----

----

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

|   | For the quarterly period ended June 30, 2009 |
|--------|----------------------------------------------|

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

----

| INDIANA                                                        | 35-2051170                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

----

| Large accelerated filer £ | Accelerated filer £    |
|--------------------------------|-----------------------------|
| Non-accelerated filer £   | Smaller reporting company S |

----

----

----

|   | · | the effect of general economic and monetary conditions on the Bank’s ability to attract deposits, make loans and achieve satisfactory interest spreads; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the risk of losses due to loan defaults by both commercial loan customers or a significant number of other borrowers; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | general changes in real estate, business and general property valuations underlying secured loans; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | the effect of banking regulation on the Bank’s ability to grow and compete; |
|--------|--------|-----------------------------------------------------------------------------------|

----

DE

|                                        | Item 1.                                                                                                                                                    |  Financial Statements                                                                 |  page no. |
|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|----------------|
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Consolidated Condensed Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008                                                                   | 4                                                                                          |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Consolidated Condensed Statements of Operations for the three and six months ended June 30, 2009 and June 30, 2008 (unaudited)                             | 5                                                                                          |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Consolidated Condensed Statements of Changes in Stockholders’ Equity for  the six months ended June 30, 2009 and June 30, 2008 (unaudited) | 6                                                                                          |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2009 and June 30, 2008 (unaudited)                                       | 7                                                                                          |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Notes to Consolidated Condensed Financial Statements (unaudited)                                                                                           | 8                                                                                          |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 2.                                                                                                                                                    | Management’s Discussion and Analysis of Financial Condition andResults of Operations | 24             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 4.                                                                                                                                                    | Controls and Procedures                                                                    | 33             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
| PART II.   OTHER INFORMATION |                                                                                                                                                       |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 1.                                                                                                                                                    | Legal Proceedings                                                                          | 34             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 1a.                                                                                                                                                   | Risk Factors                                                                               | 34             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 4.                                                                                                                                                    | Submission of Matters to a Vote of Security Holders                                        | 34             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
|                                        | Item 6.                                                                                                                                                    | Exhibits                                                                                   | 34             |
|                                        |                                                                                                                                                       |                                                                                       |           |   |
| SIGNATURES                                  | 35                                                                                                                                                         |

----

Table of Contents

soli

|                                                                                                                                           |   | (unaudited) |           |   |         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|----------------|--------|--------------|--------|
|                                                                                                                                           |   | June 30,    |           |   | December 31, |   |
|                                                                                                                                           |   | 2009        |           |   | 2008         |   |
| ASSETS                                                                                                                                         |   |        |           |   |         |   |
| Cash and due from banks                                                                                                                        |   | $           | 11,692,671     |   |         | $      | 19,418,905 |   |
| Short-term investments and interest-earning deposits                                                                                           |   |        | 486,924        |   |         |   | 9,525,414 |   |
| Federal funds sold                                                                                                                             |   |        | 3,702,334      |   |         |   | 2,632,054 |   |
| Total cash and cash equivalents                                                                                                                |   |        | 15,881,929     |   |         |   | 31,576,373 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Securities available for sale, at fair value                                                                                                   |   |        | 77,959,647     |   |         |   | 77,792,255 |   |
| Securities held to maturity, at cost                                                                                                           |   |        | 4,720,914      |   |         |   | - |   |
| FHLB and FRB stock                                                                                                                             |   |        | 4,032,446      |   |         |   | 4,032,446 |   |
| Loans held for sale                                                                                                                            |   |        | 3,513,721      |   |         |   | 151,614 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Loans                                                                                                                                          |   |        | 557,529,990    |   |         |   | 561,011,675 |   |
| Allowance for loan losses                                                                                                                      |   |        | (14,105,074    | )      |         |   | (10,654,879 | ) |
| Net loans                                                                                                                                      |   |        | 543,424,916    |   |         |   | 550,356,796 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Premises and equipment, net                                                                                                                    |   |        | 7,592,201      |   |         |   | 8,010,596 |   |
| Accrued interest receivable                                                                                                                    |   |        | 2,462,880      |   |         |   | 2,615,260 |   |
| Bank owned life insurance                                                                                                                      |   |        | 12,809,168     |   |         |   | 12,589,699 |   |
| Other Real Estate Owned                                                                                                                        |   |        | 4,060,025      |   |         |   | 2,660,310 |   |
| Other assets                                                                                                                                   |   |        | 9,849,162      |   |         |   | 6,798,774 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Total assets                                                                                                                                   |   | $           | 686,307,009    |   |         | $      | 696,584,123 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                           |   |        |           |   |         |   |   |   |
| LIABILITIES                                                                                                                                    |   |        |           |   |         |   |   |   |
| Deposits:                                                                                                                                      |   |        |           |   |         |   |   |   |
| Noninterest-bearing                                                                                                                            |   | $           | 105,667,772    |   |         | $      | 82,107,483 |   |
| Interest-bearing                                                                                                                               |   |        | 488,925,976    |   |         |   | 504,129,631 |   |
| Total deposits                                                                                                                                 |   |        | 594,593,748    |   |         |   | 586,237,114 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Short-term borrowings                                                                                                                          |   |        | 2,800,000      |   |         |   | - |   |
| Federal Home Loan Bank (FHLB) advances                                                                                                         |   |        | 21,200,000     |   |         |   | 39,200,000 |   |
| Junior subordinated debt                                                                                                                       |   |        | 17,527,000     |   |         |   | 17,527,000 |   |
| Accrued interest payable                                                                                                                       |   |        | 539,193        |   |         |   | 658,956 |   |
| Other liabilities                                                                                                                              |   |        | 3,684,819      |   |         |   | 3,342,913 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Total liabilities                                                                                                                              |   |        | 640,344,760    |   |         |   | 646,965,983 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                           |   |        |           |   |         |   |   |   |
| Preferred stock, no par value, 4,000,000 shares authorized; no shares issued and outstanding                                                   |   |        | -         |   |         |   | - |   |
| Common stock and paid-in-capital, no par value, 6,000,000 4,090,432 and 4,084,432 shares outstanding at at June 30, 2009 and December 31, 2008 |   |        | 39,803,592     |   |         |   | 39,766,742 |   |
| Treasury stock, at cost, 65,000 shares at June 30, 2009 and December 31, 2008                                                                  |   |        | (884,376       | )      |         |   | (884,376 | ) |
| Retained earnings                                                                                                                              |   |        | 7,210,469      |   |         |   | 10,895,724 |   |
| Accumulated other comprehensive income(loss), net of tax of ($86,254) at June 30, 2009 and ($82,399) at December 31, 2008                      |   |        | (167,436  | )      |         |   | ((159,950 | ) |
| Total stockholders' equity                                                                                                                     |   |        | 45,962,249     |   |         |   | 49,618,140 |   |
|                                                                                                                                           |   |        |           |   |         |   |   |   |
| Total liabilities and stockholders' equity                                                                                                     |   | $           | 686,307,009    |   |         | $      | 696,584,123 |   |

