----

----

| 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) |

| Large accelerated filer o   | Accelerated filer o | Non-accelerated filer o |
|-----------------------------|---------------------|-------------------------|
|                        |                |                    |
| Smaller Reporting Company x |

----

----

----

| UNITED BANCORPORATION OF ALABAMA, INC. |
|----------------------------------------|
|                                   |
| FORM 10-Q                              |
|                                   |
| For the Quarter Ended March 31, 2011   |

|                          |   |                                                                                  |   |
|-------------------------------|--------|---------------------------------------------------------------------------------------|--------|
| INDEX                         |
|                          |   |                                                                                  |   |
| PART I -FINANCIAL INFORMATION | PAGE   |
|                          |   |                                                                                  |   |
| Item 1.                       |   | Financial Statements                                                                  |   |
|                          |   |                                                                                  |   |
|                          |   | Consolidated Balance Sheets                                                           | 3      |
|                          |   |                                                                                  |   |
|                          |   | Consolidated Statements of Earnings  and Comprehensive Income               | 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 | 34     |
|                          |   |                                                                                  |   |
| Item 4.                       |   | Controls and Procedures                                                               | 42     |
|                          |   |                                                                                  |   |
| PART II -OTHER INFORMATION    |   |
|                          |   |                                                                                  |   |
| Item 1A.                 |   | Risk Factors                                                                          | 43     |
|                          |   |                                                                                  |   |
| Item 6.                       |   | Exhibits                                                                              | 43     |

----

Index

Balance Sheets

|                                                                                                                                                              |   | March 31, |        |   | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|--------|-------------------|--------|
|                                                                                                                                                              |   | 2011           |        |   | 2010              |   |
|                                                                                                                                                              |   | (Unaudited)    |        |   |              |   |
| Assets                                                                                                                                                            |   |           |        |   |              |   |
| Cash and due from banks                                                                                                                                           |   | $              | 15,142,913  |   |              | $      | 18,179,566 |   |
| Interest bearing deposits in banks                                                                                                                                |   |           | 44,695,313  |   |              |   | 62,786,543 |   |
| Cash and cash equivalents                                                                                                                                         |   |           | 59,838,226  |   |              |   | 80,966,109 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Securities available for sale (amortized cost of $74,444,961 and $69,518,789 respectively)                                                                        |   |           | 73,539,287  |   |              |   | 68,808,624 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Securities held to maturity (fair values of  $14,869,192 and $17,302,864 respectively)                                                                  |   |           | 14,894,665  |   |              |   | 17,262,606 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Loans                                                                                                                                                             |   |           | 263,812,762 |   |              |   | 261,770,815 |   |
| Less: Allowance for loan losses                                                                                                                                   |   |           | 5,404,474   |   |              |   | 5,139,998 |   |
| Net loans                                                                                                                                                         |   |           | 258,408,288 |   |              |   | 256,630,817 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Premises and equipment, net                                                                                                                                       |   |           | 16,266,359  |   |              |   | 16,472,056 |   |
| Interest receivable                                                                                                                                               |   |           | 2,004,477   |   |              |   | 2,192,768 |   |
| Other assets                                                                                                                                                      |   |           | 23,378,842  |   |              |   | 24,887,714 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Total assets                                                                                                                                                      |   |           | 448,330,144 |   |              |   | 467,220,694 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                              |   |           |        |   |              |   |   |   |
| Deposits:                                                                                                                                                         |   |           |        |   |              |   |   |   |
| Non-interest bearing                                                                                                                                              |   |           | 121,011,588 |   |              |   | 142,681,749 |   |
| Interest bearing                                                                                                                                                  |   |           | 277,232,369 |   |              |   | 274,350,971 |   |
| Total deposits                                                                                                                                                    |   |           | 398,243,957 |   |              |   | 417,032,720 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Advances from Federal Home Loan Bank of Atlanta                                                                                                                   |   |           | 1,222,850   |   |              |   | 1,280,300 |   |
| Treasury, tax, and loan account                                                                                                                                   |   |           | 863,074     |   |              |   | 944,078 |   |
| Interest payable                                                                                                                                                  |   |           | 375,018     |   |              |   | 402,953 |   |
| Accrued expenses and other liabilities                                                                                                                            |   |           | 1,734,492   |   |              |   | 1,731,437 |   |
| Note payable to Trust                                                                                                                                             |   |           | 10,310,000  |   |              |   | 10,310,000 |   |
| Total liabilities                                                                                                                                                 |   |           | 412,749,391 |   |              |   | 431,701,488 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Stockholders' equity                                                                                                                                              |   |           |        |   |              |   |   |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Preferred stock of $.01 par value.  Authorized 250,000 shares; 10,300 shares, net of discount                                                           |   |           | 10,097,131  |   |              |   | 10,080,227 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Class A common stock, $0.01 par value. Authorized 5,000,000 shares; issued and outstanding, 2,389,127  shares in 2011 and 2010,  respectively |   |           | 23,891      |   |              |   | 23,891 |   |
| Class B common stock, $0.01 par value. Authorized 250,000 shares; no shares issued or outstanding                                                                 |   |           | -           |   |              |   | - |   |
| Additional paid in capital                                                                                                                                        |   |           | 6,957,696   |   |              |   | 6,815,176 |   |
| Accumulated other comprehensive loss net of tax                                                                                                                   |   |           | (543,410    | )      |              |   | (426,105 | ) |
| Retained earnings                                                                                                                                                 |   |           | 19,558,304  |   |              |   | 19,721,667 |   |
|                                                                                                                                                              |   |           | 36,093,612  |   |              |   | 36,214,856 |   |
|                                                                                                                                                              |   |           |        |   |              |   |   |   |
| Less:  63,965 and 86,757 treasury shares, at cost, respectively                                                                                         |   |           | 512,859     |   |              |   | 695,650 |   |
| Total stockholders' equity                                                                                                                                        |   |           | 35,580,753  |   |              |   | 35,519,206 |   |
| Total liabilities and stockholders' equity                                                                                                                        |   | $              | 448,330,144 |   |              | $      | 467,220,694 |   |

----

Index

c

|                                                            |   | Three Months Ended |      |
|-----------------------------------------------------------------|--------|--------------------|-----------|
|                                                            |   | March 31           |      |
|                                                            |   | 2011               |      |   | 2010 |   |
|                                                            |   |               |      |   |   |   |
| Interest income:                                                |   |               |      |   |   |   |
| Interest and fees on loans                                      |   | $                  | 3,896,988 |   |   | $ | 4,138,769 |   |
| Interest on investment securities:                              |   |               |      |   |   |   |   |   |
| Taxable                                                         |   |               | 438,129   |   |   |   | 428,665 |   |
| Nontaxable                                                      |   |               | 84,646    |   |   |   | 258,368 |   |
| Total investment income                                         |   |               | 522,775   |   |   |   | 687,033 |   |
| Other interest income                                           |   |               | 45,692    |   |   |   | 32,734 |   |
| Total interest income                                           |   |               | 4,465,455 |   |   |   | 4,858,536 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Interest expense:                                               |   |               |      |   |   |   |   |   |
| Interest on deposits                                            |   |               | 866,407   |   |   |   | 1,305,454 |   |
| Interest on other borrowed funds                                |   |               | 69,054    |   |   |   | 68,373 |   |
| Total interest expense                                          |   |               | 935,461   |   |   |   | 1,373,827 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Net interest income                                             |   |               | 3,529,994 |   |   |   | 3,484,709 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Provision for loan losses                                       |   |               | 300,000   |   |   |   | 438,000 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Net interest income after  provision for loan losses  |   |               | 3,229,994 |   |   |   | 3,046,709 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Noninterest income:                                             |   |               |      |   |   |   |   |   |
| Service charge on deposits                                      |   |               | 796,682   |   |   |   | 826,017 |   |
| Investment securities gains, net                                |   |               | -         |   |   |   | 159,465 |   |
| Mortgage loan and related fees                                  |   |               | 63,570    |   |   |   | 54,965 |   |
| Other                                                           |   |               | 171,088   |   |   |   | 189,590 |   |
| Total noninterest income                                        |   |               | 1,031,340 |   |   |   | 1,230,037 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Noninterest expense:                                            |   |               |      |   |   |   |   |   |
| Salaries and benefits                                           |   |               | 2,207,870 |   |   |   | 2,168,662 |   |
| Net occupancy expense                                           |   |               | 483,691   |   |   |   | 538,476 |   |
| Other                                                           |   |               | 1,278,364 |   |   |   | 1,232,347 |   |
| Total noninterest expense                                       |   |               | 3,969,925 |   |   |   | 3,939,485 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Earnings before income tax expense (benefits)                   |   |               | 291,409   |   |   |   | 337,261 |   |
| Income tax expense (benefit)                                    |   |               | 64,047    |   |   |   | (18,542 | ) |
| Net earnings                                                    |   |               | 227,362   |   |   |   | 355,803 |   |
| Preferred stock dividends                                       |   |               | 51,500    |   |   |   | 128,750 |   |
| Accretion on preferred stock discount                           |   |               | 16,904    |   |   |   | 15,961 |   |
| Net earnings available to common shareholders                   |   | $                  | 158,958   |   |   | $ | 211,092 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Basic earnings per share available to common shareholders       |   | $                  | 0.07      |   |   | $ | 0.09 |   |
| Diluted earnings per share available to common shareholders     |   | $                  | 0.07      |   |   | $ | 0.09 |   |
| Basic weighted average shares outstanding                       |   |               | 2,314,019 |   |   |   | 2,276,192 |   |
| Diluted weighted average shares outstanding                     |   |               | 2,314,019 |   |   |   | 2,276,192 |   |
| Cash dividend per share                                         |   | $                  | -         |   |   | $ | - |   |
|                                                            |   |               |      |   |   |   |   |   |
| Statement of Comprehensive Income                               |   |               |      |   |   |   |   |   |
|                                                            |   |               |      |   |   |   |   |   |
| Net earnings                                                    |   | $                  | 227,362   |   |   | $ | 355,803 |   |
|                                                            |   |               |      |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                  |   |               |      |   |   |   |   |   |
| Unrealized holding gains (losses) arising during the period     |   |               | (117,305  | ) |   |   | 28,137 |   |
| Reclassification adjustment for gains included in net earnings. |   |               | -    |   |   |   |              (95,679 | ) |
| Comprehensive income                                            |   | $                  | 110,057   |   |   | $ | 288,261 |   |

