 38,806 |   |                                   | $      | 15.36 |   |
| Granted                      |   |               | -      |   |                                   |   |   |   |
| Expired                      |   |               | (8,160 | )      |                                   |   | 12.87  |   |
| Surrendered                  |   |               | -      |   |                                   |   |   |   |
| Exercised                    |   |               | -      |   |                                   |   |   |   |
| Balance at December 31, 2009 |   |               | 30,646 |   |                                   | $      | 16.02 |   |
| Granted                      |   |               | -      |   |                                   |   |   |   |
| Expired                      |   |               | (8,160 | )      |                                   |   | 15.65  |   |
| Surrendered                  |   |               | -      |   |                                   |   |   |   |
| Exercised                    |   |               | -      |   |                                   |   |   |   |
| Balance at December 31, 2010 |   |               | 22,486 |   |                                   | $      | 16.15 |   |

----

| Exercise price per share |   |   | Shares under option |   |   | Weighted averageremaining contractuallife in years |   |   | Weighted averageexercise price |   |
|--------------------------|--------|--------|---------------------|--------|--------|----------------------------------------------------|--------|--------|--------------------------------|--------|
|                     |   |   |                |   |   |                                               |   |   |                           |   |
| $                        | 15.65  |   |                |   | 800    |                                               |   |   | 1.3                            |   |   | $ | 15.65 |   |
|                     | 15.75  |   |                |   | 9,526  |                                               |   |   | 2.0                            |   |   | $ | 15.75 |   |
|                     | 16.00  |   |                |   | 2,000  |                                               |   |   | 5.0                            |   |   | $ | 16.00 |   |
|                     | 16.25  |   |                |   | 8,160  |                                               |   |   | 1.0                            |   |   | $ | 16.25 |   |
|                     | 18.00  |   |                |   | 2,000  |                                               |   |   | 5.6                            |   |   | $ | 18.00 |   |
|                     |   |   |                |   | 22,486 |                                               |   |   | 2.2                            |   |   | $ | 16.15 |   |

|                         |   | Shares underoption |        |   | Weightedaverageexercise priceper share |   |
|------------------------------|--------|--------------------|-------------|--------|----------------------------------------|--------|
| Balance at December 31, 2008 |   |               | —     |   |                                   |   |   |
| Granted                      |   |               | 4,000  |   |                                   | 14.85  |   |
| Surrendered                  |   |               | —     |   |                                   | $      |   |   |
| Exercised                    |   |               | —     |   |                                   |   |   |   |
| Balance at December 31, 2009 |   |               | 4,000  |   |                                   | $      | 14.85 |   |
| Granted                      |   |               | —     |   |                                   |   |   |   |
| Surrendered                  |   |               | —     |   |                                   |   |   |   |
| Exercised                    |   |               | —     |   |                                   |   |   |   |
| Balance at December 31, 2010 |   |               | 4,000  |   |                                   | $      | 14.85 |   |

----

|                                                             |   | 2010   |   |   | 2009   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Weighted-average expected life (in years)                        |   |   | n/a    |   |   |   | 10.00 |   |
| Expected Volatility                                              |   |   | n/a    |   |   |   | 20.00 | % |
| Risk-free interest rate                                          |   |   | n/a    |   |   |   | 3.86 | % |
| Expected dividend yield                                          |   |   | n/a    |   |   |   | 2.02 | % |
| Weighted-average fair value of options granted during the period |   |   | n/a    |   |   | $      | 3.88 |   |

|                         |   | Restrictedstockactivity |   |   | Weightedaveragefair value |   |
|------------------------------|--------|-------------------------|--------|--------|---------------------------|--------|
| Balance at December 31, 2008 |   |                    | 5,772  |   |                      | $      | 17.06 |   |
| Granted                      |   |                    | 442    |   |                      |   | 14.85 |   |
| Surrendered                  |   |                    | -      |   |                      |   | - |   |
| Vested                       |   |                    | -      |   |                      |   | - |   |
| Balance at December 31, 2009 |   |                    | 6,214  |   |                      | $      | 16.91 |   |
| Granted                      |   |                    | 135    |   |                      |   | 13.00 |   |
| Surrendered                  |   |                    | -      |   |                      |   | - |   |
| Vested                       |   |                    | (834   | )      |                      |   | 18.00 |   |
| Balance at December 31, 2010 |   |                    | 5,515  |   |                      | $      | 16.65 |   |

