| x | Quarterly                Report Pursuant To Section 13 or 15 (d) of the Securities                Exchange Act of 1934  For                the Quarter Ended June 30,   2007             |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | Transition                Report Pursuant To Section 13 or 15 (d) of the Securities                Exchange Act of 1934 |
|---|------------------------------------------------------------------------------------------------------------------------------|

| Florida                                                                                                                 | 65-0840545                                                           |
|-------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
| (State                  or Other Jurisdiction of                   Incorporation                  or Organization) | (                  IRS Employer Identification                  No.) |

| Common stock, $0.01 Par value | 1,808,219 Shares            |
|-------------------------------|------------------------------------------------------------------------------------|

----

| Part                      I. Financial Information                                                                                                                                  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                |   |
|                                                                                                                                                                                |   |
| Item                      1. Financial Statements (unaudited)                                                                                                                       |   |
|                                                                                                                                                                                |   |
| Consolidated                      Balance Sheets as of June 30, 2007 and December 31, 2006                                                                                          | 3      |
|                                                                                                                                                                                |   |
| Consolidated                      Statements of Income and Comprehensive Income for the Three                      and Six Months                      Ended June 30, 2007 and 2006 | 4      |
|                                                                                                                                                                                |   |
| Consolidated                      Statements of Cash Flows for the Six Months Ended June 30,                      2007 and                      2006                                | 5      |
|                                                                                                                                                                                |   |
| Consolidated                      Statements of Changes in Shareholders' Equity as of June 30,                      2007 and                      2006                              | 6      |
|                                                                                                                                                                                |   |
| Notes                      to Consolidated Financial Statements                                                                                                                     | 7-10   |
|                                                                                                                                                                                |   |
| Item                      2. Management's Discussion and Analysis of Financial Condition                      and Results                      of Operations                        | 11-14  |
|                                                                                                                                                                                |   |
| Item                      3. Controls and Procedures                                                                                                                                | 14     |
|                                                                                                                                                                                |   |
| Part                      II. Other Information                                                                                                                                     |   |
|                                                                                                                                                                                |   |
| Item                      1. Legal Proceedings                                                                                                                                      | 15     |
|                                                                                                                                                                                |   |
| Item                      2. Unregistered Sales of Equity Securities and Use of                      Proceeds                                                                       | 15     |
|                                                                                                                                                                                |   |
| Item                      3. Defaults Upon Senior Securities                                                                                                                        | 15     |
|                                                                                                                                                                                |   |
| Item                      4. Submission of Matters to a Vote of Shareholders                                                                                                        | 15     |
|                                                                                                                                                                                |   |
| Item                      5. Other Information                                                                                                                                      | 15     |
|                                                                                                                                                                                |   |
| Item                      6. Exhibits                                                                                                                                               | 15     |

