----

----

| Delaware                                                       | 63-0833573                              |
|----------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |

| 200 East Nashville Avenue, Atmore, Alabama | 36502      |
|--------------------------------------------|------------|
| (Address of principal executive offices)   | (Zip Code) |

----

----

----

UNITED

| PART I - FINANCIAL INFORMATION | PAGE                                                                                  |
|--------------------------------|---------------------------------------------------------------------------------------|
|                           |                                                                                  |   |
| Item 1.                        | Financial Statements                                                                  |   |
|                           |                                                                                  |   |
|                           | Consolidated Balance Sheets                                                           | 3 |
|                           |                                                                                  |   |
|                           | Consolidated Statements of Operations and Comprehensive Income (Loss)                 | 4 |
|                           |                                                                                  |   |
|                           | Consolidated Statements of Cash Flows                                                 | 5 |
|                           |                                                                                  |   |
|                           | Notes to Consolidated Financial Statements                                            | 6 |
|                           |                                                                                  |   |
| Item 2.                        | Management's Discussion and Analysis of Financial Condition and Results of Operations | 22 |
|                           |                                                                                  |   |
| Item 4T.        | Controls and Procedures                                                               | 33 |
|                           |                                                                                  |   |
| PART II - OTHER INFORMATION    |                                                                                  |
|                           |                                                                                  |   |
| Item 1A.                       | Risk Factors                                                                          | 34 |
|                           |                                                                                  |   |
| Item 6.                        | Exhibits                                                                              | 35 |

----

Index

Uni

|                                                                                                                   |   | June 30, |        |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|-------------------|--------|
|                                                                                                                   |   | 2010          |        |   | 2009              |   |
|                                                                                                                   |   | (Unaudited)   |        |   |              |   |
| Assets                                                                                                                 |   |          |        |   |              |   |
| Cash and due from banks                                                                                                |   | $             | 9,963,492   |   |              | $      | 13,858,726 |   |
| Interest bearing deposits in banks                                                                                     |   |          | 78,351,559  |   |              |   | 40,809,385 |   |
| Cash and cash equivalents                                                                                              |   |          | 88,315,051  |   |              |   | 54,668,111 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Securities available for sale (amortized cost of $76,226,324and $67,627,174 respectively)                              |   |          | 77,453,174  |   |              |   | 68,212,662 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Securities held to maturity (market values of  $10,744,514and $15,715,993 respectively)                      |   |          | 10,398,202  |   |              |   | 15,659,330 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Loans                                                                                                                  |   |          | 281,889,405 |   |              |   | 283,346,171 |   |
| Less: Allowance for loan losses                                                                                        |   |          | 7,740,744   |   |              |   | 7,435,509 |   |
| Net loans                                                                                                              |   |          | 274,148,661 |   |              |   | 275,910,662 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Premises and equipment, net                                                                                            |   |          | 17,046,348  |   |              |   | 17,589,236 |   |
| Interest receivable                                                                                                    |   |          | 2,494,000   |   |              |   | 2,858,122 |   |
| Intangible assets                                                                                                      |   |          | 934,763     |   |              |   | 934,763 |   |
| Other assets                                                                                                           |   |          | 21,453,967  |   |              |   | 21,149,520 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Total assets                                                                                                           |   |          | 492,244,166 |   |              |   | 456,982,406 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Liabilities and Stockholders' Equity                                                                                   |   |          |        |   |              |   |   |   |
| Deposits:                                                                                                              |   |          |        |   |              |   |   |   |
| Non-interest bearing                                                                                                   |   |          | 155,903,953 |   |              |   | 121,753,295 |   |
| Interest bearing                                                                                                       |   |          | 283,454,992 |   |              |   | 283,056,954 |   |
| Total deposits                                                                                                         |   |          | 439,358,945 |   |              |   | 404,810,249 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Advances from Federal Home Loan Bank of Atlanta                                                                        |   |          | 1,362,700   |   |              |   | 1,445,100 |   |
| Treasury, tax, and loan account                                                                                        |   |          | 866,439     |   |              |   | 624,143 |   |
| Interest payable                                                                                                       |   |          | 480,146     |   |              |   | 620,867 |   |
| Accrued expenses and other liabilities                                                                                 |   |          | 1,659,910   |   |              |   | 1,608,243 |   |
| Note payable to Trust                                                                                                  |   |          | 10,310,000  |   |              |   | 10,310,000 |   |
| Total liabilities                                                                                                      |   |          | 454,038,140 |   |              |   | 419,418,602 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Stockholders' equity                                                                                                   |   |          |        |   |              |   |   |   |
| Preferred stock of $.01 par value.  Authorized 250,000 shares;10,300 shares, net of discount                 |   |          | 10,047,138  |   |              |   | 10,014,985 |   |
| Class A common stock, $0.01 par value.                                                                                 |   |          |        |   |              |   |   |   |
| Authorized 5,000,000 shares; issued and outstanding,2,388,992 and  2,388,992 shares,  respectively |   |          | 23,890      |   |              |   | 23,890 |   |
| Class B common stock, $0.01 par value.                                                                                 |   |          |        |   |              |   |   |   |
| Authorized 250,000 shares; no shares issued or outstanding                                                             |   |          | -           |   |              |   | - |   |
| Additional paid in capital                                                                                             |   |          | 6,710,513   |   |              |   | 6,544,079 |   |
| Accumulated other comprehensive income net of tax                                                                      |   |          | 736,104     |   |              |   | 351,289 |   |
| Retained earnings                                                                                                      |   |          | 21,565,011  |   |              |   | 21,685,478 |   |
|                                                                                                                   |   |          | 39,082,656  |   |              |   | 38,619,721 |   |
|                                                                                                                   |   |          |        |   |              |   |   |   |
| Less:  109,323 and 131,678 treasury shares, at cost, respectively                                            |   |          | 876,630     |   |              |   | 1,055,917 |   |
| Total stockholders' equity                                                                                             |   |          | 38,206,026  |   |              |   | 37,563,804 |   |
| Total liabilities and stockholders' equity                                                                             |   | $             | 492,244,166 |   |              | $      | 456,982,406 |   |