----

|                                   |   | 2010   |   |   | 2009   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
|                                   |   |   |   |   |   |   |
| Stock Option Expense                   |   | $      | 5,832  |   |   | $      | 6,286 |   |
| Restricted Stock Expense               |   |   | 22,770 |   |   |   | 25,119 |   |
| Total Stock Based Compensation Expense |   | $      | 28,602 |   |   | $      | 31,405 |   |

----

| (16) | Fair Value of Financial Instruments |
|------|-------------------------------------|

----

----

|           |   |                                    |       |   | Fair Value Measurements at December 31, 2010 Using          |   |
|----------------|--------|-----------------------------------------|------------|--------|-------------------------------------------------------------|--------|
|           |   | Assets/LiabilitiesMeasured atFair Value |       |   | Quoted Pricesin Active Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservableInputsLevel (2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|           |   |                                    |       |   |                                                        |   |   |   |   |   |   |   |
| AFS Securities |   | $                                       | 68,808,624 |   |                                                        | $      | 21,203,537 |   |   | $ | 47,605,087 |   |   | $ | - |   |

|           |   |                                    |       |   | Fair Value Measurements at December 31, 2009 Using          |   |
|----------------|--------|-----------------------------------------|------------|--------|-------------------------------------------------------------|--------|
|           |   | Assets/LiabilitiesMeasured atFair Value |       |   | Quoted Pricesin Active Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservableInputsLevel (2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|           |   |                                    |       |   |                                                        |   |   |   |   |   |   |   |
| AFS Securities |   | $                                       | 68,212,662 |   |                                                        | $      | 3,030,009 |   |   | $ | 65,182,653 |   |   | $ | - |   |

|   | Assets Measured at Fair Value on a Non-recurring Basis |
|--------|--------------------------------------------------------|

----

|              |   | Carrying Value at December 31, 2010 |       |   | Year Ended |   |
|-------------------|--------|-------------------------------------|------------|--------|------------|--------|
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   | December 31, 2010 |   |
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   |   |   |
|              |   | Total                               |       |   | Level 1    |   |   | Level 2 |   |   | Level3 |   |   | Totallosses |   |
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   |   |   |
| Impaired loans    |   | $                                   | 11,367,697 |   |       | $      | - |   |   | $ | - |   |   | $ | 11,367,697 |   |   | $ | (4,023,954 | ) |
| Other real estate |   |                                | 10,163,992 |   |       |   | - |   |   |   | - |   |   |   | 10,163,992 |   |   |   | (199,999 | ) |

|              |   | Carrying Value at December 31, 2009 |       |   | Year Ended |   |
|-------------------|--------|-------------------------------------|------------|--------|------------|--------|
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   | December 31, 2009 |   |
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   |   |   |
|              |   | Total                               |       |   | Level 1    |   |   | Level 2 |   |   | Level3 |   |   | Totallosses |   |
|              |   |                                |       |   |       |   |   |   |   |   |   |   |   |   |   |
| Impaired loans    |   | $                                   | 43,577,517 |   |       | $      | - |   |   | $ | - |   |   | $ | 43,577,517 |   |   | $ | (7,952,833 | ) |
| Other real estate |   |                                | 7,610,690  |   |       |   | - |   |   |   | - |   |   |   | 7,610,690 |   |   |   | (1,027,703 | ) |

----

|   | (a) | Cash and Short-term Investments |
|--------|-----|---------------------------------|

|   | (b) | Investment Securities and Other Securities |
|--------|-----|--------------------------------------------|

|   | (c) | Loans |
|--------|-----|-------|

|   | (d) | Bank Owned Life Insurance |
|--------|-----|---------------------------|

|   | (e) | Deposits |
|--------|-----|----------|

|   | (f) | FHLB, Other Borrowed Funds and Subordinated Debt |
|--------|-----|--------------------------------------------------|

|   | (g) | Accrued Interest |
|--------|-----|------------------|

|   | (h) | Commitments to Extend Credit and Standby Letters of Credit |
|--------|-----|------------------------------------------------------------|

