----

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|   | þ |   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010 |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   | 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 |

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|                                                                                                                                                                                                                                                             |   | September 30, |      |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
|                                                                                                                                                                                                                                                             |   | 2010          |      |   | 2009         |   |
| ASSETS                                                                                                                                                                                                                                                           |   |          |      |   |         |   |
|                                                                                                                                                                                                                                                             |   |          |      |   |         |   |
| Cash and due from banks                                                                                                                                                                                                                                          |   | $             | 24,721    |   |         | $      | 26,087 |   |
| Federal funds sold and other short-term investments                                                                                                                                                                                                              |   |          | 127,702   |   |         |   | 82,006 |   |
| Total cash and cash equivalents                                                                                                                                                                                                                                  |   |          | 152,423   |   |         |   | 108,093 |   |
| Securities available-for-sale, at fair value                                                                                                                                                                                                                     |   |          | 156,386   |   |         |   | 98,368 |   |
| Securities held-to-maturity (fair value $4,517 and $ 4,352 at September 30, 2010     and December 31, 2009, respectively)                                                                                                                    |   |          | 4,044     |   |         |   | 4,044 |   |
| Other investments                                                                                                                                                                                                                                                |   |          | 7,038     |   |         |   | 21,577 |   |
| Loans, net of allowance for loan losses of $34,644 and $29,403 at September 30, 2010     and December 31, 2009, respectively                                                                                                                 |   |          | 1,138,923 |   |         |   | 1,244,594 |   |
| Accrued interest receivable                                                                                                                                                                                                                                      |   |          | 4,854     |   |         |   | 5,161 |   |
| Premises and equipment, net                                                                                                                                                                                                                                      |   |          | 5,663     |   |         |   | 6,042 |   |
| Goodwill                                                                                                                                                                                                                                                         |   |          | 17,327    |   |         |   | 19,327 |   |
| Core deposit intangibles                                                                                                                                                                                                                                         |   |          | 234       |   |         |   | 329 |   |
| Customers' liability on acceptances                                                                                                                                                                                                                              |   |          | 7,484     |   |         |   | 3,011 |   |
| Foreclosed assets, net                                                                                                                                                                                                                                           |   |          | 16,141    |   |         |   | 22,291 |   |
| Cash value of bank owned life insurance                                                                                                                                                                                                                          |   |          | 29,617    |   |         |   | 28,526 |   |
| Prepaid FDIC assessment                                                                                                                                                                                                                                          |   |          | 8,404     |   |         |   | 10,637 |   |
| Other assets                                                                                                                                                                                                                                                     |   |          | 18,921    |   |         |   | 17,548 |   |
| Total assets                                                                                                                                                                                                                                                     |   | $             | 1,567,459 |   |         | $      | 1,589,548 |   |
|                                                                                                                                                                                                                                                             |   |          |      |   |         |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                                             |   |          |      |   |         |   |   |   |
| Deposits:                                                                                                                                                                                                                                                        |   |          |      |   |         |   |   |   |
| Noninterest-bearing                                                                                                                                                                                                                                              |   | $             | 198,507   |   |         | $      | 203,427 |   |
| Interest-bearing                                                                                                                                                                                                                                                 |   |          | 1,101,462 |   |         |   | 1,160,740 |   |
| Total deposits                                                                                                                                                                                                                                                   |   |          | 1,299,969 |   |         |   | 1,364,167 |   |
| Junior subordinated debentures                                                                                                                                                                                                                                   |   |          | 36,083    |   |         |   | 36,083 |   |
| Other borrowings                                                                                                                                                                                                                                                 |   |          | 56,205    |   |         |   | 25,513 |   |
| Accrued interest payable                                                                                                                                                                                                                                         |   |          | 555       |   |         |   | 625 |   |
| Acceptances outstanding                                                                                                                                                                                                                                          |   |          | 7,484     |   |         |   | 3,011 |   |
| Other liabilities                                                                                                                                                                                                                                                |   |          | 7,379     |   |         |   | 4,843 |   |
| Total liabilities                                                                                                                                                                                                                                                |   |          | 1,407,675 |   |         |   | 1,434,242 |   |
| Commitments and contingencies                                                                                                                                                                                                                                    |   |          | –   |   |         |   | – |   |
|                                                                                                                                                                                                                                                             |   |          |      |   |         |   |   |   |
| Shareholders' equity:                                                                                                                                                                                                                                            |   |          |      |   |         |   |   |   |
| Preferred stock, $1.00 par value, 2,000,000 shares authorized; 45,000 shares issued and     outstanding at September 30, 2010 and December 31, 2009                                                                                          |   |          | 45,391    |   |         |   | 44,718 |   |
| Common stock, $1.00 par value, 50,000,000 shares authorized; 13,230,315 and 10,994,965      shares issued and 13,230,315 and 10,926,315 shares outstanding at September 30, 2010     and December 31, 2009, respectively |   |          | 13,230    |   |         |   | 10,995 |   |
| Additional paid-in-capital                                                                                                                                                                                                                                       |   |          | 33,155    |   |         |   | 29,114 |   |
| Retained earnings                                                                                                                                                                                                                                                |   |          | 68,043    |   |         |   | 72,505 |   |
| Accumulated other comprehensive loss                                                                                                                                                                                                                             |   |          | (35       | )      |         |   | (1,106 | ) |
| Treasury stock, at cost, 68,650 shares at December 31, 2009                                                                                                                                                                                                      |   |          | –   |   |         |   | (920 | ) |
| Total shareholders' equity                                                                                                                                                                                                                                       |   |          | 159,784   |   |         |   | 155,306 |   |
| Total liabilities and shareholders' equity                                                                                                                                                                                                                       |   | $             | 1,567,459 |   |         | $      | 1,589,548 |   |

----

|                                                |   | For the Three Months |    |   | For the Nine Months |   |
|-----------------------------------------------------|--------|----------------------|---------|--------|---------------------|--------|
|                                                |   | Ended September 30,  |    |   | Ended September 30, |   |
|                                                |   | 2010                 |    |   | 2009                |   |   | 2010 |   |   | 2009 |   |
| Interest income:                                    |   |                 |    |   |                |   |   |   |   |   |   |   |
| Loans                                               |   | $                    | 17,960  |   |                | $      | 20,654 |   |   | $ | 55,717 |   |   | $ | 61,791 |   |
| Securities:                                         |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                             |   |                 | 977     |   |                |   | 965 |   |   |   | 2,590 |   |   |   | 3,048 |   |
| Tax-exempt                                          |   |                 | 117     |   |                |   | 85 |   |   |   | 356 |   |   |   | 210 |   |
| Other investments                                   |   |                 | 57      |   |                |   | 89 |   |   |   | 207 |   |   |   | 386 |   |
| Federal funds sold and other short-term investments |   |                 | 108     |   |                |   | 29 |   |   |   | 266 |   |   |   | 150 |   |
| Total interest income                               |   |                 | 19,219  |   |                |   | 21,822 |   |   |   | 59,136 |   |   |   | 65,585 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                   |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Time deposits                                       |   |                 | 2,863   |   |                |   | 4,687 |   |   |   | 9,410 |   |   |   | 15,991 |   |
| Demand and savings deposits                         |   |                 | 1,301   |   |                |   | 1,761 |   |   |   | 4,397 |   |   |   | 6,190 |   |
| Junior subordinated debentures                      |   |                 | 519     |   |                |   | 519 |   |   |   | 1,559 |   |   |   | 1,559 |   |
| Subordinated debentures and other borrowings        |   |                 | 287     |   |                |   | 240 |   |   |   | 798 |   |   |   | 768 |   |
| Total interest expense                              |   |                 | 4,970   |   |                |   | 7,207 |   |   |   | 16,164 |   |   |   | 24,508 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                 |   |                 | 14,249  |   |                |   | 14,615 |   |   |   | 42,972 |   |   |   | 41,077 |   |
| Provision for loan losses                           |   |                 | 4,700   |   |                |   | 3,596 |   |   |   | 15,028 |   |   |   | 12,710 |   |
| Net interest income after provision for loan losses |   |                 | 9,549   |   |                |   | 11,019 |   |   |   | 27,944 |   |   |   | 28,367 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income:                                 |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Service fees                                        |   |                 | 1,222   |   |                |   | 1,134 |   |   |   | 3,384 |   |   |   | 3,309 |   |
| Loan-related fees                                   |   |                 | 91      |   |                |   | 136 |   |   |   | 305 |   |   |   | 429 |   |
| Letters of credit commissions and fees              |   |                 | 185     |   |                |   | 256 |   |   |   | 570 |   |   |   | 769 |   |
| Gain on securities, net                             |   |                 | 31      |   |                |   | 347 |   |   |   | 76 |   |   |   | 356 |   |
| Total other-than-temporary impairments              |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| (“OTTI”) on securities                  |   |                 | (212    | )      |                |   | (804 | ) |   |   | (495 | ) |   |   | (1,984 | ) |
| Less: Noncredit portion of “OTTI”       |   |                 | 48      |   |                |   | 454 |   |   |   | 135 |   |   |   | 1,335 |   |
| Net impairments on securities                       |   |                 | (164    | )      |                |   | (350 | ) |   |   | (360 | ) |   |   | (649 | ) |
| Other noninterest income                            |   |                 | 396     |   |                |   | 442 |   |   |   | 1,173 |   |   |   | 1,320 |   |
| Total noninterest income                            |   |                 | 1,761   |   |                |   | 1,965 |   |   |   | 5,148 |   |   |   | 5,534 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expenses:                               |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                      |   |                 | 5,073   |   |                |   | 4,864 |   |   |   | 15,430 |   |   |   | 15,495 |   |
| Occupancy and equipment                             |   |                 | 1,882   |   |                |   | 2,014 |   |   |   | 5,780 |   |   |   | 6,006 |   |
| Foreclosed assets, net                              |   |                 | 1,088   |   |                |   | 1,320 |   |   |   | 5,367 |   |   |   | 2,740 |   |
| FDIC assessment                                     |   |                 | 881     |   |                |   | 1,027 |   |   |   | 2,471 |   |   |   | 2,712 |   |
| Goodwill impairment                                 |   |                 | – |   |                |   | – |   |   |   | 2,000 |   |   |   | – |   |
| Other noninterest expense                           |   |                 | 1,935   |   |                |   | 2,061 |   |   |   | 6,024 |   |   |   | 6,738 |   |
| Total noninterest expenses                          |   |                 | 10,859  |   |                |   | 11,286 |   |   |   | 37,072 |   |   |   | 33,691 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before provision for income taxes     |   |                 | 451     |   |                |   | 1,698 |   |   |   | (3,980 | ) |   |   | 210 |   |
| Provision (benefit) for income taxes                |   |                 | (186    | )      |                |   | 560 |   |   |   | (1,323 | ) |   |   | (46 | ) |
| Net income (loss)                                   |   | $                    | 637     |   |                | $      | 1,138 |   |   | $ | (2,657 | ) |   | $ | 256 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Dividends and discount – preferred stock      |   |                 | (605    | )      |                |   | (599 | ) |   |   | (1,805 | ) |   |   | (1,701 | ) |
| Net income (loss) available to common shareholders  |   | $                    | 32      |   |                | $      | 539 |   |   | $ | (4,462 | ) |   | $ | (1,445 | ) |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share:                   |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                    | 0.00    |   |                | $      | 0.05 |   |   | $ | (0.38 | ) |   | $ | (0.13 | ) |
| Diluted                                             |   | $                    | 0.00    |   |                | $      | 0.05 |   |   | $ | (0.38 | ) |   | $ | (0.13 | ) |
| Weighted average shares outstanding:                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   |                 | 12,329  |   |                |   | 10,915 |   |   |   | 11,712 |   |   |   | 10,899 |   |
| Diluted                                             |   |                 | 12,345  |   |                |   | 10,923 |   |   |   | 11,712 |   |   |   | 10,899 |   |
|                                                |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Dividends per common share                          |   | $                    | – |   |                | $      | – |   |   | $ | – |   |   | $ | 0.04 |   |