----

Index

Unite

|                                                                    |   | Three Months Ended |      |   | Six Months Ended |   |
|-------------------------------------------------------------------------|--------|------------------------------|-----------|--------|----------------------------|--------|
|                                                                    |   | June 30                      |      |   | June 30                    |   |
|                                                                    |   | 2010                         |      |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |
| Interest income:                                                        |   |                         |      |   |                       |   |   |   |   |   |   |   |
| Interest and fees on loans                                              |   | $                            | 4,233,077 |   |                       | $      | 4,288,089 |   |   | $ | 8,371,846 |   |   | $ | 8,413,890 |   |
| Interest on investment securities available for sale:                   |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                 |   |                         | 396,013   |   |                       |   | 601,793 |   |   |   | 824,678 |   |   |   | 1,250,807 |   |
| Nontaxable                                                              |   |                         | 237,282   |   |                       |   | 309,552 |   |   |   | 495,650 |   |   |   | 635,473 |   |
| Total investment income                                                 |   |                         | 633,295   |   |                       |   | 911,345 |   |   |   | 1,320,328 |   |   |   | 1,886,280 |   |
| Other interest income                                                   |   |                         | 39,271    |   |                       |   | 61,957 |   |   |   | 72,005 |   |   |   | 166,911 |   |
| Total interest income                                                   |   |                         | 4,905,643 |   |                       |   | 5,261,391 |   |   |   | 9,764,179 |   |   |   | 10,467,081 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                       |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits                                                    |   |                         | 1,140,477 |   |                       |   | 1,766,175 |   |   |   | 2,445,931 |   |   |   | 3,660,424 |   |
| Interest on other borrowed funds                                        |   |                         | 72,776    |   |                       |   | 99,396 |   |   |   | 141,149 |   |   |   | 203,050 |   |
| Total interest expense                                                  |   |                         | 1,213,253 |   |                       |   | 1,865,571 |   |   |   | 2,587,080 |   |   |   | 3,863,474 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                     |   |                         | 3,692,390 |   |                       |   | 3,395,820 |   |   |   | 7,177,099 |   |   |   | 6,603,607 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                               |   |                         | 600,000   |   |                       |   | 2,240,000 |   |   |   | 1,038,000 |   |   |   | 2,600,000 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after provision for loan losses                     |   |                         | 3,092,390 |   |                       |   | 1,155,820 |   |   |   | 6,139,099 |   |   |   | 4,003,607 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income:                                                     |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Service charge on deposits                                              |   |                         | 834,472   |   |                       |   | 869,184 |   |   |   | 1,660,489 |   |   |   | 1,716,277 |   |
| Investment securities gains, net                                        |   |                         | 59,889    |   |                       |   | 172,066 |   |   |   | 219,354 |   |   |   | 172,066 |   |
| Mortgage loan and related fees                                          |   |                         | 82,736    |   |                       |   | 44,817 |   |   |   | 137,701 |   |   |   | 77,285 |   |
| Other                                                                   |   |                         | 233,216   |   |                       |   | 175,848 |   |   |   | 422,806 |   |   |   | 399,811 |   |
| Total noninterest income                                                |   |                         | 1,210,313 |   |                       |   | 1,261,915 |   |   |   | 2,440,350 |   |   |   | 2,365,439 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expense:                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and benefits                                                   |   |                         | 2,153,319 |   |                       |   | 2,162,829 |   |   |   | 4,321,981 |   |   |   | 4,359,825 |   |
| Net occupancy expense                                                   |   |                         | 557,790   |   |                       |   | 602,401 |   |   |   | 1,096,266 |   |   |   | 1,176,912 |   |
| Other                                                                   |   |                         | 1,505,006 |   |                       |   | 1,409,856 |   |   |   | 2,737,353 |   |   |   | 2,452,321 |   |
| Total noninterest expense                                               |   |                         | 4,216,115 |   |                       |   | 4,175,086 |   |   |   | 8,155,600 |   |   |   | 7,989,058 |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (Losses) before income tax benefits                            |   |                         | 86,588    |   |                       |   | (1,757,351 | ) |   |   | 423,849 |   |   |   | (1,620,012 | ) |
| Income tax benefits                                                     |   |                         | (58,767   | )      |                       |   | (753,200 | ) |   |   | (77,309 | ) |   |   | (825,188 | ) |
| Net earnings (losses)                                                   |   |                         | 145,355   |   |                       |   | (1,004,151 | ) |   |   | 501,158 |   |   |   | (794,824 | ) |
| Preferred stock dividends                                               |   |                         | 128,750   |   |                       |   | 128,750 |   |   |   | 257,500 |   |   |   | 203,139 |   |
| Accretion on preferred stock discount                                   |   |                         | 16,192    |   |                       |   | 15,289 |   |   |   | 32,153 |   |   |   | 30,360 |   |
| Net earnings (losses) available to common shareholders                  |   | $                            | 413       |   |                       | $      | (1,148,190 | ) |   | $ | 211,505 |   |   | $ | (1,028,323 | ) |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (losses) per share                                       |   | $                            | 0.00      |   |                       | $      | (0.51 | ) |   | $ | 0.09 |   |   | $ | (0.46 | ) |
| Diluted earnings (losses) per share                                     |   | $                            | 0.00      |   |                       | $      | (0.51 | ) |   | $ | 0.09 |   |   | $ | (0.46 | ) |
| Basic weighted average shares outstanding                               |   |                         | 2,279,669 |   |                       |   | 2,234,920 |   |   |   | 2,277,940 |   |   |   | 2,234,394 |   |
| Diluted weighted average shares outstanding                             |   |                         | 2,280,456 |   |                       |   | 2,236,167 |   |   |   | 2,278,727 |   |   |   | 2,235,641 |   |
| Cash dividend per share                                                 |   | $                            | -         |   |                       | $      | - |   |   | $ | - |   |   | $ | - |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Statement of Comprehensive Income (Loss)                                |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings (losses)                                                   |   | $                            | 145,355   |   |                       | $      | (1,004,151 | ) |   | $ | 501,158 |   |   | $ | (794,824 | ) |
|                                                                    |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                          |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains (losses) arising during the period             |   |                         | 488,290   |   |                       |   | (331,165 | ) |   |   | 516,427 |   |   |   | (491,671 | ) |
| Reclassification adjustment for gains included in net earnings (losses) |   |                         | (35,933   | )      |                       |   | (103,240 | ) |   |   | (131,612 | ) |   |   | (103,240 | ) |
| Comprehensive Income (Loss)                                             |   | $                            | 597,712   |   |                       | $      | (1,438,556 | ) |   | $ | 885,973 |   |   | $ | (1,389,735 | ) |