----

|                                        |   | 2010                   |    |   | 2009                |   |
|---------------------------------------------|--------|------------------------|---------|--------|---------------------|--------|
|                                        |   | Carryingamount         |    |   | Estimatedfair value |   |   | Carryingamount |   |   | Estimatedfair value |   |
| Financial assets:                           |   | (Dollars in Thousands) |    |
| Cash and short–term investments       |   | $                      | 80,966  |   |                | $      | 80,966 |   |   | $ | 54,668 |   |   | $ | 54,668 |   |
| Investment securities                       |   |                   | 86,071  |   |                |   | 86,111 |   |   |   | 83,872 |   |   |   | 83,929 |   |
| Loans, net of the allowance for loan losses |   |                   | 256,631 |   |                |   | 264,155 |   |   |   | 275,911 |   |   |   | 276,090 |   |
|  Bank owned life insurance             |   |                   | 2,845   |   |                |   | 2,845 |   |   |   | 2,729 |   |   |   | 2,729 |   |
| Other securities                            |   |                   | 1,872   |   |                |   | 1,872 |   |   |   | 1,889 |   |   |   | 1,889 |   |
| Accrued interest receivable                 |   |                   | 2,193   |   |                |   | 2,193 |   |   |   | 2,858 |   |   |   | 2,858 |   |
|                                        |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                      |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                    |   |                   | 417,033 |   |                |   | 420,546 |   |   |   | 404,810 |   |   |   | 405,504 |   |
| Other borrowed funds                        |   |                   | 944     |   |                |   | 944 |   |   |   | 624 |   |   |   | 624 |   |
| FHLB advances                               |   |                   | 1,280   |   |                |   | 1,534 |   |   |   | 1,445 |   |   |   | 1,539 |   |
| Subordinated Debt                           |   |                   | 10,310  |   |                |   | 10,310 |   |   |   | 10,310 |   |   |   | 10,310 |   |
| Accrued interest payable                    |   |                   | 403     |   |                |   | 403 |   |   |   | 621 |   |   |   | 621 |   |

| (17) | Dividends From Bank |
|------|---------------------|

----

|  (18) | Comprehensive Loss |
|------------|--------------------|

|                                                                                |   | Years ended December 31 |       |
|-------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                |   | 2010                    |       |   | 2009 |   |
| Other comprehensive loss before tax:                                                |   |                    |       |   |   |   |
| Unrealized holding losses arising during the period for securities, net             |   | $                       | (249,082   | ) |   | $ | (39,175 | ) |
| Reclassification adjustment for gains on sales of securities included in net losses |   |                    | (1,046,575 | ) |   |   | (176,316 | ) |
| Other comprehensive loss,before income taxes                                        |   |                    | (1,295,657 | ) |   |   | (215,491 | ) |
| Income tax related to other comprehensive loss:                                     |   |                    |       |   |   |   |   |   |
| Unrealized holding losses arising during the period for securities, net             |   |                    | 99,633     |   |   |   | 15,670 |   |
| Reclassification adjustment for gains on sales of securities included in net losses |   |                    | 418,630    |   |   |   | 70,526 |   |
| Total income tax related to other comprehensive loss                                |   |                    | 518,263    |   |   |   | 86,196 |   |
|                                                                                |   |                    |       |   |   |   |   |   |
| Other comprehensive loss after taxes                                                |   | $                       | (777,394   | ) |   | $ | (129,295 | ) |

----

| (19) | Litigation |
|------|------------|

| (20) | Commitments |
|------|-------------|

|                         |   | Years Ended December 31, |       |
|------------------------------|--------|--------------------------|------------|
|                         |   | 2010                     |       |   | 2009 |   |
|                         |   |                     |       |   |   |   |
| Commitments to extend credit |   | $                        | 36,515,000 |   |   | $ | 31,047,000 |   |
| Standby letters of credit    |   |                     | 1,360,000  |   |   |   | 1,155,000 |   |

