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TABLE OF CONTENTS

|       |                                                                                        | Page   |
|------------|---------------------------------------------------------------------------------------------|--------|
| PART I     | FINANCIAL INFORMATION                                                                       |   |
| Item 1     | Consolidated Financial Statements                                                           |   |
|       | Statements of Condition                                                                     | 1      |
|       | Statements of Operations                                                                    | 2      |
|       | Statements of Comprehensive Loss                                                            | 3      |
|       | Statements of Stockholders’ Equity                                                    | 4      |
|       | Statements of Cash Flows                                                                    | 5      |
|       | Notes to Consolidated Financial Statements                                                  | 7      |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                  | 51     |
| Item 4.    | Controls and Procedures                                                                     | 53     |
|       |                                                                                        |   |
| PART II    | OTHER INFORMATION                                                                           |   |
| Item 1.    | Legal Proceedings                                                                           | 53     |
| Item 1A.   | Risk Factors                                                                                | 53     |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 53     |
| Item 3.    | Defaults Upon Senior Securities                                                             | 53     |
| Item 4.    | Submission of Matters to a Vote of Security Holders                                         | 53     |
| Item 5.    | Other Information                                                                           | 53     |
| Item 6.    | Exhibits                                                                                    | 54     |
|       |                                                                                        |   |
| SIGNATURES | 54                                                                                          |

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Table of Contents

Item 1. Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CONDITION

|                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              |   | September 30,2010 |   |   | December 31,2009 |
|                                                                                                              |   | (UNAUDITED) |   |   |   |
| ASSETS                                                                                                            |   |   |   |   |   |
| Cash and due from banks                                                                                           |   | $ | 9,431,780 |   |   | $ | 16,641,978 |   |
| Interest-bearing deposits in other banks                                                                          |   |   | 151,097,302 |   |   |   | 169,732,493 |   |
| Federal funds sold                                                                                                |   |   | 431,205 |   |   |   | 103,825 |   |
| Investment securities                                                                                             |   |   | 169,100,503 |   |   |   | 111,541,113 |   |
| Restricted equity securities                                                                                      |   |   | 8,487,200 |   |   |   | 9,459,600 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Loans                                                                                                             |   |   | 597,721,702 |   |   |   | 805,313,687 |   |
| Allowance for loan losses                                                                                         |   |   | (26,918,015 | ) |   |   | (29,314,145 | ) |
| Net loans                                                                                                         |   |   | 570,803,687 |   |   |   | 775,999,542 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Premises and equipment, net                                                                                       |   |   | 13,881,692 |   |   |   | 18,609,472 |   |
| Cash value of bank-owned life insurance policies                                                                  |   |   | 13,230,056 |   |   |   | 12,874,651 |   |
| Foreclosed assets                                                                                                 |   |   | 100,261,240 |   |   |   | 92,117,123 |   |
| Other assets                                                                                                      |   |   | 7,475,759 |   |   |   | 24,864,778 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Total assets                                                                                                      |   | $ | 1,044,200,424 |   |   | $ | 1,231,944,575 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                              |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                         |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand                                                                                        |   | $ | 89,346,580 |   |   | $ | 100,458,230 |   |
| Interest-bearing demand and savings                                                                               |   |   | 171,990,787 |   |   |   | 250,232,355 |   |
| Time                                                                                                              |   |   | 634,126,558 |   |   |   | 694,524,617 |   |
| Total deposits                                                                                                    |   |   | 895,463,925 |   |   |   | 1,045,215,202 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase                                        |   |   | 2,496,933 |   |   |   | 10,011,024 |   |
| Advances from the Federal Home Loan Bank of Atlanta                                                               |   |   | 89,646,031 |   |   |   | 90,139,501 |   |
| Guaranteed preferred beneficial interests in debentures (trust preferred securities)                              |   |   | 10,310,000 |   |   |   | 10,310,000 |   |
| Other borrowings                                                                                                  |   |   | 20,000,000 |   |   |   | 20,000,000 |   |
| Other liabilities                                                                                                 |   |   | 5,854,510 |   |   |   | 5,682,200 |   |
| Total liabilities                                                                                                 |   |   | 1,023,771,399 |   |   |   | 1,181,357,927 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Stockholders' equity:                                                                                             |   |   |   |   |   |   |   |   |
| Preferred stock, no par value; 10,000,000 and 1,500,000 shares authorized; no shares issued                       |   |   | - |   |   |   | - |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Common stock, no par value; 300,000,000 and 98,500,000 shares authorized;13,795,040 shares issued and outstanding |   |   | 1,217,065 |   |   |   | 1,217,065 |   |
| Additional paid-in capital                                                                                        |   |   | 37,666,448 |   |   |   | 37,348,508 |   |
| Retained earnings (deficit)                                                                                       |   |   | (19,587,433 | ) |   |   | 11,295,000 |   |
| Accumulated other comprehensive income                                                                            |   |   | 1,132,945 |   |   |   | 726,075 |   |
| Total stockholders' equity                                                                                        |   |   | 20,429,025 |   |   |   | 50,586,648 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                        |   | $ | 1,044,200,424 |   |   | $ | 1,231,944,575 |   |