----

|                                                                                                |   | For the Three Months |   |   | For the Nine Months |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|
|                                                                                                |   | Ended September 30,  |   |   | Ended September 30, |   |
|                                                                                                |   | 2010                 |   |   | 2009                |   |   | 2010 |   |   | 2009 |   |
|                                                                                                |   |                 |   |   |                |   |   |   |   |   |   |   |
| Net income (loss)                                                                                   |   | $                    | 637    |   |                | $      | 1,138 |   |   | $ | (2,657 | ) |   | $ | 256 |   |
|                                                                                                |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of taxes:                                                    |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Change in accumulated loss on effective cash flow      hedging derivatives |   |                 | (390   | )      |                |   | (168 | ) |   |   | (1,191 | ) |   |   | (168 | ) |
|                                                                                                |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized loss on investment securities, net:                                                      |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Securities with OTTI charges during the period                                                      |   |                 | (135   | )      |                |   | (515 | ) |   |   | (316 | ) |   |   | (1,270 | ) |
| Less: OTTI charges recognized in net income                                                         |   |                 | (105   | )      |                |   | (225 | ) |   |   | (231 | ) |   |   | (416 | ) |
| Net unrealized losses on investment                                                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| securities with OTTI                                                                                |   |                 | (30    | )      |                |   | (290 | ) |   |   | (85 | ) |   |   | (854 | ) |
|                                                                                                |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gain  arising during the                                               |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| period                                                                                              |   |                 | 474    |   |                |   | 1,016 |   |   |   | 2,396 |   |   |   | 1,893 |   |
| Less: reclassification adjustment for gain                                                          |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| included in net income                                                                              |   |                 | 20     |   |                |   | 214 |   |   |   | 49 |   |   |   | 220 |   |
| Net unrealized gains on investment                                                                  |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| securities                                                                                          |   |                 | 454    |   |                |   | 802 |   |   |   | 2,347 |   |   |   | 1,673 |   |
| Other comprehensive income                                                                |   |                 | 34     |   |                |   | 344 |   |   |   | 1,071 |   |   |   | 651 |   |
| Total comprehensive income (loss)                                                                   |   | $                    | 671    |   |                | $      | 1,482 |   |   | $ | (1,586 | ) |   | $ | 907 |   |

----

|                                                                                                                 |   | Preferred Stock |    |   | Common Stock |   |    | Additionalpaid-in |   |   | Retained |   |   | Accumulatedothercomprehensive |    |   | Treasurystock, at |   |    |          |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|--------------|--------|---------|-------------------|--------|--------|----------|--------|--------|-------------------------------|---------|--------|-------------------|--------|---------|---------------|--------|
|                                                                                                                 |   | Shares          |    |   | Amount       |   |    | Shares            |   |   | Amount   |   |   | capital                       |    |   | earnings          |   |    | income (loss) |   |   | cost |   |   | Total |   |
| Balance at December 31, 2009                                                                                         |   |            | 45      |   |         | $      | 44,718  |              |   |   | 10,927   |   |   | $                             | 10,995  |   |              | $      | 29,114  |          |   | $ | 72,505 |   |   | $ | (1,106 | ) |   | $ | (920 | ) |   | $ | 155,306 |   |
| Re-issuance of treasury stock                                                                                        |   |            | – |   |         |   | – |              |   |   | 78       |   |   |                          | – |   |              |   | (705    | )             |   |   | – |   |   |   | – |   |   |   | 952 |   |   |   | 247 |   |
| Issuance of common stock                                                                                             |   |            | – |   |         |   | – |              |   |   | 2,235    |   |   |                          | 2,235   |   |              |   | 4,766   |          |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 7,001 |   |
| Stock-based compensation expense related       to stock options recognized in earnings |   |            | – |   |         |   | – |              |   |   | –  |   |   |                          | – |   |              |   | (20     | )             |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (20 | ) |
| Net loss                                                                                                             |   |            | – |   |         |   | – |              |   |   | –  |   |   |                          | – |   |              |   | – |          |   |   | (2,657 | ) |   |   | – |   |   |   | – |   |   |   | (2,657 | ) |
| Amortization of preferred stock discount                                                                             |   |            | – |   |         |   | 107     |              |   |   | –  |   |   |                          | – |   |              |   | – |          |   |   | (107 | ) |   |   | – |   |   |   | – |   |   |   | – |   |
| Forfeiture of restricted shares                                                                                      |   |            | – |   |         |   | – |              |   |   | (10      | )      |   |                          | – |   |              |   | – |          |   |   | – |   |   |   | – |   |   |   | (32 | ) |   |   | (32 | ) |
| Other comprehensive income                                                                                           |   |            | – |   |         |   | – |              |   |   | –  |   |   |                          | – |   |              |   | – |          |   |   | – |   |   |   | 1,071 |   |   |   | – |   |   |   | 1,071 |   |
| Dividends – preferred stock                                                                                    |   |            | – |   |         |   | 566     |              |   |   | –  |   |   |                          | – |   |              |   | – |          |   |   | (1,698 | ) |   |   | – |   |   |   | – |   |   |   | (1,132 | ) |
| Balance at September 30, 2010                                                                                        |   |            | 45      |   |         | $      | 45,391  |              |   |   | 13,230   |   |   | $                             | 13,230  |   |              | $      | 33,155  |          |   | $ | 68,043 |   |   | $ | (35 | ) |   | $ | – |   |   | $ | 159,784 |   |

----

|                                                                                     |   | For the Nine Months EndedSeptember 30, |     |
|------------------------------------------------------------------------------------------|--------|----------------------------------------|----------|
|                                                                                     |   | 2010                                   |     |   | 2009 |   |
|                                                                                     |   |                                   |     |   |   |   |
| Cash flows from operating activities:                                                    |   |                                   |     |   |   |   |
| Net income (loss)                                                                        |   | $                                      | (2,657   | ) |   | $ | 256 |   |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |                                   |     |   |   |   |   |   |
| Depreciation                                                                             |   |                                   | 1,224    |   |   |   | 1,455 |   |
| Provision for loan losses                                                                |   |                                   | 15,028   |   |   |   | 12,710 |   |
| Impairment on securities                                                                 |   |                                   | 360      |   |   |   | 649 |   |
| Goodwill impairment                                                                      |   |                                   | 2,000    |   |   |   | – |   |
| Gain on securities transactions, net                                                     |   |                                   | (76      | ) |   |   | (356 | ) |
| Loss on writedown and sale of foreclosed assets                                          |   |                                   | 2,916    |   |   |   | 1,029 |   |
| Gain on sale of premises and equipment                                                   |   |                                   | (7       | ) |   |   | (20 | ) |
| Amortization of premiums and discounts on securities, net                                |   |                                   | 19       |   |   |   | (8 | ) |
| Amortization of deferred loan fees and discounts                                         |   |                                   | (992     | ) |   |   | (1,563 | ) |
| Amortization of core deposit intangibles                                                 |   |                                   | 95       |   |   |   | 133 |   |
| Stock-based compensation                                                                 |   |                                   | (20      | ) |   |   | 277 |   |
| Changes in:                                                                              |   |                                   |     |   |   |   |   |   |
| Accrued interest receivable                                                              |   |                                   | 307      |   |   |   | 994 |   |
| Other assets                                                                             |   |                                   | (1,186   | ) |   |   | (3,813 | ) |
| Accrued interest payable                                                                 |   |                                   | (70      | ) |   |   | (207 | ) |
| Other liabilities                                                                        |   |                                   | 1,346    |   |   |   | 1,408 |   |
| Net cash provided by operating activities                                                |   |                                   | 18,287   |   |   |   | 12,944 |   |
|                                                                                     |   |                                   |     |   |   |   |   |   |
| Cash flows from investing activities:                                                    |   |                                   |     |   |   |   |   |   |
| Purchases of securities available-for-sale                                               |   |                                   | (123,000 | ) |   |   | (46,171 | ) |
| Purchases of securities held-to-maturity                                                 |   |                                   | -        |   |   |   | (4,044 | ) |
| Purchases of other investments                                                           |   |                                   | (50      | ) |   |   | (19,207 | ) |
| Proceeds from sales of securities available-for-sale                                     |   |                                   | 20,076   |   |   |   | 31,848 |   |
| Proceeds from maturities, calls, and principal paydowns of securities available-for-sale |   |                                   | 14,590   |   |   |   | 23,077 |   |
| Proceeds from sales and maturities of other investments                                  |   |                                   | 48,135   |   |   |   | 27,215 |   |
| Net change in loans                                                                      |   |                                   | 77,296   |   |   |   | (2,982 | ) |
| Proceeds from sale of foreclosed assets                                                  |   |                                   | 17,573   |   |   |   | 8,497 |   |
| Proceeds from sale of premises and equipment                                             |   |                                   | 9        |   |   |   | 22 |   |
| Purchases of premises and equipment                                                      |   |                                   | (847     | ) |   |   | (324 | ) |
| Net cash provided by investing activities                                                |   |                                   | 53,782   |   |   |   | 17,931 |   |
|                                                                                     |   |                                   |     |   |   |   |   |   |
| Cash flows from financing activities:                                                    |   |                                   |     |   |   |   |   |   |
| Net change in:                                                                           |   |                                   |     |   |   |   |   |   |
| Deposits                                                                                 |   |                                   | (64,198  | ) |   |   | 122,673 |   |
| Other borrowings                                                                         |   |                                   | 30,692   |   |   |   | (113,928 | ) |
| Proceeds from issuance of common stock                                                   |   |                                   | 6,899    |   |   |   | – |   |
| Proceeds from issuance of preferred stock with common stock warrant                      |   |                                   | -        |   |   |   | 45,000 |   |
| Re-issuance of treasury stock                                                            |   |                                   | -        |   |   |   | 169 |   |
| Cash dividends paid on preferred stock                                                   |   |                                   | (1,132   | ) |   |   | (1,307 | ) |
| Cash dividends paid on common stock                                                      |   |                                   | -        |   |   |   | (869 | ) |
| Net cash (used in) provided by financing activities                                      |   |                                   | (27,739  | ) |   |   | 51,738 |   |
|                                                                                     |   |                                   |     |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                |   |                                   | 44,330   |   |   |   | 82,613 |   |
| Cash and cash equivalents at beginning of period                                         |   |                                   | 108,093  |   |   |   | 38,101 |   |
| Cash and cash equivalents at end of period                                               |   | $                                      | 152,423  |   |   | $ | 120,714 |   |

|                                                |   |   |   |   |   |   |   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Supplemental information:                           |   |   |   |   |   |   |   |   |
| Interest paid                                       |   | $      | 16,235 |   |   | $      | 24,715 |   |
| Income taxes paid                                   |   |   | 3,025  |   |   |   | 648    |   |
| Noncash investing and financing activities:         |   |   |   |   |   |   |   |   |
| Issuance of common stock pursuant to incentive plan |   |   | 349    |   |   |   | -      |   |
| Dividends accrued not paid on preferred stock       |   |   | 853    |   |   |   | 287    |   |
| Foreclosed assets acquired                          |   |   | 14,339 |   |   |   | 27,713 |   |
| Loans originated to finance foreclosed assets       |   |   | 3,505  |   |   |   | 3,760  |   |