----

Index

Unit

|                                                                                                  |   | Six Months Ended |        |
|-------------------------------------------------------------------------------------------------------|--------|------------------|-------------|
|                                                                                                  |   | June 30          |        |
|                                                                                                  |   | 2010             |        |   | 2009 |   |
|                                                                                                  |   |             |        |   |   |   |
| Cash flows from operating activities                                                                  |   |             |        |   |   |   |
| Net earnings (losses)                                                                                 |   | $                | 501,158     |   |   | $ | (794,824 | ) |
| Adjustments to reconcile net earnings (losses) to net cash provided by operating activities           |   |             |        |   |   |   |   |   |
| Provision for loan losses                                                                             |   |             | 1,038,000   |   |   |   | 2,600,000 |   |
| Depreciation of premises and equipment                                                                |   |             | 583,058     |   |   |   | 657,379 |   |
| Net amortization of premuim / discount on investment securities available for sale                    |   |             | 118,576     |   |   |   | 49,121 |   |
| Net amortization of premium on investment securities held to maturity                                 |   |             | 26,128      |   |   |   | 131,201 |   |
| Gain on sales of investment securities available for sale, net                                        |   |             | (219,354    | ) |   |   | (172,066 | ) |
| Gain on sale of other real estate                                                                     |   |             | (27,066     | ) |   |   | (22,418 | ) |
| Writedown of other real estate                                                                        |   |             | -           |   |   |   | 4,500 |   |
| Stock-based compensation                                                                              |   |             | 13,748      |   |   |   | 17,982 |   |
| Loss on disposal of equipment                                                                         |   |             | -           |   |   |   | 9,790 |   |
| Decrease in interest receivable                                                                       |   |             | 364,122     |   |   |   | 250,053 |   |
| (Increase) decrease in other assets                                                                   |   |             | 533,366     |   |   |   | (2,064,872 | ) |
| Decrease in interest payable                                                                          |   |             | (140,721    | ) |   |   | (109,489 | ) |
| Increase in accrued expenses and other liabilities                                                    |   |             | 54,887      |   |   |   | 584,876 |   |
| Net cash provided by operating activities                                                             |   |             | 2,845,902   |   |   |   | 1,141,233 |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Cash flows from investing activities                                                                  |   |             |        |   |   |   |   |   |
| Proceeds from maturities, calls, and principal repayments of investment securities available for sale |   |             | 13,933,798  |   |   |   | 34,209,798 |   |
| Proceeds from maturities, calls, and principal repayments of investment securities held to maturity   |   |             | 5,235,000   |   |   |   | 1,000,000 |   |
| Proceeds from sales of investment securities available for sale                                       |   |             | 6,405,693   |   |   |   | 14,258,707 |   |
| Purchases of investment securities available for sale                                                 |   |             | (28,837,863 | ) |   |   | (25,410,331 | ) |
| Purchases of investment securities held to maturity                                                   |   |             | -           |   |   |   | (22,602,343 | ) |
| Net increase in loans                                                                                 |   |             | (580,138    | ) |   |   | (10,492,428 | ) |
| Purchases of premises and equipment, net                                                              |   |             | (40,170     | ) |   |   | (46,835 | ) |
| Proceeds from sale of premises and equipment                                                          |   |             | -           |   |   |   | 8,000 |   |
| Proceeds from sale of other real estate                                                               |   |             | 236,846     |   |   |   | 116,997 |   |
| Net cash used in investing activities                                                                 |   |             | (3,646,834  | ) |   |   | (8,958,435 | ) |
|                                                                                                  |   |             |        |   |   |   |   |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Cash flows from financing activities                                                                  |   |             |        |   |   |   |   |   |
| Net increase (decrease) in deposits                                                                   |   |             | 34,548,696  |   |   |   | (17,284,012 | ) |
| Net decrease in securities sold under agreements to repurchase                                        |   |             | -           |   |   |   | (1,861,237 | ) |
| Cash dividends - preferred stock                                                                      |   |             | (257,500    | ) |   |   | (203,139 | ) |
| Cash dividends - common stock                                                                         |   |             | (3,220      | ) |   |   | (167,426 | ) |
| Proceeds from sale of common stock                                                                    |   |             | -           |   |   |   | 5,130 |   |
| Proceeds from sale of treasury stock                                                                  |   |             | -           |   |   |   | 29,938 |   |
| Repayments of advances from FHLB Atlanta                                                              |   |             | (82,400     | ) |   |   | (82,400 | ) |
| Increase in other borrowed funds                                                                      |   |             | 242,296     |   |   |   | 190,698 |   |
| Net cash provided by (used in) financing activities                                                   |   |             | 34,447,872  |   |   |   | (19,372,448 | ) |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                  |   |             | 33,646,940  |   |   |   | (27,189,650 | ) |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                                        |   |             | 54,668,111  |   |   |   | 143,522,498 |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Cash and cash equivalents, end of period                                                              |   | $                | 88,315,051  |   |   | $ | 116,332,848 |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Supplemental disclosures                                                                              |   |             |        |   |   |   |   |   |
| Cash paid during the period for:                                                                      |   |             |        |   |   |   |   |   |
| Interest                                                                                              |   | $                | 2,727,801   |   |   | $ | 3,972,963 |   |
| Income taxes                                                                                          |   |             | 51,704      |   |   |   | 52,352 |   |
|                                                                                                  |   |             |        |   |   |   |   |   |
| Noncash transactions                                                                                  |   |             |        |   |   |   |   |   |
| Transfer of loans to other real estate through foreclosure                                            |   | $                | 1,304,139   |   |   | $ | 1,784,141 |   |