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Table of Contents

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                          |   |
|---------------------------------------------------------------|--------|
|                                                          |   | Three Months Ended September 30, |   |   | Nine Months EndedSeptember 30, |   |
|                                                          |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and fees on loans                                    |   | $ | 8,219,337 |   |   | $ | 13,119,681 |   |   | $ | 27,005,982 |   |   | $ | 41,098,368 |   |
| Interest and dividends on investment securities:              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                       |   |   | 1,666,211 |   |   |   | 1,487,428 |   |   |   | 4,331,282 |   |   |   | 5,212,782 |   |
| Nontaxable                                                    |   |   | 63,626 |   |   |   | 129,340 |   |   |   | 255,145 |   |   |   | 513,142 |   |
| Other interest income                                         |   |   | 103,109 |   |   |   | 79,862 |   |   |   | 307,074 |   |   |   | 232,881 |   |
| Total interest income                                         |   |   | 10,052,283 |   |   |   | 14,816,311 |   |   |   | 31,899,483 |   |   |   | 47,057,173 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits                                          |   |   | 4,172,497 |   |   |   | 6,199,294 |   |   |   | 14,202,804 |   |   |   | 20,585,898 |   |
| Interest on Federal Home Loan Bank advances                   |   |   | 873,223 |   |   |   | 1,052,374 |   |   |   | 2,597,957 |   |   |   | 3,203,873 |   |
| Interest on other borrowings                                  |   |   | 262,265 |   |   |   | 310,727 |   |   |   | 774,847 |   |   |   | 835,076 |   |
| Total interest expense                                        |   |   | 5,307,985 |   |   |   | 7,562,395 |   |   |   | 17,575,608 |   |   |   | 24,624,847 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                           |   |   | 4,744,298 |   |   |   | 7,253,916 |   |   |   | 14,323,875 |   |   |   | 22,432,326 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                     |   |   | 3,100,000 |   |   |   | 31,437,987 |   |   |   | 20,214,000 |   |   |   | 35,187,987 |   |
| Net interest income (expense) after provision for loan losses |   |   | 1,644,298 |   |   |   | (24,184,071 | ) |   |   | (5,890,125 | ) |   |   | (12,755,661 | ) |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                           |   |   | 565,572 |   |   |   | 943,908 |   |   |   | 2,011,819 |   |   |   | 2,625,886 |   |
| Other fee income                                              |   |   | 541,914 |   |   |   | 483,568 |   |   |   | 1,607,537 |   |   |   | 1,512,299 |   |
| Securities transactions, net                                  |   |   | 2,405,294 |   |   |   | 92,742 |   |   |   | 3,235,624 |   |   |   | 865,243 |   |
| Loss on sale and write-down of other assets                   |   |   | (1,938,565 | ) |   |   | (754,918 | ) |   |   | (7,196,298 | ) |   |   | (1,276,488 | ) |
| Gain (loss) on derivative instruments                         |   |   | - |   |   |   | (143,189 | ) |   |   | 162,649 |   |   |   | 1,025,722 |   |
| Other noninterest income                                      |   |   | 277,855 |   |   |   | 267,004 |   |   |   | 759,899 |   |   |   | 728,760 |   |
| Total other income                                            |   |   | 1,852,070 |   |   |   | 889,115 |   |   |   | 581,230 |   |   |   | 5,481,422 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other expenses                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                |   |   | 2,854,235 |   |   |   | 3,631,008 |   |   |   | 9,049,701 |   |   |   | 12,306,131 |   |
| Occupancy expense of premises                                 |   |   | 418,379 |   |   |   | 569,441 |   |   |   | 1,436,205 |   |   |   | 1,756,721 |   |
| Furniture and equipment expense                               |   |   | 457,716 |   |   |   | 502,080 |   |   |   | 1,457,518 |   |   |   | 1,504,201 |   |
| Other noninterest expense                                     |   |   | 4,224,690 |   |   |   | 2,581,902 |   |   |   | 13,535,468 |   |   |   | 7,944,786 |   |
| Total other expenses                                          |   |   | 7,955,020 |   |   |   | 7,284,431 |   |   |   | 25,478,892 |   |   |   | 23,511,839 |   |
| Loss before income tax expense (benefit)                      |   |   | (4,458,652 | ) |   |   | (30,579,387 | ) |   |   | (30,787,787 | ) |   |   | (30,786,078 | ) |
| Income tax expense (benefit)                                  |   |   | - |   |   |   | (10,622,932 | ) |   |   | 94,646 |   |   |   | (10,876,475 | ) |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                      |   | $ | (4,458,652 | ) |   | $ | (19,956,455 | ) |   | $ | (30,882,433 | ) |   | $ | (19,909,603 | ) |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss per common share                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                         |   | $ | (0.32 | ) |   | $ | (1.93 | ) |   | $ | (2.24 | ) |   | $ | (2.06 | ) |
| Diluted                                                       |   | $ | (0.32 | ) |   | $ | (1.93 | ) |   | $ | (2.24 | ) |   | $ | (2.06 | ) |