----

**PART      I - FINANCIAL INFORMATION**

**Item      1.  Financial Statements**
**.**

**HORIZON      BANCORPORATION, INC.**

|                                                                                                                      |   | June                30, 2007 |                                  | December                31,2006 |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------------------------------------|---------------------------------|--------|
|                                                                                                                      |   | (Unaudited)                  |                                  |                            |   |
| **ASSETS**                                                                                                                |   |                         |                                  |                            |   |
| Cash                and cash equivalents                                                                                  |   |                         |                                  |                            |   |
| Cash                and due from banks                                                                                    |   | $                            | 2,621,859                             |                            | $      | 4,672,956 |   |
| Federal                funds sold                                                                                         |   |                         |  0                               |                            |   | 0 |   |
| Total                cash and cash equivalents                                                                            |   |                         | 2,621,859                             |                            |   | 4,672,956 |   |
| Securities:                                                                                                               |   |                         |                                  |                            |   |   |   |
| Held                to maturity, at amortized cost                                                                        |   |                         | 13,092,870                            |                            |   | 6,539,698 |   |
| Available-for-sale                at fair value                                                                           |   |                         | 15,182,614                            |                            |   | 17,018,928 |   |
| Loans,                net                                                                                                 |   |                         | 145,276,363                           |                            |   | 136,229,170 |   |
| Premises                and equipment, net                                                                                |   |                         | 2,075,641                             |                            |   | 2,116,015 |   |
| Other                assets                                                                                               |   |                         | 3,987,333                             |                            |   | 1,696,568 |   |
|                                                                                                                      |   |                         |                                  |                            |   |   |   |
|                                                                                                                      |   | $                            | 182,236,680                           |                            | $      | 168,273,335 |   |
|                                                                                                                      |   |                         |                                  |                            |   |   |   |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**                                                                   |   |                         |                                  |                            |   |   |   |
| Liabilities                                                                                                               |   |                         |                                  |                            |   |   |   |
| Deposits                                                                                                                  |   |                         |                                  |                            |   |   |   |
| Noninterest-bearing                                                                                                       |   | $                            | 10,146,639                            |                            | $      | 10,384,537 |   |
| Interest-bearing                                                                                                          |   |                         | 131,462,130                           |                            |   | 129,146,962 |   |
| Total                deposits                                                                                             |   |                         | 141,608,769                           |                            |   | 139,531,499 |   |
| Federal                Home Loan Bank borrowings                                                                          |   |                         | 26,050,000                            |                            |   | 15,500,000 |   |
| Fed                Funds Purchased                                                                                        |   |                         | 1,001,000                             |                            |   | 0 |   |
| Dividends                Payable                                                                                          |   |                         |                      0 |                            |   | 180,815 |   |
| Other                liabilities                                                                                          |   |                         | 445,253                               |                            |   | 491,404 |   |
| Total                liabilities                                                                                          |   |                         | 169,105,022                           |                            |   | 155,703,718 |   |
|                                                                                                                      |   |                         |                                  |                            |   |   |   |
|                                                                                                                      |   |                         |                                  |                            |   |   |   |
| Shareholders'                equity                                                                                       |   |                         |                                  |                            |   |   |   |
| Preferred                stock, $.01 par value 1,000,000 shares authorized; none                outstanding               |   |                         |   0                         |                            |   |    0 |   |
| Common                stock, $.01 par value 25,000,000 shares authorized;                1,808,219 Issued and outstanding |   |                         |                                  |                            |   |   |   |
| at                June 30, 2007 and 1,808,152 issued and outstanding                at December 31, 2006                  |   |                         | 18,082                                |                            |   | 18,082 |   |
| Additional                paid in capital                                                                                 |   |                         | 10,252,176                            |                            |   | 10,223,103 |   |
| Retained                earnings                                                                                          |   |                         | 3,181,067                             |                            |   | 2,468,651 |   |
| Accumulated                other comprehensive income (loss), net of tax                                                  |   |                         | (319,667                              | )                               |   | (140,219 | ) |
| Total                shareholders' equity                                                                                 |   |                         | 13,131,658                            |                            |   | 12,569,617 |   |
|                                                                                                                      |   |                         |                                  |                            |   |   |   |
|                                                                                                                      |   | $                            | 182,236,680                           |                            | $      | 168,273,335 |   |