----

Index

of Cash 

|                                                                                                                                                            |   | Three Months Ended |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|
|                                                                                                                                                            |   | March 31           |        |
|                                                                                                                                                            |   | 2011               |        |   | 2010 |   |
|                                                                                                                                                            |   |               |        |   |   |   |
| Cash flows from operating activities                                                                                                                            |   |               |        |   |   |   |
| Net earnings                                                                                                                                                    |   | $                  | 227,362     |   |   | $ | 355,803 |   |
| Adjustments to reconcile net earnings to net cash provided by operating activities Provision for loan losses                                                    |   |               | 300,000     |   |   |   | 438,000 |   |
| Depreciation of premises and equipment                                                                                                                          |   |               | 235,719     |   |   |   | 290,569 |   |
| Net amortization of premium on investment securities available for sale                                                                                         |   |               | 110,801     |   |   |   | 57,177 |   |
| Net amortization of premium on investment securities held to maturity                                                                                           |   |               | 42,941      |   |   |   | 13,064 |   |
| Gain on sales or calls of investment securities available for sale, net                                                                                         |   |               | -           |   |   |   | (159,465 | ) |
| Loss (gain) on sale of other real estate                                                                                                                        |   |               | 9,501       |   |   |   | (23,432 | ) |
| Stock-based compensation                                                                                                                                        |   |               | 6,223       |   |   |   | 6,875 |   |
| Decrease in interest receivable                                                                                                                                 |   |               | 188,291     |   |   |   | 556,617 |   |
| Decrease in other assets                                                                                                                                        |   |               | 1,303,581   |   |   |   | 514,177 |   |
| Decrease in interest payable                                                                                                                                    |   |               | (27,935     | ) |   |   | (72,617 | ) |
| Increase in accrued expenses and other liabilities                                                                                                              |   |               | 3,055       |   |   |   | 68,651 |   |
| Net cash provided by operating activities                                                                                                                       |   |               | 2,399,539   |   |   |   | 2,045,419 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Cash flows from investing activities                                                                                                                            |   |               |        |   |   |   |   |   |
| Proceeds from maturities, calls, and principal  repayments of investment securities available for sale Proceeds from maturities, calls, and principal |   |               | 2,108,335   |   |   |   | 8,251,101 |   |
| repayments of investment securities held to maturity                                                                                                            |   |               | 2,325,000   |   |   |   | 5,235,000 |   |
| Proceeds from sales of investment securities available for sale                                                                                                 |   |               | -           |   |   |   | 3,991,451 |   |
| Purchases of investment securities available for sale                                                                                                           |   |               | (7,145,308  | ) |   |   | (15,862,731 | ) |
| Net (increase) decrease in loans                                                                                                                                |   |               | (2,183,599  | ) |   |   | 1,033,601 |   |
| Purchases of premises and equipment, net                                                                                                                        |   |               | (30,022     | ) |   |   | (21,629 | ) |
| Proceeds from sale of other real estate                                                                                                                         |   |               | 380,122     |   |   |   | 150,362 |   |
| Net cash provided by  (used in) investing activities                                                                                                  |   |               | (4,545,472  | ) |   |   | 2,777,155 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Cash fows from financing activities                                                                                                                             |   |               |        |   |   |   |   |   |
| Net increase (decrease) in deposits                                                                                                                             |   |               | (18,788,763 | ) |   |   | 13,115,200 |   |
| Cash dividends - preferred stock                                                                                                                                |   |               | (51,500     | ) |   |   | (128,750 | ) |
| Cash dividends - common stock                                                                                                                                   |   |               | (3,233      | ) |   |   | (3,220 | ) |
| Repayments of advances from FHLB Atlanta                                                                                                                        |   |               | (57,450     | ) |   |   | (57,450 | ) |
| Increase (decrease) in other borrowed funds                                                                                                                     |   |               | (81,004     | ) |   |   | 240,858 |   |
| Net cash provided by  (used in) financing activities                                                                                                  |   |               | (18,981,950 | ) |   |   | 13,166,638 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                                                                            |   |               | (21,127,883 | ) |   |   | 17,989,212 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                                                                                                  |   |               | 80,966,109  |   |   |   | 54,668,111 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Cash and cash equivalents, end of period                                                                                                                        |   | $                  | 59,838,226  |   |   | $ | 72,657,323 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Supplemental disclosures                                                                                                                                        |   |               |        |   |   |   |   |   |
| Cash paid during the period for:                                                                                                                                |   |               |        |   |   |   |   |   |
| Interest                                                                                                                                                        |   | $                  | 963,396     |   |   | $ | 2,036,581 |   |
| Income taxes                                                                                                                                                    |   |               | 46,642      |   |   |   | 45,920 |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Noncash transactions                                                                                                                                            |   |               |        |   |   |   |   |   |
|                                                                                                                                                            |   |               |        |   |   |   |   |   |
| Transfer of loans to other real estate through foreclosure                                                                                                      |   | $                  | 106,128     |   |   | $ | 23,000 |   |

----

Index

otes

|                                                                            |   | Three Months EndedMarch 31, |      |
|---------------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                            |   | 2011                        |      |   | 2010 |   |
|                                                                            |   |                        |      |   |   |   |
| Diluted earnings per share                                                      |   | $                           | 0.07      |   |   | $ | 0.09 |   |
|                                                                            |   |                        |      |   |   |   |   |   |
| Weighted average common shares outstanding                                 |   |                        | 2,314,019 |   |   |   | 2,276,192 |   |
|                                                                            |   |                        |      |   |   |   |   |   |
| Dilutive effect of the assumed exercise of stock options                   |   |                        | -         |   |   |   | - |   |
|                                                                            |   |                        |      |   |   |   |   |   |
| Total weighted average common shares and potential commonstock outstanding |   |                        | 2,314,019 |   |   |   | 2,276,192 |   |