----

Index

UNIT

----

Index

|                                                                                                          |   | Three Months Ended |      |   | Six Months Ended |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|--------|----------------------------|--------|
|                                                                                                          |   | June 30,                     |      |   | June 30,                   |   |
|                                                                                                          |   | 2010                         |      |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
|                                                                                                          |   |                         |      |   |                       |   |   |   |   |   |   |   |
| Diluted earnings (losses) per share                                                                           |   | $                            | -         |   |                       | $      | (0.51 | ) |   | $ | 0.09 |   |   | $ | (0.46 | ) |
|                                                                                                          |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                                                                    |   |                         | 2,279,669 |   |                       |   | 2,234,920 |   |   |   | 2,277,940 |   |   |   | 2,234,394 |   |
|                                                                                                          |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Effect of the assumed exercise of stock options based on the treasury stock method using average market price |   |                         | 787       |   |                       |   | 1,247 |   |   |   | 787 |   |   |   | 1,247 |   |
|                                                                                                          |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Total weighted average common shares and potential common stock outstanding                                   |   |                         | 2,280,456 |   |                       |   | 2,236,167 |   |   |   | 2,278,727 |   |   |   | 2,235,641 |   |

----

Index

|                               |   | Amortized cost |       |   | Gross unrealized gains |   |      | Gross unrealized losses |   |   | Fair value |   |
|------------------------------------|--------|----------------|------------|--------|------------------------|--------|-----------|-------------------------|--------|--------|------------|--------|
| June 30, 2010                      |   |           |       |   |                   |   |      |                    |   |   |       |   |
| U.S. Treasury securities           |   | $              | 15,155,142 |   |                   | $      | 158,451   |                    |   | $      | -          |   |   | $ | 15,313,593 |   |
| U.S. government sponsored agencies |   |           | 39,912,793 |   |                   |   | 900,658   |                    |   |   | -          |   |   |   | 40,813,451 |   |
| State and political subdivisions   |   |           | 21,148,236 |   |                   |   | 425,549   |                    |   |   | (253,630   | )      |   |   | 21,320,155 |   |
| Equity securities                  |   |           | 10,153     |   |                   |   | -         |                    |   |   | (4,178     | )      |   |   | 5,975 |   |
|                               |   | $              | 76,226,324 |   |                   | $      | 1,484,658 |                    |   | $      | (257,808   | )      |   | $ | 77,453,174 |   |
| December 31, 2009                  |   |           |       |   |                   |   |      |                    |   |   |       |   |   |   |   |   |
| U.S. Treasury securities           |   | $              | 3,024,364  |   |                   | $      | 3,132     |                    |   | $      | (777       | )      |   | $ | 3,026,719 |   |
| U.S. government sponsored agencies |   |           | 36,040,571 |   |                   |   | 444,446   |                    |   |   | (16,504    | )      |   |   | 36,468,513 |   |
| State and political subdivisions   |   |           | 28,552,086 |   |                   |   | 517,459   |                    |   |   | (355,405   | )      |   |   | 28,714,140 |   |
| Equity securities                  |   |           | 10,153     |   |                   |   | -         |                    |   |   | (6,863     | )      |   |   | 3,290 |   |
|                               |   | $              | 67,627,174 |   |                   | $      | 965,037   |                    |   | $      | (379,549   | )      |   | $ | 68,212,662 |   |

|                     |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------|--------|------------------------------|--------|--------|----------------------------|--------|
|                     |   | June 30,                     |   |   | June 30,                   |   |
|                     |   | 2010                         |   |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
|                     |   |                         |   |   |                       |   |   |   |   |   |   |   |
| Gross gains realized     |   | $                            | 69,583 |   |                       | $      | 189,353 |   |   | $ | 306,058 |   |   | $ | 189,353 |   |
| Gross losses realized    |   |                         | (9,694 | )      |                       |   | (17,287 | ) |   |   | (86,704 | ) |   |   | (17,287 | ) |
| Net gain (loss) realized |   | $                            | 59,889 |   |                       | $      | 172,066 |   |   | $ | 219,354 |   |   | $ | 172,066 |   |

