----

----

----

|   | þ |   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011 |   |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |
|   | o      |   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934                                              |   |

| Texas(State or other jurisdiction ofincorporation or organization) | 76-0579161(I.R.S. EmployerIdentification No.) |
|--------------------------------------------------------------------|-----------------------------------------------|

| Large Accelerated Filer £                                                        |   | Accelerated Filer £    |
|---------------------------------------------------------------------------------------|--------|-----------------------------|
|                                                                                  |   |                        |
| Non-accelerated Filer £  (Do not check if a smaller reporting company) |   | Smaller Reporting Company R |

----

|  Item 1. | Financial Statements. |
|--------------------|-----------------------|

|                                                                                                                                                                             |   | March 31, |         |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------------|--------|--------------|--------|
|                                                                                                                                                                             |   | 2011      |         |   | 2010         |   |
| ASSETS                                                                                                                                                                           |   |      |         |   |         |   |
|                                                                                                                                                                             |   |      |         |   |         |   |
| Cash and due from banks                                                                                                                                                          |   | $         | 22,984       |   |         | $      | 21,406 |   |
| Federal funds sold and other short-term investments                                                                                                                              |   |      | 175,254      |   |         |   | 130,319 |   |
| Total cash and cash equivalents                                                                                                                                                  |   |      | 198,238      |   |         |   | 151,725 |   |
| Securities available-for-sale, at fair value                                                                                                                                     |   |      | 118,468      |   |         |   | 134,369 |   |
| Securities available-for-sale pledged with creditors’ right to repledge, at fair value                                                                                     |   |      | 40,100       |   |         |   | 41,337 |   |
| Total securities available-for-sale                                                                                                                                              |   |      | 158,568      |   |         |   | 175,706 |   |
| Securities held-to-maturity (fair value $4,202 and $4,167 at March 31, 2011 and December 31, 2010, respectively)                                                            |   |      | 4,045        |   |         |   | 4,045 |   |
| Other investments                                                                                                                                                                |   |      | 6,817        |   |         |   | 6,925 |   |
| Loans, net of allowance for loan losses of $31,883 and $33,757, respectively                                                                                                     |   |      | 1,064,324    |   |         |   | 1,110,553 |   |
| Accrued interest receivable                                                                                                                                                      |   |      | 4,420        |   |         |   | 4,682 |   |
| Premises and equipment, net                                                                                                                                                      |   |      | 5,203        |   |         |   | 5,377 |   |
| Goodwill                                                                                                                                                                         |   |      | 17,327       |   |         |   | 17,327 |   |
| Core deposit intangibles                                                                                                                                                         |   |      | 181          |   |         |   | 202 |   |
| Deferred tax asset, net                                                                                                                                                          |   |      | 17,708       |   |         |   | 17,781 |   |
| Customers' liability on acceptances                                                                                                                                              |   |      | 5,019        |   |         |   | 4,708 |   |
| Foreclosed assets, net                                                                                                                                                           |   |      | 16,529       |   |         |   | 19,956 |   |
| Cash value of bank owned life insurance                                                                                                                                          |   |      | 30,347       |   |         |   | 29,988 |   |
| Prepaid FDIC assessment                                                                                                                                                          |   |      | 6,766        |   |         |   | 7,610 |   |
| Other assets                                                                                                                                                                     |   |      | 2,359        |   |         |   | 2,000 |   |
| Total assets                                                                                                                                                                     |   | $         | 1,537,851    |   |         | $      | 1,558,585 |   |
|                                                                                                                                                                             |   |      |         |   |         |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                             |   |      |         |   |         |   |   |   |
| Deposits:                                                                                                                                                                        |   |      |         |   |         |   |   |   |
| Noninterest-bearing                                                                                                                                                              |   | $         | 237,413      |   |         | $      | 223,105 |   |
| Interest-bearing                                                                                                                                                                 |   |      | 1,033,750    |   |         |   | 1,071,079 |   |
| Total deposits                                                                                                                                                                   |   |      | 1,271,163    |   |         |   | 1,294,184 |   |
| Junior subordinated debentures                                                                                                                                                   |   |      | 36,083       |   |         |   | 36,083 |   |
| Other borrowings                                                                                                                                                                 |   |      | 56,544       |   |         |   | 56,804 |   |
| Accrued interest payable                                                                                                                                                         |   |      | 420          |   |         |   | 447 |   |
| Acceptances outstanding                                                                                                                                                          |   |      | 5,019        |   |         |   | 4,708 |   |
| Other liabilities                                                                                                                                                                |   |      | 8,166        |   |         |   | 7,592 |   |
| Total liabilities                                                                                                                                                                |   |      | 1,377,395    |   |         |   | 1,399,818 |   |
| Commitments and contingencies                                                                                                                                                    |   |      | –      |   |         |   | – |   |
|                                                                                                                                                                             |   |      |         |   |         |   |   |   |
| Shareholders' equity:                                                                                                                                                            |   |      |         |   |         |   |   |   |
| Preferred stock, $1.00 par value, 2,000,000 shares authorized; 45,000 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively                        |   |      | 45,462  |   |         |   | 45,427  |   |
| Common stock, $1.00 par value, 50,000,000 shares authorized; 13,297,815 and 13,230,315  shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively |   |      | 13,298  |   |         |   | 13,230  |   |
| Additional paid-in-capital                                                                                                                                                       |   |      | 33,535       |   |         |   | 33,178 |   |
| Retained earnings                                                                                                                                                                |   |      | 70,689       |   |         |   | 69,168 |   |
| Accumulated other comprehensive loss                                                                                                                                             |   |      | (2,528       | )      |         |   | (2,236 | ) |
| Total shareholders' equity                                                                                                                                                       |   |      | 160,456      |   |         |   | 158,767 |   |
| Total liabilities and shareholders' equity                                                                                                                                       |   | $         | 1,537,851    |   |         | $      | 1,558,585 |   |

----

|                                                                     |   | For the Three Months |    |
|--------------------------------------------------------------------------|--------|----------------------|---------|
|                                                                     |   | Ended March 31,      |    |
|                                                                     |   | 2011                 |    |   | 2010 |   |
| Interest income:                                                         |   |                 |    |   |   |   |
| Loans                                                                    |   | $                    | 16,002  |   |   | $ | 19,186 |   |
| Securities:                                                              |   |                 |    |   |   |   |   |   |
| Taxable                                                                  |   |                 | 1,228   |   |   |   | 790 |   |
| Tax-exempt                                                               |   |                 | 98      |   |   |   | 121 |   |
| Other investments                                                        |   |                 | 42      |   |   |   | 75 |   |
| Federal funds sold and other short-term investments                      |   |                 | 81      |   |   |   | 56 |   |
| Total interest income                                                    |   |                 | 17,451  |   |   |   | 20,228 |   |
| Interest expense:                                                        |   |                 |    |   |   |   |   |   |
| Time deposits                                                            |   |                 | 2,226   |   |   |   | 3,346 |   |
| Demand and savings deposits                                              |   |                 | 920     |   |   |   | 1,621 |   |
| Junior subordinated debentures                                           |   |                 | 324     |   |   |   | 520 |   |
| Other borrowings                                                         |   |                 | 281     |   |   |   | 239 |   |
| Total interest expense                                                   |   |                 | 3,751   |   |   |   | 5,726 |   |
| Net interest income                                                      |   |                 | 13,700  |   |   |   | 14,502 |   |
| Provision for loan losses                                                |   |                 | 330     |   |   |   | 7,898 |   |
| Net interest income after provision for loan losses                      |   |                 | 13,370  |   |   |   | 6,604 |   |
| Noninterest income:                                                      |   |                 |    |   |   |   |   |   |
| Service fees                                                             |   |                 | 1,056   |   |   |   | 1,039 |   |
| Loan-related fees                                                        |   |                 | 97      |   |   |   | 95 |   |
| Letters of credit commissions and fees                                   |   |                 | 184     |   |   |   | 199 |   |
| Loss on securities transactions, net                                     |   |                 | (50     | ) |   |   | (14 | ) |
| Total other-than-temporary-impairment (“OTTI”) on securities |   |                 | (105    | ) |   |   | (186 | ) |
| Less: Noncredit portion of “OTTI”                            |   |                 | (17     | ) |   |   | (85 | ) |
| Net impairments on securities                                            |   |                 | (88     | ) |   |   | (101 | ) |
| Other noninterest income                                                 |   |                 | 460     |   |   |   | 386 |   |
| Total noninterest income                                                 |   |                 | 1,659   |   |   |   | 1,604 |   |
| Noninterest expenses:                                                    |   |                 |    |   |   |   |   |   |
| Salaries and employee benefits                                           |   |                 | 5,245   |   |   |   | 5,450 |   |
| Occupancy and equipment                                                  |   |                 | 1,802   |   |   |   | 1,961 |   |
| Foreclosed assets, net                                                   |   |                 | 675     |   |   |   | 837 |   |
| FDIC assessment                                                          |   |                 | 861     |   |   |   | 811 |   |
| Goodwill impairment                                                      |   |                 | – |   |   |   | 2,000 |   |
| Other noninterest expense                                                |   |                 | 3,180   |   |   |   | 1,971 |   |
| Total noninterest expenses                                               |   |                 | 11,763  |   |   |   | 13,030 |   |
|                                                                     |   |                 |    |   |   |   |   |   |
| Income (loss) before provision (benefit) for income taxes                |   |                 | 3,266   |   |   |   | (4,822 | ) |
| Provision (benefit) for income taxes                                     |   |                 | 1,140   |   |   |   | (1,444 | ) |
| Net income (loss)                                                        |   | $                    | 2,126   |   |   | $ | (3,378 | ) |
|                                                                     |   |                 |    |   |   |   |   |   |
| Dividends and discount – preferred stock                           |   |                 | (605    | ) |   |   | (598 | ) |
| Net income (loss) available to common shareholders                       |   | $                    | 1,521   |   |   | $ | (3,976 | ) |
|                                                                     |   |                 |    |   |   |   |   |   |
| Earnings (loss) per common share:                                        |   |                 |    |   |   |   |   |   |
| Basic                                                                    |   | $                    | 0.12    |   |   | $ | (0.36 | ) |
| Diluted                                                                  |   | $                    | 0.12    |   |   | $ | (0.36 | ) |
|  Weighted average common shares outstanding:                        |   |                 |    |   |   |   |   |   |
| Basic                                                                    |   |                 | 13,136  |   |   |   | 10,918 |   |
| Diluted                                                                  |   |                 | 13,205  |   |   |   | 10,918 |   |
| Dividends per common share                                               |   | $                    | – |   |   | $ | – |   |

----

|                                                                         |   | For the Three Months |   |
|------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                         |   | Ended March 31,      |   |
|                                                                         |   | 2011                 |   |   | 2010 |   |
|                                                                         |   |                 |   |   |   |   |
| Net income (loss)                                                            |   | $                    | 2,126  |   |   | $ | (3,378 | ) |
| Other comprehensive income (loss), net of tax:                               |   |                 |   |   |   |   |   |   |
|                                                                         |   |                 |   |   |   |   |   |   |
| Change in accumulated gain (loss) on effective cash flow hedging derivatives |   |                 | 149    |   |   |   | (245 | ) |
|                                                                         |   |                 |   |   |   |   |   |   |
| Unrealized losses on investment securities, net of tax:                      |   |                 |   |   |   |   |   |   |
| Securities with OTTI charges during the period                               |   |                 | (67    | ) |   |   | (119 | ) |
| Less: OTTI charges recognized in net income                                  |   |                 | (56    | ) |   |   | (65 | ) |
| Net unrealized losses on investment securities with OTTI                     |   |                 | (11    | ) |   |   | (54 | ) |
|                                                                         |   |                 |   |   |   |   |   |   |
| Unrealized holding (losses) gains arising during the period                  |   |                 | (462   | ) |   |   | 759 |   |
| Less: reclassification adjustment for losses included in net income          |   |                 | (32    | ) |   |   | (9 | ) |
| Net unrealized (losses) gains on investment securities                       |   |                 | (430   | ) |   |   | 768 |   |
|                                                                         |   |                 |   |   |   |   |   |   |
| Other comprehensive income (loss)                                            |   |                 | (292   | ) |   |   | 469 |   |
| Total comprehensive income (loss)                                            |   | $                    | 1,834  |   |   | $ | (2,909 | ) |