----

Index

|                                          |   | Amortized cost |       |   | Gross unrealized gains |   |    | Gross unrealized losses |   |   | Fair value |   |
|-----------------------------------------------|--------|----------------|------------|--------|------------------------|--------|---------|------------------------------|--------|--------|------------|--------|
| March 31, 2011                                |   |           |       |   |                   |   |    |                         |   |   |       |   |
| U.S. Treasury securities                      |   | $              | 20,181,014 |   |                   | $      | 135,645 |                         |   | $      | (157,752   | )      |   | $ | 20,158,907 |   |
| U.S. government  sponsored agencies |   |           | 39,462,908 |   |                   |   | 186,654 |                         |   |   | (634,508   | )      |   |   | 39,015,054 |   |
| State and political subdivisions              |   |           | 9,740,976  |   |                   |   | 76,592  |                         |   |   | (359,115   | )      |   |   | 9,458,453 |   |
| Mortgage-backed securities                    |   |           | 5,049,910  |   |                   |   | -       |                         |   |   | (150,092   | )      |   |   | 4,899,818 |   |
| Equity securities                             |   |           | 10,153     |   |                   |   | -       |                         |   |   | (3,098     | )      |   |   | 7,055 |   |
|                                          |   | $              | 74,444,961 |   |                   | $      | 398,891 |                         |   | $      | (1,304,565 | )      |   | $ | 73,539,287 |   |
| December 31, 2010                             |   |           |       |   |                   |   |    |                         |   |   |       |   |   |   |   |   |
| U.S. Treasury securities                      |   | $              | 19,207,231 |   |                   | $      | 157,497 |                         |   | $      | (135,666   | )      |   |   | 19,229,062 |   |
| U.S. government  sponsored agencies |   |           | 35,391,603 |   |                   |   | 273,654 |                         |   |   | (497,372   | )      |   |   | 35,167,885 |   |
| State and political subdivisions              |   |           | 9,744,841  |   |                   |   | 69,416  |                         |   |   | (447,406   | )      |   |   | 9,366,851 |   |
| Mortgage-backed securities                    |   |           | 5,164,961  |   |                   |   | -       |                         |   |   | (126,710   | )      |   |   | 5,038,251 |   |
| Equity securities                             |   |           | 10,153     |   |                   |   | -       |                         |   |   | (3,578     | )      |   |   | 6,575 |   |
|                                          |   | $              | 69,518,789 |   |                   | $      | 500,567 |                         |   | $      | (1,210,732 | )      |   | $ | 68,808,624 |   |

----

Index

|                                          |   | Amortized cost |       |   | Gross unrealized gains |   |    | Gross unrealized losses |   |   | Fair value |   |
|-----------------------------------------------|--------|----------------|------------|--------|------------------------|--------|---------|-------------------------|--------|--------|------------|--------|
| March 31, 2011                                |   |           |       |   |                   |   |    |                    |   |   |       |   |
| U.S. government  sponsored agencies |   | $              | 14,894,665 |   |                   | $      | 242,500 |                    |   | $      | (267,973   | )      |   | $ | 14,869,192 |   |
|                                          |   | $              | 14,894,665 |   |                   | $      | 242,500 |                    |   | $      | (267,973   | )      |   | $ | 14,869,192 |   |
| December 31, 2010                             |   |           |       |   |                   |   |    |                    |   |   |       |   |   |   |   |   |
| U.S. government  sponsored agencies |   | $              | 17,262,606 |   |                   | $      | 290,222 |                    |   | $      | (249,964   | )      |   | $ | 17,302,864 |   |
|                                          |   | $              | 17,262,606 |   |                   | $      | 290,222 |                    |   | $      | (249,964   | )      |   | $ | 17,302,864 |   |

----

Index

| March 31, 2011                                   |   |                |       |   |              |   |       |              |   |   |              |   |   |              |     |   |              |   |
|--------------------------------------------------|--------|---------------------|------------|--------|-------------------|--------|------------|-------------------|--------|--------|-------------------|--------|--------|-------------------|----------|--------|-------------------|--------|
|                                             |   | Less than 12 months |       |   | 12 months or more |   |       | Total             |   |
|                                             |   |   Fair Value   |       |   | Unrealized losses |   |       |   Fair Value |   |   | Unrealized losses |   |   |   Fair Value |     |   | Unrealized losses |   |
| Description of Securities                        |
| U.S. Treasury securities                         |   | $                   | 3,929,063  |   |              | $      | (157,752   | )                 |   | $      | -                 |   |   | $                 | -        |   |              | $      | 3,929,063 |   |   | $ | (157,752 | ) |
| U.S. government sponsored agencies               |   |                | 21,624,096 |   |              |   | (634,508   | )                 |   |   | -                 |   |   |              | -        |   |              |   | 21,624,096 |   |   |   | (634,508 | ) |
| State and political subdivisions                 |   |                | 4,302,836  |   |              |   | (222,167   | )                 |   |   | 657,374           |   |   |              | (136,948 | )      |              |   | 4,960,210 |   |   |   | (359,115 | ) |
| Mortgage-backed securities                       |   |                | 4,899,818  |   |              |   | (150,092   | )                 |   |   | -                 |   |   |              | -        |   |              |   | 4,899,818 |   |   |   | (150,092 | ) |
| Equity securities                                |   |                | -          |   |              |   | -          |              |   |   | 7,055             |   |   |              | (3,098   | )      |              |   | 7,055 |   |   |   | (3,098 | ) |
| Total temporarily impaired  securities |   | $                   | 34,755,813 |   |              | $      | (1,164,519 | )                 |   | $      | 664,429           |   |   | $                 | (140,046 | )      |              | $      | 35,420,242 |   |   | $ | (1,304,565 | ) |

| December 31, 2010                     |   |                |       |   |              |   |       |              |   |   |              |   |   |              |     |   |              |   |
|---------------------------------------|--------|---------------------|------------|--------|-------------------|--------|------------|-------------------|--------|--------|-------------------|--------|--------|-------------------|----------|--------|-------------------|--------|
|                                  |   | Less than 12 months |       |   | 12 months or more |   |       | Total             |   |
|                                  |   |   Fair Value   |       |   | Unrealized losses |   |       |   Fair Value |   |   | Unrealized losses |   |   |   Fair Value |     |   | Unrealized losses |   |
| Description of Securities             |
|                                  |   |                |       |   |              |   |       |              |   |   |              |   |   |              |     |   |              |   |
| U.S. Treasury securities              |   | $                   | 3,954,531  |   |              | $      | (135,666   | )                 |   | $      | -                 |   |   | $                 | -        |   |              | $      | 3,954,531 |   |   | $ | (135,666 | ) |
| U.S. government sponsored agencies    |   |                | 17,681,269 |   |              |   | (497,372   | )                 |   |   | -                 |   |   |              | -        |   |              |   | 17,681,269 |   |   |   | (497,372 | ) |
| State and political subdivdisions     |   |                | 4,537,904  |   |              |   | (289,375   | )                 |   |   | 636,830           |   |   |              | (158,031 | )      |              |   | 5,174,734 |   |   |   | (447,406 | ) |
| Mortgage-backed securities            |   |                | 5,038,251  |   |              |   | (126,710   | )                 |   |   | -                 |   |   |              | -        |   |              |   | 5,038,251 |   |   |   | (126,710 | ) |
| Equity securities                     |   |                | -          |   |              |   | -          |              |   |   | 6,575             |   |   |              | (3,578   | )      |              |   | 6,575 |   |   |   | (3,578 | ) |
| Total temporarily impaired securities |   | $                   | 31,211,955 |   |              | $      | (1,049,123 | )                 |   | $      | 643,405           |   |   | $                 | (161,609 | )      |              | $      | 31,855,360 |   |   | $ | (1,210,732 | ) |

----

Index

| March 31, 2011                                |   |                |      |   |              |   |     |              |   |   |              |   |   |              |   |   |              |   |
|-----------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|----------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                          |   | Less than 12 months |      |   | 12 months or more |   |     | Total             |   |
|                                          |   |   Fair Value   |      |   | Unrealized losses |   |     |   Fair Value |   |   | Unrealized losses |   |   |   Fair Value |   |   | Unrealized losses |   |
| Description of Securities                     |
|                                          |   |                |      |   |              |   |     |              |   |   |              |   |   |              |   |   |              |   |
| U.S. Government  sponsored agencies |   | $                   | 7,586,537 |   |              | $      | (267,973 | )                 |   | $      | -                 |   |   | $                 | -      |   |              | $      | 7,586,537 |   |   | $ | (267,973 | ) |
| Total temporarily impaired securities         |   | $                   | 7,586,537 |   |              | $      | (267,973 | )                 |   | $      | -                 |   |   | $                 | -      |   |              | $      | 7,586,537 |   |   | $ | (267,973 | ) |

| December 31, 2010                     |   |                |      |   |              |   |     |              |   |   |              |   |   |              |   |   |              |   |
|---------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|----------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                  |   | Less than 12 months |      |   | 12 months or more |   |     | Total             |   |
|                                  |   |   Fair Value   |      |   | Unrealized losses |   |     |   Fair Value |   |   | Unrealized losses |   |   |   Fair Value |   |   | Unrealized losses |   |
| Description of Securities             |
|                                  |   |                |      |   |              |   |     |              |   |   |              |   |   |              |   |   |              |   |
| U.S. Government sponsored agencies    |   | $                   | 7,640,567 |   |              | $      | (249,964 | )                 |   | $      | -                 |   |   | $                 | -      |   |              | $      | 7,640,567 |   |   | $ | (249,964 | ) |
| Total temporarily impaired securities |   | $                   | 7,640,567 |   |              | $      | (249,964 | )                 |   | $      | -                 |   |   | $                 | -      |   |              | $      | 7,640,567 |   |   | $ | (249,964 | ) |