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

|                                                                                                                                                                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                |   | Three Months Ended September 30, |   |   | Nine Months EndedSeptember 30, |   |
|                                                                                                                                                                                                                |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                                                                                                            |   | $ | (4,458,652 | ) |   | $ | (19,956,455 | ) |   | $ | (30,882,433 | ) |   | $ | (19,909,603 | ) |
|                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized loss on cash flow hedge during the period, net of tax benefit of $13,058 and $44,859 for the quarter and $67,940 and $614,502 for the year to date                                                       |   |   | (25,346 | ) |   |   | (87,080 | ) |   |   | (131,891 | ) |   |   | (1,192,854 | ) |
| Reclassification adjustment for (gains) losses on  cash flow hedge included in net loss, net of tax (benefit) of  $0 and ($48,684)for the quarter and $55,301 and $348,745 for the year to date |   |   | - |   |   |   | 94,505 |   |   |   | (107,348 | ) |   |   | (676,977 | ) |
| Unrealized holding gains on securities available for sale arising during the period, net of tax of $416,742 and $1,025,652 for the quarter and $1,432,956 and $510,612 for the year to date                         |   |   | 808,968 |   |   |   | 1,988,737 |   |   |   | 2,781,621 |   |   |   | 991,676 |   |
| Reclassification adjustment for gains on securities available for sale included in net loss, net of tax of $817,800 and $32,460for the quarter and $1,100,112 and $294,183 for the year to date                     |   |   | (1,587,494 | ) |   |   | (60,283 | ) |   |   | (2,135,512 | ) |   |   | (571,060 | ) |
|                                                                                                                                                                                                                |   |   | (803,872 | ) |   |   | 1,935,879 |   |   |   | 406,870 |   |   |   | (1,449,215 | ) |
| Comprehensive loss                                                                                                                                                                                                  |   | $ | (5,262,524 | ) |   | $ | (18,020,576 | ) |   | $ | (30,475,563 | ) |   | $ | (21,358,818 | ) |