|                                                                             |   | Preferred Stock |    |   | Common Stock |   |    | Additionalpaid-in |   |   | Retained |   |   | Accumulated other comprehensive income |    |   |     |   |
|----------------------------------------------------------------------------------|--------|-----------------|---------|--------|--------------|--------|---------|-------------------|--------|--------|----------|--------|--------|----------------------------------------|---------|--------|----------|--------|
|                                                                             |   | Shares          |    |   | At par       |   |    | Shares            |   |   | At par   |   |   |  capital                          |    |   | earnings |   |   | (loss) |   |   | Total |   |
| Balance at December 31, 2010                                                     |   |            | 45      |   |         | $      | 45,427  |              |   |   | 13,230   |   |   | $                                      | 13,230  |   |     | $      | 33,178 |   |   | $ | 69,168 |   |   | $ | (2,236 | ) |   | $ | 158,767 |   |
| Issuance of common stock                                                         |   |            | – |   |         |   | – |              |   |   | 68       |   |   |                                   | 68      |   |     |   | 329 |   |   |   | – |   |   |   | – |   |   |   | 397 |   |
| Stock-based compensation expense related to stock options recognized in earnings |   |            | – |   |         |   | – |              |   |   | –  |   |   |                                   | – |   |     |   | 28 |   |   |   | – |   |   |   | – |   |   |   | 28 |   |
| Net income                                                                       |   |            | – |   |         |   | – |              |   |   | –  |   |   |                                   | – |   |     |   | – |   |   |   | 2,126 |   |   |   | – |   |   |   | 2,126 |   |
| Amortization  of preferred stock discount                              |   |            | – |   |         |   | 35      |              |   |   | –  |   |   |                                   | – |   |     |   | – |   |   |   | (35 | ) |   |   | – |   |   |   | – |   |
| Other comprehensive loss                                                         |   |            | – |   |         |   | – |              |   |   | –  |   |   |                                   | – |   |     |   | – |   |   |   | – |   |   |   | (292 | ) |   |   | (292 | ) |
| Dividends – preferred stock                                                |   |            | – |   |         |   | – |              |   |   | –  |   |   |                                   | – |   |     |   | – |   |   |   | (570 | ) |   |   | – |   |   |   | (570 | ) |
| Balance at March 31, 2011                                                        |   |            | 45      |   |         | $      | 45,462  |              |   |   | 13,298   |   |   | $                                      | 13,298  |   |     | $      | 33,535 |   |   | $ | 70,689 |   |   | $ | (2,528 | ) |   | $ | 160,456 |   |

----

|                                                                                     |   | For the Three Months EndedMarch 31, |    |
|------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                     |   | 2011                                |    |   | 2010 |   |
|                                                                                     |   |                                |    |   |   |   |
| Cash flows from operating activities:                                                    |   |                                |    |   |   |   |
| Net income (loss)                                                                        |   | $                                   | 2,126   |   |   | $ | (3,378 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |                                |    |   |   |   |   |   |
| Depreciation                                                                             |   |                                | 363     |   |   |   | 429 |   |
| Provision for loan losses                                                                |   |                                | 330     |   |   |   | 7,898 |   |
| Impairment on securities                                                                 |   |                                | 88      |   |   |   | 101 |   |
| Impairment on goodwill                                                                   |   |                                | – |   |   |   | 2,000 |   |
| Loss on securities transactions, net                                                     |   |                                | 50      |   |   |   | 14 |   |
| Loss on sale of foreclosed assets                                                        |   |                                | 144     |   |   |   | 392 |   |
| Gain on sale of premises and equipment                                                   |   |                                | – |   |   |   | (5 | ) |
| Amortization of premiums and discounts on securities                                     |   |                                | 7       |   |   |   | (2 | ) |
| Amortization of deferred loan fees and discounts                                         |   |                                | (301    | ) |   |   | (311 | ) |
| Amortization of core deposit intangibles                                                 |   |                                | 21      |   |   |   | 32 |   |
| Stock-based compensation                                                                 |   |                                | 28      |   |   |   | 73 |   |
| Change in:                                                                               |   |                                |    |   |   |   |   |   |
| Accrued interest receivable                                                              |   |                                | 262     |   |   |   | 44 |   |
| Other assets                                                                             |   |                                | 845     |   |   |   | (2,827 | ) |
| Accrued interest payable                                                                 |   |                                | (27     | ) |   |   | 1 |   |
| Other liabilities                                                                        |   |                                | 723     |   |   |   | 1,713 |   |
| Net cash provided by operating activities                                                |   |                                | 4,659   |   |   |   | 6,174 |   |
|                                                                                     |   |                                |    |   |   |   |   |   |
| Cash flows from investing activities:                                                    |   |                                |    |   |   |   |   |   |
| Purchases of securities available-for-sale                                               |   |                                | (103    | ) |   |   | (723 | ) |
| Purchases of other investments                                                           |   |                                | (1      | ) |   |   | (23 | ) |
| Proceeds from sales of securities available-for-sale                                |   |                                | 106     |   |   |   | – |   |
| Proceeds from maturities, calls and principal paydowns of securities available-for-sale  |   |                                | 16,301  |   |   |   | 6,782 |   |
| Proceeds from sales and maturities of other investments                             |   |                                | 108     |   |   |   | 4,271 |   |
| Net change in loans                                                                      |   |                                | 40,001  |   |   |   | 4,860 |   |
| Proceeds from sales of foreclosed assets                                                 |   |                                | 9,482   |   |   |   | 950 |   |
| Proceeds from sales of premises and equipment                                            |   |                                | – |   |   |   | 5 |   |
| Purchases of premises and equipment                                                      |   |                                | (189    | ) |   |   | (560 | ) |
| Net cash provided by investing activities                                                |   |                                | 65,705  |   |   |   | 15,562 |   |
|                                                                                     |   |                                |    |   |   |   |   |   |
| Cash flows from financing activities:                                                    |   |                                |    |   |   |   |   |   |
| Net change in:                                                                           |   |                                |    |   |   |   |   |   |
| Deposits                                                                                 |   |                                | (23,021 | ) |   |   | 2,345 |   |
| Other borrowings                                                                         |   |                                | (260    | ) |   |   | 704 |   |
| Cash dividends paid on preferred stock                                                   |   |                                | (570    | ) |   |   | (563 | ) |
| Net cash provided by (used in)  financing activities                           |   |                                | (23,851 | ) |   |   | 2,486 |   |
|                                                                                     |   |                                |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                |   |                                | 46,513  |   |   |   | 24,222 |   |
| Cash and cash equivalents at beginning of period                                         |   |                                | 151,725 |   |   |   | 108,093 |   |
| Cash and cash equivalents at end of period                                               |   | $                                   | 198,238 |   |   | $ | 132,315 |   |

| Interest paid                                 |   | $      | 3,777   |   |   | $      | 5,725   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Income taxes paid                             |   |   | – |   |   |   | – |   |
| Noncash investing and financing activities:   |   |   |    |   |   |   |    |   |
| Dividends accrued not paid on preferred stock |   |   | 570     |   |   |   | 287     |   |
| Foreclosed assets acquired                    |   |   | 6,199   |   |   |   | 6,037   |   |
| Loans originated to finance foreclosed assets |   |   | 115     |   |   |   | 450     |   |

----

| 1. | BASIS OF PRESENTATION |
|----|-----------------------|

----

| 2. | SECURITIES |
|----|------------|

|                                                                       |   | As of March 31, 2011   |    |
|----------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                       |   | Amortized              |    |   | Unrealized |   |   | Fair |   |
|                                                                       |   | Cost                   |    |   | Gains |   |   | Losses |   |   | OTTI |   |   | Value |   |
|                                                                       |   | (Dollars in thousands) |    |
| Securities available-for-sale                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt Securities                                                            |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government sponsored enterprises and agencies |   | $                      | 99,319  |   |   | $ | 115 |   |   | $ | (2,218 | ) |   | $ | - |   |   | $ | 97,216 |   |
| Obligations of state and political subdivisions                            |   |                   | 4,354   |   |   |   | 93 |   |   |   | (5 | ) |   |   | - |   |   |   | 4,442 |   |
| Mortgage-backed securities and collateralized mortgage obligations         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                            |   |                   | 42,679  |   |   |   | 405 |   |   |   | (420 | ) |   |   | - |   |   |   | 42,664 |   |
| Privately issued residential                                               |   |                   | 1,298   |   |   |   | 330 |   |   |   | (32 | ) |   |   | (508 | ) |   |   | 1,088 |   |
| Asset backed securities                                                    |   |                   | 304     |   |   |   | 63 |   |   |   | - |   |   |   | (207 | ) |   |   | 160 |   |
| Equity Securities                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CRA funds                                                                  |   |                   | 13,314  |   |   |   | - |   |   |   | (316 | ) |   |   | - |   |   |   | 12,998 |   |
| Total available-for-sale securities                                        |   | $                      | 161,268 |   |   | $ | 1,006 |   |   | $ | (2,991 | ) |   | $ | (715 | ) |   | $ | 158,568 |   |
|                                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity                                                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of state and political subdivisions                            |   | $                      | 4,045   |   |   | $ | 157 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,202 |   |
| Total held-to-maturity securities                                          |   | $                      | 4,045   |   |   | $ | 157 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,202 |   |
|                                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other investments                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB/Federal Reserve Bank stock(1)                                         |   | $                      | 5,734   |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 5,734 |   |
| Investment in subsidiary trust(1)                                          |   |                   | 1,083   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,083 |   |
| Total other investments                                                    |   | $                      | 6,817   |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 6,817 |   |

----

|                                                                       |   | As of December 31, 2010 |    |
|----------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                       |   | Amortized               |    |   | Unrealized |   |   | Fair |   |
|                                                                       |   | Cost                    |    |   | Gains |   |   | Losses |   |   | OTTI |   |   | Value |   |
|                                                                       |   | (Dollars in thousands)  |    |
| Securities available-for-sale                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt Securities                                                            |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government sponsored enterprises and agencies |   | $                       | 112,959 |   |   | $ | 196 |   |   | $ | (1,554 | ) |   | $ | - |   |   | $ | 111,601 |   |
| Obligations of state and political subdivisions                            |   |                    | 4,356   |   |   |   | 57 |   |   |   | (42 | ) |   |   | - |   |   |   | 4,371 |   |
| Mortgage-backed securities and collateralized mortgage obligations         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                            |   |                    | 45,285  |   |   |   | 476 |   |   |   | (377 | ) |   |   | - |   |   |   | 45,384 |   |
| Privately issued residential                                               |   |                    | 1,564   |   |   |   | 289 |   |   |   | (65 | ) |   |   | (558 | ) |   |   | 1,230 |   |
| Asset backed securities                                                    |   |                    | 342     |   |   |   | 67 |   |   |   | - |   |   |   | (231 | ) |   |   | 178 |   |
| Equity Securities                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CRA funds                                                                  |   |                    | 13,210  |   |   |   | - |   |   |   | (268 | ) |   |   | - |   |   |   | 12,942 |   |
| Total available-for-sale securities                                        |   | $                       | 177,716 |   |   | $ | 1,085 |   |   | $ | (2,306 | ) |   | $ | (789 | ) |   | $ | 175,706 |   |
|                                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity                                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of state and political subdivisions                            |   | $                       | 4,045   |   |   | $ | 122 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,167 |   |
| Total held-to-maturity securities                                          |   | $                       | 4,045   |   |   | $ | 122 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,167 |   |
|                                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other investments                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB/Federal Reserve Bank stock(1)                                         |   |                    | 5,842   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,842 |   |
| Investment in subsidiary trust(1)                                          |   |                    | 1,083   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,083 |   |
| Total other investments                                                    |   | $                       | 6,925   |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 6,925 |   |

----

|                                                                       |   | March 31, 2011         |    |
|----------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                       |   | Less Than 12 Months    |    |   | Greater Than 12 Months |   |   | Total |   |
|                                                                       |   | Fair Value             |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|                                                                       |   | (Dollars in thousands) |    |
| Securities available-for-sale                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government sponsored enterprises and agencies |   | $                      | 77,122  |   |   | $ | (2,218 | ) |   | $ | - |   |   | $ | - |   |   | $ | 77,122 |   |   | $ | (2,218 | ) |
| Obligations of state and political subdivisions                            |   |                   | 711     |   |   |   | (5 | ) |   |   | - |   |   |   | - |   |   |   | 711 |   |   |   | (5 | ) |
| Mortgage-backed securities and collateralized mortgage obligations         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                            |   |                   | 22,204  |   |   |   | (420 | ) |   |   | - |   |   |   | - |   |   |   | 22,204 |   |   |   | (420 | ) |
| Privately issued residential                                               |   |                   | -       |   |   |   | - |   |   |   | 272 |   |   |   | (32 | ) |   |   | 272 |   |   |   | (32 | ) |
| Investment in CRA funds                                                    |   |                   | 12,998  |   |   |   | (316 | ) |   |   | - |   |   |   | - |   |   |   | 12,998 |   |   |   | (316 | ) |
| Total securities                                                           |   | $                      | 113,035 |   |   | $ | (2,959 | ) |   | $ | 272 |   |   | $ | (32 | ) |   | $ | 113,307 |   |   | $ | (2,991 | ) |