----

**HORIZON      BANCORPORATION, INC,.**

|                                                                   |   | Three                Months Ended June 30, |                      | Six                Months Ended June 30, |   |
|------------------------------------------------------------------------|--------|--------------------------------------------|---------------------------|------------------------------------------|--------|
|                                                                   |   | 2007                                       |                      | 2006                                     |   | 2007 |   | 2006 |   |
| **Interest                income**                                     |   |                                       |                      |                                     |   |   |   |   |   |
| Loans,                including fees                                   |   | $                                          | 2                ,745,358 |                                     | $      | 2,502,048 |   | $ | 5,433,957 |   | $ | 4,819,868 |   |
| Investment                securities                                   |   |                                       | 429,784                   |                                     |   | 304,321 |   |   | 786,657 |   |   | 592,125 |   |
| Federal                funds sold and overnight accounts               |   |                                       | 0                         |                                     |   | 7,264 |   |   | 29,311 |   |   | 26,395 |   |
| Total                interest income                                   |   |                                       | 3,175,142                 |                                     |   | 2,813,633 |   |   | 6,249,925 |   |   | 5,438,388 |   |
| **Interest                expense**                                    |   |                                       |                      |                                     |   |   |   |   |   |   |   |   |   |
| Deposits                                                               |   |                                       | 1,513,238                 |                                     |   | 1,199,299 |   |   | 3,030,300 |   |   | 2,243,918 |   |
| Other                borrowings                                        |   |                                       | 211,542                   |                                     |   | 132,922 |   |   | 344,205 |   |   | 221,778 |   |
| Total                interest expense                                  |   |                                       | 1,724,780                 |                                     |   | 1,332,221 |   |   | 3,374,505 |   |   | 2,465,696 |   |
| **Net                interest income**                                 |   |                                       | 1,450,362                 |                                     |   | 1,481,412 |   |   | 2,875,420 |   |   | 2,972,692 |   |
| Provision                for loan losses                               |   |                                       | 30,000                    |                                     |   | 30,000 |   |   | 60,000 |   |   | 60,000 |   |
| **Net                interest income after provision for loan losses** |   |                                       | 1,420,362                 |                                     |   | 1,451,412 |   |   | 2,815,420 |   |   | 2,912,692 |   |
| Noninterest                income                                      |   |                                       |                      |                                     |   |   |   |   |   |   |   |   |   |
| Gain                on sales of loans                                  |   |                                       | 46,125                    |                                     |   | 0 |   |   | 46,125 |   |   | 0 |   |
| Gain                on sale of servicing                               |   |                                       | 54,447                    |                                     |   |   |   |   | 54,447 |   |   |   |   |
| Gain/(loss)                on sale of foreclosed assets                |   |                                       | 0                         |                                     |   |   |   |   | (2,591 | ) |   |   |   |
| Gain                on sale of other assets, net                       |   |                                       | 0                         |                                     |   | 0 |   |   | (271 | ) |   | 4,000 |   |
| Service                charges on deposit accounts                     |   |                                       | 22,579                    |                                     |   | 23,511 |   |   | 45,940 |   |   | 51,323 |   |
| Miscellaneous                , other                                   |   |                                       | 27,845                    |                                     |   | 20,516 |   |   | 49,162 |   |   | 44,179 |   |
| Total                noninterest income                                |   |                                       | 150,996                   |                                     |   | 44,027 |   |   | 192,812 |   |   | 99,502 |   |
| Noninterest                expense                                     |   |                                       |                      |                                     |   |   |   |   |   |   |   |   |   |
| Compensation                and employee benefits                      |   |                                       | 539,603                   |                                     |   | 445,971 |   |   | 1,056,305 |   |   | 875,072 |   |
| Building                & equipment expense                        |   |                                       | 176,648                   |                                     |   | 163,669 |   |   | 340,639 |   |   | 326,109 |   |
| Professional                fees                                       |   |                                       | 53,161                    |                                     |   | 89,069 |   |   | 169,963 |   |   | 140,392 |   |
| Data                processing & software expense                  |   |                                       | 82,731                    |                                     |   | 91,170 |   |   | 174,846 |   |   | 187,848 |   |
| Other                noninterest expense                               |   |                                       | 168,950                   |                                     |   | 130,541 |   |   | 320,869 |   |   | 253,148 |   |
| Total                noninterest expense                               |   |                                       | 1,021,093                 |                                     |   | 920,420 |   |   | 2,062,622 |   |   | 1,782,569 |   |
| **Income                before income taxes**                          |   |                                       | 550,265                   |                                     |   | 575,019 |   |   | 945,610 |   |   | 1,229,625 |   |
| Income                tax expense                                      |   |                                       | 138,873                   |                                     |   | 206,356 |   |   | 233,194 |   |   | 458,239 |   |
| **Net                Income**                                          |   | $                                          | 411,392                   |                                     | $      | 368,663 |   | $ | 712,416 |   | $ | 771,386 |   |
| Basic                earnings per share                                |   | $                                          | 0.23                      |                                     | $      | 0.20 |   | $ | 0.39 |   | $ | 0.43 |   |
| Diluted                earnings per share                              |   | $                                          | 0.21                      |                                     | $      | 0.19 |   | $ | 0.37 |   | $ | 0.40 |   |