----

----

|                                                                                       |   | As of September 30, 2010 |
|--------------------------------------------------------------------------------------------|--------|--------------------------|
|                                                                                       |   | Amortized                |   |   | Unrealized |   |   | Fair |
|                                                                                       |   | Cost                     |   |   | Gains |   |   | Losses |   |   | OTTI |   |   | Value |
| Securities available-for-sale                                                              |   | (In thousands)           |
| Debt Securities                                                                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government     corporations and agencies  |   | $                        | 100,980 |   |   | $ | 1,266 |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | 102,246 |
| Obligations of state and political     subdivisions                    |   |                     | 5,955 |   |   |   | 266 |   |   | ─ |   |   | ─ |   |   |   | 6,221 |
| Mortgage-backed securities and collateralized     mortgage obligations |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or                                                                       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| guaranteed                                                                                 |   |                     | 32,024 |   |   |   | 897 |   |   | ─ |   |   | ─ |   |   |   | 32,921 |
| Privately issued residential                                                               |   |                     | 2,099 |   |   |   | 360 |   |   |   | (58 | ) |   |   | (715 | ) |   |   | 1,686 |
| Asset backed securities                                                                    |   |                     | 357 |   |   |   | 49 |   |   | ─ |   |   |   | (231 | ) |   |   | 175 |
| Equity Securities                                                                          |   |                     |   |   |   |   |   |   |   | ─ |   |   |   |   |   |   |   |   |
| Investment in CRA funds                                                                    |   |                     | 13,105 |   |   |   | 32 |   |   | ─ |   |   | ─ |   |   |   | 13,137 |
| Total available-for-sale     securities                                |   | $                        | 154,520 |   |   | $ | 2,870 |   |   | $ | (58 | ) |   | $ | (946 | ) |   | $ | 156,386 |
|                                                                                       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of state and political     subdivisions                    |   | $                        | 4,044 |   |   | $ | 473 |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | 4,517 |
| Total held-to-maturity     securities                                  |   | $                        | 4,044 |   |   | $ | 473 |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | 4,517 |
|                                                                                       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other investments                                                                          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB/Federal Reserve Bank stock                                                            |   | $                        | 5,955 |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | 5,955 |
| Investment in subsidiary trust                                                             |   |                     | 1,083 |   |   | ─ |   |   | ─ |   |   | ─ |   |   |   | 1,083 |
| Total other investments                                                                    |   | $                        | 7,038 |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | ─ |   |   | $ | 7,038 |

----

|                                                                                       | As of December 31, 2009 |
|--------------------------------------------------------------------------------------------|-------------------------|
|                                                                                       |  Amortized         |   |   | Unrealized |   |   | Fair |
|                                                                                       | Cost                    |   |   | Gains |   |   |  Losses |   | OTTI  |   |   | Value |
|                                                                                       | (In thousands)          |
| Securities available-for-sale                                                              |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt Securities                                                                            |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government corporations and     agencies  | $                       | 57,882  |   |   | $ | ─ |   |   | $ | (654 | ) | $ | ─ |   |   | $ | 57,228 |
| Obligations of state and political     subdivisions                    |                    | 5,724 |   |   |   | 118 |   |   |   | (29 | ) |   | ─ |   |   |   | 5,813 |
| Mortgage-backed securities and collateralized mortgage     obligations |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                                            |                    | 32,014 |   |   |   | 397 |   |   |   | (103 | ) |   | ─ |   |   |   | 32,308 |
| Privately issued residential                                                               |                    | 3,947 |   |   |   | 233 |   |   |   | (241 | ) |   | (1,104 | ) |   |   | 2,835 |
| Asset backed securities                                                                    |                    | 467 |   |   | ─ |   |   | ─ |   |   | (283 | ) |   |   | 184 |
| Total available-for-sale securities                                                        | $                       | 100,034 |   |   | $ | 748 |   |   | $ | (1,027 | ) | $   | (1,387 | ) |   | $ | 98,368 |
|                                                                                       |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity                                                                |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of state and political subdivisions                                            | $                       | 4,044 |   |   | $ | 308 |   |   | $ | ─ |   | $   | ─ |   |   | $ | 4,352 |
| Total held-to-maturity securities                                                          | $                       | 4,044 |   |   | $ | 308 |   |   | $ | ─ |   | $   | ─ |   |   | $ | 4,352 |
|                                                                                       |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other investments                                                                          |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in CDARS                                                                        | $                       | 14,042 |   |   | $ | ─ |   |   | $ | ─ |   | $   | ─ |   |   | $ | 14,042 |
| FHLB/Federal Reserve Bank stock                                                            |                    | 6,452 |   |   |   | ─ |   |   |   | ─ |   |   | ─ |   |   |   | 6,452 |
| Investment in subsidiary trust                                                             |                    | 1,083 |   |   |   | ─ |   |   |   | ─ |   |   | ─ |   |   |   | 1,083 |
| Total other investments                                                                    | $                       | 21,577 |   |   | $ | ─ |   |   | $ | ─ |   | $   | ─ |   |   | $ | 21,577 |

|                                                                                       |   | September 30, 2010  |    |
|--------------------------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                                       |   | Less Than 12 Months |    |   | Greater Than 12 Months |   |   | Total |   |
|                                                                                       |   | FairValue           |    |   | GrossUnrealized Losses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |
|                                                                                       |   | (In thousands)      |    |
| Securities available-for-sale                                                              |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities                                                                            |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities and     collateralized mortgage obligations |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Privately issued residential                                                               |   | $                   | ─ |   |   | $ | ─ |   |   | $ | 419 |   |   | $ | (58 | ) |   | $ | 419 |   |   | $ | (58 | ) |
| Total available-for-sale securities                                                        |   | $                   | ─ |   |   | $ | ─ |   |   | $ | 419 |   |   | $ | (58 | ) |   | $ | 419 |   |   | $ | (58 | ) |

----

|                                                                                       |   | December 31, 2009   |
|--------------------------------------------------------------------------------------------|--------|---------------------|
|                                                                                       |   | Less Than 12 Months |   | Greater Than 12 Months |   | Total |
|                                                                                       |   | FairValue           |   | GrossUnrealizedLosses |   | FairValue |   | GrossUnrealizedLosses |   | FairValue |   | GrossUnrealizedLosses |
|                                                                                       |   | (In thousands)      |
| Securities available for sale                                                              |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government     corporations and agencies  |   | $                   |       52,228 |   | $ | (654) |   | $  |  ─ |   | $  |       ─ |   | $  |      52,228 |   | $  |     (654) |
| Obligations of state and political     subdivisions                    |   |                | 1,516 |   |   | (29) |   |   | ─ |   |   | ─ |   |   | 1,516 |   |   | (29) |
| Mortgage-backed securities and     collateralized mortgage obligations |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued or guaranteed                                                            |   |                |        10,937 |   |   |    (103) |   |   | ─ |   |   | ─ |   |   |      10,937 |   |   |     (103) |
| Privately issued residential                                                               |   |                | 86 |   |   | (33) |   |   | ─ |   |   | ─ |   |   | 86 |   |   | (33) |
| Asset backed securities                                                                    |   |                | ─ |   |   | ─ |   |   | 488 |   |   | (208) |   |   | 488 |   |   | (208) |
| Total securities                                                                           |   | $              |  64,767 |   | $  | (819) |   | $  | 488 |   | $  | (208) |   | $  |     65,255 |   | $  |    (1,027) |

|                                                                                                                                                                                                      |   | Impairment related to credit losses  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                                                                                                                                                      |   | Three months endedSeptember 30, 2010 |   |   | Nine months endedSeptember 30, 2010 |   |
|                                                                                                                                                                                                      |   | (In thousands)                       |   |
| Credit losses at beginning  of period                                                                                                                                                           |   | $                                    | 1,487  |   |   | $ | 1,291 |   |
| Addition of OTTI that was not previously recognized                                                                                                                                                       |   |                                 | 2      |   |   |   | 6 |   |
| Additions to OTTI that were previously recognized when there is no     intent to sell and no requirement to sell before recovery of amortized     cost basis |   |                                 | 26     |   |   |   | 26 |   |
| Transfers from accumulated other comprehensive income to OTTI related     to credit losses                                                                                            |   |                                 | 136    |   |   |   | 328 |   |
| Reclassifications from OTTI to realized losses on sales of securities                                                                                                                                     |   |                                 | (48    | ) |   |   | (48 | ) |
| Credit losses at end of period                                                                                                                                                                            |   | $                                    | 1,603  |   |   | $ | 1,603 |   |

----

|                  |   | Nine Months EndedSeptember 30, |   |
|-----------------------|--------|--------------------------------|--------|
|                  |   | 2010                           |   |   | 2009 |   |
| Amortized cost        |   | $                              | 20,092 |   |   | $ | 31,512 |   |
| Proceeds              |   |                           | 20,076 |   |   |   | 31,848 |   |
| Gross realized gains  |   |                           | 216    |   |   |   | 337 |   |
| Gross realized losses |   |                           | (232   | ) |   |   | — |   |

|                                                               |   | Securities         |    |   | Securities       |   |
|--------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                               |   | Available-for-sale |    |   | Held-to-maturity |   |
|                                                          |   | AmortizedCost      |    |   | FairValue        |   |   | AmortizedCost |   |   | FairValue |   |
| Within one year                                                    |   | $                  | — |   |             | $      | — |   |   | $ | — |   |   | $ | — |   |
| Within two to five years                                           |   |               | 14,124  |   |             |   | 14,393 |   |   |   | — |   |   |   | — |   |
| Within six to ten years                                            |   |               | 89,248  |   |             |   | 90,278 |   |   |   | — |   |   |   | — |   |
| After ten years                                                    |   |               | 3,920   |   |             |   | 3,971 |   |   |   | 4,044 |   |   |   | 4,517 |   |
| Mortgage-backed securities and collateralized mortgage obligations |   |               | 34,123  |   |             |   | 34,607 |   |   |   | — |   |   |   | — |   |
| Total debt securities                                              |   | $                  | 141,415 |   |             | $      | 143,249 |   |   | $ | 4,044 |   |   | $ | 4,517 |   |

----

|                                           |   | As of September 30, 2010 |      |   | As of December 31, 2009 |   |
|------------------------------------------------|--------|--------------------------|-----------|--------|-------------------------|--------|
|                                           |   | Amount                   |      |   | Percent                 |   |   | Amount |   |   | Percent |   |
|                                           |   | (Dollars in thousands)   |      |
|                                           |   |                     |      |   |                    |   |   |   |   |   |   |   |
| Commercial and industrial                      |   | $                        | 357,803   |   |                    |   | 30.43 | % |   | $ | 399,235 |   |   |   | 31.27 | % |
| Real estate mortgage                           |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                     | 35,551    |   |                    |   | 3.03 |   |   |   | 32,730 |   |   |   | 2.56 |   |
| Commercial                                     |   |                     | 739,210   |   |                    |   | 62.87 |   |   |   | 742,974 |   |   |   | 58.20 |   |
|                                           |   |                     | 774,761   |   |                    |   | 65.90 |   |   |   | 775,704 |   |   |   | 60.76 |   |
| Real estate construction                       |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                     | 15,539    |   |                    |   | 1.32 |   |   |   | 32,257 |   |   |   | 2.52 |   |
| Commercial                                     |   |                     | 23,779    |   |                    |   | 2.02 |   |   |   | 65,532 |   |   |   | 5.14 |   |
|                                           |   |                     | 39,318    |   |                    |   | 3.34 |   |   |   | 97,789 |   |   |   | 7.66 |   |
| Consumer and other                             |   |                     | 3,842     |   |                    |   | 0.33 |   |   |   | 3,888 |   |   |   | 0.31 |   |
| Gross loans                                    |   |                     | 1,175,724 |   |                    |   | 100.00 | % |   |   | 1,276,616 |   |   |   | 100.00 | % |
| Unearned discounts, interest and deferred fees |   |                     | (2,157    | )      |                    |   |   |   |   |   | (2,619 | ) |   |   |   |   |
| Total loans                                    |   |                     | 1,173,567 |   |                    |   |   |   |   |   | 1,273,997 |   |   |   |   |   |
| Allowance for loan losses                      |   |                     | (34,644   | )      |                    |   |   |   |   |   | (29,403 | ) |   |   |   |   |
| Loans, net                                     |   | $                        | 1,138,923 |   |                    |   |   |   |   | $ | 1,244,594 |   |   |   |   |   |