----

|                                                                       |   | December 31, 2010      |    |
|----------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                       |   | Less Than 12 Months    |    |   | Greater Than 12 Months |   |   | Total |   |
|                                                                       |   | Fair Value             |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|                                                                       |   | (Dollars in thousands) |    |
| Securities available-for-sale                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government sponsored enterprises and agencies |   | $                      | 77,784  |   |   | $ | (1,554 | ) |   | $ | - |   |   | $ | - |   |   | $ | 77,784 |   |   | $ | (1,554 | ) |
| Obligations of state and political subdivisions                            |   |                   | 2,220   |   |   |   | (42 | ) |   |   | - |   |   |   | - |   |   |   | 2,220 |   |   |   | (42 | ) |
| Mortgage-backed securities and collateralized mortgage obligations         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                            |   |                   | 22,674  |   |   |   | (377 | ) |   |   | - |   |   |   | - |   |   |   | 22,674 |   |   |   | (377 | ) |
| Privately issued residential                                               |   |                   | -       |   |   |   | - |   |   |   | 398 |   |   |   | (65 | ) |   |   | 398 |   |   |   | (65 | ) |
| Investment in CRA funds                                                    |   |                   | 12,942  |   |   |   | (268 | ) |   |   | - |   |   |   | - |   |   |   | 12,942 |   |   |   | (268 | ) |
| Total securities                                                           |   | $                      | 115,620 |   |   | $ | (2,241 | ) |   | $ | 398 |   |   | $ | (65 | ) |   | $ | 116,018 |   |   | $ | (2,306 | ) |

| Impairment related to credit losses                                                                                                                 |   | Three months ended March 31, 2011 |   |   | Three months ended March 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
|                                                                                                                                                |   |                              |   |   |                              |   |
| Beginning balance at beginning of period                                                                                                            |   | $                                 | 1,600  |   |                              | $      | 1,291 |   |
| Addition of OTTI that was not previously recognized                                                                                                 |   |                              | -      |   |                              |   | - |   |
| Additions to OTTI that was previously recognized when there is no intent to sell and no requirement to sell before recovery of amortized cost basis |   |                              | -      |   |                              |   | - |   |
| Transfers from AOCI to OTTI related to credit losses                                                                                                |   |                              | 88     |   |                              |   | 101 |   |
| Reclassifications from OTTI to realized losses                                                                                                      |   |                              | (199   | )      |                              |   | - |   |
| Ending balance at end of period                                                                                                                     |   | $                                 | 1,489  |   |                              | $      | 1,392 |   |

----

|                  |   | Three Months EndedMarch 31, |   |
|-----------------------|--------|-----------------------------|--------|
|                  |   | 2011                        |   |   | 2010 |   |
| Amortized cost        |   | $                           | 173    |   |   | $ | - |   |
| Proceeds              |   |                        | 106    |   |   |   | - |   |
| Gross realized gains  |   |                        | -      |   |   |   | - |   |
| Gross realized losses |   |                        | (67    | ) |   |   | - |   |

|                                                               |   | Securities         |    |   | Securities       |   |
|--------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                               |   | Available-for-sale |    |   | Held-to-maturity |   |
|                                                          |   | AmortizedCost      |    |   | FairValue        |   |   | AmortizedCost |   |   | FairValue |   |
| Within one year                                                    |   | $                  | -       |   |             | $      | - |   |   | $ | - |   |   | $ | - |   |
| Within two to five years                                           |   |               | 14,995  |   |             |   | 14,995 |   |   |   | - |   |   |   | - |   |
| Within six to ten years                                            |   |               | 85,917  |   |             |   | 83,875 |   |   |   | - |   |   |   | - |   |
| After ten years                                                    |   |               | 3,065   |   |             |   | 2,948 |   |   |   | 4,045 |   |   |   | 4,202 |   |
| Mortgage-backed securities and collateralized mortgage obligations |   |               | 43,977  |   |             |   | 43,752 |   |   |   | - |   |   |   | - |   |
|   Total debt securities                                  |   | $                  | 147,954 |   |             | $      | 145,570 |   |   | $ | 4,045 |   |   | $ | 4,202 |   |

----

| 3. |  LOANS |
|----|-------------|

|                                           |   | As of March 31, 2011   |      |   | As of December 31, 2010 |   |
|------------------------------------------------|--------|------------------------|-----------|--------|-------------------------|--------|
|                                           |   | Amount                 |      |   | Percent                 |   |   | Amount |   |   | Percent |   |
|                                           |   | (Dollars in thousands) |      |
|                                           |   |                   |      |   |                    |   |   |   |   |   |   |   |
| Commercial and industrial                      |   | $                      | 344,768   |   |                    |   | 31.39 | % |   | $ | 349,891 |   |   |   | 30.52 | % |
| Real estate mortgage                           |   |                   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                   | 38,923    |   |                    |   | 3.54 |   |   |   | 38,667 |   |   |   | 3.37 |   |
| Commercial                                     |   |                   | 695,015   |   |                    |   | 63.28 |   |   |   | 718,795 |   |   |   | 62.69 |   |
|                                           |   |                   | 733,938   |   |                    |   | 66.82 |   |   |   | 757,462 |   |   |   | 66.06 |   |
| Real estate construction                       |   |                   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                   | 9,216     |   |                    |   | 0.84 |   |   |   | 10,983 |   |   |   | 0.96 |   |
| Commercial                                     |   |                   | 3,713     |   |                    |   | 0.34 |   |   |   | 24,291 |   |   |   | 2.12 |   |
|                                           |   |                   | 12,929    |   |                    |   | 1.18 |   |   |   | 35,274 |   |   |   | 3.08 |   |
| Consumer and other                             |   |                   | 6,735     |   |                    |   | 0.61 |   |   |   | 3,928 |   |   |   | 0.34 |   |
| Gross loans                                    |   |                   | 1,098,370 |   |                    |   | 100.00 | % |   |   | 1,146,555 |   |   |   | 100.00 | % |
| Unearned discounts, interest and deferred fees |   |                   | (2,163    | )      |                    |   |   |   |   |   | (2,245 | ) |   |   |   |   |
| Total loans                                    |   |                   | 1,096,207 |   |                    |   |   |   |   |   | 1,144,310 |   |   |   |   |   |
| Allowance for loan losses                      |   |                   | (31,883   | )      |                    |   |   |   |   |   | (33,757 | ) |   |   |   |   |
| Loans, net                                     |   | $                      | 1,064,324 |   |                    |   |   |   |   | $ | 1,110,553 |   |   |   |   |   |

|   March 31, 2011     |   | Gross Loan Balance |      |   | Deferred Loan Fees |   |   | Accrued Interest Receivable |   |   | Recorded Investment in Loans |   |
|---------------------------|--------|--------------------|-----------|--------|--------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|
|                      |   |               |      |   |               |   |   |                        |   |   |                         |   |
| Commercial and industrial |   | $                  | 344,768   |   |               | $      | (1,098 | )                           |   | $      | 1,040                        |   |   | $ | 344,710 |   |
| Real estate-mortgage      |   |               | 733,938   |   |               |   | (1,036 | )                           |   |   | 2,548                        |   |   |   | 735,450 |   |
| Real estate-construction  |   |               | 12,929    |   |               |   | (19    | )                           |   |   | 45                           |   |   |   | 12,955 |   |
| Consumer and other        |   |               | 6,735     |   |               |   | (10    | )                           |   |   | 8                            |   |   |   | 6,733 |   |
|                      |   |               |      |   |               |   |   |                        |   |   |                         |   |   |   |   |   |
| Total                     |   | $                  | 1,098,370 |   |               | $      | (2,163 | )                           |   | $      | 3,641                        |   |   | $ | 1,099,848 |   |

|   December 31, 2010  |   | Gross Loan Balance |      |   | Deferred Loan Fees |   |   | Accrued Interest Receivable |   |   | Recorded Investment in Loans |   |
|---------------------------|--------|--------------------|-----------|--------|--------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|
|                      |   |               |      |   |               |   |   |                        |   |   |                         |   |
| Commercial and industrial |   | $                  | 349,891   |   |               | $      | (932   | )                           |   | $      | 1,116                        |   |   | $ | 350,075 |   |
| Real estate-mortgage      |   |               | 757,462   |   |               |   | (1,091 | )                           |   |   | 2,653                        |   |   |   | 759,024 |   |
| Real estate-construction  |   |               | 35,274    |   |               |   | (21    | )                           |   |   | 94                           |   |   |   | 35,347 |   |
| Consumer and other        |   |               | 3,928     |   |               |   | (201   | )                           |   |   | 8                            |   |   |   | 3,735 |   |
|                      |   |               |      |   |               |   |   |                        |   |   |                         |   |   |   |   |   |
| Total                     |   | $                  | 1,146,555 |   |               | $      | (2,245 | )                           |   | $      | 3,871                        |   |   | $ | 1,148,181 |   |

----

----

| As of March 31, 2011                                   |   | Commercial and industrial |    |   | Real estate-mortgage |   |    | Real estate - construction |   |   | Consumer and other |   |   | Total  |   |
|--------------------------------------------------------|--------|---------------------------|---------|--------|----------------------|--------|---------|----------------------------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                   |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |
| Grade:                                                 |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |
| 1-6 - “Pass”                               |   | $                         | 297,845 |   |                 | $      | 564,185 |                       |   | $      | 3,437              |   |   | $      | 6,730  |   |   | $ | 872,197 |   |
| 7 - “Special Mention”/ “Watch” |   |                      | 10,093  |   |                 |   | 25,733  |                       |   |   | -                  |   |   |   | -      |   |   |   | 35,826 |   |
| 8 - “Substandard”                          |   |                      | 36,772  |   |                 |   | 145,295 |                       |   |   | 9,518              |   |   |   | 3      |   |   |   | 191,588 |   |
| 9 -“Doubtful"                                    |   |                      | -       |   |                 |   | 237     |                       |   |   | -                  |   |   |   | -      |   |   |   | 237 |   |
|                                                   |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |   |   |   |   |   |
| Total                                                  |   | $                         | 344,710 |   |                 | $      | 735,450 |                       |   | $      | 12,955             |   |   | $      | 6,733  |   |   | $ | 1,099,848 |   |

| As of December 31, 2010                                |   | Commercial and industrial |    |   | Real estate-mortgage |   |    | Real estate - construction |   |   | Consumer and other |   |   | Total  |   |
|--------------------------------------------------------|--------|---------------------------|---------|--------|----------------------|--------|---------|----------------------------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                   |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |
| Grade:                                                 |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |
| 1-6 - “Pass”                               |   | $                         | 301,919 |   |                 | $      | 563,003 |                       |   | $      | 12,831             |   |   | $      | 3,732  |   |   | $ | 881,485 |   |
| 7 - “Special Mention”/ “Watch” |   |                      | 8,063   |   |                 |   | 45,776  |                       |   |   | 3,536              |   |   |   | -      |   |   |   | 57,375 |   |
| 8 - “Substandard”                          |   |                      | 40,093  |   |                 |   | 149,988 |                       |   |   | 18,980             |   |   |   | 3      |   |   |   | 209,064 |   |
| 9 -“Doubtful"                                    |   |                      | -       |   |                 |   | 257     |                       |   |   | -                  |   |   |   | -      |   |   |   | 257 |   |
|                                                   |   |                      |    |   |                 |   |    |                       |   |   |               |   |   |   |   |   |   |   |   |   |
| Total                                                  |   | $                         | 350,075 |   |                 | $      | 759,024 |                       |   | $      | 35,347             |   |   | $      | 3,735  |   |   | $ | 1,148,181 |   |