----

Index

----

Index

|                               |   | Within 1 |      |   | 1 to 5 |   |       | 5 to 10 |   |   | Over 10    |   |   |   |       |
|------------------------------------|--------|----------|-----------|--------|--------|--------|------------|---------|--------|--------|------------|--------|--------|--------|------------|
|                               |   | Year     |      |   | Years  |   |       | Years   |   |   | Years      |   |   | Total  |       |
| Amortized Cost                     |   |     |      |   |   |   |       |    |   |   |       |   |   |   |       |
| U.S. Treasury securities           |   | $        | 5,010,732 |   |   | $      | 11,083,468 |    |   | $      | 4,086,814  |   |   | $      | -          |   |   | $ | 20,181,014 |   |
| U.S. government sponsored agencies |   |     | -         |   |   |   | 23,601,215 |    |   |   | 15,861,693 |   |   |   | -          |   |   |   | 39,462,908 |   |
| State and political subdivisions   |   |     | 149,886   |   |   |   | 743,746    |    |   |   | 2,779,105  |   |   |   | 6,068,239  |   |   |   | 9,740,976 |   |
| Mortgage-backed securities         |   |     | -         |   |   |   | -          |    |   |   | -          |   |   |   | 5,049,910  |   |   |   | 5,049,910 |   |
| Equity securities                  |   |     | 10,153    |   |   |   | -          |    |   |   | -          |   |   |   | -          |   |   |   | 10,153 |   |
| Total                              |   | $        | 5,170,771 |   |   | $      | 35,428,429 |    |   | $      | 22,727,612 |   |   | $      | 11,118,149 |   |   | $ | 74,444,961 |   |
|                               |   |     |      |   |   |   |       |    |   |   |       |   |   |   |       |   |   |   |   |   |
| Fair Value                         |   |     |      |   |   |   |       |    |   |   |       |   |   |   |       |   |   |   |   |   |
| U.S. Treasury securities           |   | $        | 5,033,125 |   |   | $      | 11,196,719 |    |   | $      | 3,929,063  |   |   | $      | -          |   |   | $ | 20,158,907 |   |
| U.S. government sponsored agencies |   |     | -         |   |   |   | 23,396,971 |    |   |   | 15,618,083 |   |   |   | -          |   |   |   | 39,015,054 |   |
| State and political subdivisions   |   |     | 151,752   |   |   |   | 769,175    |    |   |   | 2,745,012  |   |   |   | 5,792,514  |   |   |   | 9,458,453 |   |
| Mortgage-backed securities         |   |     | -         |   |   |   | -          |    |   |   | -          |   |   |   | 4,899,818  |   |   |   | 4,899,818 |   |
| Equity securities                  |   |     | 7,055     |   |   |   | -          |    |   |   | -          |   |   |   | -          |   |   |   | 7,055 |   |
| Total                              |   | $        | 5,191,932 |   |   | $      | 35,362,865 |    |   | $      | 22,292,158 |   |   | $      | 10,692,332 |   |   | $ | 73,539,287 |   |
|                               |   |     |      |   |   |   |       |    |   |   |       |   |   |   |       |   |   |   |   |   |
| Total Average Yield                |   |     | 1.03      | %      |   |   | 1.82       | %       |   |   | 2.80       | %      |   |   | 3.85       | % |   |   | 2.37 | % |

|                               |   | Within 1 |      |   | 1 to 5 |   |      | 5 to 10 |   |   | Over 10   |   |   |   |   |
|------------------------------------|--------|----------|-----------|--------|--------|--------|-----------|---------|--------|--------|-----------|--------|--------|--------|--------|
|                               |   | Year     |      |   | Years  |   |      | Years   |   |   | Years     |   |   | Total  |   |
| Amortized Cost                     |   |     |      |   |   |   |      |    |   |   |      |   |   |   |   |
| U.S. government sponsored agencies |   | $        | 999,871   |   |   | $      | 7,039,173 |    |   | $      | 6,855,621 |   |   | $      | -      |   |   | $ | 14,894,665 |   |
| Total                              |   | $        | 999,871   |   |   | $      | 7,039,173 |    |   | $      | 6,855,621 |   |   | $      | -      |   |   | $ | 14,894,665 |   |
|                               |   |     |      |   |   |   |      |    |   |   |      |   |   |   |   |   |   |   |   |   |
| Fair Value                         |   |     |      |   |   |   |      |    |   |   |      |   |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies |   | $        | 1,013,245 |   |   | $      | 7,257,882 |    |   | $      | 6,598,065 |   |   | $      | -      |   |   | $ | 14,869,192 |   |
| Total                              |   | $        | 1,013,245 |   |   | $      | 7,257,882 |    |   | $      | 6,598,065 |   |   | $      | -      |   |   | $ | 14,869,192 |   |
|                               |   |     |      |   |   |   |      |    |   |   |      |   |   |   |   |   |   |   |   |   |
| Total Average Yield                |   |     | 2.02      | %      |   |   | 2.76      | %       |   |   | 2.11      | %      |   |   | 0.00   | % |   |   | 2.41 | % |

----

Index

|                     |   | Three Months Ended |   |
|--------------------------|--------|--------------------|--------|
|                     |   | March 31           |   |
|                     |   | 2011               |   |   | 2010 |   |
|                     |   |               |   |   |   |   |
| Gross gains realized     |   | $                  | -      |   |   | $ | 159,465 |   |
| Gross losses realized    |   |               | -      |   |   |   | - |   |
| Net gain (loss) realized |   | $                  | -      |   |   | $ | 159,465 |   |

|                                     |   | March 31, |      |   | December 31, |   |
|------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                     |   | 2011      |      |   | 2010         |   |
|                                     |   |      |      |   |         |   |
| Federal Home Loan Bank stock        |   | $         | 1,046,700 |   |         | $      | 1,046,700 |   |
| First National Bankers' Bank stock  |   |      | 825,000   |   |         |   | 825,000 |   |
|                                     |   | $         | 1,871,700 |   |         | $      | 1,871,700 |   |

----

Index

|                              |   | March 31,2011 |        |   | December 31,2010 |   |
|-----------------------------------|--------|--------------------|-------------|--------|-----------------------|--------|
| Real estate:                      |   |               |        |   |                  |   |
| Construction and land loans       |   | $                  | 36,641,511  |   |                  | $      | 36,825,855 |   |
| Farmland                          |   |               | 30,498,665  |   |                  |   | 30,269,876 |   |
| 1-4 family residential mortgage   |   |               | 56,821,244  |   |                  |   | 58,342,993 |   |
| Multifamily                       |   |               | 3,207,270   |   |                  |   | 3,082,066 |   |
| Commercial                        |   |               | 73,043,151  |   |                  |   | 73,800,481 |   |
| Agriculture                       |   |               | 19,948,566  |   |                  |   | 12,633,816 |   |
| Commercial                        |   |               | 26,153,401  |   |                  |   | 29,413,147 |   |
| Consumer                          |   |               | 13,463,828  |   |                  |   | 13,597,817 |   |
| States and political subdivisions |   |               | 3,978,154   |   |                  |   | 3,735,144 |   |
| Other loans                       |   |               | 56,972      |   |                  |   | 69,620 |   |
| Total                             |   | $                  | 263,812,762 |   |                  | $      | 261,770,815 |   |

|                         |   |   March 31, |   |
|------------------------------|--------|------------------|--------|
|                         |   | 2011             |   |   | 2010 |   |
|                         |   |             |   |   |   |   |
| Balance at beginning of year |   |             | 5,140  |   |   |   | 7,436 |   |
|                         |   |             |   |   |   |   |   |   |
| Provision charged to expense |   |             | 300    |   |   |   | 438 |   |
|                         |   |             |   |   |   |   |   |   |
| Loans charged off            |   |             | (121   | ) |   |   | (474 | ) |
|                         |   |             |   |   |   |   |   |   |
| Recoveries                   |   |             | 85     |   |   |   | 52 |   |
|                         |   |             |   |   |   |   |   |   |
| Balance at end of period     |   |             | 5,404  |   |   |   | 7,452 |   |