----

Index

|                                  |   | Less than 12 months |      |   | 12 months or more |   |    | Total      |   |
|---------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|---------|------------|--------|
| Description of Securities             |   | Fair Value          |      |   | Unrealized losses |   |    | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
| U.S. Treasury securities              |   |                |      |   |              |   |    |       |   |   |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies    |   | $                   | -         |   |              | $      | -       |       |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| State and political subdivisions      |   | $                   | 1,720,945 |   |              | $      | (38,878 | )          |   | $ | 2,018,565 |   |   | $ | (214,752 | ) |   |   | 3,739,510 |   |   |   | (253,630 | ) |
| Equity securities                     |   |                | -         |   |              |   | -       |       |   |   | 5,978 |   |   |   | (4,178 | ) |   |   | 5,978 |   |   |   | (4,178 | ) |
| Total temporarily impaired securities |   | $                   | 1,720,945 |   |              | $      | (38,878 | )          |   | $ | 2,024,543 |   |   | $ | (218,930 | ) |   | $ | 3,745,488 |   |   | $ | (257,808 | ) |

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

----

Index

|                                |   | Within 1 Year |       |   | 1 to 5 Years |   |       | 5 to 10 Years |   |   | Over 10 Years |   |   | Total  |      |
|-------------------------------------|--------|---------------|------------|--------|--------------|--------|------------|---------------|--------|--------|---------------|--------|--------|--------|-----------|
| Amortized Cost                      |   |          |       |   |         |   |       |          |   |   |          |   |   |   |      |
| U.S. Treasury securities            |   | $             | -          |   |         | $      | 15,155,142 |          |   | $      | -             |   |   | $      | -         |   |   | $ | 15,155,142 |   |
| U.S. governement sponsored agencies |   |          | 13,529,657 |   |         |   | 25,314,140 |          |   |   | 1,068,996     |   |   |   | -         |   |   |   | 39,912,793 |   |
| State and political subdivisions    |   |          | 5,039,840  |   |         |   | 9,401,333  |          |   |   | 3,168,099     |   |   |   | 3,538,964 |   |   |   | 21,148,236 |   |
| Equity securities                   |   |          | 10,153     |   |         |   | -          |          |   |   | -             |   |   |   | -         |   |   |   | 10,153 |   |
| Total                               |   | $             | 18,579,650 |   |         | $      | 49,870,615 |          |   | $      | 4,237,095     |   |   | $      | 3,538,964 |   |   | $ | 76,226,324 |   |
|                                |   |          |       |   |         |   |       |          |   |   |          |   |   |   |      |   |   |   |   |   |
| Fair Value                          |   |          |       |   |         |   |       |          |   |   |          |   |   |   |      |   |   |   |   |   |
| U.S. Treasury securities            |   | $             | -          |   |         | $      | 15,313,593 |          |   | $      | -             |   |   | $      | -         |   |   | $ | 15,313,593 |   |
| U.S. governement sponsored agencies |   |          | 13,706,164 |   |         |   | 25,960,018 |          |   |   | 1,147,269     |   |   |   | -         |   |   |   | 40,813,451 |   |
| State and political subdivisions    |   |          | 5,078,705  |   |         |   | 9,702,676  |          |   |   | 3,205,285     |   |   |   | 3,333,489 |   |   |   | 21,320,155 |   |
| Equity securities                   |   |          | 5,975      |   |         |   | -          |          |   |   | -             |   |   |   | -         |   |   |   | 5,975 |   |
| Total                               |   | $             | 18,790,844 |   |         | $      | 50,976,287 |          |   | $      | 4,352,554     |   |   | $      | 3,333,489 |   |   | $ | 77,453,174 |   |
|                                |   |          |       |   |         |   |       |          |   |   |          |   |   |   |      |   |   |   |   |   |
| Total Average Yield                 |   |          | 3.42       | %      |         |   | 2.37       | %             |   |   | 4.05          | %      |   |   | 4.12      | % |   |   | 2.80 | % |

----

Index

|                               |   | Amortized cost |       |   | Gross unrealized gains |   |    | Gross unrealized losses |   |   | Fair value |   |
|------------------------------------|--------|----------------|------------|--------|------------------------|--------|---------|-------------------------|--------|--------|------------|--------|
| June 30, 2010                      |   |           |       |   |                   |   |    |                    |   |   |       |   |
| U.S. government sponsored agencies |   | $              | 10,398,202 |   |                   | $      | 346,312 |                    |   | $      | -          |   |   | $ | 10,744,514 |   |
| Other domestic debt securities     |   |           | -          |   |                   |   | -       |                    |   |   | -          |   |   |   | - |   |
|                               |   | $              | 10,398,202 |   |                   | $      | 346,312 |                    |   | $      | -          |   |   | $ | 10,744,514 |   |
| December 31, 2009                  |   |           |       |   |                   |   |    |                    |   |   |       |   |   |   |   |   |
| U.S. government sponsored agencies |   | $              | 15,424,330 |   |                   | $      | 105,554 |                    |   | $      | (48,891    | )      |   | $ | 15,480,993 |   |
| Other domestic debt securities     |   |           | 235,000    |   |                   |   | -       |                    |   |   | -          |   |   |   | 235,000 |   |
|                               |   | $              | 15,659,330 |   |                   | $      | 105,554 |                    |   | $      | (48,891    | )      |   | $ | 15,715,993 |   |