----

| As of March 31, 2011      |   | 30-59 Days Past Due |   |   | 60-89 Days ast Due |   |   | Greater Than 90 Days |   |   | Total Past Due |   |   | Current |   |   | Total Recorded Investment in Loans |   |      | Recorded Investment 90 Days and Accruing |   |
|---------------------------|--------|---------------------|--------|--------|--------------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|---------|--------|--------|------------------------------------|--------|-----------|------------------------------------------|--------|
|                      |   |                |   |   |               |   |   |                 |   |   |           |   |   |    |   |   |                               |   |      |                                     |   |
| Commercial and industrial |   | $                   | 4,784  |   |               | $      | 660    |                 |   | $      | 11,510         |   |   | $       | 16,954 |   |                               | $      | 327,756   |                                     |   | $ | 344,710 |   |   | $ | - |   |
| Real estate mortgage:     |   |                |   |   |               |   |   |                 |   |   |           |   |   |    |   |   |                               |   |      |                                     |   |   |   |   |   |   |   |   |
| Residential               |   |                | 16     |   |               |   | -      |                 |   |   | 276            |   |   |    | 292    |   |                               |   | 38,728    |                                     |   |   | 39,020 |   |   |   | - |   |
| Commercial                |   |                | 16,759 |   |               |   | 15,773 |                 |   |   | 29,027         |   |   |    | 61,559 |   |                               |   | 634,871   |                                     |   |   | 696,430 |   |   |   | - |   |
| Real estate construction: |   |                |   |   |               |   |   |                 |   |   |           |   |   |    |   |   |                               |   |      |                                     |   |   |   |   |   |   |   |   |
| Residential               |   |                | -      |   |               |   | -      |                 |   |   | -              |   |   |    | -      |   |                               |   | 9,225     |                                     |   |   | 9,225 |   |   |   | - |   |
| Commercial                |   |                | -      |   |               |   | -      |                 |   |   | -              |   |   |    | -      |   |                               |   | 3,730     |                                     |   |   | 3,730 |   |   |   | - |   |
| Consumer and other        |   |                | 6      |   |               |   | -      |                 |   |   | 3              |   |   |    | 9      |   |                               |   | 6,724     |                                     |   |   | 6,733 |   |   |   | - |   |
|                      |   |                |   |   |               |   |   |                 |   |   |           |   |   |    |   |   |                               |   |      |                                     |   |   |   |   |   |   |   |   |
| Total                     |   | $                   | 21,565 |   |               | $      | 16,433 |                 |   | $      | 40,816         |   |   | $       | 78,814 |   |                               | $      | 1,021,034 |                                     |   | $ | 1,099,848 |   |   | $ | - |   |

----

| Recorded investment in nonaccrual loans |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-----------------------------------------|--------|----------------|---------|--------|-------------------|--------|
| Commercial and industrial               |   | $              | 14,629  |   |              | $      | 16,614 |   |
| Real estate mortgage:                   |   |           |    |   |              |   |   |   |
| Residential                             |   |           | 276     |   |              |   | 286 |   |
| Commercial                              |   |           | 51,210  |   |              |   | 48,592 |   |
| Real estate construction:               |   |           |    |   |              |   |   |   |
| Residential                             |   |           | — |   |              |   | 196 |   |
| Commercial                              |   |           | — |   |              |   | 5,193 |   |
| Consumer and other                      |   |           | 3       |   |              |   | 3 |   |
|                                    |   |           |    |   |              |   |   |   |
| Total                                   |   | $              | 66,118  |   |              | $      | 70,884 |   |

|                                                 |   | March 31, 2011 |                                                                                                |   | December 31, 2010 |   |
|------------------------------------------------------|--------|----------------|-----------------------------------------------------------------------------------------------------|--------|-------------------|--------|
| Nonaccrual loans (1)                                 |   | $              |           50,084                                  |   |              | $      | 50,985 |   |
| Accruing loans 90 days or more past due (1)          |   |           | —                                                                                             |   |              |   | 334 |   |
| Troubled debt restructurings – accruing (1)    |   |           |                 133 |   |              |   | 1,314 |   |
| Troubled debt restructurings – nonaccruing (1) |   |           |            16,203                            |   |              |   | 20,198 |   |
| Other real estate (“ORE”)                |   |           |            16,529                            |   |              |   | 19,956 |   |
|                                                 |   |           |                                                                                                |   |              |   |   |   |
| Total nonperforming assets                           |   | $              | 82,949                                                                                              |   |              | $      | 92,787 |   |

----

| As of March 31, 2011             |   | Recorded Investment |    |   | Unpaid Principal Balance |    |    | Related Allowance |   |    | Average Recorded Investment |   |
|----------------------------------|--------|---------------------|---------|--------|--------------------------|---------|---------|-------------------|--------|---------|-----------------------------|--------|
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Impaired loans with no allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Commercial and industrial        |   | $                   | 14,629  |   |                     | $       | 14,676  |              |   |  $ | —                     |   |   | $ | 16,325 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | 276     |   |                     |    | 276     |              |   |    | —                     |   |   |   | 284 |   |
| Commercial                       |   |                | 35,827  |   |                     |    | 35,903  |              |   |    | —                     |   |   |   | 32,201 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 705 |   |
| Commercial                       |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 4,205 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Impaired loans with an allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   | $                   | 133     |   |                     | $       | 133     |              |   | $       | 1                           |   |   | $ | 704 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | — |   |
| Commercial                       |   |                | 15,389  |   |                     |    | 15,429  |              |   |    | 746                         |   |   |   | 13,038 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | — |   |
| Commercial                       |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 619 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Total:                           |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   | $              | 14,762  |   |                     | $  | 14,809  |              |   | $  | 1                           |   |   |  $ | 17,029 |   |
| Real estate mortgage             |   |                | 51,492  |   |                     |    | 51,608  |              |   |    | 746                         |   |   |   | 45,523 |   |
| Real estate construction         |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 5,529 |   |

----

| As of December 31, 2010          |   | Recorded Investment |    |   | Unpaid Principal Balance |    |    | Related Allowance |   |    | Average Recorded Investment |   |
|----------------------------------|--------|---------------------|---------|--------|--------------------------|---------|---------|-------------------|--------|---------|-----------------------------|--------|
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Impaired loans with no allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Commercial and industrial        |   | $                   | 17,940  |   |                     | $       | 18,004  |              |   |  $ | —                     |   |   | $ | 14,385 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | 286     |   |                     |    | 286     |              |   |    | —                     |   |   |   | 265 |   |
| Commercial                       |   |                | 41,012  |   |                     |    | 41,093  |              |   |    | —                     |   |   |   | 31,663 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | 197     |   |                     |    | 197     |              |   |    | —                     |   |   |   | 2,279 |   |
| Commercial                       |   |                | 5,205   |   |                     |    | 5,213   |              |   |    | —                     |   |   |   | 6,330 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Impaired loans with an allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   | $                   | 98      |   |                     | $       | 98      |              |   | $       | 57                          |   |   | $ | 1,037 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | — |   |
| Commercial                       |   |                | 7,581   |   |                     |    | 7,606   |              |   |    | 483                         |   |   |   | 13,713 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 238 |   |
| Commercial                       |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 828 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Total:                           |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   |  $             | 18,038  |   |                     |  $ | 18,102  |              |   |  $ | 57                          |   |   |  $ | 15,422 |   |
| Real estate mortgage             |   |                | 48,879  |   |                     |    | 48,985  |              |   |    | 483                         |   |   |   | 45,641 |   |
| Real estate construction         |   |                | 5,402   |   |                     |    | 5,410   |              |   |    | —                     |   |   |   | 9,675 |   |

----

| As of and for the three months ended  March 31, 2011                                |   | Commercial and industrial |    |   | Real estate-mortgage |   |    | Real estate - construction |   |   | Consumer and other |    |   | Unallocated |    |   | Total  |   |
|------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|----------------------|--------|---------|----------------------------|--------|--------|--------------------|---------|--------|-------------|---------|--------|--------|--------|
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |
| Allowance for loan losses at beginning of period                                         |   | $                         | 8,187   |   |                 | $      | 22,016  |                       |   | $      | 1,993              |    |   | $           | 195     |   |   | $      | 1,366 |   |   | $ | 33,757 |   |
| Provision for loan losses                                                                |   |                      | 57      |   |                 |   | 1,547   |                       |   |   | (1,697             | )  |   |        | 52      |   |   |   | 371 |   |   |   | 330 |   |
| Charge-offs                                                                              |   |                      | (132    | )      |                 |   | (2,906  | )                          |   |   | —            |    |   |        | (20     | )      |   |   | — |   |   |   | (3,058 | ) |
| Recoveries                                                                               |   |                      | 107     |   |                 |   | 11      |                       |   |   | 716                |    |   |        | 20      |   |   |   | — |   |   |   | 854 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses at end of period                                               |   | $                         | 8,219   |   |                 | $      | 20,668  |                       |   | $      | 1,012              |    |   | $           | 247     |   |   | $      | 1,737 |   |   | $ | 31,883 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Ending allowance for loan losses balance for loans individually evaluated for impairment |   | $                         | 1       |   |                 | $      | 874     |                       |   | $      | —            |    |   | $           | — |   |   |   |   |   |   | $ | 875 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Ending allowance for loan losses balance for loans collectively evaluated for impairment |   | $                         | 8,218   |   |                 | $      | 19,794  |                       |   | $      | 1,012              |    |   | $           | 247     |   |   |   |   |   |   | $ | 29,271 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Loans:                                                                                   |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Recorded investment in loans                                                        |   | $                    | 344,710 |   |                 | $      | 735,450 |                       |   | $      | 12,955             |    |   | $           | 6,733   |   |   |   |   |   |   | $  | 1,099,848 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Recorded investment in loans  individually evaluated for impairment            |   | $                         | 14,762  |   |                 | $      | 51,492  |                       |   | $      | —            |    |   | $           | 3       |   |   |   |   |   |   | $ | 66,257 |   |
|                                                                                     |   |                      |    |   |                 |   |    |                       |   |   |               |    |   |        |    |   |   |   |   |   |   |   |   |   |
| Recorded investment in loans  collectively evaluated for impairment            |   | $                         | 329,948 |   |                 | $      | 683,958 |                       |   | $      | 12,955             |    |   | $           | 6,730   |   |   |   |   |   |   | $ | 1,033,591 |   |

----

|                                                            |   | As of and for the three months endedMarch 31, 2010 |   |
|-----------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                            |   | (Dollars in thousands)                             |   |
|                                                            |   |                                               |   |
| Allowance for loan losses at beginning of period                |   | $                                                  | 29,403 |   |
| Provision for loan losses                                       |   |                                               | 7,898  |   |
| Charge-offs                                                     |   |                                               | (2,793 | ) |
| Recoveries                                                      |   |                                               | 224    |   |
| Allowance for loan losses at end of period                      |   |                                               | 34,732 |   |
|                                                            |   |                                               |   |   |
| Reserve for unfunded lending commitments at beginning of period |   |                                               | 1,043  |   |
| Provision for unfunded lending commitments                      |   |                                               | (55    | ) |
| Reserve for unfunded lending commitments at end of period       |   |                                               | 988    |   |
|                                                            |   |                                               |   |   |
| Allowance for credit losses                                     |   | $                                                  | 35,720 |   |

| 4. | GOODWILL |
|----|----------|

|                          |   | As of and for the three months ended March 31, 2011 |    |   | As of and for the year ended December 31, 2010 |   |
|-------------------------------|--------|-----------------------------------------------------|---------|--------|------------------------------------------------|--------|
| Balance as of January 1       |   |                                                |    |   |                                           |   |
| Goodwill                      |   | $                                                   | 21,827  |   |                                           | $      | 21,827 |   |
| Accumulated impairment losses |   |                                                | (4,500  | )      |                                           |   | (2,500 | ) |
|                          |   |                                                | 17,327  |   |                                           |   | 19,327 |   |
| Impairment losses             |   |                                                | — |   |                                           |   | (2,000 | ) |
| Balance as of end of period   |   | $                                                   | 17,327  |   |                                           | $      | 17,327 |   |
|                          |   |                                                |    |   |                                           |   |   |   |
| Accumulated impairment losses |   | $                                                   | (4,500  | )      |                                           | $      | (4,500 | ) |