----

**HORIZON      BANCORPORATION, INC,.**

|                                                                   |   | For                the six months endedJune                30, 2007 |        | For                the six monthsended                June                30, 2006 |   |
|------------------------------------------------------------------------|--------|---------------------------------------------------------------------|-------------|------------------------------------------------------------------------------------|--------|
| **Cash                flows from operating activities**                |   |                                                                |        |                                                                               |   |
| Net                cash provided by operating activities               |   | $                                                                   | 222,960     |                                                                               | $      | 936,348 |   |
| **Cash                flows from investing activities**                |   |                                                                |        |                                                                               |   |   |   |
| Proceeds                from sale of foreclosed assets                 |   |                                                                | 12,500      |                                                                               |   | 0 |   |
| Proceeds                from sale of loans                             |   |                                                                | 1,579,000   |                                                                               |   | 0 |   |
| Purchase                of securities held to maturity                 |   |                                                                | (6,554,643  | )                                                                                  |   | (2,700,519 | ) |
| Purchase                of securities available for sale               |   |                                                                | (2,153,644  | )                                                                                  |   | 0 |   |
| Proceeds                from maturity and pay-downs of securities ,AFS |   |                                                                | 2,334,214   |                                                                               |   | 1,450,064 |   |
| Purchase                Federal Home Loan Bank Stock                   |   |                                                                | (473,392    | )                                                                                  |   | (215,650 | ) |
| Loan                originations, net                                  |   |                                                                | (10,585,621 | )                                                                                  |   | (9,973,363 | ) |
| Property                and equipment expenditures, net                |   |                                                                | (61,545     | )                                                                                  |   | (123,585 | ) |
| Net                cash used by investing activities                   |   |                                                                | (15,903,131 | )                                                                                  |   | (11,563,053 | ) |
| **Cash                flows from financing activities**                |   |                                                                |        |                                                                               |   |   |   |
| Increase                in deposits                                    |   |                                                                | 2,077,270   |                                                                               |   | 1,954,246 |   |
| Increase                in Federal Home Loan Bank borrowings           |   |                                                                | 10,550,000  |                                                                               |   | 5,000,000 |   |
| Increase                in Fed Funds Purchased                         |   |                                                                | 1,001,000   |                                                                               |   | 0 |   |
| Proceeds                from exercise of stock options/warrants        |   |                                                                | 804         |                                                                               |   | 74,162 |   |
| Net                cash provided by financing activities               |   |                                                                | 13,629,074  |                                                                               |   | 7,028,408 |   |
|                                                                   |   |                                                                |        |                                                                               |   |   |   |
| Net                change in cash and cash equivalents                 |   |                                                                | (2,051,097  | )                                                                                  |   | (3,598,297 | ) |
|                                                                   |   |                                                                |        |                                                                               |   |   |   |
| Cash                and cash equivalents at beginning of period        |   |                                                                | 4,672,956   |                                                                               |   | 7,174,308 |   |
|                                                                   |   |                                                                |        |                                                                               |   |   |   |
| **Cash                and cash equivalents at end of period**          |   | $                                                                   | 2,621,859   |                                                                               | $      | 3,576,011 |   |

----

**HORIZON      BANCORPORATION, INC,**
**.**
** **

|                                                                                                                       |   |                         |      |                                      |   |      |   |           |       |  Accumulated |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|------------------------------------------------|--------|----------------|--------|---------------------|------------|-------------------|--------|--------------|--------|
|                                                                                                                       |   |                         |      |                                      |   |      |   |           |       |  Other       |   |    |   |
|                                                                                                                       |   |  Common                Stock |      |                  Paid                  in |   |  Retained |   |  Comprehensive |       |         |   |
|                                                                                                                       |   |  Shares                      |      |  Par                Value                 |   |  Capital  |   |  Earnings      |       |  Income      |   |  Total  |   |
| Balance,                December 31, 2005                                                                                  |   |                              | 1,797,619 |                                           | $      | 17,976         |   | $                   | 10,150,543 |              | $      | 803,895      |   | $ | (85,838 | ) | $ | 10,886,576 |   |
| Comprehensive                Income:Net                income, six-month period ended June                30, 2006         |   |                              | —   |                                           |   | —        |   |                | —    |              |   | 771,386      |   |   | — |   |   | 771,386 |   |
| Net                unrealized loss on securities, six-month                period ended June                30, 2006       |   |                              | —   |                                           |   | —        |   |                | —    |              |   | —      |   |   | (291,253 | ) |   | (291,253 | ) |
| Total                comprehensive income                                                                                  |   |                              | —   |                                           |   | —        |   |                | —    |              |   | 771,386      |   |   | (291,253 | ) |   | 480,133 |   |
| Exercise                of warrants & stock options                                                                    |   |                              | 10,393    |                                           | $      | 104            |   | $                   | 52,458     |              |   |              |   |   |  |   | $ | 52,562 |   |
| Stock                Based Compensation                                                                                    |   |                              |      |                                           |   |           |   | $                   | 21,600     |              |   |         |   |   |   |   | $ | 21,600 |   |
| Balance,                June 30, 2006                                                                                      |   |                              | 1,808,012 |                                           | $      | 18,080         |   | $                   | 10,224,601 |              | $      | 1,575,281    |   |   | ($377,091 | ) | $ | 11,440,871 |   |
| Balance,                December 31, 2006                                                                                  |   |                              | 1,808,152 |                                           | $      | 18,082         |   | $                   | 10,223,103 |              | $      | 2,468,651    |   | $ | (140,219 | ) | $ | 12,569,617 |   |
| Comprehensive                Income:                                                                                       |   |                              |           |                                           |   |                |   |                |            |              |   |         |   |   |  |   |   |   |   |
| Net                income, six-month period ended                June 30, 2007                                             |   |                              | —   |                                           |   | —        |   |                | —    |              |   | 712,416      |   |   | — |   |   | 712,416 |   |
| Net                unrealized loss on securities, six-month                period ended June                30, 2007  |   |                              | —   |                                           |   | —        |   |                | —    |              |   | —      |   |   | (179,448 | ) |   | (179,448 | ) |
| Total                comprehensive income                                                                                  |   |                              | —   |                                           |   | —        |   |                | —    |              |   | 712,416      |   |   | (179,448 | ) |   | 532,968 |   |
| Exercise                of warrants & stock options                                                                    |   |                              | 67        |                                           | $      | 0              |   | $                   | 804        |              |   |              |   |   |  |   | $ | 804 |   |
| Stock                Based Compensation                                                                                    |   |                              |      |                                           |   |           |   |                | 28,269     |              |   |         |   |   |   |   |   | 28,269 |   |
| Balance,                June 30, 2007                                                                                      |   |                              | 1,808,219 |                                           | $      | 18,082         |   | $                   | 10,252,176 |              | $      | 3,181,067    |   |   | ($319,667 | ) | $ | 13,131,658 |   |