----

| (21) | Other Noninterest Expense |
|------|---------------------------|

|                       |   | 2010   |      |   | 2009   |   |
|----------------------------|--------|--------|-----------|--------|--------|--------|
| Accounting & audit     |   | $      | 283,133   |   |   | $      | 218,291 |   |
| Advertising                |   |   | 276,039   |   |   |   | 284,178 |   |
| Armored car service        |   |   | 230,669   |   |   |   | 223,736 |   |
| ATM network                |   |   | 407,483   |   |   |   | 332,716 |   |
| Communications             |   |   | 402,293   |   |   |   | 377,327 |   |
| Data processing            |   |   | 654,911   |   |   |   | 548,975 |   |
| FDIC deposit insurance     |   |   | 1,041,779 |   |   |   | 1,293,212 |   |
| Intangible writedown       |   |   | 934,763   |   |   |   | - |   |
| Legal                      |   |   | 312,366   |   |   |   | 270,355 |   |
| Other real estate expenses |   |   | 321,165   |   |   |   | 1,206,449 |   |

| (22) | Concentrations of Credit Risk |
|------|-------------------------------|

| (23) | Regulatory Matters |
|------|--------------------|

----

|                     |   | Total Qualifying Capital |   |   | Tier I Capital |   |   | Leverage |   |
|--------------------------|--------|--------------------------|--------|--------|----------------|--------|--------|----------|--------|
|                     |   | Amount                   |   |   | Ratio          |   |   | Amount   |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2010: |   |                     |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |   |
| United Bancorporation    |   | $                        | 43,956 |   |           |   | 15.14  | %        |   | $ | 40,312 |   |   |   | 13.88 | % |   | $ | 40,312 |   |   |   | 8.74 | % |
| United Bank              |   |                     | 43,896 |   |           |   | 15.13  | %        |   |   | 40,252 |   |   |   | 13.88 | % |   |   | 40,252 |   |   |   | 8.69 | % |
| As of December 31, 2009: |   |                     |   |   |           |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United Bancorporation    |   | $                        | 45,299 |   |           |   | 14.23  | %        |   | $ | 41,836 |   |   |   | 13.14 | % |   | $ | 41,836 |   |   |   | 8.76 | % |
| United Bank              |   |                     | 45,106 |   |           |   | 14.19  | %        |   |   | 41,092 |   |   |   | 12.93 | % |   |   | 41,092 |   |   |   | 8.71 | % |

----

| (24) | Parent Corporation Financial Information |
|------|------------------------------------------|

| Assets                                                                                                                                     |   | 2010   |       |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash                                                                                                                                       |   | $      | 38,213     |   |   | $      | 556,345 |   |
| Investment in subsidiary                                                                                                                   |   |   | 45,770,245 |   |   |   | 47,129,776 |   |
| Other assets                                                                                                                               |   |   | 47,828     |   |   |   | 208,753 |   |
| Total assets                                                                                                                               |   | $      | 45,856,286 |   |   | $      | 47,894,874 |   |
| Liabilities and Stockholders’ Equity                                                                                                 |   |   |       |   |   |   |   |   |
| Other liabilities                                                                                                                          |   | $      | 27,080     |   |   | $      | 21,070 |   |
|                                                                                                                                       |   |   |       |   |   |   |   |   |
| Note payable to Trust                                                                                                                      |   |   | 10,310,000 |   |   |   | 10,310,000 |   |
| Total liabilities                                                                                                                          |   |   | 10,337,080 |   |   |   | 10,331,070 |   |
| Stockholders’ equity:                                                                                                                |   |   |       |   |   |   |   |   |
| Preferred stock of $.01 par value.  Authorized 250,000 shares;10,300 shares issued in 2010 and 2009, respectively                |   |   | 10,080,227 |   |   |   | 10,014,985 |   |
|                                                                                                                                       |   |   |       |   |   |   |   |   |
| Class A common stock of $0.01 par value. Authorized 5,000,000 shares; issued 2,389,127 and 2,388,992 shares in 2010 and 2009, respectively |   |   | 23,891     |   |   |   | 23,890 |   |
| Class B common stock of $0.01 par value. Authorized 250,000 shares; no shares issued                                                       |   |   | -          |   |   |   | - |   |
| Additional paid–in capital                                                                                                           |   |   | 6,815,176  |   |   |   | 6,544,079 |   |
| Retained earnings                                                                                                                          |   |   | 19,721,667 |   |   |   | 21,685,478 |   |
| Accumulated other comprehensive income, net of tax                                                                                         |   |   | (426,105   | )      |   |   | 351,289 |   |
| Less: 86,757 and 131,678 treasury shares at cost in 2010and 2009, respectively                                                             |   |   | 695,650    |   |   |   | 1,055,917 |   |
| Total stockholders’ equity                                                                                                           |   |   | 35,519,206 |   |   |   | 37,563,804 |   |
| Total liabilities and stockholders’ equity                                                                                           |   | $      | 45,856,286 |   |   | $      | 47,894,874 |   |