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

----

Index

|                                |   | Within 1 Year |      |   | 1 to 5 Years |   |      | 5 to 10 Years |   |   | Over 10 Years |   |   | Total  |   |
|-------------------------------------|--------|---------------|-----------|--------|--------------|--------|-----------|---------------|--------|--------|---------------|--------|--------|--------|--------|
| Amortized Cost                      |   |          |      |   |         |   |      |          |   |   |          |   |   |   |   |
| U.S. governement sponsored agencies |   | $             | 3,349,033 |   |         | $      | 4,021,686 |          |   | $      | 3,027,483     |   |   | $      | -      |   |   | $ | 10,398,202 |   |
| Total                               |   | $             | 3,349,033 |   |         | $      | 4,021,686 |          |   | $      | 3,027,483     |   |   | $      | -      |   |   | $ | 10,398,202 |   |
|                                |   |          |      |   |         |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |
| Fair Value                          |   |          |      |   |         |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |
| U.S. governement sponsored agencies |   | $             | 3,392,123 |   |         | $      | 4,152,422 |          |   | $      | 3,199,969     |   |   | $      | -      |   |   | $ | 10,744,514 |   |
| Total                               |   | $             | 3,392,123 |   |         | $      | 4,152,422 |          |   | $      | 3,199,969     |   |   | $      | -      |   |   | $ | 10,744,514 |   |
|                                |   |          |      |   |         |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |
| Total Average Yield                 |   |          | 3.03      | %      |         |   | 2.36      | %             |   |   | 3.50          | %      |   |   | n/a    |   |   |   | 2.91 | % |

|                         |   | June 30 |   |
|------------------------------|--------|---------|--------|
|                         |   | 2010    |   |   | 2009 |   |
|                         |   |    |   |   |   |   |
| Balance at beginning of year |   |    | 7,436  |   |   |   | 3,592 |   |
|                         |   |    |   |   |   |   |   |   |
| Provision charged to expense |   |    | 1,038  |   |   |   | 2,600 |   |
|                         |   |    |   |   |   |   |   |   |
| Loans charged off            |   |    | (807   | ) |   |   | (1,314 | ) |
|                         |   |    |   |   |   |   |   |   |
| Recoveries                   |   |    | 74     |   |   |   | 21 |   |
|                         |   |    |   |   |   |   |   |   |
| Balance at end of period     |   |    | 7,741  |   |   |   | 4,899 |   |

----

Index

|                                     |   | Shares under option |    |   | Weighted average exercise price per share |   |    | Weighted average remaining contractual life |   |
|------------------------------------------|--------|---------------------|---------|--------|-------------------------------------------|--------|---------|---------------------------------------------|--------|
| Options outstanding, beginning of period |   |                | 30,646  |   |                                      |   | 16.02   |                                        |   |   |   |
| Granted                                  |   |                | — |   |                                      |   | — |                                        |   |   |   |
| Surrendered                              |   |                | — |   |                                      |   | — |                                        |   |   |   |
| Exercised                                |   |                | — |   |                                      |   | — |                                        |   |   |   |
| Options outstanding, end of period       |   |                | 30,646  |   |                                      |   | 16.02   |                                        |   |   | 2.1 |   |
| Exercisable, end of period               |   |                | 30,246  |   |                                      |   | 15.99   |                                        |   |   | 2.1 |   |

|                                             |   | 2010   |   |   | 2009   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                             |   |   |   |   |   |   |
| Aggregate intrinsic value of outstanding options |   | $      | -      |   |   | $      | 17,381 |   |
|                                             |   |   |   |   |   |   |   |   |
| Aggregate intrinsic value of exercisable options |   | $      | -      |   |   | $      | 17,381 |   |

----

Index

|                                     |   |         |        |   |           |   |        | Weighted    |   |
|------------------------------------------|--------|--------------|-------------|--------|----------------|--------|-------------|-------------|--------|
|                                     |   |         |        |   | Weighted       |   |        | average     |   |
|                                     |   |         |        |   | average        |   |        | remaining   |   |
|                                     |   | Shares under |        |   | exercise price |   |        | contractual |   |
|                                     |   | option       |        |   | per share      |   |        | life        |   |
| Options outstanding, beginning of period |   |         | 4,000  |   |           | $      | 14.85       |        |   |   | 8.9 |   |
| Granted                                  |   |         | —     |   |           |   | —     |        |   |   |   |   |
| Surrendered                              |   |         | —     |   |           |   | —     |        |   |   |   |   |
| Exercised                                |   |         | —     |   |           |   | —     |        |   |   |   |   |
| Options outstanding, end of period       |   |         | 4,000  |   |           |   | 14.85  |        |   |   | 8.9 |   |
| Exercisable, end of period               |   |         | 1,600  |   |           |   | 14.85  |        |   |   | 8.9 |   |

|                                             |   | 2010   |   |   | 2009   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                             |   |   |   |   |   |   |
| Aggregate intrinsic value of outstanding options |   | $      | -      |   |   | $      | 600 |   |
|                                             |   |   |   |   |   |   |   |   |
| Aggregate intrinsic value of exercisable options |   | $      | -      |   |   | $      | 120 |   |

|                                                             |   | 2010   |   |   | 2009   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Weighted-average expected life (in years)                        |   |   | N/A    |   |   |   | 10 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Expected Volatility                                              |   |   | N/A    |   |   |   | 20.00 | % |
| Risk-free interest rate                                          |   |   | N/A    |   |   |   | 3.86 | % |
| Expected dividend yield                                          |   |   | N/A    |   |   |   | 2.02 | % |
| Weighted-average fair value of options granted during the period |   |   | N/A    |   |   | $      | 3.88 |   |