----

| 5. | EARNINGS PER COMMON SHARE |
|----|---------------------------|

----

|                                                |   | For the Three Months                     |   |
|-----------------------------------------------------|--------|------------------------------------------|--------|
|                                                |   | Ended March 31,                          |   |
|                                                |   | 2011                                     |   |   | 2010 |   |
|                                                |   | (In thousands, except per share amounts) |   |
|                                                |   |                                     |   |   |   |   |
| Net income (loss) available to common shareholders  |   | $                                        | 1,521  |   |   | $ | (3,976 | ) |
|                                                |   |                                     |   |   |   |   |   |   |
|                                                |   |                                     |   |   |   |   |   |   |
| Weighted average common shares in basic EPS         |   | $                                        | 13,136 |   |   | $ | 10,918 |   |
|    Effect of dilutive securities     |   |                                     | 69     |   |   |   | — |   |
| Weighted average common and potentially dilutive    |   |                                     |   |   |   |   |   |   |
|    common shares used in diluted EPS |   | $                                        | 13,205 |   |   | $ | 10,918 |   |
|                                                |   |                                     |   |   |   |   |   |   |
|                                                |   |                                     |   |   |   |   |   |   |
| Income (loss) per common share:                     |   |                                     |   |   |   |   |   |   |
| Basic                                               |   | $                                        | 0.12   |   |   | $ | (0.36 | ) |
| Diluted                                             |   | $                                        | 0.12   |   |   | $ | (0.36 | ) |

| 6. | COMMITMENTS AND CONTINGENCIES |
|----|-------------------------------|

|                                                         |   | As ofMarch 31, 2011    |    |   | As ofDecember 31, 2010 |   |
|--------------------------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                                         |   | (Dollars in thousands) |    |
| Unfunded loan commitments including unfunded lines of credit |   | $                      | 77,293  |   |                   | $      | 63,967 |   |
| Standby letters of credit                                    |   |                   | 7,145   |   |                   |   | 5,137 |   |
| Commercial letters of credit                                 |   |                   | 9,592   |   |                   |   | 5,019 |   |
| Operating leases                                             |   |                   | 8,999   |   |                   |   | 8,698 |   |
| Total financial instruments with off-balance sheet risk      |   | $                      | 103,029 |   |                   | $      | 82,821 |   |

| 7. | SHAREHOLDERS’ EQUITY |
|----|----------------------------|

----

| 8. | REGULATORY MATTERS |
|----|--------------------|

----

----

|                                     |   | Actual |    |   | MinimumRequired ForCapital AdequacyPurposes |   |   | To be Categorizedas Well Capitalizedunder PromptCorrective ActionProvisions |   |
|------------------------------------------|--------|--------|---------|--------|---------------------------------------------|--------|--------|---------------------------------------------------------------------------------------|--------|
|                                     |   | Amount |    |   | Ratio                                       |   |   | Amount                                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of March 31, 2011                     |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital ratio           |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   | $      | 187,272 |   |                                        |   | 16.11  | %                                                                                     |   | $ | 92,998 |   |   |   | 8.00 | % |   | $ | N/A |   |   |   | N/A | % |
| MetroBank, N.A.                          |   |   | 136,173 |   |                                        |   | 15.89  |                                                                                  |   |   | 68,540 |   |   |   | 8.00 |   |   |   | 85,675 |   |   |   | 10.00 |   |
| Metro United Bank                        |   |   | 46,924  |   |                                        |   | 15.39  |                                                                                  |   |   | 24,398 |   |   |   | 8.00 |   |   |   | 30,498 |   |   |   | 10.00 |   |
| Tier 1 risk-based capital ratio          |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   |   | 172,506 |   |                                        |   | 14.84  |                                                                                  |   |   | 46,499 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                          |   |   | 125,282 |   |                                        |   | 14.62  |                                                                                  |   |   | 34,270 |   |   |   | 4.00 |   |   |   | 51,405 |   |   |   | 6.00 |   |
| Metro United Bank                        |   |   | 43,058  |   |                                        |   | 14.12  |                                                                                  |   |   | 12,199 |   |   |   | 4.00 |   |   |   | 18,299 |   |   |   | 6.00 |   |
| Leverage ratio                           |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   |   | 172,506 |   |                                        |   | 11.39  |                                                                                  |   |   | 60,601 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                          |   |   | 125,282 |   |                                        |   | 11.16  |                                                                                  |   |   | 44,904 |   |   |   | 4.00 |   |   |   | 56,130 |   |   |   | 5.00 |   |
| Metro United Bank                        |   |   | 43,058  |   |                                        |   | 10.90  |                                                                                  |   |   | 15,805 |   |   |   | 4.00 |   |   |   | 19,756 |   |   |   | 5.00 |   |
|   As of December 31, 2010 |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital ratio           |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   | $      | 184,573 |   |                                        |   | 15.13  | %                                                                                     |   | $ | 97,599 |   |   |   | 8.00 | % |   | $ | N/A |   |   |   | N/A | % |
| MetroBank, N.A.                          |   |   | 133,737 |   |                                        |   | 14.92  |                                                                                  |   |   | 71,727 |   |   |   | 8.00 |   |   |   | 89,658 |   |   |   | 10.00 |   |
| Metro United Bank                        |   |   | 46,141  |   |                                        |   | 14.28  |                                                                                  |   |   | 25,840 |   |   |   | 8.00 |   |   |   | 32,300 |   |   |   | 10.00 |   |
| Tier 1 risk-based capital ratio          |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   |   | 169,087 |   |                                        |   | 13.86  |                                                                                  |   |   | 48,799 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                          |   |   | 122,366 |   |                                        |   | 13.65  |                                                                                  |   |   | 35,863 |   |   |   | 4.00 |   |   |   | 53,795 |   |   |   | 6.00 |   |
| Metro United Bank                        |   |   | 42,031  |   |                                        |   | 13.01  |                                                                                  |   |   | 12,920 |   |   |   | 4.00 |   |   |   | 19,380 |   |   |   | 6.00 |   |
| Leverage ratio                           |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.               |   |   | 169,087 |   |                                        |   | 10.75  |                                                                                  |   |   | 62,893 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                          |   |   | 122,366 |   |                                        |   | 10.64  |                                                                                  |   |   | 46,003 |   |   |   | 4.00 |   |   |   | 57,503 |   |   |   | 5.00 |   |
| Metro United Bank                        |   |   | 42,031  |   |                                        |   | 9.84   |                                                                                  |   |   | 17,089 |   |   |   | 4.00 |   |   |   | 21,361 |   |   |   | 5.00 |   |
|                                     |   |   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| 9. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
|----|-----------------------------------------------|

|                             |   | Gains (Losses) on Effective Cash Hedging Derivatives |   |   | Net Unrealized Losses on Investments with OTTI |   |   | Net Unrealized Investment Gains (Losses) |   |   | Total Accumulated Other Comprehensive Income (Loss) |   |
|----------------------------------|--------|------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------|--------|--------|-----------------------------------------------------|--------|
| Balance December 31, 2010        |   | $                                                    | (949   | )      |                                           | $      | (977   | )                                        |   | $      | (310                                                | )      |   | $ | (2,236 | ) |
| Current period  change |   |                                                 | 149    |   |                                           |   | (11    | )                                        |   |   | (430                                                | )      |   |   | (292 | ) |
|                             |   |                                                 |   |   |                                           |   |   |                                     |   |   |                                                |   |   |   |   |   |
| Balance March 31, 2011           |   | $                                                    | (800   | )      |                                           | $      | (988   | )                                        |   | $      | (740                                                | )      |   | $ | (2,528 | ) |

| 10. | DERIVATIVE FINANCIAL INSTRUMENTS |
|-----|----------------------------------|

----

|                             |   | Gains/(losses) recorded in income and other comprehensive income (loss), net of tax(in thousands) |    |
|----------------------------------|--------|---------------------------------------------------------------------------------------------------|---------|
|                             |   | Derivatives – effective portion reclassified from AOCI into income                          |    |   | Hedge ineffectiveness recorded directly in income |   |   | Total income statement impact |   |   | Derivatives – effective portion recorded in OCI |   |   | Total change in OCIfor period |   |
| Three months endedMarch 31, 2011 |   | $                                                                                                 | — |   |   | $ | — |   |   | $ | — |   |   | $ | 149 |   |   | $ | 149 |   |
| Interest rate swap               |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three months endedMarch 31, 2010 |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap               |   | $                                                                                                 | — |   |   | $ | — |   |   | $ | — |   |   | $ | (245 | ) |   | $ | (245 | ) |

| 11. | OPERATING SEGMENT INFORMATION |
|-----|-------------------------------|

|                                                      |   | For the three months ended March 31, 2011 |   |   | For the three months ended March 31, 2010 |   |
|-----------------------------------------------------------|--------|-------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                                      |   | MetroBank                                 |   |   | Metro United                              |   |   | Other |   |   | Consolidated Company |   |   | MetroBank |   |   | Metro United |   |   | Other |   |   | Consolidated Company |   |
|                                                      |   | (Dollars in thousands)                    |   |
| Total interest income                                     |   | $                                         | 13,062 |   |                                      | $      | 4,383 |   |   | $ | 6 |   |   | $ | 17,451 |   |   | $ | 14,834 |   |   | $ | 5,378 |   |   | $ | 16 |   |   | $ | 20,228 |   |
| Total interest expense                                    |   |                                      | 2,571  |   |                                      |   | 844 |   |   |   | 336 |   |   |   | 3,751 |   |   |   | 3,617 |   |   |   | 1,582 |   |   |   | 527 |   |   |   | 5,726 |   |
|   Net interest income                           |   |                                      | 10,491 |   |                                      |   | 3,539 |   |   |   | (330 | ) |   |   | 13,700 |   |   |   | 11,217 |   |   |   | 3,796 |   |   |   | (511 | ) |   |   | 14,502 |   |
| Provision for loan losses                                 |   |                                      | 300    |   |                                      |   | 30 |   |   | ─ |   |   |   | 330 |   |   |   | 3,600 |   |   |   | 4,298 |   |   | ─ |   |   |   | 7,898 |   |
| Net interest income after provision for loan losses       |   |                                      | 10,191 |   |                                      |   | 3,509 |   |   |   | (330 | ) |   |   | 13,370 |   |   |   | 7,617 |   |   |   | (502 | ) |   |   | (511 | ) |   |   | 6,604 |   |
| Noninterest income                                        |   |                                      | 1,913  |   |                                      |   | 77 |   |   |   | (331 | ) |   |   | 1,659 |   |   |   | 1,821 |   |   |   | 99 |   |   |   | (316 | ) |   |   | 1,604 |   |
| Noninterest expenses                                      |   |                                      | 9,002  |   |                                      |   | 2,717 |   |   |   | 44 |   |   |   | 11,763 |   |   |   | 7,759 |   |   |   | 5,255 |   |   |   | 16 |   |   |   | 13,030 |   |
| Income (loss) before income tax provision                 |   |                                      | 3,102  |   |                                      |   | 869 |   |   |   | (705 | ) |   |   | 3,266 |   |   |   | 1,679 |   |   |   | (5,658 | ) |   |   | (843 | ) |   |   | (4,822 | ) |
| Provision (benefit) for income taxes......... |   |                                      | 994    |   |                                      |   | 382 |   |   |   | (236 | ) |   |   | 1,140 |   |   |   | 339 |   |   |   | (1,533 | ) |   |   | (250 | ) |   |   | (1,444 | ) |
| Net income (loss)                                         |   | $                                         | 2,108  |   |                                      | $      | 487 |   |   | $ | (469 | ) |   | $ | 2,126 |   |   | $ | 1,340 |   |   | $ | (4,125 | ) |   | $ | (593 | ) |   | $ | (3,378 | ) |

|         |   | As of March 31, 2011   |      |   | March 31, 2010 |   |
|--------------|--------|------------------------|-----------|--------|----------------|--------|
|         |   | MetroBank              |      |   | Metro United   |   |   | Other |   |   | Consolidated Company |   |   | MetroBank |   |   | Metro United |   |   | Other |   |   | Consolidated Company |   |
|         |   | (Dollars in thousands) |      |
| Net loans    |   | $                      | 766,996   |   |           | $      | 297,328 |   |   | $ | ─ |   |   | $ | 1,064,324 |   |   | $ | 879,862 |   |   | $ | 346,248 |   |   | $ | ─ |   |   | $ | 1,226,110 |   |
| Total assets |   |                   | 1,127,497 |   |           |   | 412,746 |   |   |   | (2,392 | ) |   |   | 1,537,851 |   |   |   | 1,137,463 |   |   |   | 463,210 |   |   |   | (3,743 | ) |   |   | 1,596,930 |   |
| Deposits     |   |                   | 960,497   |   |           |   | 320,201 |   |   |   | (9,535 | ) |   |   | 1,271,163 |   |   |   | 970,334 |   |   |   | 403,445 |   |   |   | (7,267 | ) |   |   | 1,366,512 |   |