----

|                                                                 |   | 2010   |     |   | 2009   |   |
|----------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Income:                                                              |   |   |     |   |   |   |
| Dividend income from subsidiary                                      |   | $      | -        |   |   | $      | - |   |
| Other income                                                         |   |   | 6,353    |   |   |   | 43,415 |   |
| Total income                                                         |   |   | 6,353    |   |   |   | 43,415 |   |
| Expense:                                                             |   |   |     |   |   |   |   |   |
| Interest on subordinated debentures                                  |   |   | 211,278  |   |   |   | 269,001 |   |
| Other operating expense                                              |   |   | 167,398  |   |   |   | 236,491 |   |
| Total expense                                                        |   |   | 378,676  |   |   |   | 505,492 |   |
| Loss before equity in undistributed losses of subsidiaries and taxes |   |   | (372,323 | )      |   |   | (462,077 | ) |
| Income tax benefit                                                   |   |   | (137,370 | )      |   |   | (184,569 | ) |
| Loss before equity in undistributed losses of subsidiaries           |   |   | (234,953 | )      |   |   | (277,508 | ) |
| Equity in undistributed losses of subsidiary                         |   |   | (604,905 | )      |   |   | (3,751,837 | ) |
| Net losses                                                           |   | $      | (839,858 | )      |   | $      | (4,029,345 | ) |

----

|                                                                         |   | 2010   |     |   | 2009   |   |
|------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Cash flows from operating activities:                                        |   |   |     |   |   |   |
| Net losses                                                                   |   | $      | (839,858 | )      |   | $      | (4,029,345 | ) |
| Adjustments to reconcile net losses to net cash used in operating activities |   |   |     |   |   |   |   |   |
| Equity in undistributed losses of subsidiary                                 |   |   | 604,905  |   |   |   | 3,751,837 |   |
| Stock based compensation                                                     |   |   | 5,832    |   |   |   | 6,286 |   |
| Increase (decrease) in other liabilities                                     |   |   | 6,012    |   |   |   | (209,690 | ) |
| Decrease in other assets                                                     |   |   | 160,925  |   |   |   | 311,939 |   |
| Net cash used in operating activities                                        |   |   | (62,184  | )      |   |   | (168,973 | ) |
| Cash flows from investing activities:                                        |   |   |     |   |   |   |   |   |
| Investment in bank subsidiary                                                |   |   | -        |   |   |   | - |   |
| Net cash used in investing activities                                        |   |   | -        |   |   |   | - |   |
| Cash flows from financing activities:                                        |   |   |     |   |   |   |   |   |
| Cash dividends - preferred stock                                             |   |   | (453,200 | )      |   |   | (460,639 | ) |
| Cash dividends - common stock                                                |   |   | (2,748   | )      |   |   | (6,031 | ) |
| Proceeds from sale of treasury stock                                         |   |   | -        |   |   |   | 29,938 |   |
| Proceeds from sale of common stock (ESPP)                                    |   |   | -        |   |   |   | 5,130 |   |
| Net cash used in financial activities                                        |   |   | (455,948 | )      |   |   | (431,602 | ) |
|                                                                         |   |   |     |   |   |   |   |   |
| Net decrease in cash                                                         |   |   | (518,132 | )      |   |   | (600,575 | ) |
| Cash, beginning of year                                                      |   |   | 556,345  |   |   |   | 1,156,920 |   |
| Cash, end of year                                                            |   | $      | 38,213   |   |   | $      | 556,345 |   |