----

Table of Contents

lida

|                                                                     |   | (unaudited)        |       |   | (unaudited)      |   |
|--------------------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                                     |   | Three Months ended |       |   | Six Months Ended |   |
|                                                                     |   | June 30            |       |   | June 30          |   |
|                                                                     |   | 2009               |       |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Interest income:                                                         |   |               |       |   |             |   |   |   |   |   |   |   |
| Loans, including fees                                                    |   | $                  | 7,099,710  |   |             | $      | 8,348,159 |   |   | $ | 14,147,664 |   |   | $ | 17,615,558 |   |
| Securities - taxable                                                     |   |               | 781,080    |   |             |   | 648,256 |   |   |   | 1,414,797 |   |   |   | 1,262,770 |   |
| Securities - tax exempt                                                  |   |               | 243,046    |   |             |   | 223,312 |   |   |   | 469,329 |   |   |   | 437,346 |   |
| Other interest income                                                    |   |               | 2,708      |   |             |   | 89,634 |   |   |   | 9,553 |   |   |   | 271,986 |   |
| Total interest income                                                    |   |               | 8,126,544  |   |             |   | 9,309,361 |   |   |   | 16,041,343 |   |   |   | 19,587,660 |   |
| Interest expense:                                                        |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                 |   |               | 2,803,694  |   |             |   | 3,433,023 |   |   |   | 5,646,584 |   |   |   | 8,075,158 |   |
| Short-term borrowings                                                    |   |               | 1,082      |   |             |   | - |   |   |   | 990 |   |   |   | - |   |
| FHLB advances                                                            |   |               | 216,680    |   |             |   | 298,637 |   |   |   | 467,028 |   |   |   | 572,777 |   |
| Junior subordinated debt                                                 |   |               | 283,071    |   |             |   | 283,071 |   |   |   | 563,297 |   |   |   | 564,720 |   |
| Total interest expense                                                   |   |               | 3,304,527  |   |             |   | 4,014,731 |   |   |   | 6,677,899 |   |   |   | 9,212,655 |   |
| Net interest income                                                      |   |               | 4,822,017  |   |             |   | 5,294,630 |   |   |   | 9,363,444 |   |   |   | 10,375,005 |   |
| Provision for loan losses                                                |   |               | 6,550,000  |   |             |   | 875,000 |   |   |   | 7,510,000 |   |   |   | 1,175,000 |   |
| Net interest income (loss) after provision for loan losses               |   |               | (1,727,983 | )      |             |   | 4,419,630 |   |   |   | 1,853,444 |   |   |   | 9,200,005 |   |
| Noninterest income:                                                      |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Trust and brokerage fees                                                 |   |               | 806,067    |   |             |   | 938,634 |   |   |   | 1,673,956 |   |   |   | 1,833,026 |   |
| Service charges                                                          |   |               | 283,483    |   |             |   | 314,144 |   |   |   | 541,316 |   |   |   | 635,354 |   |
| Loan broker fees                                                         |   |               | 195,403    |   |             |   | 66,812 |   |   |   | 333,681 |   |   |   | 127,870 |   |
| Gain (Loss) on sale of securities                                        |   |               | 3,861      |   |             |   | - |   |   |   | 195,012 |   |   |   | 59,837 |   |
| Impairment on available-for-sale securities (See Note 4 for more detail) |   |               | (47,656    | )      |             |   | - |   |   |   | (47,656 | ) |   |   | - |   |
| Other fees                                                               |   |               | 357,790    |   |             |   | 148,879 |   |   |   | 691,942 |   |   |   | 453,156 |   |
| Total noninterest income                                                 |   |               | 1,598,948  |   |             |   | 1,468,469 |   |   |   | 3,388,251 |   |   |   | 3,109,243 |   |
| Noninterest expense:                                                     |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and benefits                                                    |   |               | 2,644,960  |   |             |   | 3,051,846 |   |   |   | 5,367,409 |   |   |   | 6,138,244 |   |
| Occupancy and equipment                                                  |   |               | 692,810    |   |             |   | 731,588 |   |   |   | 1,391,402 |   |   |   | 1,489,903 |   |
| Marketing                                                                |   |               | 134,215    |   |             |   | 224,014 |   |   |   | 278,872 |   |   |   | 374,216 |   |
| Data processing                                                          |   |               | 327,443    |   |             |   | 220,172 |   |   |   | 621,452 |   |   |   | 500,930 |   |
| Loan and professional costs                                              |   |               | 383,196    |   |             |   | 386,418 |   |   |   | 695,140 |   |   |   | 630,068 |   |
| Office supplies and postage                                              |   |               | 73,489     |   |             |   | 81,947 |   |   |   | 170,546 |   |   |   | 195,979 |   |
| Courier services                                                         |   |               | 58,472     |   |             |   | 75,070 |   |   |   | 119,907 |   |   |   | 164,535 |   |
| Business development                                                     |   |               | 165,765    |   |             |   | 173,959 |   |   |   | 266,762 |   |   |   | 328,832 |   |
| Communication Expense                                                    |   |               | 44,321     |   |             |   | 80,931 |   |   |   | 88,239 |   |   |   | 151,723 |   |
| FDIC Insurance Premiums                                                  |   |               | 679,308    |   |             |   | 200,241 |   |   |   | 958,798 |   |   |   | 367,755 |   |
| Write-down on Other Real Estate Owned                                    |   |               | 950,000    |   |             |   | - |   |   |   | 950,000 |   |   |   | 50,000 |   |
| Other expense                                                            |   |               | 303,902    |   |             |   | 394,239 |   |   |   | 542,625 |   |   |   | 707,024 |   |
| Total noninterest expense                                                |   |               | 6,457,881  |   |             |   | 5,620,425 |   |   |   | 11,451,152 |   |   |   | 11,099,209 |   |
| Income (Loss) before income taxes                                        |   |               | (6,586,916 | )      |             |   | 267,674 |   |   |   | (6,209,457 | ) |   |   | 1,210,039 |   |
| Income tax expense (benefit)                                             |   |               | (2,491,436 | )      |             |   | (75,033 | ) |   |   | (2,524,202 | ) |   |   | 156,160 |   |
|                                                                     |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                        |   | $                  | (4,095,480 | )      |             | $      | 342,707 |   |   | $ | (3,685,255 | ) |   | $ | 1,053,879 |   |

----

Table of Contents

khold

|                                                                                        |   | Common    |       |   |     |   |       | Accumulated   |   |   |     |   |   |   |     |
|---------------------------------------------------------------------------------------------|--------|-----------|------------|--------|----------|--------|------------|---------------|--------|--------|----------|--------|--------|--------|----------|
|                                                                                        |   | Stock and |       |   |     |   |       | Other         |   |   |     |   |   |   |     |
|                                                                                        |   | Paid-in   |       |   | Retained |   |       | Comprehensive |   |   | Treasury |   |   |   |     |
|                                                                                        |   | Capital   |       |   | Earnings |   |       | Income (Loss) |   |   | Stock    |   |   | Total  |     |
| Balance, January 1, 2008                                                                    |   | $         | 39,482,669 |   |     | $      | 9,208,719  |          |   | $      | 274,993  |   |   | $      | (758,827 | ) |   | $ | 48,207,554 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Net income for 2008                                                                         |   |      |       |   |     |   | 1,053,879  |          |   |   |     |   |   |   |     |   |   |   | 1,053,879 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Other Comprehensive Income (See Note 5)                                                     |   |      |       |   |     |   |       |          |   |   | (378,112 | )      |   |   |     |   |   |   | (378,112 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Total Comprehensive Income                                                                  |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   | 675,767 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash dividends paid ($0.044 per share)                                                      |   |      |       |   |     |   | (179,104   | )             |   |   |     |   |   |   |     |   |   |   | (179,104 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Issuance of 22,127 shares of common stock for stock options exercised, including tax benfit |   |      | 220,639    |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   | 220,639 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Stock based compensation expense                                                            |   |      | 32,007     |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   | 32,007 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Repurchase of 11,964 shares of common stock                                                 |   |      | -          |   |     |   |       |          |   |   |     |   |   |   | (125,549 | ) |   |   | (125,549 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Balance, June 30, 2008                                                                      |   | $         | 39,735,315 |   |     | $      | 10,083,494 |          |   | $      | (103,119 | )      |   | $      | (884,376 | ) |   | $ | 48,831,314 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Balance, January 1, 2009                                                                    |   | $         | 39,766,742 |   |     | $      | 10,895,724 |          |   | $      | (159,950 | )      |   | $      | (884,376 | ) |   | $ | 49,618,140 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Net income(loss) for 2009                                                                   |   |      |       |   |     |   | (3,685,255 | )             |   |   |     |   |   |   |     |   |   |   | (3,685,255 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Other Comprehensive Income (Loss) (See Note 5)                                              |   |      |       |   |     |   |       |          |   |   | (7,486   | )      |   |   |     |   |   |   | (7,486 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Total Comprehensive Income (Loss)                                                           |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   | (3,692,741 | ) |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Stock based compensation expense                                                            |   |      | 36,850     |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   | 36,850 |   |
|                                                                                        |   |      |       |   |     |   |       |          |   |   |     |   |   |   |     |   |   |   |   |   |
| Balance, June 30, 2009                                                                      |   | $         | 39,803,592 |   |     | $      | 7,210,469  |          |   | $      | (167,436 | )      |   | $      | (884,376 | ) |   | $ | 45,962,249 |   |