----

| 12. | FAIR VALUE |
|-----|------------|

|   | · | Level 1 – Quoted prices in active markets for identical assets or liabilities. |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                               |   | Fair Value Measurements, using                                 |    |   |                                          |   |
|--------------------------------------------------------------------|--------|----------------------------------------------------------------|---------|--------|-----------------------------------------------|--------|
|                                                               |   | (In thousands)                                                 |    |   |                                          |   |
| March 31, 2011                                                     |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |    |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |   | Fair Value Measurements |   |
| Securities available-for-sale                                      |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government corporations and agencies  |   | $                                                              | – |   |                                          | $      | 97,216 |   |   | $ | – |   |   | $ | 97,216 |   |
| Obligations of state and political subdivisions                    |   |                                                           | – |   |                                          |   | 4,442 |   |   |   | – |   |   |   | 4,442 |   |
| Mortgage-backed securities and collateralized mortgage obligations |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                    |   |                                                           | – |   |                                          |   | 42,664 |   |   |   | – |   |   |   | 42,664 |   |
| Privately issued residential                                       |   |                                                           | – |   |                                          |   | 1,088 |   |   |   | – |   |   |   | 1,088 |   |
| Asset backed securities                                            |   |                                                           | – |   |                                          |   | 160 |   |   |   | – |   |   |   | 160 |   |
| Investment in CRA funds                                            |   |                                                           | 12,998  |   |                                          |   | – |   |   |   | – |   |   |   | 12,998 |   |
| Total available-for-sale securities                                |   |                                                           | 12,998  |   |                                          |   | 145,570 |   |   |   | – |   |   |   | 158,568 |   |
| Total assets measured at fair value on a recurring basis           |   | $                                                              | 12,998  |   |                                          | $      | 145,570 |   |   | $ | – |   |   | $ | 158,568 |   |
|                                                               |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                                             |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap                                                 |   | $                                                              | – |   |                                          | $      | (1,250 | ) |   | $ | – |   |   | $ | (1,250 | ) |
|                                                               |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                  |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Securities available-for-sale                                      |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government corporations and agencies  |   | $                                                              | – |   |                                          | $      | 111,601 |   |   | $ | – |   |   | $ | 111,601 |   |
| Obligations of state and political subdivisions                    |   |                                                           | – |   |                                          |   | 4,371 |   |   |   | – |   |   |   | 4,371 |   |
| Mortgage-backed securities and collateralized mortgage obligations |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                    |   |                                                           | – |   |                                          |   | 45,384 |   |   |   | – |   |   |   | 45,384 |   |
| Privately issued residential                                       |   |                                                           | – |   |                                          |   | 1,230 |   |   |   | – |   |   |   | 1,230 |   |
| Asset backed securities                                            |   |                                                           | – |   |                                          |   | 178 |   |   |   | – |   |   |   | 178 |   |
| Investment in CRA funds                                            |   |                                                           | 12,942  |   |                                          |   | — |   |   |   | – |   |   |   | 12,942 |   |
| Total available-for-sale securities                                |   | $                                                              | 12,942  |   |                                          | $      | 162,764 |   |   | $ | – |   |   | $ | 175,706 |   |
|                                                               |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                                             |   |                                                           |    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap                                                 |   | $                                                              | – |   |                                          | $      | (1,483 | ) |   | $ | – |   |   | $ | (1,483 | ) |

----

|               | As of March 31, 2011 |   |
|--------------------|----------------------|--------|
|               | Level 2              |   | Level 3 |   |
| Assets             |                 |   |   |   |
| Goodwill           |                 | $      | - |   |   | $ | 17,327 |   |
| Foreclosed assets  |                 |   | - |   |   |   | 16,529 |   |
| Impaired loans (1) |                 |   | 15,136 |   |   |   | - |   |

|               | As of December 31, 2010 |   |
|--------------------|-------------------------|--------|
|               | Level 2                 |   | Level 3 |   |
| Assets             |                    |   |   |   |
| Goodwill           |                    | $      | - |   |   | $ | 17,327 |   |
| Foreclosed assets  |                    |   | - |   |   |   | 19,956 |   |
| Impaired loans (1) |                    |   | 7,121 |   |   |   | - |   |

----

|                  | Three months ended March 31, |   |
|-----------------------|------------------------------|--------|
|                  | 2011                         |   | 2010 |   |
| Losses related to:    |                         |   |   |   |
| Goodwill              |                         | $      | - |   |   | $ | 2,000 |   |
| Foreclosed assets (1) |                         |   | 191 |   |   |   | 520 |   |
| Impaired loans (2)    |                         |   | 1,596 |   |   |   | 40 |   |

----

----

|                                                                       |   | As of March 31, 2011        |      |   |  As of December 31, 2010 |   |
|----------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|------------------------------------|--------|
|                                                                       |   | Carrying or Contract Amount |      |   | Estimated Fair Value               |   |   | Carrying or Contract Amount |   |   | Estimated Fair Value |   |
|                                                                       |   | (In thousands)              |      |
| Financial Assets                                                           |   |                        |      |   |                               |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                  |   | $                           | 198,238   |   |                               | $      | 198,238 |   |   | $ | 151,725 |   |   | $ | 151,725 |   |
| Investment securities available-for-sale                                   |   |                        | 158,568   |   |                               |   | 158,568 |   |   |   | 175,706 |   |   |   | 175,706 |   |
| Investment securities held-to-maturity                                     |   |                        | 4,045     |   |                               |   | 4,202 |   |   |   | 4,045 |   |   |   | 4,167 |   |
| Other investments                                                          |   |                        | 6,817     |   |                               |   | 6,817 |   |   |   | 6,925 |   |   |   | 6,925 |   |
| Loans held-for-investment, net                                             |   |                        | 1,064,324 |   |                               |   | 961,155 |   |   |   | 1,110,553 |   |   |   | 990,818 |   |
| Cash value of bank owned life insurance                                    |   |                        | 30,347    |   |                               |   | 30,347 |   |   |   | 29,988 |   |   |   | 29,988 |   |
| Accrued interest receivable                                                |   |                        | 4,420     |   |                               |   | 4,420 |   |   |   | 4,682 |   |   |   | 4,682 |   |
|                                                                       |   |                        |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities                                                      |   |                        |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   |                        |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|      Transaction accounts                         |   |                        | 701,712   |   |                               |   | 701,712 |   |   |   | 707,000 |   |   |   | 707,000 |   |
|      Time deposits                                |   |                        | 569,451   |   |                               |   | 566,594 |   |   |   | 587,184 |   |   |   | 586,342 |   |
|           Total deposits |   |                        | 1,271,163 |   |                               |   | 1,268,306 |   |   |   | 1,294,184 |   |   |   | 1,293,342 |   |
| Other borrowings                                                           |   |                        | 56,544    |   |                               |   | 58,812 |   |   |   | 56,804 |   |   |   | 59,028 |   |
| Junior subordinated debentures                                             |   |                        | 36,083    |   |                               |   | 36,083 |   |   |   | 36,083 |   |   |   | 36,083 |   |
| Interest rate derivative                                                   |   |                        | 1,250     |   |                               |   | 1,250 |   |   |   | 1,483 |   |   |   | 1,483 |   |
| Accrued interest payable                                                   |   |                        | 420       |   |                               |   | 420 |   |   |   | 447 |   |   |   | 447 |   |
|                                                                       |   |                        |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments                                    |   |                        |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Unfunded loan commitments, including unfunded lines of credit              |   |                        | —   |   |                               |   | 384 |   |   |   | — |   |   |   | 179 |   |
| Standby letters of credit                                                  |   |                        | —   |   |                               |   | 10 |   |   |   | — |   |   |   | 13 |   |
| Commercial letters of credit                                               |   |                        | —   |   |                               |   | — |   |   |   | — |   |   |   | — |   |

----

| 14. | NEW AUTHORITATIVE ACCOUNTING GUIDANCE |
|-----|---------------------------------------|

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
|--------------|----------------------------------------------------------------------------------------------|

| Special Cautionary Notice Regarding Forward-looking Statements |
|----------------------------------------------------------------|

|   | • | changes in the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on the Company's loan portfolio and allowance for loan losses; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in interest rates and market prices, which could reduce the Company’s net interest margins, asset valuations and expense expectations; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in the levels of loan prepayments and the resulting effects on the value of the Company’s loan portfolio; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in local economic and business conditions which adversely affect the ability of the Company’s customers to transact profitable business with the Company, including the ability of borrowers to repay their loans according to their terms or a change in the value of the related collateral; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | increased competition for deposits and loans adversely affecting rates and terms; |
|--------|---------|-----------------------------------------------------------------------------------|

|   | • | the concentration of the Company’s loan portfolio in loans collateralized by real estate; |
|--------|---------|-------------------------------------------------------------------------------------------------|

|   | • | the Company’s ability to raise additional capital; |
|--------|---------|----------------------------------------------------------|

|   | • | the effect of MetroBank’s compliance, or failure to comply within stated deadlines, of the provisions of the formal agreement with the OCC; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the effect of Metro United's compliance, or failure to comply within stated deadlines, of the provisions of the consent order with the FDIC and CDFI; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | the timing, impact and other uncertainties of the Company’s ability to enter new markets successfully and capitalize on growth opportunities; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | increased credit risk in the Company’s assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of the total loan portfolio; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the failure of assumptions underlying the establishment of and provisions made to the allowance for loan losses; |
|--------|---------|------------------------------------------------------------------------------------------------------------------|

|   | • |  increases in the level of nonperforming assets; |
|--------|---------|-------------------------------------------------------|

|   | • | the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on the results of operations; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in the availability of funds resulting in increased costs or reduced liquidity; |
|--------|---------|-----------------------------------------------------------------------------------------|

|   | • | an inability to fully realize the Company’s net deferred tax asset; |
|--------|---------|---------------------------------------------------------------------------|

|   | • | a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company’s securities portfolio; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | potential environmental risk and associated cost on the Company's foreclosed real estate assets; |
|--------|---------|--------------------------------------------------------------------------------------------------|

|   | • | the Company’s ability to acquire, operate and maintain cost effective and efficient systems without incurring unexpectedly difficult or expensive but necessary technological changes; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | increases in FDIC deposit insurance assessments; |
|--------|---------|--------------------------------------------------|

|   | • | government intervention in the U.S. financial system; and |
|--------|---------|-----------------------------------------------------------|

|   | • | the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in statutes and government regulations or their interpretations applicable to bank holding companies and our present and future banking and other subsidiaries, including changes in tax requirements and tax rates. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                            |   | For The Three Months Ended March 31, |      |
|-----------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                            |   | 2011                                 |      |   | 2010 |   |
|                                                            |   | Average                              |      |   | Interest |   |   | Average |   |   | Average |   |   | Interest |   |   | Average |   |
|                                                            |   | Outstanding                          |      |   | Earned/ |   |   | Yield/ |   |   | Outstanding |   |   | Earned/ |   |   | Yield/ |   |
|                                                            |   | Balance                              |      |   | Paid |   |   | Rate(1) |   |   | Balance |   |   | Paid |   |   | Rate(1) |   |
|                                                            |   |  (Dollars in thousands)         |      |
| Assets                                                          |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                        |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                           |   | $                                    | 1,125,832 |   |   | $ | 16,002 |   |   |   | 5.76 | % |   | $ | 1,273,656 |   |   | $ | 19,186 |   |   |   | 6.11 | % |
| Taxable securities                                              |   |                                 | 170,797   |   |   |   | 1,228 |   |   |   | 2.92 |   |   |   | 90,668 |   |   |   | 790 |   |   |   | 3.53 |   |
| Tax-exempt securities                                           |   |                                 | 8,401     |   |   |   | 98 |   |   |   | 4.73 |   |   |   | 10,242 |   |   |   | 121 |   |   |   | 4.79 |   |
| Other investments (2)                                           |   |                                 | 6,916     |   |   |   | 42 |   |   |   | 2.46 |   |   |   | 17,665 |   |   |   | 75 |   |   |   | 1.72 |   |
| Federal funds sold and other short-term investments             |   |                                 | 131,967   |   |   |   | 81 |   |   |   | 0.25 |   |   |   | 90,858 |   |   |   | 56 |   |   |   | 0.25 |   |
| Total interest-earning assets                                   |   |                                 | 1,443,913 |   |   |   | 17,451 |   |   |   | 4.90 |   |   |   | 1,483,089 |   |   |   | 20,228 |   |   |   | 5.53 |   |
| Allowance for loan losses                                       |   |                                 | (34,632   | ) |   |   |   |   |   |   |   |   |   |   | (31,381 | ) |   |   |   |   |   |   |   |   |
| Total interest-earning assets, net of allowance for loan losses |   |                                 | 1,409,281 |   |   |   |   |   |   |   |   |   |   |   | 1,451,708 |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets                                      |   |                                 | 130,156   |   |   |   |   |   |   |   |   |   |   |   | 141,772 |   |   |   |   |   |   |   |   |   |
| Total assets                                                    |   | $                                    | 1,539,437 |   |   |   |   |   |   |   |   |   |   | $ | 1,593,480 |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity                            |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                |   | $                                    | 57,255    |   |   | $ | 60 |   |   |   | 0.42 | % |   | $ | 54,305 |   |   | $ | 69 |   |   |   | 0.52 | % |
| Savings and money market accounts                               |   |                                 | 410,949   |   |   |   | 860 |   |   |   | 0.85 |   |   |   | 469,391 |   |   |   | 1,552 |   |   |   | 1.34 |   |
| Time deposits                                                   |   |                                 | 582,111   |   |   |   | 2,226 |   |   |   | 1.55 |   |   |   | 638,573 |   |   |   | 3,346 |   |   |   | 2.13 |   |
| Junior subordinated debentures                                  |   |                                 | 36,083    |   |   |   | 324 |   |   |   | 3.59 |   |   |   | 36,083 |   |   |   | 520 |   |   |   | 5.76 |   |
| Other borrowings                                                |   |                                 | 56,589    |   |   |   | 281 |   |   |   | 2.01 |   |   |   | 26,140 |   |   |   | 239 |   |   |   | 3.71 |   |
| Total interest-bearing liabilities                              |   |                                 | 1,142,987 |   |   |   | 3,751 |   |   |   | 1.33 |   |   |   | 1,224,492 |   |   |   | 5,726 |   |   |   | 1.90 |   |
| Noninterest-bearing liabilities:                                |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                             |   |                                 | 222,288   |   |   |   |   |   |   |   |   |   |   |   | 199,290 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                               |   |                                 | 14,068    |   |   |   |   |   |   |   |   |   |   |   | 11,891 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                               |   |                                 | 1,379,343 |   |   |   |   |   |   |   |   |   |   |   | 1,435,673 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                            |   |                                 | 160,094   |   |   |   |   |   |   |   |   |   |   |   | 157,807 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                      |   | $                                    | 1,539,437 |   |   |   |   |   |   |   |   |   |   | $ | 1,593,480 |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                             |   |                                 |      |   |   | $ | 13,700 |   |   |   |   |   |   |   |   |   |   | $ | 14,502 |   |   |   |   |   |
| Net interest spread                                             |   |                                 |      |   |   |   |   |   |   |   | 3.57 | % |   |   |   |   |   |   |   |   |   |   | 3.63 | % |
| Net interest margin                                             |   |                                 |      |   |   |   |   |   |   |   | 3.85 | % |   |   |   |   |   |   |   |   |   |   | 3.97 | % |