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Table of Contents

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

|                                       |   |                     |       |   |                     |   |      |                      |   |   |                                |   |   |                           |        |   |   |   |
|--------------------------------------------|--------|--------------------------|------------|--------|--------------------------|--------|-----------|---------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------|-------------|--------|--------|--------|
|                                  |   |   Common Stock |       |   | AdditionalPaid-inCapital |   |      | RetainedEarnings(Deficit) |   |   | AccumulatedOtherComprehensiveIncome |   |   | TotalStockholders’Equity |        |
|                                       |   | Shares                   |       |   | Par Value                |   |      |                      |   |   |                                |   |   |                           |
|                                       |   |                     |       |   |                     |   |      |                      |   |   |                                |   |   |                           |        |   |   |   |
| Balance, December 31, 2008                 |   |                     | 9,324,407  |   |                     | $      | 1,217,065 |                      |   | $      | 24,225,407                          |   |   | $                              | 62,467,000  |   |   | $      | 3,691,270 |   |   | $ | 91,600,742 |   |
| Net loss                                   |   |                     | -          |   |                     |   | -         |                      |   |   | -                                   |   |   |                           | (51,172,000 | )      |   |   | - |   |   |   | (51,172,000 | ) |
| Other comprehensive loss                   |   |                     | -          |   |                     |   | -         |                      |   |   | -                                   |   |   |                           | -           |   |   |   | (2,965,195 | ) |   |   | (2,965,195 | ) |
| Proceeds from private placement of capital |   |                     | 4,470,633  |   |                     |   | -         |                      |   |   | 12,772,471                          |   |   |                           | -           |   |   |   | - |   |   |   | 12,772,471 |   |
| Stock-based compensation                   |   |                     | -          |   |                     |   | -         |                      |   |   | 350,630                             |   |   |                           | -           |   |   |   | - |   |   |   | 350,630 |   |
| Balance, December 31, 2009                 |   |                     | 13,795,040 |   |                     |   | 1,217,065 |                      |   |   | 37,348,508                          |   |   |                           | 11,295,000  |   |   |   | 726,075 |   |   |   | 50,586,648 |   |
| Net loss                                   |   |                     | -          |   |                     |   | -         |                      |   |   | -                                   |   |   |                           | (30,882,433 | )      |   |   | - |   |   |   | (30,882,433 | ) |
| Other comprehensive income                 |   |                     | -          |   |                     |   | -         |                      |   |   | -                                   |   |   |                           | -           |   |   |   | 406,870 |   |   |   | 406,870 |   |
| Stock-based compensation                   |   |                     | -          |   |                     |   | -         |                      |   |   | 317,940                             |   |   |                           | -           |   |   |   | - |   |   |   | 317,940 |   |
| Balance, September 30, 2010                |   |                     | 13,795,040 |   |                     | $      | 1,217,065 |                      |   | $      | 37,666,448                          |   |   | $                              | (19,587,433 | )      |   | $      | 1,132,945 |   |   | $ | 20,429,025 |   |

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Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                              |   |
|-------------------------------------------------------------------|--------|
|                                                              |   | Nine Months Ended September 30, |   |
|                                                              |   | 2010 |   |   | 2009 |   |
|                                                              |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                              |   |   |   |   |   |   |
| Net loss                                                          |   | $ | (30,882,433 | ) |   | $ | (19,909,603 | ) |
| Adjustments to reconcile net loss to net cash                     |   |   |   |   |   |   |   |   |
| provided by operating activities:                                 |   |   |   |   |   |   |   |   |
| Depreciation, amortization and accretion, net                     |   |   | 1,258,201 |   |   |   | 1,079,601 |   |
| Provision for loan losses                                         |   |   | 20,214,000 |   |   |   | 35,187,987 |   |
| Net realized gain on securities transactions                      |   |   | (3,235,624 | ) |   |   | (865,243 | ) |
| Loss on disposal of assets                                        |   |   | 7,889,543 |   |   |   | 1,276,488 |   |
| Gain on sale of branches                                          |   |   | (693,241 | ) |   |   | - |   |
| Gain on derivative instruments                                    |   |   | (162,649 | ) |   |   | (1,025,722 | ) |
| Stock-based compensation expense                                  |   |   | 317,940 |   |   |   | 225,043 |   |
| Increase in cash value of bank-owned life insurance               |   |   | (355,405 | ) |   |   | (429,855 | ) |
| Increase in deferred compensation accrual                         |   |   | 152,859 |   |   |   | 180,156 |   |
| Net change in taxes receivable and taxes payable                  |   |   | 15,416,982 |   |   |   | (6,916,603 | ) |
| Decrease in interest receivable                                   |   |   | 2,054,043 |   |   |   | 526,184 |   |
| Decrease in interest payable                                      |   |   | (303,516 | ) |   |   | (468,843 | ) |
| Net increase in prepaid expenses and other assets                 |   |   | (422,230 | ) |   |   | (1,556,006 | ) |
| Net increase (decrease) in accrued expenses and other liabilities |   |   | 3,348,407 |   |   |   | (580,075 | ) |
| Net cash provided by operating activities                         |   |   | 14,596,877 |   |   |   | 6,723,509 |   |
|                                                              |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                              |   |   |   |   |   |   |   |   |
| Decrease (increase) in interest-bearing deposits in other banks   |   |   | 18,635,191 |   |   |   | (7,603,766 | ) |
| (Increase) decrease in federal funds sold                         |   |   | (327,380 | ) |   |   | 850,871 |   |
| Purchase of debt securities                                       |   |   | (166,501,990 | ) |   |   | (44,313,619 | ) |
| Proceeds from sales of debt securities                            |   |   | 87,556,203 |   |   |   | 58,435,008 |   |
| Proceeds from calls of debt securities                            |   |   | 9,520,000 |   |   |   | 15,532,000 |   |
| Proceeds from maturities and paydowns of debt securities          |   |   | 18,581,980 |   |   |   | 19,866,109 |   |
| Purchase of restricted equity investments                         |   |   | - |   |   |   | (288,023 | ) |
| Redemption of restricted equity investments                       |   |   | 972,400 |   |   |   | 94,700 |   |
| Proceeds from sales of loans unrelated to branch sale             |   |   | 24,822,219 |   |   |   | - |   |
| Net decrease in loans                                             |   |   | 68,365,397 |   |   |   | 11,541,262 |   |
| Purchase of premises and equipment                                |   |   | (50,553 | ) |   |   | (587,323 | ) |
| Proceeds from disposal of assets                                  |   |   | 18,087,383 |   |   |   | 7,882,599 |   |
| Net cash paid in branch sale                                      |   |   | (40,562,248 | ) |   |   | - |   |
| Net cash provided by investing activities                         |   |   | 39,098,602 |   |   |   | 61,409,818 |   |