----

Index

|                                      |   | Restricted stock activity |    |   | Weighted average fair value |   |
|-------------------------------------------|--------|---------------------------|---------|--------|-----------------------------|--------|
| Shares under grant at beginning of period |   |                      | 10,022  |   |                        |   | 17.20 |   |
| Granted                                   |   |                      | — |   |                        |   | — |   |
| Surrendered                               |   |                      | — |   |                        |   | — |   |
| Vested                                    |   |                      | — |   |                        |   | — |   |
| Shares under grant at end of period       |   |                      | 10,022  |   |                        |   | 17.20 |   |

----

Index

----

Index

|           |   |                                      |       |   | Fair Value Measurements at June 30, 2010 Using                |   |
|----------------|--------|-------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|           |   | Assets/Liabilities Measured at Fair Value |       |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable InputsLevel (2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|           |   |                                      |       |   |                                                          |   |   |   |   |   |   |   |
| AFS Securities |   | $                                         | 77,453,174 |   |                                                          | $      | 19,285,662 |   |   | $ | 58,167,512 |   |   | $ | - |   |

|           |   |                                      |       |   | Fair Value Measurements at June 30, 2009 Using                |   |
|----------------|--------|-------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|           |   | Assets/Liabilities Measured at Fair Value |       |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable InputsLevel (2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|           |   |                                      |       |   |                                                          |   |   |   |   |   |   |   |
| AFS Securities |   | $                                         | 64,823,828 |   |                                                          | $      | 1,930 |   |   | $ | 64,821,898 |   |   | $ | - |   |

----

Index

|               |   | Carrying Value at June 30, 2010 |       |   | Six Months Ended |   |
|--------------------|--------|---------------------------------|------------|--------|------------------|--------|
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   | June 30, 2010 |   |
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   |   |   |
|               |   | Total                           |       |   | Level 1          |   |   | Level 2 |   |   | Level3 |   |   | Total gains (losses) |   |
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (1) |   | $                               | 42,989,979 |   |             | $      | - |   |   | $ | - |   |   | $ | 42,989,979 |   |   | $ | (872,186 | ) |
| Foreclosed assets  |   |                            | 8,660,262  |   |             |   | - |   |   |   | - |   |   |   | 8,660,262 |   |   |   | (220 | ) |

|               |   | Carrying Value at June 30, 2009 |       |   | Six Months Ended |   |
|--------------------|--------|---------------------------------|------------|--------|------------------|--------|
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   | June 30, 2009 |   |
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   |   |   |
|               |   | Total                           |       |   | Level 1          |   |   | Level 2 |   |   | Level3 |   |   | Total gains (losses) |   |
|               |   |                            |       |   |             |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (1) |   | $                               | 19,200,702 |   |             | $      | - |   |   | $ | 6,490,552 |   |   | $ | 12,710,150 |   |   | $ | (2,273,902 | ) |
| Foreclosed assets  |   |                            | 7,209,141  |   |             |   | - |   |   |   | 7,209,141 |   |   |   | - |   |   |   | (4,500 | ) |

----

Index

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

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

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

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

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

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

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

----

Index

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

|                                        |   | June 30, 2010     |    |   | December 31, 2009 |   |
|---------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                        |   | Carrying amount        |    |   | Estimated fair value   |   |   | Carrying amount |   |   | Estimated fair value |   |
| Financial assets:                           |   | (Dollars in Thousands) |    |
| Cash and short–term investments       |   | $                      | 88,315  |   |                   | $      | 88,315 |   |   | $ | 54,668 |   |   | $ | 54,668 |   |
| Investment securities                       |   |                   | 87,851  |   |                   |   | 88,198 |   |   |   | 83,872 |   |   |   | 83,929 |   |
| Loans, net of the allowance for loan losses |   |                   | 274,149 |   |                   |   | 279,706 |   |   |   | 275,911 |   |   |   | 276,090 |   |
| Bank owned life insurance                   |   |                   | 2,787   |   |                   |   | 2,787 |   |   |   | 2,729 |   |   |   | 2,729 |   |
| Correspondent bank stock                    |   |                   | 1,889   |   |                   |   | 1,889 |   |   |   | 1,889 |   |   |   | 1,889 |   |
| Accrued interest receivable                 |   |                   | 2,494   |   |                   |   | 2,494 |   |   |   | 2,858 |   |   |   | 2,858 |   |
|                                        |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                      |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                    |   |                   | 439,359 |   |                   |   | 443,094 |   |   |   | 404,810 |   |   |   | 405,504 |   |
| Other borrowed funds                        |   |                   | 866     |   |                   |   | 866 |   |   |   | 624 |   |   |   | 624 |   |
| FHLB advances                               |   |                   | 1,363   |   |                   |   | 1,503 |   |   |   | 1,445 |   |   |   | 1,539 |   |
| Subordinated Debt                           |   |                   | 10,310  |   |                   |   | 10,310 |   |   |   | 10,310 |   |   |   | 10,310 |   |
| Accrued interest payable                    |   |                   | 480     |   |                   |   | 480 |   |   |   | 621 |   |   |   | 621 |   |

----

Index

----

Index

 2.  