----

| (1) |   | Annualized.                                                                                                                   |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Other investments include CDARS, Federal Reserve Bank stock, Federal Home Loan Bank stock and investment in subsidiary trust. |

----

|                                                                                          |   | Three Months Ended March 31, |   |
|-----------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                          |   | 2011 vs 2010                 |   |
|                                                                                          |   | Increase (Decrease)          |   |   |   |   |
|                                                                                          |   | Due to                       |   |   |   |   |
|                                                                                          |   | Volume                       |   |   | Rate |   |   | Total |   |
|                                                                                          |   | (Dollars in thousands)       |   |
|                                                                                          |   |                         |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                      |   |                         |   |   |   |   |   |   |   |
|   Loans                                                                             |   | $                            | (2,227 | ) |   | $ | (957 | ) |   | $ | (3,184 | ) |
|   Taxable securities                                                                |   |                         | 698    |   |   |   | (260 | ) |   |   | 438 |   |
|   Tax-exempt securities                                                             |   |                         | (22    | ) |   |   | (1 | ) |   |   | (23 | ) |
|   Other investments                                                                 |   |                         | (46    | ) |   |   | 13 |   |   |   | (33 | ) |
|   Federal funds sold and other short-term investments                               |   |                         | 25     |   |   |   | — |   |   |   | 25 |   |
|         Total increase (decrease) in interest income  |   |                         | (1,572 | ) |   |   | (1,205 | ) |   |   | (2,777 | ) |
|                                                                                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                 |   |                         |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing demand deposits                                                  |   |                         | 4      |   |   |   | (13 | ) |   |   | (9 | ) |
|   Savings and money market accounts                                                 |   |                         | (193   | ) |   |   | (499 | ) |   |   | (692 | ) |
|   Time deposits                                                                     |   |                         | (296   | ) |   |   | (824 | ) |   |   | (1,120 | ) |
|         Junior subordinated debentures                |   |                         | (3     | ) |   |   | (193 | ) |   |   | (196 | ) |
|   Other borrowings                                                                  |   |                         | 278    |   |   |   | (236 | ) |   |   | 42 |   |
|         Total increase (decrease) in interest expense |   |                         | (210   | ) |   |   | (1,765 | ) |   |   | (1,975 | ) |
|                                                                                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in net interest income                                                    |   | $                            | (1,362 | ) |   | $ | 560 |   |   | $ | (802 | ) |

----

----

|                                           |   | As of March 31, 2011   |      |   | As of December 31, 2010 |   |
|------------------------------------------------|--------|------------------------|-----------|--------|-------------------------|--------|
|                                           |   | Amount                 |      |   | Percent                 |   |   | Amount |   |   | Percent |   |
|                                           |   | (Dollars in thousands) |      |
|                                           |   |                   |      |   |                    |   |   |   |   |   |   |   |
| Commercial and industrial                      |   | $                      | 344,768   |   |                    |   | 31.39 | % |   | $ | 349,891 |   |   |   | 30.52 | % |
| Real estate mortgage                           |   |                   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                   | 38,923    |   |                    |   | 3.54 |   |   |   | 38,667 |   |   |   | 3.37 |   |
| Commercial                                     |   |                   | 695,015   |   |                    |   | 63.28 |   |   |   | 718,795 |   |   |   | 62.69 |   |
|                                           |   |                   | 733,938   |   |                    |   | 66.82 |   |   |   | 757,462 |   |   |   | 66.06 |   |
| Real estate construction                       |   |                   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                   | 9,216     |   |                    |   | 0.84 |   |   |   | 10,983 |   |   |   | 0.96 |   |
| Commercial                                     |   |                   | 3,713     |   |                    |   | 0.34 |   |   |   | 24,291 |   |   |   | 2.12 |   |
|                                           |   |                   | 12,929    |   |                    |   | 1.18 |   |   |   | 35,274 |   |   |   | 3.08 |   |
| Consumer and other                             |   |                   | 6,735     |   |                    |   | 0.61 |   |   |   | 3,928 |   |   |   | 0.34 |   |
| Gross loans                                    |   |                   | 1,098,370 |   |                    |   | 100.00 | % |   |   | 1,146,555 |   |   |   | 100.00 | % |
| Unearned discounts, interest and deferred fees |   |                   | (2,163    | )      |                    |   |   |   |   |   | (2,245 | ) |   |   |   |   |
| Total loans                                    |   |                   | 1,096,207 |   |                    |   |   |   |   |   | 1,144,310 |   |   |   |   |   |
| Allowance for loan losses                      |   |                   | (31,883   | )      |                    |   |   |   |   |   | (33,757 | ) |   |   |   |   |
| Loans, net                                     |   | $                      | 1,064,324 |   |                    |   |   |   |   | $ | 1,110,553 |   |   |   |   |   |

----

|                                                 |   | As of                  |   |   | As of             |   |
|------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                                                 |   | March 31, 2011         |   |   | December 31, 2010 |   |
|                                                 |   | (Dollars in thousands) |   |
| Nonaccrual loans (1)                                 |   | $                      | 50,084 |   |              | $      | 50,985 |   |
| Accruing loans 90 days or more past due (1)          |   |                   | -      |   |              |   | 334 |   |
| Troubled debt restructurings – accruing (1)    |   |                   | 133    |   |              |   | 1,314 |   |
| Troubled debt restructurings – nonaccruing (1) |   |                   | 16,203 |   |              |   | 20,198 |   |
| Other real estate (“ORE”)                |   |                   | 16,529 |   |              |   | 19,956 |   |
| Total nonperforming assets                           |   |                   | 82,949 |   |              |   | 92,787 |   |
|                                                 |   |                   |   |   |              |   |   |   |
| Total nonperforming assets to total assets           |   |                   | 5.39   | %      |              |   | 5.95 | % |
| Total nonperforming assets to total loans and ORE    |   |                   | 7.45   | %      |              |   | 7.97 | % |

----

| As of March 31, 2011             |   | Recorded Investment |    |   | Unpaid Principal Balance |    |    | Related Allowance |   |    | Average Recorded Investment |   |
|----------------------------------|--------|---------------------|---------|--------|--------------------------|---------|---------|-------------------|--------|---------|-----------------------------|--------|
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Impaired loans with no allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |
| Commercial and industrial        |   | $                   | 14,629  |   |                     | $       | 14,676  |              |   |  $ | —                     |   |   | $ | 16,326 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | 276     |   |                     |    | 276     |              |   |    | —                     |   |   |   | 284 |   |
| Commercial                       |   |                | 35,821  |   |                     |    | 35,903  |              |   |    | —                     |   |   |   | 32,201 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 705 |   |
| Commercial                       |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 4,205 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Impaired loans with an allowance |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   |                | 133     |   |                     |    | 133     |              |   |    | 1                           |   |   |   | 580 |   |
| Real estate mortgage:            |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | — |   |
| Commercial                       |   |                | 15,389  |   |                     |    | 15,429  |              |   |    | 746                         |   |   |   | 12,553 |   |
| Real estate construction:        |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | — |   |
| Commercial                       |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 619 |   |
|                             |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Total:                           |   |                |    |   |                     |    |    |              |   |    |                        |   |   |   |   |   |
| Commercial and industrial        |   |  $             | 14,762  |   |                     |  $ | 14,809  |              |   |  $ | 1                           |   |   | $  | 16,906 |   |
| Real estate mortgage             |   |                | 51,486  |   |                     |    | 51,608  |              |   |    | 746                         |   |   |   | 45,038 |   |
| Real estate construction         |   |                | — |   |                     |    | — |              |   |    | —                     |   |   |   | 5,529 |   |

----

| As of December 31, 2010          |   | Recorded Investment |    |   | Unpaid Principal Balance |   |    | Related Allowance |   |   | Average Recorded Investment |   |
|----------------------------------|--------|---------------------|---------|--------|--------------------------|--------|---------|-------------------|--------|--------|-----------------------------|--------|
|                             |   |                |    |   |                     |   |    |              |   |   |                        |   |
| Impaired loans with no allowance |   |                |    |   |                     |   |    |              |   |   |                        |   |
| Commercial and industrial        |   | $                   | 17,940  |   |                     | $      | 18,004  |              |   | $      | —                     |   |   | $ | 14,385 |   |
| Real estate mortgage:            |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Residential                      |   |                | 286     |   |                     |   | 286     |              |   |   | —                     |   |   |   | 265 |   |
| Commercial                       |   |                | 41,012  |   |                     |   | 41,093  |              |   |   | —                     |   |   |   | 31,663 |   |
| Real estate construction:        |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Residential                      |   |                | 197     |   |                     |   | 197     |              |   |   | —                     |   |   |   | 2,279 |   |
| Commercial                       |   |                | 5,205   |   |                     |   | 5,213   |              |   |   | —                     |   |   |   | 6,330 |   |
|                             |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Impaired loans with an allowance |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Commercial and industrial        |   |                | 98      |   |                     |   | 98      |              |   |   | 57                          |   |   |   | 1,037 |   |
| Real estate mortgage:            |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |   | — |              |   |   | —                     |   |   |   | — |   |
| Commercial                       |   |                | 7,581   |   |                     |   | 7,606   |              |   |   | 483                         |   |   |   | 13,713 |   |
| Real estate construction:        |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Residential                      |   |                | — |   |                     |   | — |              |   |   | —                     |   |   |   | 238 |   |
| Commercial                       |   |                | — |   |                     |   | — |              |   |   | —                     |   |   |   | 828 |   |
|                             |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Total:                           |   |                |    |   |                     |   |    |              |   |   |                        |   |   |   |   |   |
| Commercial and industrial        |   | $                   | 18,038  |   |                     | $      | 18,102  |              |   | $      | 57                          |   |   | $ | 15,422 |   |
| Real estate mortgage             |   |                | 48,879  |   |                     |   | 48,985  |              |   |   | 483                         |   |   |   | 45,641 |   |
| Real estate construction         |   |                | 5,402   |   |                     |   | 5,410   |              |   |   | —                     |   |   |   | 9,675 |   |