|                                                            |   | As of and for the Three Months |   |   | As of and for the Nine Months |   |
|-----------------------------------------------------------------|--------|--------------------------------|--------|--------|-------------------------------|--------|
|                                                            |   | Ended September 30,            |   |   | Ended September 30,           |   |
|                                                            |   | 2010                           |   |   | 2009                          |   |   | 2010 |   |   | 2009 |   |
|                                                            |   | (In thousands)                 |   |
| Allowance for loan losses at beginning of period                |   | $                              | 36,004 |   |                          | $      | 24,266 |   |   | $ | 29,403 |   |   | $ | 24,235 |   |
| Provision for loan losses                                       |   |                           | 4,700  |   |                          |   | 3,596 |   |   |   | 15,028 |   |   |   | 12,710 |   |
| Charge-offs                                                     |   |                           | (6,115 | )      |                          |   | (2,421 | ) |   |   | (10,400 | ) |   |   | (12,009 | ) |
| Recoveries                                                      |   |                           | 55     |   |                          |   | 162 |   |   |   | 613 |   |   |   | 667 |   |
| Allowance for loan losses at end of period                      |   |                           | 34,644 |   |                          |   | 25,603 |   |   |   | 34,644 |   |   |   | 25,603 |   |
|                                                            |   |                           |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Reserve for unfunded lending commitments at beginning of period |   |                           | 822    |   |                          |   | 1,478 |   |   |   | 1,043 |   |   |   | 1,092 |   |
| Provision (reversal) for unfunded lending commitments      |   |                           | (110   | )      |                          |   | (290 | ) |   |   | (331 | ) |   |   | 96 |   |
| Reserve for unfunded lending commitments at end of period       |   |                           | 712    |   |                          |   | 1,188 |   |   |   | 712 |   |   |   | 1,188 |   |
|                                                            |   |                           |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for credit losses                                     |   | $                              | 35,356 |   |                          | $      | 26,791 |   |   | $ | 35,356 |   |   | $ | 26,791 |   |

----

|                                              |   | As of                  |   |   | As of            |   |
|---------------------------------------------------|--------|------------------------|--------|--------|------------------|--------|
|                                              |   | September 30,2010      |   |   | December 31,2009 |   |
|                                              |   | (Dollars in thousands) |   |
|                                              |   |                   |   |   |             |   |   |   |
| Nonaccrual loans                                  |   | $                      | 51,464 |   |             | $      | 58,236 |   |
| Accruing loans 90 days or more past due           |   |                   | -      |   |             |   | 420 |   |
| Troubled debt restructurings - accruing           |   |                   | 1,319  |   |             |   | 4,927 |   |
| Troubled debt restructurings - nonaccruing        |   |                   | 16,645 |   |             |   | 16,993 |   |
| Other real estate (“ORE”)             |   |                   | 16,141 |   |             |   | 22,291 |   |
| Total nonperforming assets                        |   | $                      | 85,569 |   |             | $      | 102,867 |   |
|                                              |   |                   |   |   |             |   |   |   |
| Total nonperforming assets to total assets        |   |                   | 5.46   | %      |             |   | 6.47 | % |
| Total nonperforming assets to total loans and ORE |   |                   | 7.19   | %      |             |   | 7.94 | % |

|                                                  |   | As ofSeptember 30,2010 |   |   | As ofDecember 31,2009 |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                                  |   | (In thousands)         |   |
| Impaired loans(1) with no valuation reserve           |   | $                      | 59,441 |   |                  | $      | 56,413 |   |
| Impaired loans(1)  with a valuation reserve |   |                   | 9,987  |   |                  |   | 23,743 |   |
| Total recorded investment in impaired loans           |   | $                      | 69,428 |   |                  | $      | 80,156 |   |
|                                                  |   |                   |   |   |                  |   |   |   |
| Valuation allowance related to impaired loans         |   | $                      | 1,086  |   |                  | $      | 2,731 |   |

----

|                          |   | As of andfor the ninemonths endedSeptember 30,2010 |   |   | As of andfor theyear endedDecember 31,2009 |   |
|-------------------------------|--------|----------------------------------------------------|--------|--------|--------------------------------------------|--------|
| Balance as of January 1       |   |                                               |   |   |                                       |   |
| Goodwill                      |   | $                                                  | 21,827 |   |                                       | $      | 21,827 |   |
| Accumulated impairment losses |   |                                               | (2,500 | )      |                                       |   | - |   |
| Net balance as of January 1   |   |                                               | 19,327 |   |                                       |   | 21,827 |   |
| Impairment losses             |   |                                               | (2,000 | )      |                                       |   | (2,500 | ) |
| Balance as of end of period   |   | $                                                  | 17,327 |   |                                       | $      | 19,327 |   |
|                          |   |                                               |   |   |                                       |   |   |   |
| Accumulated impairment losses |   | $                                                  | (4,500 | )      |                                       | $      | (2,500 | ) |

----

----

|                                                |   | As of and for the Three Months           |   |   | As of and for the Nine Months |   |
|-----------------------------------------------------|--------|------------------------------------------|--------|--------|-------------------------------|--------|
|                                                |   | Ended September 30,                      |   |   | Ended September 30,           |   |
|                                                |   | 2010                                     |   |   | 2009                          |   |   | 2010 |   |   | 2009 |   |
|                                                |   | (In thousands, except per share amounts) |   |
|                                                |   |                                     |   |   |                          |   |   |   |   |   |   |   |
| Net income (loss) available to common shareholders  |   | $                                        | 32     |   |                          | $      | 539 |   |   | $ | (4,462 | ) |   | $ | (1,445 | ) |
|                                                |   |                                     |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares in basic EPS         |   |                                     | 12,329 |   |                          |   | 10,915 |   |   |   | 11,712 |   |   |   | 10,899 |   |
| Effect of dilutive securities                       |   |                                     | 16     |   |                          |   | 8 |   |   |   | - |   |   |   | - |   |
| Weighted average common and potentially dilutive    |   |                                     |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|    common shares used in diluted EPS |   |                                     | 12,345 |   |                          |   | 10,923 |   |   |   | 11,712 |   |   |   | 10,899 |   |
|                                                |   |                                     |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share:                   |   |                                     |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                                        | 0.00   |   |                          | $      | 0.05 |   |   | $ | (0.38 | ) |   | $ | (0.13 | ) |
| Diluted                                             |   | $                                        | 0.00   |   |                          | $      | 0.05 |   |   | $ | (0.38 | ) |   | $ | (0.13 | ) |

|                                                         |   | As ofSeptember 30, 2010 |   |   | As ofDecember 31, 2009 |   |
|--------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                                                         |   | (Dollars in thousands)  |   |
| Unfunded loan commitments including unfunded lines of credit |   | $                       | 78,427 |   |                   | $      | 121,166 |   |
| Standby letters of credit                                    |   |                    | 5,171  |   |                   |   | 12,556 |   |
| Commercial letters of credit                                 |   |                    | 4,184  |   |                   |   | 10,415 |   |
| Operating leases                                             |   |                    | 5,415  |   |                   |   | 6,133 |   |
| Total financial instruments with off-balance sheet risk      |   | $                       | 93,197 |   |                   | $      | 150,270 |   |

----

----

----

|                            |   | Actual                 |    |   | MinimumRequired ForCapital AdequacyPurposes |   |   | To be Categorizedas Well Capitalizedunder PromptCorrective ActionProvisions |   |
|---------------------------------|--------|------------------------|---------|--------|---------------------------------------------|--------|--------|---------------------------------------------------------------------------------------|--------|
|                            |   | Amount                 |    |   | Ratio                                       |   |   | Amount                                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                            |   | (Dollars in thousands) |    |
| As of September 30, 2010        |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital ratio  |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   | $                      | 189,299 |   |                                        |   | 15.14  | %                                                                                     |   | $ | 99,998 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A | % |
| MetroBank, N.A.                 |   |                   | 138,191 |   |                                        |   | 15.01  |                                                                                  |   |   | 73,644 |   |   |   | 8.00 |   |   |   | 92,055 |   |   |   | 10.00 |   |
| Metro United Bank               |   |                   | 45,456  |   |                                        |   | 13.79  |                                                                                  |   |   | 26,369 |   |   |   | 8.00 |   |   |   | 32,961 |   |   |   | 10.00 |   |
| Tier 1 risk-based capital ratio |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   |                   | 173,417 |   |                                        |   | 13.87  |                                                                                  |   |   | 49,999 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                 |   |                   | 126,507 |   |                                        |   | 13.74  |                                                                                  |   |   | 36,822 |   |   |   | 4.00 |   |   |   | 55,233 |   |   |   | 6.00 |   |
| Metro United Bank               |   |                   | 41,255  |   |                                        |   | 12.52  |                                                                                  |   |   | 13,185 |   |   |   | 4.00 |   |   |   | 19,777 |   |   |   | 6.00 |   |
| Leverage ratio                  |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   |                   | 173,417 |   |                                        |   | 10.96  |                                                                                  |   |   | 63,299 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                 |   |                   | 126,507 |   |                                        |   | 10.72  |                                                                                  |   |   | 47,215 |   |   |   | 4.00 |   |   |   | 59,018 |   |   |   | 5.00 |   |
| Metro United Bank               |   |                   | 41,255  |   |                                        |   | 10.08  |                                                                                  |   |   | 16,365 |   |   |   | 4.00 |   |   |   | 20,456 |   |   |   | 5.00 |   |
|                            |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009    |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital ratio  |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   | $                      | 189,043 |   |                                        |   | 13.80  | %                                                                                     |   | $ | 109,586 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A | % |
| MetroBank, N.A.                 |   |                   | 138,342 |   |                                        |   | 14.01  |                                                                                  |   |   | 79,012 |   |   |   | 8.00 |   |   |   | 98,766 |   |   |   | 10.00 |   |
| Metro United Bank               |   |                   | 48,625  |   |                                        |   | 12.74  |                                                                                  |   |   | 30,537 |   |   |   | 8.00 |   |   |   | 38,171 |   |   |   | 10.00 |   |
| Tier 1 risk-based capital ratio |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   |                   | 171,756 |   |                                        |   | 12.54  |                                                                                  |   |   | 54,793 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                 |   |                   | 125,853 |   |                                        |   | 12.74  |                                                                                  |   |   | 39,506 |   |   |   | 4.00 |   |   |   | 59,259 |   |   |   | 6.00 |   |
| Metro United Bank               |   |                   | 43,832  |   |                                        |   | 11.48  |                                                                                  |   |   | 15,268 |   |   |   | 4.00 |   |   |   | 22,903 |   |   |   | 6.00 |   |
| Leverage ratio                  |   |                   |    |   |                                        |   |   |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MetroCorp Bancshares, Inc.      |   |                   | 171,756 |   |                                        |   | 10.76  |                                                                                  |   |   | 63,845 |   |   |   | 4.00 |   |   |   | N/A |   |   |   | N/A |   |
| MetroBank, N.A.                 |   |                   | 125,853 |   |                                        |   | 10.69  |                                                                                  |   |   | 47,113 |   |   |   | 4.00 |   |   |   | 58,891 |   |   |   | 5.00 |   |
| Metro United Bank               |   |                   | 43,832  |   |                                        |   | 10.47  |                                                                                  |   |   | 16,750 |   |   |   | 4.00 |   |   |   | 20,937 |   |   |   | 5.00 |   |