----

Index

----

Index

----

Index

----

Index

----

Index

----

Index

|                                                        |   | As of the six months ended |       |
|-------------------------------------------------------------|--------|-----------------------------------------------------|------------|
|                                                        |   | June 30,                                            |       |
|                                                        |   | 2010                                                |       |   | 2009 |   |
|                                                        |   |                                                |       |   |   |   |
| Impaired loans with a valuation allowance                   |   | $                                                   | 22,102,892 |   |   | $ | 16,285,462 |   |
| Impaired loans without a valuation allowance                |   |                                                | 26,403,666 |   |   |   | 5,661,240 |   |
| Total impaired loans                                        |   | $                                                   | 48,506,558 |   |   | $ | 21,946,702 |   |
| Valuation allowance related to impaired loans               |   | $                                                   | 5,516,579  |   |   | $ | 2,746,000 |   |
| Total nonaccrual loans                                      |   |                                                | 20,891,421 |   |   |   | 20,147,173 |   |
| Total loans past due ninety days or more and still accruing |   |                                                | 792,739    |   |   |   | 11,442 |   |
| Troubled debt restructured loans                            |   |                                                | 1,464,363  |   |   |   | 4,486,732 |   |

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Index

|   |   |                                                                                                                                                                               |   | June 30,          |   |   | December 31, |   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|   |   |                                                                                                                                                                               |   | 2010                   |   |   | 2009              |   |
|   |   |                                                                                                                                                                               |   | (Dollars in Thousands) |   |
|   |   | Description                                                                                                                                                                        |   |                   |   |   |              |   |
|   |   |                                                                                                                                                                               |   |                   |   |   |              |   |
| A      |   | Loans accounted for on a nonaccrual basis                                                                                                                                          |   | $                      | 20,891 |   |              | $      | 18,993 |   |
|   |   |                                                                                                                                                                               |   |                   |   |   |              |   |   |   |
| B      |   | Loans which are contractually past due ninety days or more as to interest or principal payments (excluding balances included in (A) above)                                         |   |                   | 793    |   |              |   | 210 |   |
|   |   |                                                                                                                                                                               |   |                   |   |   |              |   |   |   |
| C      |   | Loans, the terms of which have been renegotiated to provide a reduction or deferral of interest or principal because of a deterioration in the financial position of the borrower. |   |                   | 1,464  |   |              |   | 1,657 |   |
|   |   |                                                                                                                                                                               |   |                   |   |   |              |   |   |   |
| D      |   | Other non-performing assets                                                                                                                                                        |   |                   | 8,660  |   |              |   | 7,611 |   |
|   |   |                                                                                                                                                                               |   |                   |   |   |              |   |   |   |
|   |   | Total                                                                                                                                                                              |   | $                      | 31,808 |   |              | $      | 28,471 |   |

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Index

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Index

|                                   |   | June 30, 2010 |   |   | Well Capitalized Treatment |   |
|----------------------------------------|--------|--------------------|--------|--------|----------------------------|--------|
| United Bancorporation of Alabama, Inc. |   |               |   |   |                       |   |
| Total risk-based capital               |   |               | 14.80  | %      |                       |   | N/A |   |
| Tier 1 risk-based capital              |   |               | 13.55  |   |                       |   | N/A |   |
| Leverage Ratio                         |   |               | 8.80   |   |                       |   | N/A |   |
|                                   |   |               |   |   |                       |   |   |   |
| United Bank                            |   |               |   |   |                       |   |   |   |
| Total risk-based capital               |   |               | 14.72  | %      |                       |   | 10.00 | % |
| Tier 1 risk-based capital              |   |               | 13.46  |   |                       |   | 6.00 |   |
| Leverage ratio                         |   |               | 8.79   |   |                       |   | 5.00 |   |

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Index

|                         |   | June 30, |       |
|------------------------------|--------|---------------|------------|
|                         |   | 2010          |       |
|                         |   |          |       |
| Commitments to extend credit |   | $             | 31,989,486 |   |
| Standby letters of credit    |   |          | 1,492,922  |   |

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Index

 4T. 

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Index

1A.   

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Index

 6.  

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

|   | 31.1 | Certification of  Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|---------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|--------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification of 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 Principal Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to section  906 of the Sarbanes-Oxley Act of 2002 |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|   | /s/ Robert R. Jones, III      |
|--------|-------------------------------|
|   | Robert R. Jones, III          |
|   | President and CEO             |
|   |                          |
|   |                          |
|   | /s/ Allen O. Jones, Jr.       |
|   | Allen O. Jones, Jr.           |
|   | Senior Vice President and CFO |

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Index

| EXHIBIT |                                                                                                                           |
|---------|--------------------------------------------------------------------------------------------------------------------------------|
| NUMBER  | DESCRIPTION                                                                                                                    |   |
|    |                                                                                                                           |
|    |                                                                                                                           |
| 31.1    | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                             |
| 31.2    | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                             |
| 32.1    | Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to section  906 of the Sarbanes-Oxley Act of 2002 |
| 32.2    | Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to section  906 of the Sarbanes-Oxley Act of 2002 |

----