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Table of Contents

|                                                                                               |   |
|----------------------------------------------------------------------------------------------------|--------|
|                                                                                               |   | Nine Months Ended September 30, |   |
|                                                                                               |   | 2010 |   |   | 2009 |   |
|                                                                                               |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                               |   |   |   |   |   |   |
| Net decrease in deposits                                                                           |   |   | (52,898,116 | ) |   |   | (94,064,812 | ) |
| Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements |   |   | (7,514,091 | ) |   |   | 3,819,429 |   |
| Proceeds from the Federal Home Loan Bank advances                                                  |   |   | 5,000,000 |   |   |   | - |   |
| Payments on Federal Home Loan Bank advances                                                        |   |   | (5,493,470 | ) |   |   | (19,408,447 | ) |
| Proceeds from issuance of long-term debt                                                           |   |   | - |   |   |   | 20,000,000 |   |
| Proceeds from termination of cash flow hedge derivative                                            |   |   | - |   |   |   | 2,276,944 |   |
| Proceeds from private placement of capital                                                         |   |   | - |   |   |   | 12,772,471 |   |
| Net cash used in financing activities                                                              |   |   | (60,905,677 | ) |   |   | (74,604,415 | ) |
|                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| Net decrease in cash and due from banks                                                            |   | $ | (7,210,198 | ) |   | $ | (6,471,088 | ) |
|                                                                                               |   |   |   |   |   |   |   |   |
| Cash and due from banks at beginning of period                                                     |   |   | 16,641,978 |   |   |   | 18,104,521 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| Cash and due from banks at end of period                                                           |   | $ | 9,431,780 |   |   | $ | 11,633,433 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                  |   |   |   |   |   |   |   |   |
| Cash paid (received) during the period for:                                                        |   |   |   |   |   |   |   |   |
| Interest                                                                                           |   | $ | 17,879,124 |   |   | $ | 25,093,690 |   |
| Taxes                                                                                              |   | $ | (15,322,336 | ) |   | $ | (3,959,872 | ) |
|                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| NONCASH INVESTING AND FINANCING TRANSACTIONS                                                       |   |   |   |   |   |   |   |   |
| Increase  in unrealized gains on securities available for sale                           |   | $ | 978,953 |   |   | $ | 637,045 |   |
| Decrease in unrealized gain on cash flow hedge                                                     |   | $ | (368,204 | ) |   | $ | (2,827,354 | ) |
| Transfer of loans to foreclosed assets                                                             |   | $ | 33,815,810 |   |   | $ | 38,603,204 |   |

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| Banking Locations          |  Number of Banking Offices |                        |
|----------------------------|---------------------------------|-----------------------------|
| South Georgia Market:      |                            |                        |   |
| Valdosta, Lowndes County   |  3                         | (including the main office) |   |
| Lake Park, Lowndes County  |  1                         |                        |   |   |
| Bainbridge, Decatur County |  3                         |                        |   |   |
| Cairo, Grady County        |  1                         |                        |   |   |
| North Georgia Market:      |                            |                        |   |   |
| McDonough, Henry County    |  1                         |                        |   |   |
| Stockbridge, Henry County  |  1                         |                        |   |   |
| Oakwood, Hall County       |   1                   |                        |   |   |
| Athens, Oconee County      |  1                         |                        |   |   |
| Florida Market:            |                            |                        |   |   |
| Ocala, Marion County       |  1                         |                        |   |   |