----

|                             |   | Gains (Loss)on EffectiveCash HedgingDerivatives |   |   | NetUnrealizedLosses onInvestmentswith OTTI |   |   | NetUnrealizedInvestmentGains(Losses) |   |   | TotalAccumulatedOtherComprehensiveIncome (Losses) |   |
|----------------------------------|--------|-------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|--------------------------------------|--------|--------|---------------------------------------------------|--------|
|                             |   | (In thousands)                                  |   |
|                             |   |                                            |   |
| Balance December 31, 2009        |   | $                                               | (39    | )      |                                       | $      | (888   | )                                    |   | $      | (179                                              | )      |   | $ | (1,106 | ) |
| Current period  change |   |                                            | (1,191 | )      |                                       |   | (85    | )                                    |   |   | 2,347                                             |   |   |   | 1,071 |   |
|                             |   |                                            |   |   |                                       |   |   |                                 |   |   |                                              |   |   |   |   |   |
| Balance September 30, 2010       |   | $                                               | (1,230 | )      |                                       | $      | (973   | )                                    |   | $      | 2,168                                             |   |   | $ | (35 | ) |

----

|                                 |   | Gains/(losses) recorded in income and other comprehensive income (loss) (in thousands) |    |
|--------------------------------------|--------|----------------------------------------------------------------------------------------|---------|
| Three months endedSeptember 30, 2010 |   | Derivatives –effective portionreclassified fromAOCI into income                  |    |   | Hedgeineffectivenessrecorded directlyin income |   |   | Total incomestatementimpact |   |   | Derivatives –effective portionrecorded in OCI |   |   | Total changein OCIfor period |   |
| Contract type                        |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate                        |   | $                                                                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | (609 | ) |   | $ | (609 | ) |
|                                 |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three months endedSeptember 30, 2009 |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contract type                        |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate                        |   | $                                                                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | (168 | ) |   | $ | (168 | ) |

|                                |   | Gains/(losses) recorded in income and other comprehensive income (loss) (in thousands) |    |
|-------------------------------------|--------|----------------------------------------------------------------------------------------|---------|
| Nine months endedSeptember 30, 2010 |   | Derivatives –effective portionreclassified fromAOCI into income                  |    |   | Hedgeineffectivenessrecorded directlyin income |   |   | Total incomestatementimpact |   |   | Derivatives –effective portionrecorded in OCI |   |   | Total changein OCIfor period |   |
| Contract type                       |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate                       |   | $                                                                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | (1,861 | ) |   | $ | (1,861 | ) |
|                                |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine months endedSeptember 30, 2009 |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contract type                       |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate                       |   | $                                                                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | (168 | ) |   | $ | (168 | ) |

----

|                                                                        |   | For the three months ended September 30, 2010 |   |   | For the three months ended September 30, 2009 |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                                                        |   | MetroBank                                     |   |   | MetroUnited                                   |   |   | Other |   |   | ConsolidatedCompany |   |   | MetroBank |   |   | MetroUnited |   |   | Other |   |   | ConsolidatedCompany |   |
|                                                                        |   | (In thousands)                                |   |
| Total interest income                                                       |   | $                                             | 14,237 |   |                                          | $      | 4,965 |   |   | $ | 17 |   |   | $ | 19,219 |   |   | $ | 16,135 |   |   | $ | 5,671 |   |   | $ | 16 |   |   | $ | 21,822 |   |
| Total interest expense                                                      |   |                                          | 3,446  |   |                                          |   | 992 |   |   |   | 532 |   |   |   | 4,970 |   |   |   | 4,770 |   |   |   | 1,917 |   |   |   | 520 |   |   |   | 7,207 |   |
| Net interest income                                                         |   |                                          | 10,791 |   |                                          |   | 3,973 |   |   |   | (515 | ) |   |   | 14,249 |   |   |   | 11,365 |   |   |   | 3,754 |   |   |   | (504 | ) |   |   | 14,615 |   |
| Provision for loan losses                                                   |   |                                          | 4,300  |   |                                          |   | 400 |   |   |   | - |   |   |   | 4,700 |   |   |   | 2,611 |   |   |   | 985 |   |   | ─ |   |   |   | 3,596 |   |
| Net interest income after     provision for loan losses |   |                                          | 6,491  |   |                                          |   | 3,573 |   |   |   | (515 | ) |   |   | 9,549 |   |   |   | 8,754 |   |   |   | 2,769 |   |   |   | (504 | ) |   |   | 11,019 |   |
| Noninterest income                                                          |   |                                          | 1,990  |   |                                          |   | 72 |   |   |   | (301 | ) |   |   | 1,761 |   |   |   | 2,190 |   |   |   | 107 |   |   |   | (332 | ) |   |   | 1,965 |   |
| Noninterest expenses                                                        |   |                                          | 8,242  |   |                                          |   | 2,589 |   |   |   | 28 |   |   |   | 10,859 |   |   |   | 8,680 |   |   |   | 2,604 |   |   |   | 2 |   |   |   | 11,286 |   |
| Income (loss) before income     tax provision           |   |                                          | 239    |   |                                          |   | 1,056 |   |   |   | (844 | ) |   |   | 451 |   |   |   | 2,264 |   |   |   | 272 |   |   |   | (838 | ) |   |   | 1,698 |   |
| Provision (benefit) for income     taxes                |   |                                          | (109   | )      |                                          |   | 320 |   |   |   | (397 | ) |   |   | (186 | ) |   |   | 769 |   |   |   | 46 |   |   |   | (255 | ) |   |   | 560 |   |
| Net income (loss)                                                           |   | $                                             | 348    |   |                                          | $      | 736 |   |   | $ | (447 | ) |   | $ | 637 |   |   | $ | 1,495 |   |   | $ | 226 |   |   | $ | (583 | ) |   | $ | 1,138 |   |

|                                                                        |   | For the nine months ended September 30, 2010 |   |   | For the nine months ended September 30, 2009 |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                        |   | MetroBank                                    |   |   | MetroUnited                                  |   |   | Other |   |   | ConsolidatedCompany |   |   | MetroBank |   |   | MetroUnited |   |   | Other |   |   | ConsolidatedCompany |   |
|                                                                        |   | (In thousands)                               |   |
| Total interest income                                                       |   | $                                            | 43,353 |   |                                         | $      | 15,734 |   |   | $ | 49 |   |   | $ | 59,136 |   |   | $ | 48,757 |   |   | $ | 16,781 |   |   | $ | 47 |   |   | $ | 65,585 |   |
| Total interest expense                                                      |   |                                         | 10,706 |   |                                         |   | 3,867 |   |   |   | 1,591 |   |   |   | 16,164 |   |   |   | 16,345 |   |   |   | 6,593 |   |   |   | 1,570 |   |   |   | 24,508 |   |
| Net interest income                                                         |   |                                         | 32,647 |   |                                         |   | 11,867 |   |   |   | (1,542 | ) |   |   | 42,972 |   |   |   | 32,412 |   |   |   | 10,188 |   |   |   | (1,523 | ) |   |   | 41,077 |   |
| Provision for loan losses                                                   |   |                                         | 10,300 |   |                                         |   | 4,728 |   |   | ─ |   |   |   | 15,028 |   |   |   | 9,138 |   |   |   | 3,572 |   |   | ─ |   |   |   | 12,710 |   |
| Net interest income after     provision for loan losses |   |                                         | 22,347 |   |                                         |   | 7,139 |   |   |   | (1,542 | ) |   |   | 27,944 |   |   |   | 23,274 |   |   |   | 6,616 |   |   |   | (1,523 | ) |   |   | 28,367 |   |
| Noninterest income                                                          |   |                                         | 5,827  |   |                                         |   | 254 |   |   |   | (933 | ) |   |   | 5,148 |   |   |   | 6,240 |   |   |   | 315 |   |   |   | (1,021 | ) |   |   | 5,534 |   |
| Noninterest expenses                                                        |   |                                         | 26,387 |   |                                         |   | 10,592 |   |   |   | 93 |   |   |   | 37,072 |   |   |   | 25,765 |   |   |   | 7,851 |   |   |   | 75 |   |   |   | 33,691 |   |
| Income before income tax     provision                  |   |                                         | 1,787  |   |                                         |   | (3,199 | ) |   |   | (2,568 | ) |   |   | (3,980 | ) |   |   | 3,749 |   |   |   | (920 | ) |   |   | (2,619 | ) |   |   | 210 |   |
| Provision (benefit) for     income taxes                |   |                                         | 205    |   |                                         |   | (622 | ) |   |   | (906 | ) |   |   | (1,323 | ) |   |   | 1,137 |   |   |   | (412 | ) |   |   | (771 | ) |   |   | (46 | ) |
| Net income (loss)                                                           |   | $                                            | 1,582  |   |                                         | $      | (2,577 | ) |   | $ | (1,662 | ) |   | $ | (2,657 | ) |   | $ | 2,612 |   |   | $ | (508 | ) |   | $ | (1,848 | ) |   | $ | 256 |   |

----

|         |   | As of September 30, 2010 |      |   | As of September 30, 2009 |   |
|--------------|--------|--------------------------|-----------|--------|--------------------------|--------|
|         |   | MetroBank                |      |   | MetroUnited              |   |   | Other |   |   | ConsolidatedCompany |   |   | MetroBank |   |   | MetroUnited |   |   | Other |   |   | ConsolidatedCompany |   |
|         |   | (In thousands)           |      |
| Net loans    |   | $                        | 817,697   |   |                     | $      | 321,226 |   |   | $  | ─ |   |   | $ | 1,138,923 |   |   | $ | 929,885 |   |   | $ | 356,050 |   |   | $ | ─ |   |   | $ | 1,285,935 |   |
| Total assets |   |                     | 1,162,650 |   |                     |   | 410,251 |   |   |   | (5,442 | ) |   |   | 1,567,459 |   |   |   | 1,177,347 |   |   |   | 455,713 |   |   |   | (3,328 | ) |   |   | 1,629,732 |   |
| Deposits     |   |                     | 995,184   |   |                     |   | 319,337 |   |   |   | (14,552 | ) |   |   | 1,299,969 |   |   |   | 1,011,435 |   |   |   | 387,720 |   |   |   | (7,329 | ) |   |   | 1,391,826 |   |

| ·   | 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)                 |    |   |  Fair Value |   |
| September 30, 2010                                                                         |   | Level 1                        |    |   | Level 2          |   |   | Level 3 |   |   | Measurements |   |
| Securities available-for-sale                                                              |   |                           |    |   |             |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government     corporations and agencies  |   | $                              | – |   |             | $      | 102,246 |   |   | $ | – |   |   | $ | 102,246 |   |
| Obligations of state and political     subdivisions                    |   |                           | – |   |             |   | 6,221 |   |   |   | – |   |   |   | 6,221 |   |
| Mortgage-backed securities and collateralized     mortgage obligations |   |                           |    |   |             |   |   |   |   |   | – |   |   |   |   |   |
| Government issued or guaranteed                                                            |   |                           | – |   |             |   | 32,921 |   |   |   | – |   |   |   | 32,921 |   |
| Privately issued residential                                                               |   |                           | – |   |             |   | 1,686 |   |   |   | – |   |   |   | 1,686 |   |
| Asset backed securities                                                                    |   |                           | – |   |             |   | 175 |   |   |   | – |   |   |   | 175 |   |
| Investment in CRA funds                                                                    |   |                           | 13,137  |   |             |   | – |   |   |   | – |   |   |   | 13,137 |   |
| Total available-for-sale securities                                                        |   | $                              | 13,137  |   |             | $      | 143,249 |   |   | $ | – |   |   | $ | 156,386 |   |
|                                                                                       |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                                                                     |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap                                                                         |   | $                              | – |   |             | $      | (1,922 | ) |   | $ | – |   |   | $ | (1,922 | ) |
|                                                                                       |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                                                          |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Securities available-for-sale                                                              |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and other U.S. government     corporations and agencies  |   | $                              | – |   |             | $      | 57,228 |   |   | $ | – |   |   | $ | 57,228 |   |
| Obligations of state and political     subdivisions                    |   |                           | – |   |             |   | 5,813 |   |   |   | – |   |   |   | 5,813 |   |
| Mortgage-backed securities and collateralized     mortgage obligations |   |                           |    |   |             |   |   |   |   |   | – |   |   |   |   |   |
| Government issued or guaranteed                                                            |   |                           | – |   |             |   | 32,308 |   |   |   | – |   |   |   | 32,308 |   |
| Privately issued residential                                                               |   |                           | – |   |             |   | 2,835 |   |   |   | – |   |   |   | 2,835 |   |
| Asset backed securities                                                                    |   |                           | – |   |             |   | 184 |   |   |   | – |   |   |   | 184 |   |
| Total available-for-sale securities                                                        |   | $                              | – |   |             | $      | 98,368 |   |   | $ | – |   |   | $ | 98,368 |   |
|                                                                                       |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                                                                     |   |                           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap                                                                         |   | $                              | – |   |             | $      | (61 | ) |   | $ | – |   |   | $ | (61 | ) |