----

Table of Contents

men

|                                                                              |   | (unaudited)      |        |   | (unaudited)      |   |
|-----------------------------------------------------------------------------------|--------|------------------|-------------|--------|------------------|--------|
|                                                                              |   | Six Months Ended |        |   | Six Months Ended |   |
|                                                                              |   | June 30, 2009    |        |   | June 30, 2008    |   |
| Cash flows from operating activities:                                             |   |             |        |   |             |   |
| Net income (loss)                                                                 |   | $                | (3,685,255  | )      |             | $      | 1,053,879 |   |
| Adjustments to reconcile net income (loss) to net cash from operating activities: |   |             |        |   |             |   |   |   |
| Depreciation and amortization                                                     |   |             | 687,346     |   |             |   | 701,825 |   |
| Provision for loan losses                                                         |   |             | 7,510,000   |   |             |   | 1,175,000 |   |
| Stock based compensation expense                                                  |   |             | 36,850      |   |             |   | 32,007 |   |
| Earnings on life insurance                                                        |   |             | (219,469    | )      |             |   | (209,813 | ) |
| Gain on sale of securities AFS                                                    |   |             | (195,012    | )      |             |   | (59,837 | ) |
| Impairment on available-for-sale securities                                       |   |             | 47,656      |   |             |   | - |   |
| Gain on settlement of interest rate floor                                         |   |             | (312,656    | )      |             |   | (156,327 | ) |
| Loss on disposal of premises and equipment                                        |   |             | 231         |   |             |   | 7,492 |   |
| Loans originated for sale                                                         |   |             | (14,961,125 | )      |             |   | (4,654,333 | ) |
| (Gain)Loss on sale of other real estate owned                                     |   |             | 59,151      |   |             |   | - |   |
| Proceeds on sale of other real estate owned                                       |   |             | 630,788     |   |             |   | - |   |
| Write-down on other real estate owned                                             |   |             | 950,000     |   |             |   | 50,000 |   |
| Proceeds from sale of loans                                                       |   |             | 11,599,018  |   |             |   | 6,974,570 |   |
| Change in accrued interest receivable                                             |   |             | 152,380     |   |             |   | 610,483 |   |
| Change in other assets                                                            |   |             | (3,046,532  | )      |             |   | 856,127 |   |
| Change in accrued interest payable                                                |   |             | (119,763    | )      |             |   | (886,316 | ) |
| Change in other liabilities                                                       |   |             | 341,906     |   |             |   | 825,209 |   |
| Net cash from operating activities                                                |   |             | (524,486    | )      |             |   | 6,319,966 |   |
| Cash flows from investing activities:                                             |   |             |        |   |             |   |   |   |
| Net change in loans                                                               |   |             | (3,617,775  | )      |             |   | 9,054,201 |   |
| Purchase of securities AFS                                                        |   |             | (14,029,392 | )      |             |   | (21,129,663 | ) |
| Purchase of securities HTM                                                        |   |             | (4,720,914  | )      |             |   | - |   |
| Proceeds from calls and maturities of securities AFS                              |   |             | 8,108,024   |   |             |   | 8,070,800 |   |
| Proceeds from settlement of interest rate floor                                   |   |             | -           |   |             |   | 833,750 |   |
| Proceeds from sale of securities AFS                                              |   |             | 6,022,315   |   |             |   | 3,476,412 |   |
| Proceeds from sale of participation loans                                         |   |             | -           |   |             |   | 11,000,231 |   |
| Purchase of premises and equipment                                                |   |             | (88,850     | )      |             |   | (421,278 | ) |
| Net cash from investing activities                                                |   |             | (8,326,592  | )      |             |   | 10,884,453 |   |
| Cash flows from financing activities:                                             |   |             |        |   |             |   |   |   |
| Net change in deposits                                                            |   |             | 8,356,634   |   |             |   | (571,856 | ) |
| Cash dividends paid                                                               |   |             | -           |   |             |   | (179,104 | ) |
| Proceeds from issuance of common stock from exercise of stock options             |   |             | -           |   |             |   | 220,639 |   |
| Net change in short-term borrowings                                               |   |             | 2,800,000   |   |             |   | - |   |
| Proceeds from FHLB advances                                                       |   |             | -           |   |             |   | 54,450,000 |   |
| Repayment of FHLB advances                                                        |   |             | (18,000,000 | )      |             |   | (65,350,000 | ) |
| Repurchase of common stock                                                        |   |             | -           |   |             |   | (125,549 | ) |
| Net cash from (used in) financing activities                                      |   |             | (6,843,366  | )      |             |   | (11,555,870 | ) |
| Net change in cash and cash equivalents                                           |   |             | (15,694,444 | )      |             |   | 5,648,549 |   |
| Cash and cash equivalents, beginning of period                                    |   |             | 31,576,373  |   |             |   | 33,830,389 |   |
| Cash and cash equivalents, end of period                                          |   | $                | 15,881,929  |   |             | $      | 39,478,938 |   |
|                                                                              |   |             |        |   |             |   |   |   |
| Supplemental disclosures of cash flow information                                 |   |             |        |   |             |   |   |   |
| Cash paid during the year for:                                                    |   |             |        |   |             |   |   |   |
| Interest                                                                          |   | $                | 6,797,662   |   |             | $      | 10,098,971 |   |
| Income taxes                                                                      |   |             | 1,265,000   |   |             |   | - |   |
| Noncash items:                                                                    |   |             |        |   |             |   |   |   |
| Transfer of loans to other real estate owned                                      |   |             | 3,039,655   |   |             |   | 1,437,745 |   |

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|                                             |   | June 30, 2009     |       |
|--------------------------------------------------|--------|-------------------|------------|
|                                             |   | Amortized Cost    |       |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
| Available for Sale:                              |   |              |       |   |   |   |   |   |   |   |   |   |
| U.S. Government agency debt obligations          |   | $                 | 8,241,489  |   |   | $ | 172,187 |   |   | $ | (9,701 | ) |   | $ | 8,403,975 |   |
| Obligations of states and political subdivisions |   |              | 25,289,367 |   |   |   | 161,115 |   |   |   | (715,617 | ) |   |   | 24,734,865 |   |
| Mortgage-backed securities                       |   |              | 43,810,056 |   |   |   | 1,231,677 |   |   |   | (294,979 | ) |   |   | 44,746,754 |   |
| Trust Preferred securities                       |   |              | 913,686    |   |   |   | - |   |   |   | (839,633 | ) |   |   | 74,053 |   |
|                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                            |   | $                 | 78,254,598 |   |   | $ | 1,564,979 |   |   | $ | (1,859,930 | ) |   | $ | 77,959,647 |   |
|                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity:                                |   | Amortized Cost    |       |   | Gross Unrecognized Gains |   |   | Gross Unrecognized Losses |   |   | Fair Value |   |
| Mortgage-backed securities                       |   | $                 | 4,720,914  |   |   | $ | 29,113 |   |   | $ | (22,908 | ) |   | $ | 4,727,119 |   |
|                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                            |   | $                 | 4,720,914  |   |   | $ | 29,113 |   |   | $ | (22,908 | ) |   | $ | 4,727,119 |   |
|                                             |   |              |       |
|                                             |   | December 31, 2008 |       |
|                                             |   | Amortized Cost    |       |   | Gross Unrecognized Gains |   |   | Gross Unrecognized Losses |   |   | Fair Value |   |
| Available for Sale:                              |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency debt obligations          |   | $                 | 8,038,385  |   |   | $ | 230,747 |   |   | $ | - |   |   | $ | 8,269,132 |   |
| Obligations of states and political subdivisions |   |              | 21,908,378 |   |   |   | 87,023 |   |   |   | (737,771 | ) |   |   | 21,257,630 |   |
| Mortgage-backed securities                       |   |              | 47,449,188 |   |   |   | 943,358 |   |   |   | (357,953 | ) |   |   | 48,034,593 |   |
| Trust Preferred securities                       |   |              | 948,290    |   |   |   | - |   |   |   | (717,390 | ) |   |   | 230,900 |   |
|                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                            |   | $                 | 78,344,241 |   |   | $ | 1,261,128 |   |   | $ | (1,813,114 | ) |   | $ | 77,792,255 |   |

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|                                                  |   | 6/30/2009              |   |   | 6/30/2009  |   |       | 12/31/2008             |   |   | 12/31/2008 |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|------------|--------|------------|------------------------|--------|--------|------------|--------|
|                                                  |   | Weighted Average Yield |   |   | Fair Value |   |       | Weighted Average Yield |   |   | Fair Value |   |
| Available for sale:                                   |   |                   |   |   |       |   |       |                   |   |   |       |   |
| Agencies:                                             |   |                   |   |   |       |   |       |                   |   |   |       |   |
| Due in one year or less                               |   |                   | 0.00   | %      |       | $      | -          |                   |   |   | 0.00       | %      |   | $ | - |   |
| Due after one to five years                           |   |                   | 3.90   | %      |       |   | 5,115,282  |                   |   |   | 4.45       | %      |   |   | 5,739,408 |   |
| Due after five years                                  |   |                   | 4.07   | %      |       |   | 1,782,753  |                   |   |   | 4.10       | %      |   |   | 2,529,724 |   |
| Due after ten years                                   |   |                   | 3.53   | %      |       |   | 1,505,940  |                   |   |   | 0.00       | %      |   |   | - |   |
| Total Agencies                                        |   |                   | 3.87   | %      |       | $      | 8,403,975  |                   |   |   | 4.35       | %      |   | $ | 8,269,132 |   |
|                                                  |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Mortgage-backed securities:                           |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Mortgage-backed securities                            |   |                   | 4.93   | %      |       | $      | 44,746,754 |                   |   |   | 4.66       | %      |   | $ | 48,034,593 |   |
|                                                  |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Obligations of state and political subdivisions:      |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Due in one year or less                               |   |                   | 4.30   | %      |       | $      | 45,801     |                   |   |   | 4.30       | %      |   | $ | 110,790 |   |
| Due after one to five years                           |   |                   | 4.72   | %      |       |   | 1,696,582  |                   |   |   | 5.07       | %      |   |   | 806,104 |   |
| Due after five to ten years                           |   |                   | 5.82   | %      |       |   | 6,721,278  |                   |   |   | 5.87       | %      |   |   | 5,180,237 |   |
| Due after ten years                                   |   |                   | 6.14   | %      |       |   | 16,271,204 |                   |   |   | 6.15       | %      |   |   | 15,160,499 |   |
| Total Obligations of state and political subdivisions |   |                   | 5.96   | %      |       | $      | 24,734,865 |                   |   |   | 6.03       | %      |   | $ | 21,257,630 |   |
|                                                  |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Trust Preferred Securities                            |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Due after ten years                                   |   |                   | 1.70   | %      |       | $      | 74,053     |                   |   |   | 3.11       | %      |   | $ | 230,900 |   |
|                                                  |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
|                                                  |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Held to maturity:                                     |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Mortgage-backed securities:                           |   |                   |   |   |       |   |       |                   |   |   |       |   |   |   |   |   |
| Mortgage-backed securities                            |   |                   | 9.21   | %      |       | $      | 4,727,119  |                   |   |   | 0.00       | %      |   | $ | - |   |