----

**NOTE      1 - BASIS OF PRESENTATION**

**NOTE      2 - SUMMARY OF ORGANIZATION**

**NOTE      3 - LOANS RECEIVABLE**

|                                            |   | June                30,2007 |        | December                31,2006 |   |
|-------------------------------------------------|--------|-----------------------------|-------------|---------------------------------|--------|
| Real                estate - commercial         |   | $                           | 64,684,691  |                            | $      | 60,270,972 |   |
| Real                estate - construction       |   |                        | 7,102,539   |                            |   | 4,060,769 |   |
| Real                estate - residential        |   |                        | 41,999,891  |                            |   | 41,016,077 |   |
| Commercial                                      |   |                        | 29,512,726  |                            |   | 28,539,544 |   |
| Consumer                                        |   |                        | 3,516,339   |                            |   | 3,912,652 |   |
| Loans,                gross                     |   |                        | 146,816,186 |                            |   | 137,800,014 |   |
| Deduct                allowance for loan losses |   |                        | (1,539,823  | )                               |   | (1,570,844 | ) |
|                                            |   |                        |        |                            |   |   |   |
| Loans,                net                       |   | $                           | 145,276,363 |                            | $      | 136,229,170 |   |

----

**HORIZON      BANCORPORATION, INC,.**

**NOTE      3 - LOANS RECEIVABLE (Continued)**

|                                          |   | 2007   |      | 2006   |         |
|-----------------------------------------------|--------|--------|-----------|--------|--------------|
|                                          |   |   |      |   |         |
| Balance                at beginning of period |   | $      | 1,499,077 |   | $            | 1,264,686 |   |
| Provision                for loan losses      |   |   | 30,000    |   |         | 30,000 |   |
| Loans                charged-off              |   |   |      |   |         |   |   |
| Recoveries                                    |   |   | 10,746    |   |    |     |   |
|                                          |   |   |      |   |         |   |   |
| Balance                at end of period       |   | $      | 1,539,823 |   | $            | 1,294,686 |   |

|                                          |   | 2007   |      | 2006   |   |
|-----------------------------------------------|--------|--------|-----------|--------|--------|
|                                          |   |   |      |   |   |
| Balance                at beginning of period |   | $      | 1,570,844 |   | $      | 1,273,524 |   |
| Provision                for loan losses      |   |   | 60,000    |   |   | 60,000 |   |
| Loans                charged-off              |   |   | (122,573  | )      |   | (38,838 | ) |
| Recoveries                                    |   |   | 31,552    |   |   |  |   |
|                                          |   |   |      |   |   |   |   |
| Balance                at end of period       |   | $      | 1,539,823 |   | $      | 1                ,294,686 |   |

**NOTE      4 - SECURITIES HELD-TO-MATURITY**

|                                                     |   | Less                Than     |       | Over                           |   |                      |   |
|----------------------------------------------------------|--------|------------------------------|------------|--------------------------------|--------|---------------------------|--------|
|                                                     |   | Twelve                Months |       | Twelve                Months   |   | Total                     |   |
|                                                     |   | FairValue                    |       | Unrealized                Loss |   | Fair                Value |   | Unrealized                Loss |   | Fair                Value |   | Unrealized                Loss |   |
| State,                Countyand                Municipal |   | $                            | 11,155,106 |                           | $      | (457,239                  | )      | $ | 471,706 |   | $ | (8,819 | ) | $ | 11,626,812 |   | $ | (466,058 | ) |
| Other                corporate securities                |   | $                            | 980,400    |                           | $      | (19,600                   | )      | $ | 0 |   | $ | 0 |   | $ | 980,400 |   | $ | (19,600 | ) |
|      Total                      |   | $                            | 12,135,506 |                           | $      | (476,839                  | )      | $ | 471,706 |   | $ | (8,819 | ) | $ | 12,607,212 |   | $ | (485,658 | ) |