----

|                  |   | As of September 30, 2010 |   |   | Losses  |   |
|-----------------------|--------|--------------------------|--------|--------|---------|--------|
|                  |   | Level 2                  |   |   | Level 3 |   |   | Three months endedSeptember 30, 2010 |   |   | Nine months endedSeptember 30, 2010 |   |
| Assets                |   |                     |   |   |    |   |   |   |   |   |   |   |
| Goodwill              |   | $                        | -      |   |    | $      | 17,327 |   |   | $ | - |   |   | $ | 2,000 |   |
| Foreclosed assets (1) |   |                     | -      |   |    |   | 16,141 |   |   |   | 551 |   |   |   | 3,178 |   |
| Impaired loans (2)    |   |                     | 4,290  |   |    |   | - |   |   |   | 105 |   |   |   | 105 |   |

|                  |   | As of September 30, 2009 |   |   | Losses  |   |
|-----------------------|--------|--------------------------|--------|--------|---------|--------|
|                  |   | Level 2                  |   |   | Level 3 |   |   | Three months endedSeptember 30, 2009 |   |   | Nine months endedSeptember 30, 2009 |   |
| Assets                |   |                     |   |   |    |   |   |   |   |   |   |   |
| Goodwill              |   | $                        | -      |   |    | $      | 21,827 |   |   | $ | - |   |   | $ | - |   |
| Foreclosed assets (1) |   |                     | -      |   |    |   | 23,012 |   |   |   | 337 |   |   |   | 775 |   |
| Impaired loans (2)    |   |                     | 12,633 |   |    |   | 232 |   |   |   | - |   |   |   | 424 |   |

----

|                                                                       |   | As of September 30, 2010   |      | As of December 31, 2009 |   |
|----------------------------------------------------------------------------|--------|----------------------------|-----------|-------------------------|--------|
|                                                                       |   | Carrying orContract Amount |      | EstimatedFair Value     |   | Carrying orContract Amount |   | EstimatedFair Value |   |
|                                                                       |   | (In thousands)             |      |
| Financial Assets                                                           |   |                       |      |                    |   |   |   |   |   |
| Cash and cash equivalents                                                  |   | $                          | 152,423   |                    | $      | 152,423 |   | $ | 108,093 |   | $ | 108,093 |   |
| Investment securities available-for-sale                                   |   |                       | 156,386   |                    |   | 156,386 |   |   | 98,368 |   |   | 98,368 |   |
| Investment securities held-to-maturity                                     |   |                       | 4,044     |                    |   | 4,517 |   |   | 4,044 |   |   | 4,352 |   |
| Other investments                                                          |   |                       | 7,038     |                    |   | 7,038 |   |   | 21,577 |   |   | 21,577 |   |
| Loans, net                                                                 |   |                       | 1,138,923 |                    |   | 1,022,010 |   |   | 1,244,594 |   |   | 1,133,959 |   |
| Cash value of bank owned life insurance                                    |   |                       | 29,617    |                    |   | 29,617 |   |   | 28,526 |   |   | 28,526 |   |
| Accrued interest receivable                                                |   |                       | 4,854     |                    |   | 4,854 |   |   | 5,161 |   |   | 5,161 |   |
|                                                                       |   |                       |      |                    |   |   |   |   |   |   |   |   |   |
| Financial Liabilities                                                      |   |                       |      |                    |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   |                       |      |                    |   |   |   |   |   |   |   |   |   |
|      Transaction accounts                         |   |                       | 708,816   |                    |   | 708,816 |   |   | 705,987 |   |   | 705,987 |   |
|      Time deposits                                |   |                       | 591,153   |                    |   | 591,136 |   |   | 658,180 |   |   | 659,296 |   |
|           Total deposits |   |                       | 1,299,969 |                    |   | 1,299,952 |   |   | 1,364,167 |   |   | 1,365,283 |   |
| Other borrowings                                                           |   |                       | 56,205    |                    |   | 59,035 |   |   | 25,513 |   |   | 27,429 |   |
| Junior subordinated debentures                                             |   |                       | 36,083    |                    |   | 45,476 |   |   | 36,083 |   |   | 37,883 |   |
| Interest rate derivative                                                   |   |                       | 1,922     |                    |   | 1,922 |   |   | 61 |   |   | 61 |   |
| Accrued interest payable                                                   |   |                       | 555       |                    |   | 555 |   |   | 625 |   |   | 625 |   |
|                                                                       |   |                       |      |                    |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments                                    |   |                       |      |                    |   |   |   |   |   |   |   |   |   |
| Unfunded loan commitments, including unfunded lines of credit              |   |                       | —   |                    |   | 177 |   |   | — |   |   | 224 |   |
| Standby letters of credit                                                  |   |                       | —   |                    |   | 17 |   |   | — |   |   | 16 |   |

----

----

----

|   | • | 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 high 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 the Company’s capital levels and regulatory capital ratios; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | 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; |
|--------|---------|--------------------------------------------------|

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

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

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

----

| •     | Create a new agency, the Consumer Financial Protection Bureau, responsible for implementing, examining and enforcing compliance with federal consumer financial laws; |
|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Apply the same leverage and risk–based capital requirements that apply to insured depository institutions to most bank holding companies, which, among other things, will require the Company to deduct all trust preferred securities issued on or after May 19, 2010 from the Company's Tier 1 capital.  Existing trust preferred securities issued prior to May 19, 2010 for all bank holding companies with less than $15.0 billion in total consolidated assets as of December 31, 2009 are exempt from this requirement and as a result, the Company is exempt from this provision; |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| •     | Require bank holding companies to be well–capitalized and well–managed in order to engage in expanded financial activities permissible for financial holding companies and to acquire banks located outside their home state; |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Broaden the base for FDIC insurance assessments from the amount of insured deposits to average total consolidated assets less average tangible equity during the assessment period, which generally is expected to result in an increase in the level of assessments; |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Permanently increase FDIC deposit insurance to $250,000 and provide unlimited FDIC deposit insurance beginning December 31, 2010 until January 1, 2013 for noninterest bearing demand transaction accounts at all insured depository institutions; |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Permit national banks and insured state banks to engage in de novo interstate branching if the laws of the state where the new branch is to be established would permit the establishment of the branch if the national bank or insured state bank were chartered by such state; |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Implement corporate governance revisions, including with regard to executive compensation and proxy access by shareholders, that apply to all public companies, not just financial institutions; and |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •     | Repeal the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts. |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                                    |   | For The Three Months Ended September 30, |
|-----------------------------------------------------------------------------------------|--------|------------------------------------------|
|                                                                                    |   | 2010                                     |   |   | 2009 |
|                                                                                    |   | AverageOutstandingBalance                |   |   | InterestEarned/Paid |   |   | AverageYield/Rate(1) |   |   | AverageOutstandingBalance |   |   | InterestEarned/Paid |   | AverageYield/Rate(1) |
|                                                                                    |   | (Dollars in thousands)                   |
| Assets                                                                                  |   |                                     |
| Interest-earning assets:                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                   |   | $                                        | 1,203,013 |   |   | $ | 17,960 |   |   |   | 5.92 | % |   | $ | 1,320,601 |   |   | $ | 20,654 |   |   | 6.20 | % |
| Taxable securities                                                                      |   |                                     | 126,875 |   |   |   | 977 |   |   |   | 3.06 |   |   |   | 110,336 |   |   |   | 965 |   |   | 3.47 |   |
| Tax-exempt securities                                                                   |   |                                     | 10,057 |   |   |   | 117 |   |   |   | 4.62 |   |   |   | 6,787 |   |   |   | 85 |   |   | 4.97 |   |
| Other investments (2)                                                                   |   |                                     | 8,625 |   |   |   | 57 |   |   |   | 2.62 |   |   |   | 19,873 |   |   |   | 89 |   |   | 1.78 |   |
| Federal funds sold and other short-term     investments             |   |                                     | 152,402 |   |   |   | 108 |   |   |   | 0.28 |   |   |   | 43,257 |   |   |   | 29 |   |   | 0.27 |   |
| Total interest-earning assets                                                           |   |                                     | 1,500,972 |   |   |   | 19,219 |   |   |   | 5.08 |   |   |   | 1,500,854 |   |   |   | 21,822 |   |   | 5.77 |   |
| Allowance for loan losses                                                               |   |                                     | (37,568 | ) |   |   |   |   |   |   |   |   |   |   | (24,918 | ) |   |   |   |   |   |   |   |
| Total interest-earning assets, net of allowance     for loan losses |   |                                     | 1,463,404 |   |   |   |   |   |   |   |   |   |   |   | 1,475,936 |   |   |   |   |   |   |   |   |
| Noninterest-earning assets                                                              |   |                                     | 140,480 |   |   |   |   |   |   |   |   |   |   |   | 130,296 |   |   |   |   |   |   |   |   |
| Total assets                                                                            |   | $                                        | 1,603,884 |   |   |   |   |   |   |   |   |   |   | $ | 1,606,232 |   |   |   |   |   |   |   |   |
|                                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                                        |   | $                                        | 55,481 |   |   | $ | 65 |   |   |   | 0.46 | % |   | $ | 54,727 |   |   | $ | 69 |   |   | 0.50 | % |
| Savings and money market accounts                                                       |   |                                     | 461,140 |   |   |   | 1,236 |   |   |   | 1.06 |   |   |   | 418,335 |   |   |   | 1,692 |   |   | 1.60 |   |
| Time deposits                                                                           |   |                                     | 615,808 |   |   |   | 2,863 |   |   |   | 1.84 |   |   |   | 680,621 |   |   |   | 4,687 |   |   | 2.73 |   |
| Junior subordinated debentures                                                          |   |                                     | 36,083 |   |   |   | 519 |   |   |   | 5.76 |   |   |   | 36,083 |   |   |   | 519 |   |   | 5.76 |   |
| Other borrowings                                                                        |   |                                     | 56,791 |   |   |   | 287 |   |   |   | 2.00 |   |   |   | 28,808 |   |   |   | 240 |   |   | 3.31 |   |
| Total interest-bearing liabilities                                                      |   |                                     | 1,225,303 |   |   |   | 4,970 |   |   |   | 1.61 |   |   |   | 1,218,574 |   |   |   | 7,207 |   |   | 2.35 |   |
| Noninterest-bearing liabilities:                                                        |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                                                     |   |                                     | 202,780 |   |   |   |   |   |   |   |   |   |   |   | 210,040 |   |   |   |   |   |   |   |   |
| Other liabilities                                                                       |   |                                     | 17,680 |   |   |   |   |   |   |   |   |   |   |   | 13,104 |   |   |   |   |   |   |   |   |
| Total liabilities                                                                       |   |                                     | 1,445,763 |   |   |   |   |   |   |   |   |   |   |   | 1,441,718 |   |   |   |   |   |   |   |   |
|                                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                    |   |                                     | 158,121 |   |   |   |   |   |   |   |   |   |   |   | 164,514 |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                              |   | $                                        | 1,603,884 |   |   |   |   |   |   |   |   |   |   | $ | 1,606,232 |   |   |   |   |   |   |   |   |
|                                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                     |   |                                     |   |   |   | $ | 14,249 |   |   |   |   |   |   |   |   |   |   | $ | 14,615 |   |   |   |   |
| Net interest spread                                                                     |   |                                     |   |   |   |   |   |   |   |   | 3.47 | % |   |   |   |   |   |   |   |   |   | 3.42 | % |
| Net interest margin                                                                     |   |                                     |   |   |   |   |   |   |   |   | 3.77 | % |   |   |   |   |   |   |   |   |   | 3.86 | % |