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|                                             |   | Continuing Unrealized |       |   | Continuing Unrealized     |   |     |       |   |   |                      |   |
|--------------------------------------------------|--------|-----------------------|------------|--------|---------------------------|--------|----------|------------|--------|--------|---------------------------|--------|
|                                             |   | Losses for            |       |   | Losses for                |   |     |       |   |   |                      |   |
|                                             |   | Less than 12 months   |       |   | More than 12 months       |   |     | Total      |   |
|                                             |   | Fair Value            |       |   | Gross Unrealized Losses   |   |     | Fair Value |   |   | Gross Unrealized Losses   |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
| Available for sale:                              |   |                  |       |   |                      |   |     |       |   |   |                      |   |   |   |   |   |   |   |
| U.S. Government agency debt obligations          |   | $                     | 2,002,810  |   |                      | $      | (9,701   | )          |   | $      | -                         |   |   | $ | - |   |   | $ | 2,002,810 |   |   | $ | (9,701 | ) |
| Obligations of states and political subdivisions |   |                  | 15,173,337 |   |                      |   | (426,238 | )          |   |   | 2,855,641                 |   |   |   | (289,379 | ) |   |   | 18,028,978 |   |   |   | (715,617 | ) |
| Mortgage-backed securities                       |   |                  | 3,904,462  |   |                      |   | (5,325   | )          |   |   | 471,174                   |   |   |   | (289,654 | ) |   |   | 4,375,636 |   |   |   | (294,979 | ) |
| Trust preferred securities                       |   |                  | -          |   |                      |   | -        |       |   |   | 74,053                    |   |   |   | (839,633 | ) |   |   | 74,053 |   |   |   | (839,633 | ) |
| Total temporarily impaired                       |   | $                     | 21,080,609 |   |                      | $      | (441,264 | )          |   | $      | 3,400,868                 |   |   | $ | (1,418,666 | ) |   | $ | 24,481,477 |   |   | $ | (1,859,930 | ) |
|                                             |   |                  |       |   |                      |   |     |       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | Fair Value            |       |   | Gross Unrecognized Losses |   |     | Fair Value |   |   | Gross Unrecognized Losses |   |   | Fair Value |   |   | Gross Unrecognized Losses |   |
| Held to maturity:                                |   |                  |       |   |                      |   |     |       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                       |   |                  | 4,727,119  |   |                      |   | (22,908  | )          |   |   | -                         |   |   |   | - |   |   |   | 4,727,119 |   |   |   | (22,908 | ) |
| Total temporarily impaired                       |   | $                     | 4,727,119  |   |                      | $      | (22,908  | )          |   | $      | -                         |   |   | $ | - |   |   | $ | 4,727,119 |   |   | $ | (22,908 | ) |

|                                             |   | Continuing UnrealizedLosses forLess than 12 months |       |   | Continuing UnrealizedLosses forMore than 12 months |   |       | Total      |   |
|--------------------------------------------------|--------|----------------------------------------------------|------------|--------|----------------------------------------------------|--------|------------|------------|--------|
|                                             |   | Fair Value                                         |       |   | Gross Unrealized Losses                            |   |       | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
| U.S. Government agency debt obligations          |   | $                                                  | -          |   |                                               | $      | -          |       |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Obligations of states and political subdivisions |   |                                               | 17,180,355 |   |                                               |   | (649,015   | )          |   |   | 816,971 |   |   |   | (88,756 | ) |   |   | 17,997,326 |   |   |   | (737,771 | ) |
| Mortgage-backed securities                       |   |                                               | 5,490,894  |   |                                               |   | (357,953   | )          |   |   | - |   |   |   | - |   |   |   | 5,490,894 |   |   |   | (357,953 | ) |
| Trust preferred securities                       |   |                                               | -          |   |                                               |   | -          |       |   |   | 230,900 |   |   |   | (717,390 | ) |   |   | 230,900 |   |   |   | (717,390 | ) |
| Total temporarily impaired                       |   | $                                                  | 22,671,249 |   |                                               | $      | (1,006,968 | )          |   | $ | 1,047,871 |   |   | $ | (806,146 | ) |   | $ | 23,719,120 |   |   | $ | (1,813,114 | ) |

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|                                                                                                              |   | Three months ended June 30 |       |
|-------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                                                              |   | 2009                       |       |   | 2008 |   |
| Net Income (Loss)                                                                                                 |   | $                          | (4,095,480 | ) |   | $ | 342,707 |   |
| Change in securities available-for-sale:                                                                          |   |                       |       |   |   |   |   |   |
| Other-than-temporary impairment on available-for-sale securities                                                  |   |                       | 30,690     |   |   |   | - |   |
| Other-than-temporary impairment on available-for-sale securities associated with credit losses realized in income |   |                       | 47,656     |   |   |   | - |   |
| Other-than-temporary impairment on available-for-sale securities, recorded in OCI                                 |   |                       | 78,346     |   |   |   | - |   |
|                                                                                                              |   |                       |       |   |   |   |   |   |
| Unrealized gains (losses) on interest rate floor                                                                  |   |                       | (132,134   | ) |   |   | (139,834 | ) |
| Unrealized holding gains (losses) on available-for-sale securities arising during the period                      |   |                       | (278,354   | ) |   |   | (1,534,969 | ) |
| Reclassification adjustment for (gains) losses realized in income on interest rate floor                          |   |                       | 219,343    |   |   |   | (139,832 | ) |
| Reclassification adjustment for (gains) losses realized in income on available-for-sale securities                |   |                       | (3,861     | ) |   |   | - |   |
| Net unrealized (gains) losses                                                                                     |   |                       | (195,006   | ) |   |   | (1,814,635 | ) |
| Income tax expense (benefit)                                                                                      |   |                       | 123,949    |   |   |   | 563,632 |   |
| Total other comprehensive income (loss)                                                                           |   |                       | (240,609   | ) |   |   | (1,251,003 | ) |
| Comprehensive Income (Loss)                                                                                       |   | $                          | (4,336,089 | ) |   | $ | (908,296 | ) |

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|                                                                                                              |   | Six months ended June 30 |       |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                                                              |   | 2009                     |       |   | 2008 |   |
| Net Income (Loss)                                                                                                 |   | $                        | (3,685,255 | ) |   | $ | 1,053,879 |   |
| Change in securities available-for-sale:                                                                          |   |                     |       |   |   |   |   |   |
| Other-than-temporary impairment on available-for-sale securities                                                  |   |                     | (169,899   | ) |   |   | - |   |
| Other-than-temporary impairment on available-for-sale securities associated with credit losses realized in income |   |                     | 47,656     |   |   |   | - |   |
| Other-than-temporary impairment on available-for-sale securities, recorded in OCI                                 |   |                     | (122,243   | ) |   |   | - |   |
|                                                                                                              |   |                     |       |   |   |   |   |   |
| Unrealized gains (losses) on interest rate floor                                                                  |   |                     | 445,505    |   |   |   | 304,936 |   |
| Unrealized holding gains (losses) on available-for-sale securities arising during the period                      |   |                     | 128,785    |   |   |   | (678,158 | ) |
| Reclassification adjustment for (gains) losses realized in income on interest rate floor                          |   |                     | (268,376   | ) |   |   | (139,832 | ) |
| Reclassification adjustment for (gains) losses realized in income on available-for-sale securities                |   |                     | (195,012   | ) |   |   | (59,837 | ) |
| Net unrealized (gains) losses                                                                                     |   |                     | (11,341    | ) |   |   | (572,891 | ) |
| Income tax expense (benefit)                                                                                      |   |                     | 3,855      |   |   |   | 194,779 |   |
| Total other comprehensive income (loss)                                                                           |   |                     | (7,486     | ) |   |   | (378,112 | ) |
| Comprehensive Income (Loss)                                                                                       |   | $                        | (3,692,741 | ) |   | $ | 675,767 |   |

|                                                                            |   | Three Months Ended |       |   | Six Months Ended |   |
|---------------------------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                                            |   | June 30            |       |   | June 30          |   |
|                                                                       |   | 2009               |       |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Basic                                                                           |   |               |       |   |             |   |   |   |   |   |   |   |
| Net income (loss)                                                               |   | $                  | (4,095,480 | )      |             | $      | 342,707 |   |   | $ | (3,685,255 | ) |   | $ | 1,053,879 |   |
| Weighted average common shares outstanding                                      |   |               | 4,090,432  |   |             |   | 4,073,582 |   |   |   | 4,090,399 |   |   |   | 4,066,864 |   |
| Basic earnings (loss) per common share                                          |   | $                  | (1.00      | )      |             | $      | 0.08 |   |   | $ | (0.90 | ) |   | $ | 0.26 |   |
|                                                                            |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                         |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                               |   | $                  | (4,095,480 | )      |             | $      | 342,707 |   |   | $ | (3,685,255 | ) |   | $ | 1,053,879 |   |
| Weighted average common shares outstanding                                      |   |               | 4,090,432  |   |             |   | 4,073,582 |   |   |   | 4,090,399 |   |   |   | 4,066,864 |   |
| Add:  dilutive effect of assumed stock option exercises               |   |               | -          |   |             |   | 2,289 |   |   |   | - |   |   |   | 13,273 |   |
|                                                                            |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares and dilutive potential common shares outstanding |   |               | 4,090,432  |   |             |   | 4,075,871 |   |   |   | 4,090,399 |   |   |   | 4,080,137 |   |
| Diluted earnings (loss) per common share                                        |   | $                  | (1.00      | )      |             | $      | 0.08 |   |   | $ | (0.90 | ) |   | $ | 0.26 |   |

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| Options                                     |   | Shares |    |   | Weighted-Average Aggregate Exercise Price |   |   | Weighted-Average Remaining Contractual Term |   |   | Instrinsic Value |   |
|---------------------------------------------|--------|--------|---------|--------|-------------------------------------------|--------|--------|---------------------------------------------|--------|--------|------------------|--------|
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |
| Outstanding at January 1, 2009              |   |   | 166,675 |   |                                      | $      | 11.88  |                                        |   |   | -                |   |   | $ | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Granted                                     |   |   | -       |   |                                      |   | -      |                                        |   |   | -                |   |   |   | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Exercised                                   |   |   | -       |   |                                      |   | -      |                                        |   |   | -                |   |   |   | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Forfeited or expired                        |   |   | (42,741 | )      |                                      |   | 10.03  |                                        |   |   | -                |   |   |   | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Outstanding at June 30, 2009                |   |   | 123,934 |   |                                      |   | 12.52  |                                        |   |   | 3.37             |   |   |   | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Vested or expected to vest at June 30, 2009 |   |   | 123,330 |   |                                      |   | 12.51  |                                        |   |   | 3.36             |   |   |   | - |   |
|                                        |   |   |    |   |                                      |   |   |                                        |   |   |             |   |   |   |   |   |
| Exercisable at June 30, 2009                |   |   | 119,707 |   |                                      |   | 12.40  |                                        |   |   | 3.27             |   |   |   | - |   |