----

| (a) | The Corporation’s management, including its principal executive officer and principal financial officer, has conducted an evaluation of the effectiveness of the Corporation’s internal control over financial reporting as of the end of the period covered by this report based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Based on evaluation of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this annual report, the principal executive officer and the principal financial officer of the Corporation have concluded that as of such date the Corporation’s disclosure controls and procedures were effective to ensure that information the Corporation is required to disclose in its filings under  the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by the Corporation in the reports that it files under the Exchange Act is accumulated and communicated to the Corporation’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | There were no significant changes in the Corporation’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referred to in (a) above. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | This annual report does not include an attestation report of the Corporation’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permits the Corporation to provide only management’s report in this annual report. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (a) | (1) | The financial statements listed in the Index to Financial Statements contained in Item 8 hereof are filed as part of this Annual Report on Form 10-K. |
|-----|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Financial statement schedules have been omitted as inapplicable. |
|--------|-----|------------------------------------------------------------------|

|   | (3) | The Exhibits listed below are filed as part of this Report.  Management contracts and compensatory plans and arrangements required to be filed pursuant to Item 15(b) are identified by an asterisk (*). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1 | Purchase Agreement, dated as of September 27, 2006, among the Registrant, United Bancorp Capital Trust II and TWE, Ltd., as Purchaser (Incorporated by reference herein from Exhibit 1.1 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1 | Restated Certificate of Incorporation of the Registrant (Incorporated by reference herein from Exhibit 3a to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1.1 | Certificate of Amendment to Restated Certificate of Incorporation Of the Registrant (Incorporated by reference herein from Exhibit 3.1.1 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1999). |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Amended and Restated Bylaws of the Registrant (Incorporated by reference herein from Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Junior Subordinated Indenture, dated as of September 27, 2006, by and between the Registrant and Wilmington Trust Company, as Trustee (Incorporated by reference herein from Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | United Bancorp Capital Trust II Amended and Restated Trust Agreement, dated as of September 27, 2006, among the Registrant, as Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee and Robert R. Jones, III and Allen O. Jones, as Administrative Trustees (Incorporated by reference herein from Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | United Bancorp Capital Trust II Guarantee Agreement, dated as of September 27, 2006, by and between the Registrant, as Guarantor and Wilmington Trust Company, as Guarantee Trustee (Incorporated by reference herein from Exhibit 4.3 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.4 | Common Securities Subscription Agreement, dated as of September 27, 2006, by and between United Bancorp Capital Trust II and the Registrant (Incorporated by reference herein from Exhibit 4.4 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.5 | Junior Subordinated Note Subscription Agreement, dated as of September 27, 2006, by and between United Bancorp Capital Trust II and the Registrant (Incorporated by reference herein from Exhibit 4.5 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2006). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | Form of Employment Agreement between United Bank and Robert R. Jones, III(Incorporated by reference herein from Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).* |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Supplemental Agreement between United Bank, the Registrant, and Robert R. Jones, III (Incorporated by reference herein from Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998)*. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | 1998 Stock Option Plan of United Bancorporation of Alabama, Inc. (Incorporated by reference herein from Exhibit 3.1.1 to Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1999). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | 1999 Employee Stock Purchase Plan of United Bancorporation of Alabama, Inc. (incorporated herein by reference from Appendix A to the Registrants definitiveproxy statement dated April 10, 2000)*. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | Supplemental Compensation and Amendment Agreement between United Bank and Robert R. Jones, III (Incorporated by reference herein from Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2001).* |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | United Bancorporation of Alabama, Inc. 2008 Equity Incentive Plan (Incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 9, 2008.* |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | First Amendment to Supplemental Compensation and Amendment Agreement between the Registrant and Robert R. Jones, III, dated as of December 12, 2008 and effective January 1, 2008 (Incorporated by reference herein from Exhibit 10.12 to the Registrant’s report on Form 8-K dated December 12, 2008).* |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14.1 | United Bank Directors’ Code of Conduct |
|--------|------|----------------------------------------------|

|   | 14.2 | United Bank Employee Code of Conduct |
|--------|------|--------------------------------------|

|   | 14.3 | United Bank Conflict of Interest Policy |
|--------|------|-----------------------------------------|

|   | 21 | Subsidiaries of the Registrant. |
|--------|----|---------------------------------|

|   | 23 | Consent of Independent Registered Public Accounting Firm (Mauldin & Jenkins, LLC) |
|--------|----|---------------------------------------------------------------------------------------|

|   | 31.1 | Certification of Chief Executive Officer under Securities Exchange Act Rules 13a-15(e) and 15d-15(e) |
|--------|------|------------------------------------------------------------------------------------------------------|