----

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

----

|                                                                                    |   | For The Nine Months Ended September 30, |
|-----------------------------------------------------------------------------------------|--------|-----------------------------------------|
|                                                                                    |   | 2010                                    |   |   | 2009 |
|                                                                                    |   | AverageOutstandingBalance               |   |   | InterestEarned/Paid |   |   | AverageYield/Rate(1) |   |   | AverageOutstandingBalance |   |   | InterestEarned/Paid |   | AverageYield/Rate(1) |
|                                                                                    |   | (Dollars in thousands)                  |
| Assets                                                                                  |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                   |   | $                                       | 1,238,835 |   |   | $ | 55,717 |   |   |   | 6.01 | % |   | $ | 1,327,198 |   |   | $ | 61,791 |   |   | 6.22 | % |
| Taxable securities                                                                      |   |                                    | 105,514 |   |   |   | 2,590 |   |   |   | 3.28 |   |   |   | 103,808 |   |   |   | 3,048 |   |   | 3.93 |   |
| Tax-exempt securities                                                                   |   |                                    | 10,160 |   |   |   | 356 |   |   |   | 4.68 |   |   |   | 5,669 |   |   |   | 210 |   |   | 4.95 |   |
| Other investments (2)                                                                   |   |                                    | 14,489 |   |   |   | 207 |   |   |   | 1.91 |   |   |   | 20,968 |   |   |   | 386 |   |   | 2.46 |   |
| Federal funds sold and other short-term     investments             |   |                                    | 133,312 |   |   |   | 266 |   |   |   | 0.27 |   |   |   | 56,669 |   |   |   | 150 |   |   | 0.35 |   |
| Total interest-earning assets                                                           |   |                                    | 1,502,310 |   |   |   | 59,136 |   |   |   | 5.26 |   |   |   | 1,514,312 |   |   |   | 65,585 |   |   | 5.79 |   |
| Allowance for loan losses                                                               |   |                                    | (34,766 | ) |   |   |   |   |   |   |   |   |   |   | (24,525 | ) |   |   |   |   |   |   |   |
| Total interest-earning assets, net of allowance     for loan losses |   |                                    | 1,467,544 |   |   |   |   |   |   |   |   |   |   |   | 1,489,787 |   |   |   |   |   |   |   |   |
| Noninterest-earning assets                                                              |   |                                    | 143,530 |   |   |   |   |   |   |   |   |   |   |   | 123,359 |   |   |   |   |   |   |   |   |
| Total assets                                                                            |   | $                                       | 1,611,074 |   |   |   |   |   |   |   |   |   |   | $ | 1,613,146 |   |   |   |   |   |   |   |   |
|                                                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                                        |   | $                                       | 55,317 |   |   | $ | 206 |   |   |   | 0.50 | % |   | $ | 54,776 |   |   | $ | 209 |   |   | 0.51 | % |
| Savings and money market accounts                                                       |   |                                    | 464,788 |   |   |   | 4,191 |   |   |   | 1.21 |   |   |   | 400,240 |   |   |   | 5,981 |   |   | 2.00 |   |
| Time deposits                                                                           |   |                                    | 635,628 |   |   |   | 9,410 |   |   |   | 1.98 |   |   |   | 696,643 |   |   |   | 15,991 |   |   | 3.07 |   |
| Junior subordinated debentures                                                          |   |                                    | 36,083 |   |   |   | 1,559 |   |   |   | 5.76 |   |   |   | 36,083 |   |   |   | 1,559 |   |   | 5.76 |   |
| Other borrowings                                                                        |   |                                    | 43,771 |   |   |   | 798 |   |   |   | 2.44 |   |   |   | 40,196 |   |   |   | 768 |   |   | 2.55 |   |
| Total interest-bearing liabilities                                                      |   |                                    | 1,235,587 |   |   |   | 16,164 |   |   |   | 1.75 |   |   |   | 1,227,938 |   |   |   | 24,508 |   |   | 2.67 |   |
| Noninterest-bearing liabilities:                                                        |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                                                     |   |                                    | 201,916 |   |   |   |   |   |   |   |   |   |   |   | 208,595 |   |   |   |   |   |   |   |   |
| Other liabilities                                                                       |   |                                    | 16,011 |   |   |   |   |   |   |   |   |   |   |   | 14,245 |   |   |   |   |   |   |   |   |
| Total liabilities                                                                       |   |                                    | 1,453,514 |   |   |   |   |   |   |   |   |   |   |   | 1,450,778 |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                    |   |                                    | 157,560 |   |   |   |   |   |   |   |   |   |   |   | 162,368 |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                              |   | $                                       | 1,611,074 |   |   |   |   |   |   |   |   |   |   | $ | 1,613,146 |   |   |   |   |   |   |   |   |
|                                                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                     |   |                                    |   |   |   | $ | 42,972 |   |   |   |   |   |   |   |   |   |   | $ | 41,077 |   |   |   |   |
| Net interest spread                                                                     |   |                                    |   |   |   |   |   |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   |   | 3.12 | % |
| Net interest margin                                                                     |   |                                    |   |   |   |   |   |   |   |   | 3.82 | % |   |   |   |   |   |   |   |   |   | 3.63 | % |

----

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

----

|                                                                        |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|-----------------------------------------------------------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
|                                                                        |   | 2010 vs 2009                     |   |   | 2010 vs 2009                    |   |
|                                                                        |   | Increase (Decrease)              |   |   |                            |   |   | Increase (Decrease) |   |   |   |   |
|                                                                        |   | Due to                           |   |   |                            |   |   | Due to |   |   |   |   |
|                                                                        |   | Volume                           |   |   | Rate                            |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
|                                                                        |   | (In thousands)                   |   |
|                                                                        |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                    |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                       |   | $                                | (1,839 | )      |                            | $      | (855 | ) |   | $ | (2,694 | ) |   | $ | (4,114 | ) |   | $ | (1,960 | ) |   | $ | (6,074 | ) |
| Taxable securities                                                          |   |                             | 145    |   |                            |   | (133 | ) |   |   | 12 |   |   |   | 50 |   |   |   | (508 | ) |   |   | (458 | ) |
| Tax-exempt securities                                                       |   |                             | 41     |   |                            |   | (9 | ) |   |   | 32 |   |   |   | 166 |   |   |   | (20 | ) |   |   | 146 |   |
| Other investments                                                           |   |                             | (50    | )      |                            |   | 18 |   |   |   | (32 | ) |   |   | (119 | ) |   |   | (60 | ) |   |   | (179 | ) |
| Federal funds sold and other short-term     investments |   |                             | 73     |   |                            |   | 6 |   |   |   | 79 |   |   |   | 203 |   |   |   | (87 | ) |   |   | 116 |   |
| Total decrease in interest income                                           |   |                             | (1,630 | )      |                            |   | (973 | ) |   |   | (2,603 | ) |   |   | (3,814 | ) |   |   | (2,635 | ) |   |   | (6,449 | ) |
|                                                                        |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                            |   |                             | 1      |   |                            |   | (5 | ) |   |   | (4 | ) |   |   | 2 |   |   |   | (5 | ) |   |   | (3 | ) |
| Savings and money market accounts                                           |   |                             | 173    |   |                            |   | (629 | ) |   |   | (456 | ) |   |   | 965 |   |   |   | (2,755 | ) |   |   | (1,790 | ) |
| Time deposits                                                               |   |                             | (446   | )      |                            |   | (1,378 | ) |   |   | (1,824 | ) |   |   | (1,401 | ) |   |   | (5,180 | ) |   |   | (6,581 | ) |
| Junior subordinated debentures                                              |   |                             | -      |   |                            |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other borrowings                                                            |   |                             | 233    |   |                            |   | (186 | ) |   |   | 47 |   |   |   | 68 |   |   |   | (38 | ) |   |   | 30 |   |
| Total decrease in interest expense                                          |   |                             | (39    | )      |                            |   | (2,198 | ) |   |   | (2,237 | ) |   |   | (366 | ) |   |   | (7,978 | ) |   |   | (8,344 | ) |
|                                                                        |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in net interest income                                  |   | $                                | (1,591 | )      |                            | $      | 1,225 |   |   | $ | (366 | ) |   | $ | (3,448 | ) |   | $ | 5,343 |   |   | $ | 1,895 |   |

----

----

|                                           |   | As of September 30, 2010 |      |   | As of December 31, 2009 |   |
|------------------------------------------------|--------|--------------------------|-----------|--------|-------------------------|--------|
|                                           |   | Amount                   |      |   | Percent                 |   |   | Amount |   |   | Percent |   |
|                                           |   | (Dollars in thousands)   |      |
|                                           |   |                     |      |   |                    |   |   |   |   |   |   |   |
| Commercial and industrial                      |   | $                        | 357,803   |   |                    |   | 30.43 | % |   | $ | 399,235 |   |   |   | 31.27 | % |
| Real estate mortgage                           |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                     | 35,551    |   |                    |   | 3.03 |   |   |   | 32,730 |   |   |   | 2.56 |   |
| Commercial                                     |   |                     | 739,210   |   |                    |   | 62.87 |   |   |   | 742,974 |   |   |   | 58.20 |   |
|                                           |   |                     | 774,761   |   |                    |   | 65.90 |   |   |   | 775,704 |   |   |   | 60.76 |   |
| Real estate construction                       |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                    |   |                     | 15,539    |   |                    |   | 1.32 |   |   |   | 32,257 |   |   |   | 2.52 |   |
| Commercial                                     |   |                     | 23,779    |   |                    |   | 2.02 |   |   |   | 65,532 |   |   |   | 5.14 |   |
|                                           |   |                     | 39,318    |   |                    |   | 3.34 |   |   |   | 97,789 |   |   |   | 7.66 |   |
| Consumer and other                             |   |                     | 3,842     |   |                    |   | 0.33 |   |   |   | 3,888 |   |   |   | 0.31 |   |
| Gross loans                                    |   |                     | 1,175,724 |   |                    |   | 100.00 | % |   |   | 1,276,616 |   |   |   | 100.00 | % |
| Unearned discounts, interest and deferred fees |   |                     | (2,157    | )      |                    |   |   |   |   |   | (2,619 | ) |   |   |   |   |
| Total loans                                    |   |                     | 1,173,567 |   |                    |   |   |   |   |   | 1,273,997 |   |   |   |   |   |
| Allowance for loan losses                      |   |                     | (34,644   | )      |                    |   |   |   |   |   | (29,403 | ) |   |   |   |   |
| Loans, net                                     |   | $                        | 1,138,923 |   |                    |   |   |   |   | $ | 1,244,594 |   |   |   |   |   |