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|                         |   | As of and for the three months ending June 30, 2009 |        |
|------------------------------|--------|-----------------------------------------------------|-------------|
|                         |   |                                                |        |   | Wealth |   |   | Corporate & |   |   |   |   |   |   |   |
|                         |   | Bank                                                |        |   | Management |   |   | Intercompany |   |   | Eliminations |   |   | Total |   |
| Income Statement Information |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income          |   | $                                                   | 5,081,444   |   |   | $ | 23,644 |   |   | $ | (283,071 | ) |   | $ | - |   |   | $ | 4,822,017 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income          |   |                                                | 776,511     |   |   |   | 812,741 |   |   |   | (3,718,656 | ) |   |   | 3,728,352 |   |   |   | 1,598,948 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense         |   |                                                | 5,559,187   |   |   |   | 589,199 |   |   |   | 309,495 |   |   |   | - |   |   |   | 6,457,881 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncash items                |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses    |   |                                                | 6,550,000   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,550,000 |   |
| Depreciation/Amortization    |   |                                                | 323,260     |   |   |   | 9,921 |   |   |   | - |   |   |   | - |   |   |   | 333,181 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense(benefit)  |   |                                                | (2,347,966  | ) |   |   | 72,272 |   |   |   | (215,742 | ) |   |   | - |   |   |   | (2,491,436 | ) |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Profit (Loss)        |   |                                                | (3,903,266  | ) |   |   | 174,914 |   |   |   | (4,095,480 | ) |   |   | 3,728,352 |   |   |   | (4,095,480 | ) |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Information    |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Assets               |   |                                                | 682,144,241 |   |   |   | 6,284,513 |   |   |   | 67,859,336 |   |   |   | (69,981,081 | ) |   |   | 686,307,009 |   |

----

Table of Contents

|                         |   | As of and for the six months ending June 30, 2009 |        |
|------------------------------|--------|---------------------------------------------------|-------------|
|                         |   |                                              |        |   | Wealth |   |   | Corporate & |   |   |   |   |   |   |   |
|                         |   | Bank                                              |        |   | Management |   |   | Intercompany |   |   | Eliminations |   |   | Total |   |
| Income Statement Information |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income          |   | $                                                 | 9,878,814   |   |   | $ | 47,927 |   |   | $ | (563,297 | ) |   | $ | - |   |   | $ | 9,363,444 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income          |   |                                              | 1,737,926   |   |   |   | 1,685,797 |   |   |   | (2,962,404 | ) |   |   | 2,926,932 |   |   |   | 3,388,251 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense         |   |                                              | 9,685,144   |   |   |   | 1,192,264 |   |   |   | 573,744 |   |   |   | - |   |   |   | 11,451,152 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncash items                |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses    |   |                                              | 7,510,000   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,510,000 |   |
| Depreciation/Amortization    |   |                                              | 667,473     |   |   |   | 19,873 |   |   |   | - |   |   |   | - |   |   |   | 687,346 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense(benefit)  |   |                                              | (2,301,535  | ) |   |   | 191,523 |   |   |   | (414,190 | ) |   |   | - |   |   |   | (2,524,202 | ) |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Profit (Loss)        |   |                                              | (3,276,869  | ) |   |   | 349,937 |   |   |   | (3,685,255 | ) |   |   | 2,926,932 |   |   |   | (3,685,255 | ) |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Information    |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Assets               |   |                                              | 682,144,241 |   |   |   | 6,284,513 |   |   |   | 67,859,336 |   |   |   | (69,981,081 | ) |   |   | 686,307,009 |   |

|                         |   | As of and for the three months ending June 30, 2008 |        |
|------------------------------|--------|-----------------------------------------------------|-------------|
|                         |   |                                                |        |   | Wealth |   |   | Corporate & |   |   |   |   |   |   |   |
|                         |   | Bank                                                |        |   | Management |   |   | Intercompany |   |   | Eliminations |   |   | Total |   |
| Income Statement Information |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income          |   | $                                                   | 5,551,759   |   |   | $ | 25,942 |   |   | $ | (283,071 | ) |   | $ | - |   |   | $ | 5,294,630 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income          |   |                                                | 704,064     |   |   |   | 938,763 |   |   |   | 577,496 |   |   |   | (751,854 | ) |   |   | 1,468,469 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense         |   |                                                | 4,704,058   |   |   |   | 697,799 |   |   |   | 218,568 |   |   |   | - |   |   |   | 5,620,425 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncash items                |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses    |   |                                                | 875,000     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 875,000 |   |
| Depreciation/Amortization    |   |                                                | 343,723     |   |   |   | 10,512 |   |   |   | - |   |   |   | - |   |   |   | 354,235 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense(benefit)  |   |                                                | 55,407      |   |   |   | 136,411 |   |   |   | (266,851 | ) |   |   | - |   |   |   | (75,033 | ) |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Profit               |   |                                                | 621,358     |   |   |   | 130,495 |   |   |   | 342,708 |   |   |   | (751,854 | ) |   |   | 342,707 |   |
|                         |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Information    |   |                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Assets               |   |                                                | 691,288,156 |   |   |   | 6,422,677 |   |   |   | 69,234,163 |   |   |   | (71,361,057 | ) |   |   | 695,583,939 |   |

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Table of Contents

|                         |   | As of and for the six months ending June 30, 2008 |        |
|------------------------------|--------|---------------------------------------------------|-------------|
|                         |   |                                              |        |   | Wealth |   |   | Corporate & |   |   |   |   |   |   |   |
|                         |   | Bank                                              |        |   | Management |   |   | Intercompany |   |   | Eliminations |   |   | Total |   |
| Income Statement Information |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income          |   | $                                                 | 10,881,189  |   |   | $ | 58,536 |   |   | $ | (564,720 | ) |   | $ | - |   |   | $ | 10,375,005 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income          |   |                                              | 1,468,198   |   |   |   | 1,833,394 |   |   |   | 1,546,563 |   |   |   | (1,738,912 | ) |   |   | 3,109,243 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense         |   |                                              | 9,329,297   |   |   |   | 1,402,627 |   |   |   | 367,285 |   |   |   | - |   |   |   | 11,099,209 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncash items                |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses    |   |                                              | 1,175,000   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,175,000 |   |
| Depreciation/Amortization    |   |                                              | 681,367     |   |   |   | 20,458 |   |   |   | - |   |   |   | - |   |   |   | 701,825 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense(benefit)  |   |                                              | 358,920     |   |   |   | 236,561 |   |   |   | (439,321 | ) |   |   | - |   |   |   | 156,160 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Profit               |   |                                              | 1,486,170   |   |   |   | 252,742 |   |   |   | 1,053,879 |   |   |   | (1,738,912 | ) |   |   | 1,053,879 |   |
|                         |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Information    |   |                                              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment Assets               |   |                                              | 691,288,156 |   |   |   | 6,422,677 |   |   |   | 69,234,163 |   |   |   | (71,361,057 | ) |   |   | 695,583,939 |   |

|                           |   | June 30, 2009 |        |   | December 31, 2008 |   |
|--------------------------------|--------|---------------|-------------|--------|-------------------|--------|
|                           |   | Balance       |        |   | %                 |   |   | Balance |   |   | % |   |
|                           |   |          |        |   |              |   |   |   |   |   |   |   |
| Commercial                     |   | $             | 265,103,331 |   |              |   | 47.5 | % |   | $ | 255,027,227 |   |   |   | 45.5 | % |
| Commercial real estate         |   |          | 142,062,873 |   |              |   | 25.5 | % |   |   | 152,417,413 |   |   |   | 27.2 | % |
| Residential real estate        |   |          | 89,055,868  |   |              |   | 16.0 | % |   |   | 98,431,638 |   |   |   | 17.5 | % |
| Home equity                    |   |          | 42,773,441  |   |              |   | 7.6 | % |   |   | 34,957,139 |   |   |   | 6.2 | % |
| Consumer                       |   |          | 18,744,966  |   |              |   | 3.4 | % |   |   | 20,329,830 |   |   |   | 3.6 | % |
| Total loans                    |   |          | 557,740,479 |   |              |   | 100.0 | % |   |   | 561,163,247 |   |   |   | 100.0 | % |
| Net deferred loan costs/(fees) |   |          | (210,489    | )      |              |   |   |   |   |   | (151,572 | ) |   |   |   |   |
| Allowance for loan losses      |   |          | (14,105,074 | )      |              |   |   |   |   |   | (10,654,879 | ) |   |   |   |   |
|                           |   |          |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net loans                      |   | $             | 543,424,916 |   |              |   |   |   |   | $ | 550,356,796 |   |   |   |   |   |

|                                          |   | 2009   |       |   | 2008   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                          |   |   |       |   |   |   |
| Beginning balance, January 1                  |   | $      | 10,654,879 |   |   | $      | 8,208,162 |   |
| Provision expense                             |   |   | 7,510,000  |   |   |   | 1,175,000 |   |
| Charge-offs                                   |   |   | (4,236,678 | )      |   |   | (1,657,598 | ) |
| Recoveries                                    |   |   | 176,873    |   |   |   | 1,248,488 |   |
|                                          |   |   |       |   |   |   |   |   |
| Ending balance, June 30                       |   | $      | 14,105,074 |   |   | $      | 8,974,052 |   |
|                                          |   |   |       |   |   |   |   |   |
| Net charge-offs to average loans (annualized) |   |   | 1.46       | %      |   |   | 0.14 | % |