----

|   | 31.2 | Certification of Chief Financial Officer under Securities Exchange Act Rules 13a-15(e) and 15d-      15(e) |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certificate pursuant to 18 U.S.C Section 1350 |
|--------|------|-----------------------------------------------|

|   | 32.2 | Certificate pursuant to 18 U.S.C Section 1350 |
|--------|------|-----------------------------------------------|

|   | 99.1 | Certificate pursuant to 31 C.F.R. Section 30.15 as adopted under TARP Standards for Compensation and Corporate Governance |
|--------|------|---------------------------------------------------------------------------------------------------------------------------|

|   | 99.2 | Certificate pursuant to 31 C.F.R. Section 30.15 as adopted under TARP Standards for        Compensation and Corporate Governance |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | UNITED BANCORPORATION OF ALABAMA, INC. |                                  |
|--------|----------------------------------------|---------------------------------------|
|   | (Registrant)                           |                                  |
|   |                                   |                                  |   |
|   | BY:                                    | /s/Robert R. Jones, III               |   |
|   |                                   | Robert R. Jones, III                  |   |
|   |                                   | President and Chief Executive Officer |   |
|   |                                   | March 29, 2011                        |   |

| SIGNATURES                                               | CAPACITY IN WHICH SIGNED        | DATE           |
|----------------------------------------------------------|---------------------------------|----------------|
|                                                     |                            |           |
|                                                     |                            |           |
| /s/  Robert R. Jones, III                      | President, Chief                | March 29, 2011 |
|    Robert R. Jones, III                        | Executive Officer, and Director |           |
|                                                     | (Principal Executive Officer)   |           |
|                                                     |                            |           |
| /s/  Allen O. Jones, Jr.                       | Senior Vice President           | March 29, 2011 |
|        Allen O. Jones, Jr. | Chief Financial Officer         |           |
|                                                     | (Principal Financial Officer)   |           |
|                                                     |                            |           |
| /s/  William J. Justice                        |  Director                  | March 29, 2011 |
|        William J. Justice  |                            |           |
|                                                     |                            |           |
| /s/  David D. Swift                            | Director                        | March 29, 2011 |
|        David D. Swift      |                            |           |
|                                                     |                            |           |
| /s/  Dale M. Ash                               | Director                        | March 29, 2011 |
|       Dale M. Ash               |                            |           |
|                                                     |                            |           |
| /s/  Michael Andreoli                          | Director                        | March 29, 2011 |
|        Michael Andreoli    |                            |           |
|                                                     |                            |           |
| /s/  L. Walter Crim                            | Director                        | March 29, 2011 |
|        L. Walter Crim      |                            |           |
|                                                     |                            |           |
| /s/ Richard K. Maxwell                                   | Director                        | March 29, 2011 |
|       Richard K. Maxwell        |                            |           |

----

| 14.1   |   | United Bank Directors’ Code of Conduct                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                      |
| 14.2   |   | United Bank Employee Code of Conduct                                                                                      |
|   |   |                                                                                                                      |
| 14.3   |   | United Bank Conflict of Interest Policy                                                                                   |
|   |   |                                                                                                                      |
| 21     |   | Subsidiaries of the registrant                                                                                            |
|   |   |                                                                                                                      |
| 23     |   | Consent of Independent Registered Public Accounting Firm (Mauldin & Jenkins, LLC)                                     |
|   |   |                                                                                                                      |
| 31.1   |   | Certification of Chief Executive Officer under Securities Exchange Act Rules 13a-15(e) and 15d-15(e)                      |
|   |   |                                                                                                                      |
| 31.2   |   | Certification of Chief Financial Officer under Securities Exchange Act Rules 13a-15(e) and 15d-15(e)                      |
|   |   |                                                                                                                      |
| 32.1   |   | Certificate pursuant to 18 U.S.C Section 1350                                                                             |
|   |   |                                                                                                                      |
| 32.2   |   | Certificate pursuant to 18 U.S.C Section 1350                                                                             |
|   |   |                                                                                                                      |
| 99.1   |   | Certificate pursuant to 31 C.F.R. Section 30.15 as adopted under TARP Standards for Compensation and Corporate Governance |
|   |   |                                                                                                                      |
| 99.2   |   | Certificate pursuant to 31 C.F.R. Section 30.15 as adopted under TARP Standards for Compensation and Corporate Governance |

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