----

**NOTE      5 - SECURITIES AVAILABLE FOR SALE**

|                                                        |   | Less                Than     |      | Over                           |   |                      |   |
|-------------------------------------------------------------|--------|------------------------------|-----------|--------------------------------|--------|---------------------------|--------|
|                                                        |   | Twelve                Months |      | Twelve                Months   |   | Total                     |   |
|                                                        |   | FairValue                    |      | Unrealized                Loss |   | Fair                Value |   | Unrealized                Loss |   | Fair                Value |   | UnrealizedLoss |   |
| Collateralized                Mortgage obligations          |   | $                            | 650,413   |                           | $      | (31,477                   | )      | $ | 3,197,843 |   | $ | (243,240 | ) | $ | 3,848,256 |   | $ | (274,717 | ) |
| Mortgage                backed    securities |   |                         | 2,206,813 |                           |   | (40,436                   | )      |   | 266,700 |   |   | (19,078 | ) |   | 2,473,513 |   |   | (59,514 | ) |
| U.S.                Agency securities                       |   |                         | 0         |                           |   | 0                         |   |   | 2,033,412 |   |   | (76,588 | ) |   | 2,033,412 |   |   | (76,588 | ) |
| Other                securities                             |   |                         | 2,931,980 |                           |   | (68,020                   | )      |   | 503,015 |   |   | (5,503 | ) |   | 3,434,995 |   |   | (73,523 | ) |
|      Total                         |   | $                            | 5,789,206 |                           | $      | (139,933                  | )      | $ | 6,000,970 |   | $ | (344,409 | ) | $ | 11,790,176 |   | $ | (484,342 | ) |

**NOTE      6 - EARNINGS PER SHARE**

|                                                                         |   | Three                Months Ended June 30, 2007 |      | Three                Months Ended June 30, 2006 |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------|-----------|-------------------------------------------------|--------|
| Basic                earnings per share                                      |   |                                            |      |                                            |   |
| Net                income applicable to common stock                         |   | $                                               | 411,392   |                                            | $      | 368,663 |   |
|                                                                         |   |                                            |      |                                            |   |   |   |
| Weighted                average shares outstanding                           |   |                                            | 1,808,219 |                                            |   | 1,805,788 |   |
|                                                                         |   |                                            |      |                                            |   |   |   |
| Basic                earnings per share                                      |   | $                                               | 0.23      |                                            | $      | 0.20 |   |
|                                                                         |   |                                            |      |                                            |   |   |   |
| Diluted                earnings per share                                    |   |                                            |      |                                            |   |   |   |
| Net                income applicable to common stock                         |   | $                                               | 411,392   |                                            | $      | 368,663 |   |
|                                                                         |   |                                            |      |                                            |   |   |   |
| Weighted                average shares outstanding                           |   |                                            | 1,808,219 |                                            |   | 1,805,788 |   |
| Dilutive                effect of assumed exercise of stock options/warrants |   |                                            | 108,031   |                                            |   | 116,376 |   |
| Diluted                average shares outstanding                            |   |                                            | 1,916,250 |                                            |   | 1,922,164 |   |
|                                                                         |   |                                            |      |                                            |   |   |   |
| Diluted                earnings per share                                    |   | $                                               | 0.21      |                                            | $      | 0.19 |   |

----

**NOTE      6 - EARNINGS PER SHARE (Continued)**

|                                                                         |   | Six                Months Ended June 30, 2007 |      | Six                Months Ended June 30, 2006 |   |
|------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|-----------------------------------------------|--------|
| Basic                earnings per share                                      |   |                                          |      |                                          |   |
| Net                income applicable to common stock                         |   | $                                             | 712,416   |                                          | $      | 771,386 |   |
|                                                                         |   |                                          |      |                                          |   |   |   |
| Weighted                average shares outstanding                           |   |                                          | 1,808,190 |                                          |   | 1,803,505 |   |
|                                                                         |   |                                          |      |                                          |   |   |   |
| Basic                earnings per share                                      |   | $                                             | 0.39      |                                          | $      | 0.43 |   |
|                                                                         |   |                                          |      |                                          |   |   |   |
| Diluted                earnings per share                                    |   |                                          |      |                                          |   |   |   |
| Net                income applicable to common stock                         |   | $                                             | 712,416   |                                          | $      | 771,386 |   |
|                                                                         |   |                                          |      |                                          |   |   |   |
| Weighted                average shares outstanding                           |   |                                          | 1,808,190 |                                          |   | 1,803,505 |   |
| Dilutive                effect of assumed exercise of stock options/warrants |   |                                          | 111,184   |                                          |   | 108,324 |   |
| Diluted                average shares outstanding                            |   |                                          | 1,919,374 |                                          |   | 1,911,829 |   |
|                                                                         |   |                                          |      |                                          |   |   |   |
| Diluted                earnings per share                                    |   | $                                             | 0.37      |                                          | $      | 0.40 |   |