----

Index

----

Index

| March 31, 2011                    |   |   |    |   |            |   |   |                   |   |   |   |   |
|-----------------------------------|--------|--------|---------|--------|-----------------|--------|--------|------------------------|--------|--------|--------|--------|
|                              |   | Pass   |    |   | Special Mention |   |   | Substandard / Doubtful |   |   | Total  |   |
| Real estate:                      |   |   |    |   |            |   |   |                   |   |   |   |   |
| Construction and land loans       |   | $      | 20,348  |   |            | $      | 3,838  |                   |   | $      | 12,456 |   |   | $ | 36,642 |   |
| Farmland                          |   |   | 19,513  |   |            |   | 5,910  |                   |   |   | 5,076  |   |   |   | 30,499 |   |
| 1-4 family residential mortgage   |   |   | 51,133  |   |            |   | 4,032  |                   |   |   | 1,656  |   |   |   | 56,821 |   |
| Multifamily                       |   |   | 3,207   |   |            |   | -      |                   |   |   | -      |   |   |   | 3,207 |   |
| Commercial                        |   |   | 51,670  |   |            |   | 12,863 |                   |   |   | 8,510  |   |   |   | 73,043 |   |
| Agriculture                       |   |   | 15,117  |   |            |   | 2,945  |                   |   |   | 1,887  |   |   |   | 19,949 |   |
| Commercial                        |   |   | 20,446  |   |            |   | 3,441  |                   |   |   | 2,266  |   |   |   | 26,153 |   |
| Consumer                          |   |   | 13,408  |   |            |   | 36     |                   |   |   | 20     |   |   |   | 13,464 |   |
| States and political subdivisions |   |   | 3,978   |   |            |   | -      |                   |   |   | -      |   |   |   | 3,978 |   |
| Other loans                       |   |   | 57      |   |            |   | -      |                   |   |   | -      |   |   |   | 57 |   |
| Total                             |   | $      | 198,877 |   |            | $      | 33,065 |                   |   | $      | 31,871 |   |   | $ | 263,813 |   |

----

Index

|                              |   | Pass   |    |   | Special Mention |   |   | Substandard / Doubtful |   |   | Total  |   |
|-----------------------------------|--------|--------|---------|--------|-----------------|--------|--------|------------------------|--------|--------|--------|--------|
| Real estate:                      |   |   |    |   |            |   |   |                   |   |   |   |   |
| Construction and land loans       |   | $      | 19,306  |   |            | $      | 4,250  |                   |   | $      | 13,270 |   |   | $ | 36,826 |   |
| Farmland                          |   |   | 18,438  |   |            |   | 6,352  |                   |   |   | 5,480  |   |   |   | 30,270 |   |
| 1-4 family residential mortgage   |   |   | 52,544  |   |            |   | 3,538  |                   |   |   | 2,261  |   |   |   | 58,343 |   |
| Multifamily                       |   |   | 3,082   |   |            |   | -      |                   |   |   | -      |   |   |   | 3,082 |   |
| Commercial                        |   |   | 53,704  |   |            |   | 12,026 |                   |   |   | 8,070  |   |   |   | 73,800 |   |
| Agriculture                       |   |   | 8,807   |   |            |   | 2,110  |                   |   |   | 1,717  |   |   |   | 12,634 |   |
| Commercial                        |   |   | 21,853  |   |            |   | 3,223  |                   |   |   | 4,337  |   |   |   | 29,413 |   |
| Consumer                          |   |   | 13,335  |   |            |   | 65     |                   |   |   | 198    |   |   |   | 13,598 |   |
| States and political subdivisions |   |   | 3,735   |   |            |   | -      |                   |   |   | -      |   |   |   | 3,735 |   |
| Other loans                       |   |   | 65      |   |            |   | -      |                   |   |   | 5      |   |   |   | 70 |   |
| Total                             |   | $      | 194,869 |   |            | $      | 31,564 |                   |   | $      | 35,338 |   |   | $ | 261,771 |   |

----

Index

|                                                 |   | March 31, |   |   | December 31, |   |
|------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                 |   | 2011           |   |   | 2010              |   |
| Non-accrual loans:                                   |   |           |   |   |              |   |
| Real estate:                                         |   |           |   |   |              |   |
| Construction, land development, and other land loans |   | $              | 8,648  |   |              | $      | 8,966 |   |
| Farmland                                             |   |           | 851    |   |              |   | 1,210 |   |
| 1-4 family residential mortgage                      |   |           | 1,013  |   |              |   | 801 |   |
| Multifamily                                          |   |           | -      |   |              |   | - |   |
| Commercial                                           |   |           | 3,189  |   |              |   | 2,803 |   |
| Agriculture                                          |   |           | 1,481  |   |              |   | 1,603 |   |
| Commercial                                           |   |           | 2,096  |   |              |   | 2,162 |   |
| Consumer                                             |   |           | 2      |   |              |   | - |   |
| States and political subdivisions                    |   |           | -      |   |              |   | - |   |
| Other loans                                          |   |           | -      |   |              |   | - |   |
| Total nonaccrual loans                               |   | $              | 17,280 |   |              | $      | 17,545 |   |

|                                                 |   | March 31, |   |   | December 31, |   |
|------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                 |   | 2011           |   |   | 2010              |   |
| Allowance for loan losses:                           |   |           |   |   |              |   |
| Real estate:                                         |   |           |   |   |              |   |
| Construction, land development, and other land loans |   | $              | 2,292  |   |              | $      | 2,176 |   |
| Farmland                                             |   |           | 114    |   |              |   | 119 |   |
| 1-4 family residential mortgage                      |   |           | 636    |   |              |   | 576 |   |
| Multifamily                                          |   |           | 8      |   |              |   | 7 |   |
| Commercial                                           |   |           | 1,189  |   |              |   | 1,100 |   |
| Agriculture                                          |   |           | 260    |   |              |   | 201 |   |
| Commercial                                           |   |           | 742    |   |              |   | 772 |   |
| Consumer                                             |   |           | 152    |   |              |   | 178 |   |
| States and political subdivisions                    |   |           | 10     |   |              |   | 9 |   |
| Other loans                                          |   |           | 1      |   |              |   | 2 |   |
| Total allowance for loan losses                      |   | $              | 5,404  |   |              | $      | 5,140 |   |

----

Index

|                                             |   | March 31, |    |   | March 31, |   |
|--------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
|                                             |   | 2011           |    |   | 2010           |   |
| Average amount of loans outstanding, net         |   | $              | 259,411 |   |           | $      | 281,692 |   |
|                                             |   |           |    |   |           |   |   |   |
| Reserve for loan losses:                         |   |           |    |   |           |   |   |   |
| Beginning balance                                |   | $              | 5,140   |   |           | $      | 7,436 |   |
| Loans charged off:                               |   |           |    |   |           |   |   |   |
| Real estate:                                     |   |           |    |   |           |   |   |   |
| Construction and  land loans           |   |           | (37     | )      |           |   | (10 | ) |
| Farmland                                         |   |           | -       |   |           |   | - |   |
| 1-4 family residential mortgage                  |   |           | (41     | )      |           |   | (148 | ) |
| Multifamily                                      |   |           | -       |   |           |   | - |   |
| Commercial                                       |   |           | (9      | )      |           |   | - |   |
| Agriculture                                      |   |           | (17     | )      |           |   | - |   |
| Commercial                                       |   |           | (1      | )      |           |   | (239 | ) |
| Consumer                                         |   |           | (16     | )      |           |   | (76 | ) |
| States and political subdivisions                |   |           | -       |   |           |   | - |   |
| Other loans                                      |   |           | -       |   |           |   | (1 | ) |
|                                             |   |           |    |   |           |   |   |   |
| Total charged off                                |   |           | (121    | )      |           |   | (474 | ) |
| Recoveries:                                      |   |           |    |   |           |   |   |   |
| Real estate:                                     |   |           |    |   |           |   |   |   |
| Construction and  land loans           |   |           | 2       |   |           |   | 2 |   |
| Farmland                                         |   |           | -       |   |           |   | - |   |
| 1-4 family residential mortgage                  |   |           | 3       |   |           |   | 39 |   |
| Multifamily                                      |   |           | -       |   |           |   | - |   |
| Commercial                                       |   |           | 9       |   |           |   | - |   |
| Agriculture                                      |   |           | 4       |   |           |   | 5 |   |
| Commercial                                       |   |           | 60      |   |           |   | 1 |   |
| Consumer                                         |   |           | 7       |   |           |   | 5 |   |
| States and political subdivisions                |   |           | -       |   |           |   | - |   |
| Other loans                                      |   |           | -       |   |           |   | - |   |
| Total recoveries                                 |   |           | 85      |   |           |   | 52 |   |
| Loans charged off, net                           |   |           | (36     | )      |           |   | (422 | ) |
| Additions to the allowance charged to operations |   |           | 300     |   |           |   | 438 |   |
| Ending balance                                   |   | $              | 5,404   |   |           | $      | 7,452 |   |
|                                             |   |           |    |   |           |   |   |   |
| Net charge offs to average loans                 |   |           | 0.01    | %      |           |   | 0.15 | % |