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Table of Contents

|                             |   | June 30, 2009 |       |   | December 31, 2008 |   |
|----------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                             |   |          |       |   |              |   |
| Specific allocations             |   | $             | 6,085,000  |   |              | $      | 3,101,000 |   |
| Loan pool percentage allocations |   |          | 7,990,000  |   |              |   | 7,497,000 |   |
| Unallocated                      |   |          | 30,074     |   |              |   | 56,879 |   |
|                             |   |          |       |   |              |   |   |   |
| Total allowance for loan losses  |   | $             | 14,105,074 |   |              | $      | 10,654,879 |   |

|                                           |   | June 30, 2009 |       |   | December 31, 2008 |   |
|------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                           |   |          |       |   |              |   |
| Loans past due over 90 days and still accruing |   | $             | 2,508,961  |   |              | $      | 1,019,857 |   |
| Restructured loans                             |   |          | 184,457    |   |              |   | 327,967 |   |
| Nonaccrual loans                               |   |          | 19,015,529 |   |              |   | 15,675,334 |   |
| Total nonperforming loans                      |   | $             | 21,708,947 |   |              | $      | 17,023,158 |   |
| Other real estate owned                        |   |          | 4,060,025  |   |              |   | 2,660,310 |   |
| Total nonperforming assets                     |   | $             | 25,768,972 |   |              | $      | 19,683,468 |   |
|                                           |   |          |       |   |              |   |   |   |
| Nonperforming assets to total assets           |   |          | 3.75       | %      |              |   | 2.83 | % |
|                                           |   |          |       |   |              |   |   |   |
| Nonperforming loans to total loans             |   |          | 3.89       | %      |              |   | 3.03 | % |

|                                              |   | June 30, 2009 |       |   | December 31, 2008 |   |
|---------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                              |   |          |       |   |              |   |
| Loans with no allocated allowance for loan losses |   | $             | 8,648,691  |   |              | $      | 6,462,113 |   |
| Loans with allocated allowance for loan losses    |   |          | 19,589,371 |   |              |   | 16,898,392 |   |
| Total Impaired                                    |   | $             | 28,238,062 |   |              | $      | 23,360,505 |   |
|                                              |   |          |       |   |              |   |   |   |
| Amount of allowance for loan losses allocated     |   | $             | 6,085,000  |   |              | $      | 3,101,000 |   |
| Average impaired loans during the period          |   | $             | 24,587,800 |   |              | $      | 22,414,645 |   |
| Interest recognized on impaired loans             |   | $             | 374,353    |   |              | $      | 244,703 |   |
| Cash-basis interest income recognized             |   | $             | 436,803    |   |              | $      | 244,703 |   |

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Table of Contents

|                                                                  |   | June 30, 2009 |       |   | December 31, 2008 |   |
|-----------------------------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
| 0.65% variable rate advance, principal due at maturity April 13, 2009 |   |          | -          |   |              |   | 2,000,000 |   |
| 0.65% variable rate advance, principal due at maturity May 20, 2009   |   |          | -          |   |              |   | 3,000,000 |   |
| 0.65% variable rate advance, principal due at maturity June 29, 2009  |   |          | -          |   |              |   | 9,000,000 |   |
| 5.00% bullet advance, principal due at maturity April 27, 2009        |   |          | -          |   |              |   | 4,000,000 |   |
| 5.16% bullet advance, principal due at maturity August 18, 2009       |   |          | 4,000,000  |   |              |   | 4,000,000 |   |
| 3.08% bullet advance, principal due at maturity August 27, 2009       |   |          | 1,000,000  |   |              |   | 1,000,000 |   |
| 2.29% bullet advance, principal due at maturity March 22, 2010        |   |          | 2,000,000  |   |              |   | 2,000,000 |   |
| 3.26% bullet advance, principal due at maturity April 28, 2010        |   |          | 1,500,000  |   |              |   | 1,500,000 |   |
| 3.63% bullet advance, principal due at maturity June 28, 2010         |   |          | 4,000,000  |   |              |   | 4,000,000 |   |
| 4.32% bullet advance, principal due at maturity June 29, 2010         |   |          | 1,200,000  |   |              |   | 1,200,000 |   |
| 3.19% bullet advance, principal due at maturity March 28, 2011        |   |          | 2,000,000  |   |              |   | 2,000,000 |   |
| 3.60% bullet advance, principal due at maturity April 28, 2011        |   |          | 1,500,000  |   |              |   | 1,500,000 |   |
| 3.55% bullet advance, principal due at maturity March 26, 2012        |   |          | 2,000,000  |   |              |   | 2,000,000 |   |
| 3.81% bullet advance, principal due at maturity March 26, 2013        |   |          | 2,000,000  |   |              |   | 2,000,000 |   |
|                                                                  |   |          |       |   |              |   |   |   |
|                                                                  |   | $             | 21,200,000 |   |              | $      | 39,200,000 |   |

| Year   |   | Advances |       |
|--------|--------|----------|------------|
| 2009   |   |     | 5,000,000  |   |
| 2010   |   |     | 8,700,000  |   |
| 2011   |   |     | 3,500,000  |   |
| 2012   |   |     | 2,000,000  |   |
| 2013   |   |     | 2,000,000  |   |
|   |   | $        | 21,200,000 |   |

----

Table of Contents

|                                             |   | June 30, 2009 |       |
|--------------------------------------------------|--------|---------------|------------|
|                                             |   | Level 1       |       |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Available for Sale:                              |   |          |       |   |   |   |   |   |   |   |   |   |
| U.S. Government agency debt obligations          |   | $             | 6,341,475  |   |   | $ | 2,062,500 |   |   | $ | - |   |   | $ | 8,403,975 |   |
| Obligations of states and political subdivisions |   |          | -          |   |   |   | 24,734,865 |   |   |   | - |   |   |   | 24,734,865 |   |
| Mortgage-backed securities                       |   |          | 44,746,754 |   |   |   | - |   |   |   | - |   |   |   | 44,746,754 |   |
| Trust Preferred securities                       |   |          | -          |   |   |   | - |   |   |   | 74,053 |   |   |   | 74,053 |   |
| Total                                            |   | $             | 51,088,229 |   |   | $ | 26,797,365 |   |   | $ | 74,053 |   |   | $ | 77,959,647 |   |

|                                             |   | December 31, 2008 |       |
|--------------------------------------------------|--------|-------------------|------------|
|                                             |   | Level 1           |       |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Available for Sale:                              |   |              |       |   |   |   |   |   |   |   |   |   |
| U.S. Government agency debt obligations          |   | $                 | 6,262,932  |   |   | $ | 2,006,200 |   |   | $ | - |   |   | $ | 8,269,132 |   |
| Obligations of states and political subdivisions |   |              | -          |   |   |   | 21,257,630 |   |   |   | - |   |   |   | 21,257,630 |   |
| Mortgage-backed securities                  |   |              | 48,034,593 |   |   |   | - |   |   |   | - |   |   |   | 48,034,593 |   |
| Trust Preferred securities                  |   |              | -          |   |   |   | - |   |   |   | 230,900 |   |   |   | 230,900 |   |
| Total                                            |   | $                 | 54,297,525 |   |   | $ | 23,263,830 |   |   | $ | 230,900 |   |   | $ | 77,792,255 |   |

|                                   |   | Available-for-salesecurities |    |
|----------------------------------------|--------|------------------------------|---------|
| For the three months ended             |   | June 30, 2009                |    |
|                                   |   |                         |    |
| Beginning Balance, April 1             |   | $                            | 37,655  |   |
| Net realized/unrealized gains (losses) |   |                         |    |   |
| Included in earnings:                  |   |                         |    |   |
| Interest income on securities          |   |                         | 5,708   |   |
| Credit loss recognized in earnings     |   |                         | (47,656 | ) |
| Included in other comprehensive income |   |                         | 78,346  |   |
| Ending Balance, June 30                |   | $                            | 74,053  |   |

----

Table of Contents

|                                   |   | Available-for-salesecurities |     |
|----------------------------------------|--------|------------------------------|----------|
| For the six months ended               |   | June 30, 2009                |     |
|                                   |   |                         |     |
| Beginning Balance, January 1           |   | $                            | 230,900  |   |
| Net realized/unrealized gains (losses) |   |                         |     |   |
| Included in earnings:                  |   |                         |     |   |
| Interest income on securities          |   |                         | 13,052   |   |
| Credit loss recognized in earnings     |   |                         | (47,656  | ) |
| Included in other comprehensive income |   |                         | (122,243 | ) |
| Ending Balance, June 30                |   | $                            | 74,053   |   |

|                    | June 30, 2009                                                                                                                         |
|-------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                    | Level 1                                                                                                                               | Level 2 | Level 3 | Total |
| Impaired loans          |                       - |                       - |        13,504,371 |        13,504,371 |
| Other real estate owned |                       - |                       - |          4,060,025 |          4,060,025 |

|           | December 31, 2008                                                                                                                     |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|
|           | Level 1                                                                                                                               | Level 2 | Level 3 | Total |
| Impaired loans |                       - |                       - |        15,515,583 |        15,515,583 |