**NOTE      7 - RECENT ACCOUNTING PRONOUNCEMENTS**

*Accounting      for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109.      *
*Accounting      for Income Taxes*

*Fair      Value Measurements. *

----

**Item      2:   Management's Discussion and Analysis of Financial Condition and      Results of Operations**

**FORWARD      LOOKING STATEMENTS**

**OVERVIEW**

**EARNINGS      PERFORMANCE**

**RESULTS      OF OPERATIONS**

----

|                                                       |   | Three                months ended June 30, |    |
|------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                       |   | 2007                                       |    | 2006 |   |
|                                                       |   | AverageVolume                              |    | Interest |   | Yield/Cost |   | AverageVolume |   | Interest |   | Yield/Cost |   |
|                                                       |   |                                       |    |
| ASSETS                                                     |   |                                       |    |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets:                    |   |                                       |    |   |   |   |   |   |   |   |   |   |   |
| Federal                funds sold                          |   | $                                          | 0       |   | $ | 0 |   |   | N/A |   | $ | 586 |   | $ | 7 |   |   | 4.78 | % |
| Securities                                                 |   |                                       | 28,265  |   |   | 430 |   |   | 6.09 |   |   | 20,802 |   |   | 305 |   |   | 5.86 |   |
| Loans                receivable                            |   |                                       | 142,628 |   |   | 2,745 |   |   | 7.70 |   |   | 130,343 |   |   | 2,502 |   |   | 7.68 |   |
| Total                interest-earning assets               |   |                                       | 170,893 |   |   | 3,175 |   |   | 7.43 |   |   | 151,731 |   |   | 2,814 |   |   | 7.42 |   |
| Non-earning                assets                          |   |                                       | 6,166   |   |   |   |   |   |   |   |   | 5,634 |   |   |   |   |   |   |   |
| Total                assets                                |   | $                                          | 177,059 |   |   |   |   |   |   |   | $ | 157,365 |   |   |   |   |   |   |   |
|                                                       |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY  |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:               |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transactional                accounts                      |   | $                                          | 33,747  |   |   | 275 |   |   | 3.25 |   | $ | 39,187 |   |   | 311 |   |   | 3.17 |   |
| Savings                deposits                            |   |                                       | 10,077  |   |   | 100 |   |   | 3.97 |   |   | 4,525 |   |   | 30 |   |   | 2.65 |   |
| Time                deposits                               |   |                                       | 89,309  |   |   | 1,139 |   |   | 5.10 |   |   | 78,317 |   |   | 858 |   |   | 4.38 |   |
| Other                borrowings                            |   |                                       | 19,412  |   |   | 211 |   |   | 4.35 |   |   | 11,858 |   |   | 133 |   |   | 4.49 |   |
| Total                interest-bearing liabilities          |   |                                       | 152,545 |   |   | 1,725 |   |   | 4.52 |   |   | 133,887 |   |   | 1,332 |   |   | 3.98 |   |
| Noninterest-bearing                liabilities             |   |                                       | 11,493  |   |   |   |   |   |   |   |   | 12,141 |   |   |   |   |   |   |   |
| Stockholders'                equity                        |   |                                       | 13,021  |   |   |   |   |   |   |   |   | 11,337 |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity  |   | $                                          | 177,059 |   |   |   |   |   |   |   | $ | 157,365 |   |   |   |   |   |   |   |
| Interest                rate spread                        |   |                                       |    |   |   |   |   |   | 2.91 | % |   |   |   |   |   |   |   | 3.44 | % |
| Net                interest income and net interest Margin |   |                                       |         |   | $ | 1,450 |   |   | 3.39 | % |   |  |   | $ | 1,482 |   |   | 3.91 | % |