----

Index

|                                   |   |       |   |   | Unpaid    |   |   |      |   |   | Interest   |   |
|----------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
|                                   |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Income     |   |
|                                   |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Recognized |   |
| With no specific allowance reserved    |   |       |   |   |      |   |   |      |   |   |       |   |
| Real estate:                           |   |       |   |   |      |   |   |      |   |   |       |   |
| Construction and  land loans |   | $          | 1,976  |   |      | $      | 3,076  |      |   | $      | -          |   |   | $ | - |   |
| Farmland                               |   |       | 687    |   |      |   | 687    |      |   |   | -          |   |   |   | - |   |
| 1-4 family residential mortgage        |   |       | 716    |   |      |   | 716    |      |   |   | -          |   |   |   | - |   |
| Multifamily                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 414    |   |      |   | 414    |      |   |   | -          |   |   |   | 5 |   |
| Agriculture                            |   |       | 1,351  |   |      |   | 1,351  |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 1,059  |   |      |   | 3,070  |      |   |   | -          |   |   |   | - |   |
| Consumer                               |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | 1 |   |
| States and political subdivisions      |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Other loans                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Total                                  |   | $          | 6,203  |   |      | $      | 9,314  |      |   | $      | -          |   |   | $ | 6 |   |

|                                   |   |       |   |   | Unpaid    |   |   |      |   |   | Interest   |   |
|----------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
|                                   |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Income     |   |
|                                   |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Recognized |   |
|                                   |   |       |   |   |      |   |   |      |   |   |       |   |
| With specific allowance reserved       |   |       |   |   |      |   |   |      |   |   |       |   |
| Real estate:                           |   |       |   |   |      |   |   |      |   |   |       |   |
| Construction and  land loans |   | $          | 7,663  |   |      | $      | 8,166  |      |   | $      | 1,267      |   |   | $ | 17 |   |
| Farmland                               |   |       | 148    |   |      |   | 148    |      |   |   | 31         |   |   |   | - |   |
| 1-4 family residential mortgage        |   |       | 812    |   |      |   | 812    |      |   |   | 159        |   |   |   | 17 |   |
| Multifamily                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 3,073  |   |      |   | 3,073  |      |   |   | 663        |   |   |   | - |   |
| Agriculture                            |   |       | 128    |   |      |   | 128    |      |   |   | 65         |   |   |   | - |   |
| Commercial                             |   |       | 1,109  |   |      |   | 1,109  |      |   |   | 484        |   |   |   | 2 |   |
| Consumer                               |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| States and political subdivisions      |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Other loans                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Total                                  |   | $          | 12,933 |   |      | $      | 13,436 |      |   | $      | 2,669      |   |   | $ | 36 |   |

----

Index

|                                   |   |    Recorded Investment |   |   | Unpaid Principal Balance |   |   |    Related Allowance |   |   | InterestIncomeRecognized |   |
|----------------------------------------|--------|---------------------------------------|--------|--------|------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------|--------|
| Total Impaired Loans                   |   |                                  |   |   |                               |   |   |                                |   |   |                     |   |
| Real estate:                           |   |                                  |   |   |                               |   |   |                                |   |   |                     |   |
| Construction and  land loans |   | $                                     | 9,639  |   |                               | $      | 11,242 |                                |   | $      | 1,267                    |   |   | $ | 17 |   |
| Farmland                               |   |                                  | 835    |   |                               |   | 835    |                                |   |   | 31                       |   |   |   | - |   |
| 1-4 family residential mortgage        |   |                                  | 1,528  |   |                               |   | 1,528  |                                |   |   | 159                      |   |   |   | 17 |   |
| Multifamily                            |   |                                  | -      |   |                               |   | -      |                                |   |   | -                        |   |   |   | - |   |
| Commercial                             |   |                                  | 3,487  |   |                               |   | 3,487  |                                |   |   | 663                      |   |   |   | 5 |   |
| Agriculture                            |   |                                  | 1,479  |   |                               |   | 1,479  |                                |   |   | 65                       |   |   |   | - |   |
| Commercial                             |   |                                  | 2,168  |   |                               |   | 4,179  |                                |   |   | 484                      |   |   |   | 2 |   |
| Consumer                               |   |                                  | -      |   |                               |   | -      |                                |   |   | -                        |   |   |   | 1 |   |
| States and political subdivisions      |   |                                  | -      |   |                               |   | -      |                                |   |   | -                        |   |   |   | - |   |
| Other loans                            |   |                                  | -      |   |                               |   | -      |                                |   |   | -                        |   |   |   | - |   |
| Total                                  |   | $                                     | 19,136 |   |                               | $      | 22,750 |                                |   | $      | 2,669                    |   |   | $ | 42 |   |

----

Index

|                                   |   |       |   |   | Unpaid    |   |   |      |   |   | Interest   |   |
|----------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
|                                   |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Income     |   |
|                                   |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Recognized |   |
|                                   |   |       |   |   |      |   |   |      |   |   |       |   |
| With no specific allowance reserved    |   |       |   |   |      |   |   |      |   |   |       |   |
|  Real estate:                     |   |       |   |   |      |   |   |      |   |   |       |   |
| Construction and  land loans |   | $          | 2,748  |   |      | $      | 3,948  |      |   | $      | -          |   |   | $ | 2 |   |
| Farmland                               |   |       | 3,485  |   |      |   | 3,485  |      |   |   | -          |   |   |   | 55 |   |
| 1-4 family residential mortgage        |   |       | 1,320  |   |      |   | 1,320  |      |   |   | -          |   |   |   | 42 |   |
| Multifamily                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 256    |   |      |   | 256    |      |   |   | -          |   |   |   | 11 |   |
| Agriculture                            |   |       | 1,338  |   |      |   | 1,338  |      |   |   | -          |   |   |   | 45 |   |
| Commercial                             |   |       | 1,157  |   |      |   | 3,168  |      |   |   | -          |   |   |   | 12 |   |
| Consumer                               |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| States and political subdivisions      |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Other loans                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Total                                  |   | $          | 10,304 |   |      | $      | 13,515 |      |   | $      | -          |   |   | $ | 167 |   |

|                                   |   |       |   |   | Unpaid    |   |   |      |   |   | Interest   |   |
|----------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
|                                   |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Income     |   |
|                                   |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Recognized |   |
|                                   |   |       |   |   |      |   |   |      |   |   |       |   |
| With specific allowance reserved       |   |       |   |   |      |   |   |      |   |   |       |   |
|  Real estate:                     |   |       |   |   |      |   |   |      |   |   |       |   |
| Construction and  land loans |   | $          | 6,813  |   |      | $      | 7,315  |      |   | $      | 1,029      |   |   | $ | 95 |   |
| Farmland                               |   |       | 150    |   |      |   | 150    |      |   |   | 33         |   |   |   | 5 |   |
| 1-4 family residential mortgage        |   |       | 223    |   |      |   | 223    |      |   |   | 129        |   |   |   | 9 |   |
| Multifamily                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 2,871  |   |      |   | 2,871  |      |   |   | 565        |   |   |   | 61 |   |
| Agriculture                            |   |       | 252    |   |      |   | 252    |      |   |   | 74         |   |   |   | 14 |   |
| Commercial                             |   |       | 987    |   |      |   | 987    |      |   |   | 445        |   |   |   | 8 |   |
| Consumer                               |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| States and political subdivisions      |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Other loans                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Total                                  |   | $          | 11,296 |   |      | $      | 11,798 |      |   | $      | 2,275      |   |   | $ | 192 |   |

----

Index

|                                   |   |       |   |   | Unpaid    |   |   |      |   |   | Interest   |   |
|----------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
|                                   |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Income     |   |
|                                   |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Recognized |   |
| Total Impaired Loans                   |   |       |   |   |      |   |   |      |   |   |       |   |
| Real estate:                           |   |       |   |   |      |   |   |      |   |   |       |   |
| Construction and  land loans |   | $          | 9,561  |   |      | $      | 11,263 |      |   | $      | 1,029      |   |   | $ | 97 |   |
| Farmland                               |   |       | 3,635  |   |      |   | 3,635  |      |   |   | 33         |   |   |   | 60 |   |
| 1-4 family residential mortgage        |   |       | 1,543  |   |      |   | 1,543  |      |   |   | 129        |   |   |   | 51 |   |
| Multifamily                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Commercial                             |   |       | 3,127  |   |      |   | 3,127  |      |   |   | 565        |   |   |   | 72 |   |
| Agriculture                            |   |       | 1,590  |   |      |   | 1,590  |      |   |   | 74         |   |   |   | 59 |   |
| Commercial                             |   |       | 2,144  |   |      |   | 4,155  |      |   |   | 445        |   |   |   | 20 |   |
| Consumer                               |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| States and political subdivisions      |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Other loans                            |   |       | -      |   |      |   | -      |      |   |   | -          |   |   |   | - |   |
| Total                                  |   | $          | 21,600 |   |      | $      | 25,313 |      |   | $      | 2,275      |   |   | $ | 359 |   |