----

|                                                                    |   | As of and for theThree Months Ended March 31, |      |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                    |   | 2011                                          |      |   | 2010 |   |
|                                                                    |   | (Dollars in thousands)                        |      |
| Average total loans outstanding for the period                          |   | $                                             | 1,125,832 |   |   | $ | 1,273,656 |   |
| Total loans outstanding at end of period                                |   | $                                             | 1,096,207 |   |   | $ | 1,260,842 |   |
|                                                                    |   |                                          |      |   |   |   |   |   |
| Allowance for loan losses at beginning of period                        |   | $                                             | 33,757    |   |   | $ | 29,403 |   |
| Provision for loan losses                                               |   |                                          | 330       |   |   |   | 7,898 |   |
| Charge-offs:                                                            |   |                                          |      |   |   |   |   |   |
| Commercial and industrial                                               |   |                                          | (132      | ) |   |   | (172 | ) |
| Real estate mortgage                                                    |   |                                          | (2,906    | ) |   |   | (1,589 | ) |
| Real estate construction                                                |   |                                          | –   |   |   |   | (967 | ) |
| Consumer and other                                                      |   |                                          | (20       | ) |   |   | (65 | ) |
| Total charge-offs                                                       |   |                                          | (3,058    | ) |   |   | (2,793 | ) |
|                                                                    |   |                                          |      |   |   |   |   |   |
| Recoveries:                                                             |   |                                          |      |   |   |   |   |   |
| Commercial and industrial                                               |   |                                          | 107       |   |   |   | 210 |   |
| Real estate mortgage                                                    |   |                                          | 11        |   |   |   | – |   |
| Real estate construction                                                |   |                                          | 716       |   |   |   | – |   |
| Consumer and other                                                      |   |                                          | 20        |   |   |   | 14 |   |
| Total recoveries                                                        |   |                                          | 854       |   |   |   | 224 |   |
| Net (charge-offs) recoveries                                            |   |                                          | (2,204    | ) |   |   | (2,569 | ) |
| Allowance for loan losses at end of period                              |   |                                          | 31,883    |   |   |   | 34,732 |   |
|                                                                    |   |                                          |      |   |   |   |   |   |
| Reserve for unfunded lending commitments at beginning of period         |   |                                          | 602       |   |   |   | 1,043 |   |
| Provision (reversal) for unfunded lending commitments                   |   |                                          | 1,101     |   |   |   | (55 | ) |
| Reserve for unfunded lending commitments at end of period               |   |                                          | 1,703     |   |   |   | 988 |   |
|                                                                    |   |                                          |      |   |   |   |   |   |
| Allowance for credit losses                                             |   | $                                             | 33,586    |   |   | $ | 35,720 |   |
|                                                                    |   |                                          |      |   |   |   |   |   |
| Ratio of allowance for loan losses to end of period total loans         |   |                                          | 2.91      | % |   |   | 2.75 | % |
| Ratio of net (charge-offs) recoveries to average total loans            |   |                                          | (0.20     | ) % |   |   | (0.20 | ) % |
| Ratio of allowance for loan losses to end of period total nonperforming |   |                                          |      |   |   |   |   |   |
|      loans (1)                                 |   |                                          | 48.00     | % |   |   | 48.52 | % |

----

| (1) |   | Total nonperforming loans are nonaccrual loans, accruing and nonaccruing TDRs, plus loans over 90 days past due. |
|-----|--------|------------------------------------------------------------------------------------------------------------------|

----

----

|                                        |   | As of and for the      |    |   | As of and for the |   |
|---------------------------------------------|--------|------------------------|---------|--------|-------------------|--------|
|                                        |   | Three Months Ended     |    |   | Year Ended        |   |
|                                        |   | March 31, 2011         |    |   | December 31, 2010 |   |
|                                        |   | (Dollars in thousands) |    |
| Federal Funds Purchased:                    |   |                   |    |   |              |   |
| at end of period                            |   | $                      | – |   |              | $      | – |   |
| average during the period                   |   |                   | – |   |              |   | 2 |   |
| maximum month-end balance during the period |   |                   | – |   |              |   | – |   |
| Interest rate at end of period              |   |                   | – | %      |              |   | – | % |
| Interest rate during the period             |   |                   | – |   |              |   | 0.73 |   |
|                                        |   |                   |    |   |              |   |   |   |
| FHLB Notes and Advances:                    |   |                   |    |   |              |   |   |   |
| at end of period                            |   | $                      | 30,000  |   |              | $      | 30,000 |   |
| average during the period                   |   |                   | 30,000  |   |              |   | 20,466 |   |
| maximum month-end balance during the period |   |                   | 30,000  |   |              |   | 30,000 |   |
| Interest rate at end of period              |   |                   | 0.49    | %      |              |   | 0.49 | % |
| Interest rate during the period             |   |                   | 0.49    |   |              |   | 0.49 |   |
|                                        |   |                   |    |   |              |   |   |   |
| Security Repurchase Agreements:             |   |                   |    |   |              |   |   |   |
| at end of period                            |   | $                      | 25,000  |   |              | $      | 25,000 |   |
| average during the period                   |   |                   | 25,000  |   |              |   | 25,000 |   |
| maximum month-end balance during the period |   |                   | 25,000  |   |              |   | 25,000 |   |
| Interest rate at end of period              |   |                   | 3.71    | %      |              |   | 3.71 | % |
| Interest rate during the period             |   |                   | 3.71    |   |              |   | 3.71 |   |
|                                        |   |                   |    |   |              |   |   |   |
| Unsecured debentures:                       |   |                   |    |   |              |   |   |   |
| at end of period                            |   | $                      | 1,000   |   |              | $      | 1,000 |   |
| average during the period                   |   |                   | 1,000   |   |              |   | 889 |   |
| maximum month-end balance during the period |   |                   | 1,000   |   |              |   | 1,000 |   |
| Interest rate at end of period              |   |                   | 5.00    | %      |              |   | 5.00 | % |
| Interest rate during the period             |   |                   | 5.00    |   |              |   | 5.00 |   |
|                                        |   |                   |    |   |              |   |   |   |
| Federal Reserve TT&L:                   |   |                   |    |   |              |   |   |   |
| at end of period                            |   | $                      | 544     |   |              | $      | 804 |   |
| average during the period                   |   |                   | 589     |   |              |   | 660 |   |
| maximum month-end balance during the period |   |                   | 742     |   |              |   | 1,075 |   |

----

|                            |   |             |   | To Be Categorized   |   |            |
|---------------------------------|--------|------------------|--------|---------------------|--------|-----------------|
|                            |   | Minimum          |   | as Well Capitalized |   |            |
|                            |   | Required For     |   |  Under         |   |            |
|                            |   | Capital Adequacy |   | Prompt Corrective   |   | Actual Ratio At |
|                            |   | Purposes         |   | Action Provisions   |   | March 31, 201   |
| The Company                     |   |             |   |                |   |            |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | %(1)                |   |            | N/A |   |   |   | 11.39 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                |   |            | N/A |   |   |   | 14.84 |   |
| Risk-based capital ratio        |   |             | 8.00   |                |   |            | N/A |   |   |   | 16.11 |   |
| MetroBank                       |   |             |   |                |   |            |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | %(2)                |   |            | 5.00 | % |   |   | 11.16 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                |   |            | 6.00 |   |   |   | 14.62 |   |
| Risk-based capital ratio        |   |             | 8.00   |                |   |            | 10.00 |   |   |   | 15.89 |   |
| Metro United                    |   |             |   |                |   |            |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | %(3)                |   |            | 5.00 | % |   |   | 10.90 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                |   |            | 6.00 |   |   |   | 14.12 |   |
| Risk-based capital ratio        |   |             | 8.00   |                |   |            | 10.00 |   |   |   | 15.39 |   |
|                            |   |             |   |                |   |            |   |   |   |   |   |   |

----

| (1) |   | The Federal Reserve Board may require the Company to maintain a leverage ratio above the required minimum. |
|-----|--------|------------------------------------------------------------------------------------------------------------|
| (2) |   | The OCC may require MetroBank to maintain a leverage ratio above the required minimum.                     |   |
| (3) |   | The FDIC may require Metro United to maintain a leverage ratio above the required minimum.                 |   |

----

----

----

----

| Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
|--------------|-------------------------------------------------------------|

| Item 4. | Controls and Procedures. |
|--------------|--------------------------|

----

| Item 1. | Legal Proceedings. |
|--------------|--------------------|

| Item 1A. | Risk Factors. |
|---------------|---------------|

| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
|--------------|--------------------------------------------------------------|

| Item 3. | Defaults Upon Senior Securities. |
|--------------|----------------------------------|

|   | Not applicable |
|--------|----------------|

| Item 4. | [Removed and Reserved] |
|--------------|------------------------|

| Item 5. | Other Information. |
|--------------|--------------------|

|   | Not applicable |
|--------|----------------|

----

| Item 6. | Exhibits. |
|--------------|-----------|

| Exhibit |   |                                                                                                                                                                                                                                                |
|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |   | Identification of Exhibit                                                                                                                                                                                                                           |
| 3.1     |   | Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-62667) (the "Registration Statement")).                    |
|    |
| 3.2     |   | Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).                 |
|    |
| 3.3     |   | Statement of Designations establishing the terms of the Series A Preferred Stock of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).                            |
|    |   |                                                                                                                                                                                                                                                |
| 3.4     |   | Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 19, 2007).                                                                          |
|    |
| 4.1     |   | Specimen form of certificate evidencing the Common Stock (incorporated herein by reference to Exhibit 4 to the Registration Statement).                                                                                                             |
|    |   |                                                                                                                                                                                                                                                |
| 4.2     |   | Warrant, dated January 16, 2009, to purchase 771,429 shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).                                  |
|    |   |                                                                                                                                                                                                                                                |
| 4.3     |   | Form of Certificate for the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $1.00 per share (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on January 21, 2009). |
|    |   |                                                                                                                                                                                                                                                |
| 11      |   | Computation of Earnings Per Common Share, included as Note 5 to the unaudited Condensed Consolidated Financial Statements of this Form 10-Q.                                                                                              |
|    |
| 31.1*   |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|    |
| 31.2*   |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|    |
| 32.1**  |   | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       |
|    |
| 32.2**  |   | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       |

| * Filed herewith.      |
|------------------------|
| ** Furnished herewith. |

----

|               | METROCORP BANCSHARES, INC.  |                                                                                      |
|--------------------|----------------------------------|-------------------------------------------------------------------------------------------|
|               | By:                    | /s/ George M. Lee                                                                    |   |
| Date: May 11, 2011 |                             | George M. Lee Executive Vice Chairman, President and                                 |   |
|               |                             | Chief Executive Officer (principal executive officer)                                |   |
|               |
|               |                             |                                                                                      |
| Date: May 11, 2011 | By:                    | /s/ David C. Choi                                                                    |   |
|               |                             | David C. Choi                                                                        |   |
|               |                             | Chief Financial Officer (principal financial officer/ principal accounting officer)  |   |

----

|    |   |                                                                                                                                                                                                                                                |
|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit |   |                                                                                                                                                                                                                                                |
| Number  |   | Identification of Exhibit                                                                                                                                                                                                                           |
| 3.1     |   | Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-62667) (the "Registration Statement")).                    |
|    |   |                                                                                                                                                                                                                                                |
| 3.2     |   | Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).                 |
|    |   |                                                                                                                                                                                                                                                |
| 3.3     |   | Statement of Designations establishing the terms of the Series A Preferred Stock of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).                            |
|    |   |                                                                                                                                                                                                                                                |
| 3.4     |   | Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 19, 2007).                                                                          |
|    |   |                                                                                                                                                                                                                                                |
| 4.1     |   | Specimen form of certificate evidencing the Common Stock (incorporated herein by reference to Exhibit 4 to the Registration Statement).                                                                                                             |
|    |   |                                                                                                                                                                                                                                                |
| 4.2     |   | Warrant, dated January 16, 2009, to purchase 771,429 shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).                                  |
|    |   |                                                                                                                                                                                                                                                |
| 4.3     |   | Form of Certificate for the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $1.00 per share (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on January 21, 2009). |
|    |   |                                                                                                                                                                                                                                                |
| 11      |   | Computation of Earnings Per Common Share, included as Note 5 to the unaudited Condensed Consolidated Financial Statements of this Form 10-Q.                                                                                              |
|    |
| 31.1*   |   | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|    |
| 31.2*   |   | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|    |
| 32.1**  |   | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       |
|    |
| 32.2**  |   | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       |

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| * Filed herewith.      |
|------------------------|
| ** Furnished herewith. |