|                                                       |   | Six                months ended June 30, |
|------------------------------------------------------------|--------|------------------------------------------|
|                                                       |   |                                     | 2007 |   |   | 2006 |   |
|                                                            |   |                                     | Average                 Volume |   |   | Interest |   |   | Yield/Cost |   |   | AverageVolume |   |   | Interest |   |   | Yield/Cost |   |
|                                                       |   |                                     |
| ASSETS                                                     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets:                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                funds sold                          |   | $                                        | 1,124 |   | $ | 29 |   |   | 5.16 | % | $ | 1,024 |   | $ | 26 |   |   | 5.08 | % |
| Securities                                                 |   |                                     | 26,178 |   |   | 787 |   |   | 6.01 |   |   | 20,314 |   |   | 592 |   |   | 5.83 |   |
| Loans                receivable                            |   |                                     | 140,816 |   |   | 5,434 |   |   | 7.72 |   |   | 128,308 |   |   | 4,820 |   |   | 7.51 |   |
| Total                interest-earning assets               |   |                                     | 168,118 |   |   | 6,250 |   |   | 7.44 |   |   | 149,646 |   |   | 5,438 |   |   | 7.27 |   |
| Non-earning                assets                          |   |                                     | 6,025 |   |   |   |   |   |   |   |   | 5,582 |   |   |   |   |   |   |   |
| Total                assets                                |   | $                                        | 174,143 |   |   |   |   |   |   |   | $ | 155,228 |   |   |   |   |   |   |   |
|                                                       |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY  |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:               |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transactional                accounts                      |   | $                                        | 35,634 |   |   | 601 |   |   | 3.37 |   | $ | 41,395 |   |   | 618 |   |   | 2.99 |   |
| Savings                deposits                            |   |                                     | 10,105 |   |   | 203 |   |   | 4.02 |   |   | 4,745 |   |   | 59 |   |   | 2.49 |   |
| Time                deposits                               |   |                                     | 88,180 |   |   | 2,227 |   |   | 5.05 |   |   | 74,983 |   |   | 1,566 |   |   | 4.18 |   |
| Other                borrowings                            |   |                                     | 16,343 |   |   | 344 |   |   | 4.21 |   |   | 10,667 |   |   | 222 |   |   | 4.16 |   |
| Total                interest-bearing liabilities          |   |                                     | 150,262 |   |   | 3,375 |   |   | 4.49 |   |   | 131,790 |   |   | 2,465 |   |   | 3.74 |   |
| Noninterest-bearing                liabilities             |   |                                     | 11,010 |   |   |   |   |   |   |   |   | 12,275 |   |   |   |   |   |   |   |
| Stockholders'                equity                        |   |                                     | 12,871 |   |   |   |   |   |   |   |   | 11,163 |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity  |   | $                                        | 174,143 |   |   |   |   |   |   |   | $ | 155,228 |   |   |   |   |   |   |   |
| Interest                rate spread                        |   |                                     |   |   |   |   |   |   | 2.95 | % |   |   |   |   |   |   |   | 3.53 | % |
| Net                interest income and net interest Margin |   |                                     |  |   | $ | 2,875 |   |   | 3.42 | % |   |  |   | $ | 2,973 |   |   | 3.97 | % |

----

**LIQUIDITY      AND CAPITAL RESOURCES**

|                               |   | Bank'sJune                30 , 2007 |   | Minimum                RegulatoryRequirement |   |
|------------------------------------|--------|-------------------------------------|--------|----------------------------------------------|--------|
| Leverage                ratio      |   |                                | 7.4    | %                                            |   | 4.0 | % |
| Risk                weighted ratio |   |                                | 10.8   | %                                            |   | 8.0 | % |

----

**Item      3: Controls and Procedures**

----

**PART      II. OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Shareholders**

|                               |   |   |      |                |   |
|------------------------------------|--------|--------|-----------|---------------------|--------|
|                               |   | For    |      | Against/Abstentions |   |
| C.                  Donald Miller  |   |   | 1,321,017 |                |   | 5,400 |   |
| Clarence                  R. Urban |   |   | 1,320,842 |                |   | 5,575 |   |

**Item      5. Other Information**

**Item      6. Exhibits**

| 31.1   | Certification                of Principal Executive Officer                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                |
| 31.2   | Certification                of Principal Financial Officer                                                                                                                                         |
|   |                                                                                                                                                                                                |
| 32.1   | Certification                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as                Adopted                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |
|   |                                                                                                                                                                                                |
| 32.2   | Certification                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as                Adopted                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |

----

|                               |                                                                                    |                   |
|------------------------------------|-----------------------------------------------------------------------------------------|------------------------|
| Date:              August 14, 2007 |                                                                                         | /s/ Charles S. Conoley |
|                               | Charles              S. Conoley                                                         |
|                               | President              and              Chief Executive Officer     |

|                                   |                                                                       |                                  |
|----------------------------------------|----------------------------------------------------------------------------|---------------------------------------|
| Date:                  August 14, 2007 |                                                                            | /s/                Kathleen M. Jepson |
|                                   | Kathleen                M. Jepson                                          |
|                                   | Senior                Vice President and Chief Financial Officer |
|                                   | (Principal Financial and Accounting Officer)      |

----