----

|                                              |   | As of                  |   |   | As of             |   |
|---------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                                              |   | September 30, 2010     |   |   | December 31, 2009 |   |
|                                              |   | (Dollars in thousands) |   |
| Nonaccrual loans                                  |   | $                      | 51,464 |   |              | $      | 58,236 |   |
| Accruing loans 90 days or more past due           |   |                   | -      |   |              |   | 420 |   |
| Troubled debt restructurings - accruing           |   |                   | 1,319  |   |              |   | 4,927 |   |
| Troubled debt restructurings - nonaccruing        |   |                   | 16,645 |   |              |   | 16,993 |   |
| Other real estate (“ORE”)             |   |                   | 16,141 |   |              |   | 22,291 |   |
| Total nonperforming assets                        |   |                   | 85,569 |   |              |   | 102,867 |   |
|                                              |   |                   |   |   |              |   |   |   |
| Total nonperforming assets to total assets        |   |                   | 5.46   | %      |              |   | 6.47 | % |
| Total nonperforming assets to total loans and ORE |   |                   | 7.19   | %      |              |   | 7.94 | % |

|                                                  |   | As ofSeptember 30, 2010 |   |   | As ofDecember 31, 2009 |   |
|-------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                                                  |   | (In thousands)          |   |
| Impaired loans(1) with no valuation reserve           |   | $                       | 59,441 |   |                   | $      | 56,413 |   |
| Impaired loans(1)  with a valuation reserve |   |                    | 9,987  |   |                   |   | 23,743 |   |
| Total recorded investment in impaired loans           |   | $                       | 69,428 |   |                   | $      | 80,156 |   |
|                                                  |   |                    |   |   |                   |   |   |   |
| Valuation allowance related to impaired loans         |   | $                       | 1,086  |   |                   | $      | 2,731 |   |

----

----

----

|                                                            |   | As of and for theThree Months Ended September 30, |      |
|-----------------------------------------------------------------|--------|---------------------------------------------------|-----------|
|                                                            |   | 2010                                              |      |   | 2009 |   |
|                                                            |   | (Dollars in thousands)                            |      |
|                                                            |   |                                              |      |
| Average total loans outstanding for the period                  |   | $                                                 | 1,203,013 |   |   | $ | 1,320,601 |   |
| Total loans outstanding at end of period                        |   | $                                                 | 1,173,567 |   |   | $ | 1,311,538 |   |
|                                                            |   |                                              |      |   |   |   |   |   |
| Allowance for loan losses at beginning of period                |   | $                                                 | 36,004    |   |   | $ | 24,266 |   |
| Provision for loan losses                                       |   |                                              | 4,700     |   |   |   | 3,596 |   |
| Charge-offs:                                                    |   |                                              |      |   |   |   |   |   |
| Commercial and industrial                                       |   |                                              | (1,191    | ) |   |   | (657 | ) |
| Real estate mortgage                                            |   |                                              | (4,451    | ) |   |   | (1,408 | ) |
| Real estate construction                                        |   |                                              | (444      | ) |   |   | (335 | ) |
| Consumer and other                                              |   |                                              | (29       | ) |   |   | (21 | ) |
| Total charge-offs                                               |   |                                              | (6,115    | ) |   |   | (2,421 | ) |
|                                                            |   |                                              |      |   |   |   |   |   |
| Recoveries:                                                     |   |                                              |      |   |   |   |   |   |
| Commercial and industrial                                       |   |                                              | 27        |   |   |   | 159 |   |
| Real estate mortgage                                            |   |                                              | -         |   |   |   | 2 |   |
| Real estate construction                                        |   |                                              | 21        |   |   |   | – |   |
| Consumer and other                                              |   |                                              | 7         |   |   |   | 1 |   |
| Total recoveries                                                |   |                                              | 55        |   |   |   | 162 |   |
| Net charge-offs                                                 |   |                                              | (6,060    | ) |   |   | (2,259 | ) |
| Allowance for loan losses at end of period                      |   |                                              | 34,644    |   |   |   | 25,603 |   |
|                                                            |   |                                              |      |   |   |   |   |   |
| Reserve for unfunded lending commitments at beginning of period |   |                                              | 822       |   |   |   | 1,478 |   |
| Provision for unfunded lending commitments                      |   |                                              | (110      | ) |   |   | (290 | ) |
| Reserve for unfunded lending commitments at end of period       |   |                                              | 712       |   |   |   | 1,188 |   |
|                                                            |   |                                              |      |   |   |   |   |   |
| Allowance for credit losses at end of period                    |   | $                                                 | 35,356    |   |   | $ | 26,791 |   |
|                                                            |   |                                              |      |   |   |   |   |   |
| Ratio of net charge-offs to end of period total loans           |   |                                              | (0.52     | ) % |   |   | (0.17 | ) % |

----

|                                                                    |   | As of and for theNine Months Ended September 30, |      |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                    |   | 2010                                             |      |   | 2009 |   |
|                                                                    |   | (Dollars in thousands)                           |      |
|                                                                    |   |                                             |      |
| Average total loans outstanding for the period                          |   | $                                                | 1,238,835 |   |   | $ | 1,327,198 |   |
| Total loans outstanding at end of period                                |   | $                                                | 1,173,567 |   |   | $ | 1,311,538 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Allowance for loan losses at beginning of period                        |   | $                                                | 29,403    |   |   | $ | 24,235 |   |
| Provision for loan losses                                               |   |                                             | 15,028    |   |   |   | 12,710 |   |
| Charge-offs:                                                            |   |                                             |      |   |   |   |   |   |
| Commercial and industrial                                               |   |                                             | (2,189    | ) |   |   | (8,879 | ) |
| Real estate mortgage                                                    |   |                                             | (6,578    | ) |   |   | (2,016 | ) |
| Real estate construction                                                |   |                                             | (1,438    | ) |   |   | (1,021 | ) |
| Consumer and other                                                      |   |                                             | (195      | ) |   |   | (93 | ) |
| Total charge-offs                                                       |   |                                             | (10,400   | ) |   |   | (12,009 | ) |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Recoveries:                                                             |   |                                             |      |   |   |   |   |   |
| Commercial and industrial                                               |   |                                             | 418       |   |   |   | 573 |   |
| Real estate mortgage                                                    |   |                                             | 149       |   |   |   | 3 |   |
| Real estate construction                                                |   |                                             | 21        |   |   |   | 88 |   |
| Consumer and other                                                      |   |                                             | 25        |   |   |   | 3 |   |
| Total recoveries                                                        |   |                                             | 613       |   |   |   | 667 |   |
| Net charge-offs                                                         |   |                                             | (9,787    | ) |   |   | (11,342 | ) |
| Allowance for loan losses at end of period                              |   |                                             | 34,644    |   |   |   | 25,603 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Reserve for unfunded lending commitments at beginning of period         |   |                                             | 1,043     |   |   |   | 1,092 |   |
| Provision for unfunded lending commitments                              |   |                                             | (331      | ) |   |   | 96 |   |
| Reserve for unfunded lending commitments at end of period               |   |                                             | 712       |   |   |   | 1,188 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Allowance for credit losses at end of period                            |   | $                                                | 35,356    |   |   | $ | 26,791 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Ratio of allowance for loan losses to end of period total loans         |   |                                             | 2.95      | % |   |   | 1.95 | % |
| Ratio of net charge-offs to end of period total loans                   |   |                                             | (0.83     | ) % |   |   | (0.86 | ) % |
| Ratio of allowance for loan losses to end of period total nonperforming |   |                                             |      |   |   |   |   |   |
|      loans (1)                                 |   |                                             | 49.90     | % |   |   | 55.91 | % |

----

----

----

|                                        |   | As of andfor the Nine  |    |   | As of andfor the |   |
|---------------------------------------------|--------|------------------------|---------|--------|------------------|--------|
|                                        |   | Months Ended           |    |   | Year Ended       |   |
|                                        |   | September 30,2010      |    |   | December 31,2009 |   |
|                                        |   | (Dollars in thousands) |    |
| Federal Funds Purchased:                    |   |                   |    |   |             |   |
| at end of period                            |   | $                      | – |   |             | $      | – |   |
| average during the period                   |   |                   | 1       |   |             |   | 22 |   |
| maximum month-end balance during the period |   |                   | – |   |             |   | – |   |
| Interest rate at end of period              |   |                   | – |   |             |   | – | % |
| Interest rate during the period             |   |                   | 0.75    | %      |             |   | 0.50 |   |
|                                        |   |                   |    |   |             |   |   |   |
| FHLB Notes and Advances:                    |   |                   |    |   |             |   |   |   |
| at end of period                            |   | $                      | 30,000  |   |             | $      | – |   |
| average during the period                   |   |                   | 17,253  |   |             |   | 10,695 |   |
| maximum month-end balance during the period |   |                   | 30,000  |   |             |   | 55,000 |   |
| Interest rate at end of period              |   |                   | 0.49    | %      |             |   | – | % |
| Interest rate during the period             |   |                   | 0.48    |   |             |   | 0.50 |   |
|                                        |   |                   |    |   |             |   |   |   |
| 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 |   |
|                                        |   |                   |    |   |             |   |   |   |
| Debentures:                                 |   |                   |    |   |             |   |   |   |
| at end of period                            |   | $                      | 1,000   |   |             | $      | – |   |
| average during the period                   |   |                   | 852     |   |             |   | 153 |   |
| maximum month-end balance during the period |   |                   | 1,000   |   |             |   | – |   |
| Interest rate at end of period              |   |                   | 5.00    | %      |             |   | – | % |
| Interest rate during the period             |   |                   | 5.00    |   |             |   | 7.19 |   |
|                                        |   |                   |    |   |             |   |   |   |
| Federal Reserve TT&L:                   |   |                   |    |   |             |   |   |   |
| at end of period                            |   | $                      | 205     |   |             | $      | 513 |   |
| average during the period                   |   |                   | 666     |   |             |   | 687 |   |
| maximum month-end balance during the period |   |                   | 1,075   |   |             |   | 1,020 |   |

----

|                            |   | Minimum          |   | To Be Categorized as   |   |               |
|---------------------------------|--------|------------------|--------|------------------------|--------|--------------------|
|                            |   | Required For     |   | Well Capitalized Under |   |               |
|                            |   | Capital Adequacy |   | Prompt Corrective      |   | Actual Ratio At    |
|                            |   | Purposes         |   | Action Provisions      |   | September 30, 2010 |
| The Company                     |   |             |   |                   |   |               |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | % (1)                  |   |               | N/A | % |   |   | 10.96 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                   |   |               | N/A |   |   |   | 13.87 |   |
| Risk-based capital ratio        |   |             | 8.00   |                   |   |               | N/A |   |   |   | 15.14 |   |
| MetroBank                       |   |             |   |                   |   |               |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | % (2)                  |   |               | 5.00 | % |   |   | 10.72 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                   |   |               | 6.00 |   |   |   | 13.74 |   |
| Risk-based capital ratio        |   |             | 8.00   |                   |   |               | 10.00 |   |   |   | 15.01 |   |
| Metro United                    |   |             |   |                   |   |               |   |   |   |   |   |   |
| Leverage ratio                  |   |             | 4.00   | % (3)                  |   |               | 5.00 | % |   |   | 10.08 | % |
| Tier 1 risk-based capital ratio |   |             | 4.00   |                   |   |               | 6.00 |   |   |   | 12.52 |   |
| Risk-based capital ratio        |   |             | 8.00   |                   |   |               | 10.00 |   |   |   | 13.79 |   |

----

----

----

----

----

----

| 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.                                                                                       |

----

----

|                   |                             |                                                                                     |   |   |
|------------------------|----------------------------------|------------------------------------------------------------------------------------------|--------|--------|
|                   | METROCORP BANCSHARES, INC.  |                                                                                     |
|                   | By:                    | /s/ George M. Lee                                                                   |   |
| Date: November 8, 2010 |                             | George M. Lee Executive Vice Chairman, President and                                |   |
|                   |                             | Chief Executive Officer (principal executive officer)                               |   |
|                   |
|                   |                             |                                                                                     |
| Date: November 8, 2010 | 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.                                                                                       |

----