----

Index

|                              |   | ALL     |   |   |         |   |   |         |   |
|-----------------------------------|--------|---------|--------|--------|--------------|--------|--------|--------------|--------|
|                              |   | Ending  |   |   | Individually |   |   | Collectively |   |
|                              |   | Balance |   |   | Evaluated    |   |   | Evaluated    |   |
|                              |   |    |   |   |         |   |   |         |   |
| Real estate:                      |   |    |   |   |         |   |   |         |   |
| Construction and land loans       |   | $       | 1,267  |   |         | $      | 9,639  |         |   | $ | - |   |
| Farmland                          |   |    | 31     |   |         |   | 835    |         |   |   | - |   |
| 1-4 family residential mortgage   |   |    | 160    |   |         |   | 1,528  |         |   |   | - |   |
| Multifamily                       |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Commercial                        |   |    | 663    |   |         |   | 3,487  |         |   |   | - |   |
| Agriculture                       |   |    | 65     |   |         |   | 1,479  |         |   |   | - |   |
| Commercial                        |   |    | 483    |   |         |   | 2,168  |         |   |   | - |   |
| Consumer                          |   |    | -      |   |         |   | -      |         |   |   | - |   |
| States and political subdivisions |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Other loans                       |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Total                             |   | $       | 2,669  |   |         | $      | 19,136 |         |   | $ | - |   |

|                              |   | ALL     |   |   |         |   |   |         |   |
|-----------------------------------|--------|---------|--------|--------|--------------|--------|--------|--------------|--------|
|                              |   | Ending  |   |   | Individually |   |   | Collectively |   |
|                              |   | Balance |   |   | Evaluated    |   |   | Evaluated    |   |
|                              |   |    |   |   |         |   |   |         |   |
| Real estate:                      |   |    |   |   |         |   |   |         |   |
| Construction and land loans       |   | $       | 1,029  |   |         | $      | 9,561  |         |   | $ | - |   |
| Farmland                          |   |    | 33     |   |         |   | 3,635  |         |   |   | - |   |
| 1-4 family residential mortgage   |   |    | 129    |   |         |   | 1,543  |         |   |   | - |   |
| Multifamily                       |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Commercial                        |   |    | 565    |   |         |   | 3,127  |         |   |   | - |   |
| Agriculture                       |   |    | 74     |   |         |   | 1,590  |         |   |   | - |   |
| Commercial                        |   |    | 445    |   |         |   | 2,144  |         |   |   | - |   |
| Consumer                          |   |    | -      |   |         |   | -      |         |   |   | - |   |
| States and political subdivisions |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Other loans                       |   |    | -      |   |         |   | -      |         |   |   | - |   |
| Total                             |   | $       | 2,275  |   |         | $      | 21,600 |         |   | $ | - |   |

----

Index

|                              |   | Past Due Loans (Accruing Interest) |   |   |       |   |   |     |   |   | Total  |   |
|-----------------------------------|--------|------------------------------------|--------|--------|------------|--------|--------|----------|--------|--------|--------|--------|
|                              |   | 30-59 days                         |   |   | 60-89 days |   |   | 90+ days |   |   | Total  |   |   | Nonaccrual |   |   | Current |   |   | Loans |   |
|                              |   |                               |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate:                      |   |                               |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction and land loans       |   | $                                  | 582    |   |       | $      | 538    |     |   | $      | 7      |   |   | $ | 1,127 |   |   | $ | 8,648 |   |   | $ | 26,867 |   |   | $ | 36,642 |   |
| Farmland                          |   |                               | 292    |   |       |   | 85     |     |   |   | 11     |   |   |   | 388 |   |   |   | 851 |   |   |   | 29,260 |   |   |   | 30,499 |   |
| 1-4 family residential mortgage   |   |                               | 135    |   |       |   | 32     |     |   |   | -      |   |   |   | 167 |   |   |   | 1,013 |   |   |   | 55,641 |   |   |   | 56,821 |   |
| Multifamily                       |   |                               | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,207 |   |   |   | 3,207 |   |
| Commercial                        |   |                               | 1,071  |   |       |   | 232    |     |   |   | -      |   |   |   | 1,303 |   |   |   | 3,189 |   |   |   | 68,551 |   |   |   | 73,043 |   |
| Agriculture                       |   |                               | 14     |   |       |   | -      |     |   |   | -      |   |   |   | 14 |   |   |   | 1,481 |   |   |   | 18,454 |   |   |   | 19,949 |   |
| Commercial                        |   |                               | 49     |   |       |   | -      |     |   |   | 31     |   |   |   | 80 |   |   |   | 2,096 |   |   |   | 23,977 |   |   |   | 26,153 |   |
| Consumer                          |   |                               | 102    |   |       |   | 43     |     |   |   | 7      |   |   |   | 152 |   |   |   | 2 |   |   |   | 13,310 |   |   |   | 13,464 |   |
| States and political subdivisions |   |                               | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,978 |   |   |   | 3,978 |   |
| Other loans                       |   |                               | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 57 |   |   |   | 57 |   |
| Totals                            |   | $                                  | 2,245  |   |       | $      | 930    |     |   | $      | 56     |   |   | $ | 3,231 |   |   | $ | 17,280 |   |   | $ | 243,302 |   |   | $ | 263,813 |   |

|                              |   | Past Due Loans (Accruing Interest |   |   |       |   |   |     |   |   | Total  |   |
|-----------------------------------|--------|-----------------------------------|--------|--------|------------|--------|--------|----------|--------|--------|--------|--------|
|                              |   | 30-59 days                        |   |   | 60-89 days |   |   | 90+ days |   |   | Total  |   |   | Nonaccrual |   |   | Current |   |   | Loans |   |
|                              |   |                              |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate:                      |   |                              |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction and land loans       |   | $                                 | 860    |   |       | $      | 106    |     |   | $      | -      |   |   | $ | 966 |   |   | $ | 8,966 |   |   | $ | 26,894 |   |   | $ | 36,826 |   |
| Farmland                          |   |                              | 2,527  |   |       |   | 18     |     |   |   | 519    |   |   |   | 3,064 |   |   |   | 1,210 |   |   |   | 25,996 |   |   |   | 30,270 |   |
| 1-4 family residential mortgage   |   |                              | 155    |   |       |   | 51     |     |   |   | -      |   |   |   | 206 |   |   |   | 801 |   |   |   | 57,336 |   |   |   | 58,343 |   |
| Multifamily                       |   |                              | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,082 |   |   |   | 3,082 |   |
| Commercial                        |   |                              | 880    |   |       |   | 610    |     |   |   | -      |   |   |   | 1,490 |   |   |   | 2,803 |   |   |   | 69,507 |   |   |   | 73,800 |   |
| Agriculture                       |   |                              | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | 1,603 |   |   |   | 11,031 |   |   |   | 12,634 |   |
| Commercial                        |   |                              | 119    |   |       |   | -      |     |   |   | -      |   |   |   | 119 |   |   |   | 2,162 |   |   |   | 27,132 |   |   |   | 29,413 |   |
| Consumer                          |   |                              | 100    |   |       |   | 15     |     |   |   | 19     |   |   |   | 134 |   |   |   | - |   |   |   | 13,464 |   |   |   | 13,598 |   |
| States and political subdivisions |   |                              | -      |   |       |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,735 |   |   |   | 3,735 |   |
| Other loans                       |   |                              | 1      |   |       |   | -      |     |   |   | -      |   |   |   | 1 |   |   |   | - |   |   |   | 69 |   |   |   | 70 |   |
| Totals                            |   | $                                 | 4,642  |   |       | $      | 800    |     |   | $      | 538    |   |   | $ | 5,980 |   |   | $ | 17,545 |   |   | $ | 238,246 |   |   | $ | 261,771 |   |

----

Index

|                                     |   | Shares under option |         |   | Weighted average exercise price per share |   |        | Weighted average remaining contractual life |   |
|------------------------------------------|--------|---------------------|--------------|--------|-------------------------------------------|--------|-------------|---------------------------------------------|--------|
| Options outstanding, beginning of period |   |                | 22,486  |   |                                      | $      | 16.15       |                                        |   |   | 2.2 |   |
| Granted                                  |   |                | —      |   |                                      |   | —     |                                        |   |   |   |   |
| Surrendered                              |   |                | —      |   |                                      |   | —     |                                        |   |   |   |   |
| Exercised                                |   |                | —      |   |                                      |   | —     |                                        |   |   |   |   |
| Options outstanding, end of period       |   |                | 22,486  |   |                                      |   | 16.15  |                                        |   |   | 1.9 |   |
| Exercisable, end of period               |   |                | 22,486  |   |                                      |   | 16.15  |                                        |   |   | 1.9 |   |