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|                          |   | June 30, 2009  |         |   | December 31, 2008 |   |
|-------------------------------|--------|----------------|--------------|--------|-------------------|--------|
|                          |   | Carrying Value |         |   | Fair Value        |   |   | Carrying Value |   |   | Fair Value |   |
| Financial assets:             |   |           |         |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $              | 15,881,929   |   |              | $      | 15,881,929 |   |   | $ | 31,576,373 |   |   | $ | 31,576,373 |   |
| Securities available for sale |   |           | 77,959,647   |   |              |   | 77,959,647 |   |   |   | 77,792,255 |   |   |   | 77,792,255 |   |
| Securities held to maturity   |   |           | 4,720,914    |   |              |   | 4,727,119 |   |   |   | - |   |   |   | - |   |
| FHLBI and FRB stock           |   |           | 4,032,446    |   |              |   | N/A |   |   |   | 4,032,446 |   |   |   | N/A |   |
| Loans held for sale           |   |           | 3,513,721    |   |              |   | 3,513,721 |   |   |   | 151,614 |   |   |   | 151,614 |   |
| Loans, net                    |   |           | 543,424,916  |   |              |   | 543,270,357 |   |   |   | 550,356,796 |   |   |   | 555,695,490 |   |
| Accrued interest receivable   |   |           | 2,462,880    |   |              |   | 2,462,880 |   |   |   | 2,615,260 |   |   |   | 2,615,260 |   |
| Financial liabilities:        |   |           |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   |           | (594,593,748 | )      |              |   | (597,430,369 | ) |   |   | (586,237,114 | ) |   |   | (589,369,429 | ) |
| Short-term borrowings         |   |           | (2,800,000   | )      |              |   | (2,800,000 | ) |   |   | - |   |   |   | - |   |
| FHLB advances                 |   |           | (21,200,000  | )      |              |   | (21,620,823 | ) |   |   | (39,200,000 | ) |   |   | (39,870,750 | ) |
| Junior subordinated debt      |   |           | (17,527,000  | )      |              |   | (17,025,235 | ) |   |   | (17,527,000 | ) |   |   | (14,532,211 | ) |
| Accrued interest payable      |   |           | (539,193     | )      |              |   | (539,193 | ) |   |   | (658,956 | ) |   |   | (658,956 | ) |

GEME

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|                             |   | June 30, 2009 |        |   | December 31, 2008 |   |
|----------------------------------|--------|---------------|-------------|--------|-------------------|--------|
|                             |   | Balance       |        |   | %                 |   |   | Balance |   |   | % |   |
| Core deposits:                   |   |          |        |   |              |   |   |   |   |   |   |   |
| Noninterest-bearing demand       |   | $             | 105,667,772 |   |              |   | 17.8 | % |   | $ | 82,107,483 |   |   |   | 14.0 | % |
| Interest-bearing checking        |   |          | 77,808,746  |   |              |   | 13.1 | % |   |   | 73,452,486 |   |   |   | 12.5 | % |
| Money market                     |   |          | 150,645,511 |   |              |   | 25.3 | % |   |   | 140,384,566 |   |   |   | 24.0 | % |
| Savings                          |   |          | 16,843,785  |   |              |   | 2.8 | % |   |   | 17,049,660 |   |   |   | 2.9 | % |
| Time, under $100,000             |   |          | 93,394,748  |   |              |   | 15.7 | % |   |   | 93,764,792 |   |   |   | 16.0 | % |
| Total core deposits              |   |          | 444,360,562 |   |              |   | 74.7 | % |   |   | 406,758,987 |   |   |   | 69.4 | % |
| Non-core deposits:               |   |          |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| In-market core deposits:         |   |          |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Time, $100,000 and over          |   |          | 80,790,172  |   |              |   | 13.6 | % |   |   | 94,926,801 |   |   |   | 16.2 | % |
| Out-of-market non-core deposits: |   |          |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Brokered certificate of deposits |   |          | 69,443,014  |   |              |   | 11.7 | % |   |   | 84,551,326 |   |   |   | 14.4 | % |
| Total non-core deposits          |   |          | 150,233,186 |   |              |   | 25.3 | % |   |   | 179,478,127 |   |   |   | 30.6 | % |
|                             |   |          |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits                   |   | $             | 594,593,748 |   |              |   | 100.0 | % |   | $ | 586,237,114 |   |   |   | 100.0 | % |

| Performance Ratios          |   | June 30 |
|-----------------------------|--------|---------|
|                        |   | 2009    | 2008 |
|                        |   |    |   |
| Return on average assets *  |   | -2.32%  | 0.20% |
| Return on average equity *  |   | -32.66% | 2.78% |
| Net interest margin (TEY) * |   | 3.02%   | 3.37% |
| Efficiency ratio            |   | 100.57% | 83.10% |
|                        |   |    |   |
| * annualized                |   |    |   |

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|                                                       |   | As of and For The Three Month Period Ended |    |
|------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                       |   | June 30, 2009                              |    |   | June 30, 2008 |   |
| ($ in thousands)                                           |   | Average Balance                            |    |   | Interest Earned or Paid |   |   | Annualized Yield or Cost |   |   | Average Balance |   |   | Interest Earned or Paid |   |   | Annualized Yield or Cost |   |
| Assets                                                     |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term investments and interest-earning deposits       |   | $                                          | 2,438   |   |   | $ | - |   |   |   | 0.00 | % |   | $ | 5,264 |   |   | $ | 41 |   |   |   | 3.13 | % |
| Federal funds sold                                         |   |                                       | 4,849   |   |   |   | 3 |   |   |   | 0.25 | % |   |   | 4,781 |   |   |   | 48 |   |   |   | 4.04 | % |
| Securities - taxable                                       |   |                                       | 62,826  |   |   |   | 781 |   |   |   | 4.99 | % |   |   | 52,706 |   |   |   | 648 |   |   |   | 4.94 | % |
| Securities - tax exempt (1)                                |   |                                       | 23,421  |   |   |   | 368 |   |   |   | 6.30 | % |   |   | 21,830 |   |   |   | 344 |   |   |   | 6.34 | % |
| Loans held for sale                                        |   |                                       | 2,190   |   |   |   | - |   |   |   | 0.00 | % |   |   | 551 |   |   |   | - |   |   |   | 0.00 | % |
| Loans                                                      |   |                                       | 561,814 |   |   |   | 7,100 |   |   |   | 5.07 | % |   |   | 561,647 |   |   |   | 8,348 |   |   |   | 5.98 | % |
| Total interest-earning assets                              |   |                                       | 657,538 |   |   |   | 8,252 |   |   |   | 5.03 | % |   |   | 646,779 |   |   |   | 9,429 |   |   |   | 5.87 | % |
| Allowance for loan losses                                  |   |                                       | (11,294 | ) |   |   |   |   |   |   |   |   |   |   | (9,299 | ) |   |   |   |   |   |   |   |   |
| Cash and due from banks                                    |   |                                       | 26,683  |   |   |   |   |   |   |   |   |   |   |   | 15,845 |   |   |   |   |   |   |   |   |   |
| Other assets                                               |   |                                       | 35,355  |   |   |   |   |   |   |   |   |   |   |   | 32,221 |   |   |   |   |   |   |   |   |   |
| Total assets                                               |   | $                                          | 708,282 |   |   |   |   |   |   |   |   |   |   | $ | 685,546 |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                       |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing checking                                  |   | $                                          | 83,597  |   |   | $ | 172 |   |   |   | 0.83 | % |   | $ | 66,866 |   |   | $ | 199 |   |   |   | 1.20 | % |
| Savings                                                    |   |                                       | 16,940  |   |   |   | 16 |   |   |   | 0.38 | % |   |   | 16,777 |   |   |   | 45 |   |   |   | 1.08 | % |
| Money market                                               |   |                                       | 157,684 |   |   |   | 436 |   |   |   | 1.11 | % |   |   | 135,542 |   |   |   | 747 |   |   |   | 2.22 | % |
| Certificates of deposit                                    |   |                                       | 265,507 |   |   |   | 2,180 |   |   |   | 3.29 | % |   |   | 289,527 |   |   |   | 2,442 |   |   |   | 3.39 | % |
| Short-term borrowings                                      |   |                                       | 453     |   |   |   | 1 |   |   |   | 0.89 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| FHLB Advances                                              |   |                                       | 23,133  |   |   |   | 217 |   |   |   | 3.76 | % |   |   | 34,041 |   |   |   | 299 |   |   |   | 3.53 | % |
| Junior subordinated debt                                   |   |                                       | 17,527  |   |   |   | 283 |   |   |   | 6.49 | % |   |   | 17,527 |   |   |   | 283 |   |   |   | 6.49 | % |
| Total interest-bearing liabilities                         |   |                                       | 564,841 |   |   |   | 3,305 |   |   |   | 2.35 | % |   |   | 560,280 |   |   |   | 4,015 |   |   |   | 2.90 | % |
| Noninterest-bearing checking                               |   |                                       | 88,921  |   |   |   |   |   |   |   |   |   |   |   | 71,851 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                          |   |                                       | 4,217   |   |   |   |   |   |   |   |   |   |   |   | 4,164 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                       |   |                                       | 50,303  |   |   |   |   |   |   |   |   |   |   |   | 49,251 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                 |   | $                                          | 708,282 |   |   |   |   |   |   |   |   |   |   | $ | 685,546 |   |   |   |   |   |   |   |   |   |
| Net interest income                                        |   |                                       |    |   |   | $ | 4,947 |   |   |   |   |   |   |   |   |   |   | $ | 5,414 |   |   |   |   |   |
| Rate spread                                                |   |                                       |    |   |   |   |   |   |   |   | 2.68 | % |   |   |   |   |   |   |   |   |   |   | 2.97 | % |
| Net interest income as a percent of average earning assets |   |                                       |    |   |   |   |   |   |   |   | 3.02 | % |   |   |   |   |   |   |   |   |   |   | 3.37 | % |