----

Index

|                                     |   | Shares under option |        |   | Weighted average exercise price per share |   |        | Weighted average remaining contractual life |   |
|------------------------------------------|--------|---------------------|-------------|--------|-------------------------------------------|--------|-------------|---------------------------------------------|--------|
| Options outstanding, beginning of period |   |                | 4,000  |   |                                      | $      | 14.85       |                                        |   |   | 8.4 |   |
| Granted                                  |   |                | —     |   |                                      |   | —     |                                        |   |   |   |   |
| Surrendered                              |   |                | —     |   |                                      |   | —     |                                        |   |   |   |   |
| Exercised                           |   |                | —     |   |                                      |   | —     |                                        |   |   |   |   |
| Options outstanding, end of period       |   |                | 4,000  |   |                                      |   | 14.85  |                                        |   |   | 8.2 |   |
| Exercisable, end of period               |   |                | 1,600  |   |                                      |   | 14.85  |                                        |   |   | 8.2 |   |

|                             |   | Restricted stock activity |        |   | Weighted average fair value |   |
|---------------------------------------|--------|---------------------------|-------------|--------|-----------------------------|--------|
| Shares granted at beginning of period |   |                      | 5,515  |   |                        |   | 16.65  |   |
| Granted                               |   |                      | —     |   |                        |   | — |   |
| Surrendered                      |   |                      | —     |   |                        |   | — |   |
| Vested                           |   |                      | —     |   |                        |   | — |   |
| Shares granted at end of period       |   |                      | 5,515  |   |                        |   | 16.65  |   |

----

Index

----

Index

|           |   |                        |       |   | Fair Value Measurements at March 31, 2011 Using        |   |
|----------------|--------|-----------------------------|------------|--------|-------------------------------------------------------------|--------|
|           |   | AssetsMeasured atFair Value |       |   | Quoted Pricesin Active Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservableInputsLevel (2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|           |   |                        |       |   |                                                        |   |   |   |   |   |   |   |
| AFS Securities |   | $                           | 73,539,287 |   |                                                        | $      | 24,171,522 |   |   | $ | 49,367,765 |   |   | $ | - |   |

|           |   |                        |       |   | Fair Value Measurements at March 31, 2010 Using        |   |
|----------------|--------|-----------------------------|------------|--------|-------------------------------------------------------------|--------|
|           |   | AssetsMeasured atFair Value |       |   | Quoted Pricesin Active Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservableInputsLevel (2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|           |   |                        |       |   |                                                        |   |   |   |   |   |   |   |
| AFS Securities |   | $                           | 71,822,559 |   |                                                        | $      | 13,244,965 |   |   | $ | 58,577,594 |   |   | $ | - |   |

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Index

|                                                                                                                       |   | Carrying Value at March 31, 2011 |       |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------|---------|--------|
|                                                                                                                       |   |                             |       |   |    |   |   |   |   |   |   |   |   | Three months endedMarch 31, 2011 |   |
|                                                                                                                       |   |                             |       |   |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                       |   |                             |       |   |    |   |   |   |   |   |   |   |   | Totallosses |   |
|                                                                                                                       |   | Total                            |       |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                                                                                                                       |   |                             |       |   |    |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (1)                                                                                                         |   | $                                | 12,413,089 |   |    | $      | - |   |   | $ | - |   |   | $ | 12,413,089 |   |   | $ | (444,994 | ) |
| Other real estate                                                                                                          |   |                             | 9,778,394  |   |    |   | - |   |   |   | - |   |   |   | 9,778,394 |   |   |   | (9,501 | ) |
|                                                                                                                       |   |                             |       |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Losses related to loans were recognized as either charge-offs or specific allocations of the allowance for loan losses |   |

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Index

|              |   | Carrying Value at December 31, 2010 |       |
|-------------------|--------|-------------------------------------|------------|
|              |   |                                |       |   |   |   |   |   |   |   |   |   |
|              |   |                                |       |   |   |   |   |   |   |   |   |   |
|              |   |                                |       |   |   |   |   |   |   |   |   |   |
|              |   | Total                               |       |   | Level 1 |   |   | Level 2 |   |   | Level3 |   |
|              |   |                                |       |   |   |   |   |   |   |   |   |   |
| Impaired loans    |   | $                                   | 11,367,697 |   |   | $ | - |   |   | $ | - |   |   | $ | 11,367,697 |   |
| Other real estate |   |                                | 10,163,992 |   |   |   | - |   |   |   | - |   |   |   | 10,163,992 |   |

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

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

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

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

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

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Index

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

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

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

|                                        |   | March 31, 2011    |    |   | December 31, 2010 |   |
|---------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                        |   | Carryingamount         |    |   | Estimatedfair value    |   |   | Carryingamount |   |   | Estimatedfair value |   |
|                                        |
| Financial assets:                           |   | (Dollars in Thousands) |    |
| Cash and short–term investments       |   | $                      | 59,838  |   |                   | $      | 59,838 |   |   | $ | 80,966 |   |   | $ | 80,966 |   |
| Investment securities                       |   |                   | 88,434  |   |                   |   | 88,408 |   |   |   | 86,071 |   |   |   | 86,111 |   |
| Loans, net of the allowance for loan losses |   |                   | 258,408 |   |                   |   | 267,117 |   |   |   | 256,631 |   |   |   | 264,155 |   |
| Bank owned life insurance                   |   |                   | 2,872   |   |                   |   | 2,872 |   |   |   | 2,845 |   |   |   | 2,845 |   |
| Correspondent bank stock                    |   |                   | 1,872   |   |                   |   | 1,872 |   |   |   | 1,872 |   |   |   | 1,872 |   |
| Accrued interest receivable                 |   |                   | 2,004   |   |                   |   | 2,004 |   |   |   | 2,193 |   |   |   | 2,193 |   |
|                                        |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                      |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                    |   |                   | 398,244 |   |                   |   | 401,613 |   |   |   | 417,033 |   |   |   | 420,546 |   |
| Other borrowed funds                        |   |                   | 863     |   |                   |   | 863 |   |   |   | 944 |   |   |   | 944 |   |
| FHLB advances                               |   |                   | 1,223   |   |                   |   | 1,458 |   |   |   | 1,280 |   |   |   | 1,534 |   |
| Subordinated Debt                           |   |                   | 10,310  |   |                   |   | 10,310 |   |   |   | 10,310 |   |   |   | 10,310 |   |
| Accrued interest payable                    |   |                   | 375     |   |                   |   | 375 |   |   |   | 403 |   |   |   | 403 |   |

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Index

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Index

GEM

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Index

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Index

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Index

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Index

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Index

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Index

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Index

|                                   |   |           |   |   | Adequately  |   |   | Well        |   |
|----------------------------------------|--------|----------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                   |   | March 31, |   |   | Capitalized |   |   | Capitalized |   |
|                                   |   | 2011           |   |   | Treatment   |   |   | Treatment   |   |
| United Bancorporation of Alabama, Inc. |   |           |   |   |        |   |   |        |   |
| Total risk-based capital               |   |           | 15.68  | %      |        |   | 8.00   | %           |   |   | 10.00 | % |
| Tier 1 risk-based capital              |   |           | 13.84  |   |        |   | 4.00   |        |   |   | 6.00 |   |
| Leverage Ratio                         |   |           | 8.61   |   |        |   | 4.00   |        |   |   | 5.00 |   |
|                                   |   |           |   |   |        |   |   |        |   |   |   |   |
| United Bank                            |   |           |   |   |        |   |   |        |   |   |   |   |
| Total risk-based capital               |   |           | 15.17  | %      |        |   | 8.00   | %           |   |   | 10.00 | % |
| Tier 1 risk-based capital              |   |           | 13.91  |   |        |   | 4.00   |        |   |   | 6.00 |   |
| Leverage ratio                         |   |           | 8.69   |   |        |   | 4.00   |        |   |   | 5.00 |   |

|                         |   | March 31, |            |
|------------------------------|--------|----------------|-----------------|
|                         |   | 2011           |            |
|                         |   |           |            |
| Commitments to extend credit |   | $              | 46,811,583      |   |
| Standby letters of credit    |   |           | 1,406,922  |   |

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Index

 Procedures

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Index

cto

ib

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

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

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Index

|  UNITED BANCORPORATION OF ALABAMA, INC. |
|----------------------------------------------|
|                                         |   |   |
| Date: May 13, 2011                           |   |   |
|                                         |   |   |
|                                         |   | /s/ Robert R. Jones, III |
|                                         | Robert R. Jones, III |
|                                         |   | President and Chief Executive Officer |

|   |                | /s/ Allen O. Jones, Jr.                      |
|--------|---------------------|---------------------------------------------------|
|   | Allen O. Jones, Jr. |
|   |                | Senior Vice President and Chief Financial Officer |

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Index

| 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 |
|--------|------|---------------------------------------------------------------------------------------------------------------------------|

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