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| Performance Ratios          |   | June 30 |
|-----------------------------|--------|---------|
|                        |   | 2009    | 2008 |
|                        |   |    |   |
| Return on average assets *  |   | -1.06%  | 0.31% |
| Return on average equity *  |   | -14.83% | 4.34% |
| Net interest margin (TEY) * |   | 2.93%   | 3.26% |
| Efficiency ratio            |   | 89.80%  | 82.31% |
|                        |   |    |   |
| * annualized                |   |    |   |

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|                                                       |   | As of and For The Six Month Period Ended |    |
|------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                       |   | June 30, 2009                            |    |   | June 30, 2008 |   |
| ($ in thousands)                                      |   | Average Balance                          |    |   | Interest Earned or Paid |   |   | Annualized Yield or Cost |   |   | Average Balance |   |   | Interest Earned or Paid |   |   | Annualized Yield or Cost |   |
| Assets                                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term investments and interest-earning deposits       |   | $                                        | 1,996   |   |   | $ | - |   |   |   | 0.00 | % |   | $ | 10,383 |   |   | $ | 156 |   |   |   | 3.02 | % |
| Federal funds sold                                         |   |                                     | 12,106  |   |   |   | 9 |   |   |   | 0.15 | % |   |   | 6,104 |   |   |   | 116 |   |   |   | 3.82 | % |
| Securities - taxable                                       |   |                                     | 61,206  |   |   |   | 1,416 |   |   |   | 4.67 | % |   |   | 51,255 |   |   |   | 1,263 |   |   |   | 4.96 | % |
| Securities - tax exempt (1)                                |   |                                     | 22,580  |   |   |   | 709 |   |   |   | 6.33 | % |   |   | 21,190 |   |   |   | 673 |   |   |   | 6.39 | % |
| Loans held for sale                                        |   |                                     | 1,527   |   |   |   | - |   |   |   | 0.00 | % |   |   | 391 |   |   |   | - |   |   |   | 0.00 | % |
| Loans                                                      |   |                                     | 560,710 |   |   |   | 14,148 |   |   |   | 5.09 | % |   |   | 566,104 |   |   |   | 17,616 |   |   |   | 6.26 | % |
| Total interest-earning assets                              |   |                                     | 660,125 |   |   |   | 16,282 |   |   |   | 4.97 | % |   |   | 655,427 |   |   |   | 19,824 |   |   |   | 6.07 | % |
| Allowance for loan losses                                  |   |                                     | (11,121 | ) |   |   |   |   |   |   |   |   |   |   | (8,911 | ) |   |   |   |   |   |   |   |   |
| Cash and due from banks                                    |   |                                     | 18,959  |   |   |   |   |   |   |   |   |   |   |   | 14,652 |   |   |   |   |   |   |   |   |   |
| Other assets                                               |   |                                     | 34,393  |   |   |   |   |   |   |   |   |   |   |   | 32,317 |   |   |   |   |   |   |   |   |   |
| Total assets                                               |   | $                                        | 702,356 |   |   |   |   |   |   |   |   |   |   | $ | 693,485 |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                       |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing checking                                  |   | $                                        | 84,109  |   |   | $ | 348 |   |   |   | 0.83 | % |   | $ | 64,631 |   |   | $ | 419 |   |   |   | 1.30 | % |
| Savings                                                    |   |                                     | 17,170  |   |   |   | 38 |   |   |   | 0.45 | % |   |   | 16,010 |   |   |   | 90 |   |   |   | 1.13 | % |
| Money market                                               |   |                                     | 155,073 |   |   |   | 917 |   |   |   | 1.19 | % |   |   | 133,017 |   |   |   | 1,702 |   |   |   | 2.57 | % |
| Certificates of deposit                                    |   |                                     | 268,403 |   |   |   | 4,344 |   |   |   | 3.26 | % |   |   | 309,752 |   |   |   | 5,864 |   |   |   | 3.81 | % |
| Short-term borrowings                                      |   |                                     | 226     |   |   |   | 1 |   |   |   | 0.89 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| FHLB advances                                              |   |                                     | 24,645  |   |   |   | 467 |   |   |   | 3.82 | % |   |   | 29,115 |   |   |   | 573 |   |   |   | 3.96 | % |
| Junior subordinated debt                                   |   |                                     | 17,527  |   |   |   | 563 |   |   |   | 6.48 | % |   |   | 17,527 |   |   |   | 565 |   |   |   | 6.48 | % |
| Total interest-bearing liabilities                         |   |                                     | 567,153 |   |   |   | 6,678 |   |   |   | 2.37 | % |   |   | 570,052 |   |   |   | 9,213 |   |   |   | 3.26 | % |
| Noninterest-bearing checking                               |   |                                     | 80,973  |   |   |   |   |   |   |   |   |   |   |   | 70,573 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                          |   |                                     | 4,108   |   |   |   |   |   |   |   |   |   |   |   | 4,021 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                       |   |                                     | 50,122  |   |   |   |   |   |   |   |   |   |   |   | 48,839 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                 |   | $                                        | 702,356 |   |   |   |   |   |   |   |   |   |   | $ | 693,485 |   |   |   |   |   |   |   |   |   |
| Net interest income                                        |   |                                     |    |   |   | $ | 9,604 |   |   |   |   |   |   |   |   |   |   | $ | 10,611 |   |   |   |   |   |
| Rate spread                                                |   |                                     |    |   |   |   |   |   |   |   | 2.60 | % |   |   |   |   |   |   |   |   |   |   | 2.81 | % |
| Net interest income as a percent of average earning assets |   |                                     |    |   |   |   |   |   |   |   | 2.93 | % |   |   |   |   |   |   |   |   |   |   | 3.26 | % |

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|              |   | June 30, 2009 |   |   | December 31, 2008 |   |
|-------------------|--------|---------------|--------|--------|-------------------|--------|
|              |   | Actual        |   |   | Well- Capitalized |   |   | Minimum Required |   |   | Actual |   |   | Well- Capitalized |   |   | Minimum Required |   |
|              |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leverage capital  |   |          | 8.56   | %      |              |   | 5.00 | % |   |   | 4.00 | % |   |   | 9.69 | % |   |   | 5.00 | % |   |   | 4.00 | % |
| Tier 1 risk-based |   |          | 10.38  | %      |              |   | 6.00 | % |   |   | 4.00 | % |   |   | 11.66 | % |   |   | 6.00 | % |   |   | 4.00 | % |
| Total risk-based  |   |          | 11.96  | %      |              |   | 10.00 | % |   |   | 8.00 | % |   |   | 12.99 | % |   |   | 10.00 | % |   |   | 8.00 | % |
|              |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Bank          |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leverage capital  |   |          | 8.31   | %      |              |   | 5.00 | % |   |   | 4.00 | % |   |   | 9.04 | % |   |   | 5.00 | % |   |   | 4.00 | % |
| Tier 1 risk-based |   |          | 10.04  | %      |              |   | 6.00 | % |   |   | 4.00 | % |   |   | 10.87 | % |   |   | 6.00 | % |   |   | 4.00 | % |
| Total risk-based  |   |          | 11.30  | %      |              |   | 10.00 | % |   |   | 8.00 | % |   |   | 12.12 | % |   |   | 10.00 | % |   |   | 8.00 | % |

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ON

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EEDI

TO

SIO

|   | (a) | The annual meeting of the shareholders of the Company was held on April 28, 2009. |
|--------|-----|-----------------------------------------------------------------------------------|

|   | (b) | The following directors were elected at the meeting to serve until the annual meeting of the shareholders in the year 2012: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------|

|                 | Votes For | Votes Withheld |
|----------------------|-----------|----------------|
| Kathryn D Callen     | 3,177,916 | 74,654         |
| Jerome F. Henry, Jr. | 3,201,226 | 51,344         |
| Debra A. Niezer      | 2,971,514 | 281,056        |
| Joseph D. Ruffolo    | 3,078,810 | 173,760        |

| Keith E. Busse              | 2011 |   |   | Donald F. Schenkel    | 2011   |
|-----------------------------|------|--------|--------|-----------------------|--------|
| Michael D. Cahill           | 2011 |   |   | Charles J. Surack     | 2010   |
| Michael S. Gouloff          | 2011 |   |   | Robert N. Taylor      | 2010   |
| Scott A. Glaze              | 2010 |   |   | John V. Tippmann, Sr. | 2010   |
| R.V. Prasad Mantravadi M.D. | 2010 |   |   | Irene A. Walters      | 2011   |
| William G. Niezer           | 2010 |   |   |                  |   |

|   | (c) | Other matters voted upon and the results of the voting were as follows: |
|--------|-----|-------------------------------------------------------------------------|

BIT

|   | (a) | Exhibits. |
|--------|-----|-----------|

31.1

31.2

32.1

32.2

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NAT

|                              | TOWER FINANCIAL CORPORATION                          |
|-----------------------------------|------------------------------------------------------|
|                              |                                                 |
|                              |                                                 |
| Dated:  August 12, 2009 |    / s /  Michael D. Cahill |
|                              | Michael D. Cahill, President                         |
|                              | and Chief Executive Officer                          |
|                              |                                                 |
|                              |                                                 |
| Dated:  August 12, 2009 |    / s /  Richard R. Sawyer |
|                              | Richard R. Sawyer                                    |
|                              | Chief Financial Officer                              |

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