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| Available for Sale Securities       |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized Losses |   |   | Fair Value |   |
|-------------------------------------|--------|----------------|-------------|--------|------------------------|--------|-----------|-------------------------|--------|--------|------------|--------|
| September 30, 2010:                 |   |           |        |   |                   |   |      |                    |   |   |       |   |
| Debt securities:                    |   |           |        |   |                   |   |      |                    |   |   |       |   |
| State and municipal securities      |   | $              | 3,370,000   |   |                   | $      | 66,399    |                    |   | $      | (98,182    | )      |   | $ | 3,338,217 |   |
| Corporate                           |   |           | 9,000,000   |   |                   |   | -         |                    |   |   | (71,438    | )      |   |   | 8,928,562 |   |
| Mortgage-backed GSE residential *   |   |           | 155,056,662 |   |                   |   | 1,919,989 |                    |   |   | (142,927   | )      |   |   | 156,833,724 |   |
| Total securities available for sale |   | $              | 167,426,662 |   |                   | $      | 1,986,388 |                    |   | $      | (312,547   | )      |   | $ | 169,100,503 |   |

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|                                         |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized Losses |   |   | Fair Value |   |
|----------------------------------------------|--------|----------------|-------------|--------|------------------------|--------|-----------|-------------------------|--------|--------|------------|--------|
| December 31, 2009:                           |   |           |        |   |                   |   |      |                    |   |   |       |   |
| Debt securities:                             |   |           |        |   |                   |   |      |                    |   |   |       |   |
| U.S. Government-sponsored enterprises (GSEs) |   | $              | 30,452,647  |   |                   | $      | 262,292   |                    |   | $      | (247,182   | )      |   | $ | 30,467,757 |   |
| State and municipal securities               |   |           | 9,997,494   |   |                   |   | 117,577   |                    |   |   | (393,701   | )      |   |   | 9,721,370 |   |
| Corporate                                    |   |           | 4,027,832   |   |                   |   | -         |                    |   |   | (198,492   | )      |   |   | 3,829,340 |   |
| Mortgage-backed GSE residential              |   |           | 65,585,084  |   |                   |   | 1,379,928 |                    |   |   | (217,795   | )      |   |   | 66,747,217 |   |
| Private-label residential                    |   |           | 606,719     |   |                   |   | -         |                    |   |   | (5,271     | )      |   |   | 601,448 |   |
| Private-label commercial                     |   |           | 176,449     |   |                   |   | -         |                    |   |   | (2,468     | )      |   |   | 173,981 |   |
| Total securities available for sale          |   | $              | 110,846,225 |   |                   | $      | 1,759,797 |                    |   | $      | (1,064,909 | )      |   | $ | 111,541,113 |   |

|                       |   | AmortizedCost |        |   | FairValue |   |
|----------------------------|--------|---------------|-------------|--------|-----------|--------|
| Due in one year or less    |   | $             | -           |   |      | $      | - |   |
| Due from one to five years |   |          | 1,000,000   |   |      |   | 928,562 |   |
| Due from five to ten years |   |          | 345,000     |   |      |   | 332,218 |   |
| Due after ten years        |   |          | 11,025,000  |   |      |   | 11,005,999 |   |
| Mortgage-backed securities |   |          | 155,056,662 |   |      |   | 156,833,724 |   |
|                       |   | $             | 167,426,662 |   |      | $      | 169,100,503 |   |

|                                        |   | Three Months ended September 30, |      |   | Nine Months ended September 30, |   |
|---------------------------------------------|--------|----------------------------------|-----------|--------|---------------------------------|--------|
|                                        |   | 2010                             |      |   | 2009                            |   |   | 2010 |   |   | 2009 |   |
| Gross gains on securities transactions      |   | $                                | 2,535,383 |   |                            | $      | 92,742 |   |   | $ | 3,400,972 |   |   | $ | 1,491,505 |   |
| Gross losses on securities transactions     |   |                             | (130,089  | )      |                            |   | - |   |   |   | (165,348 | ) |   |   | (626,262 | ) |
| Net realized gain onsecurities transactions |   | $                                | 2,405,294 |   |                            | $      | 92,742 |   |   | $ | 3,235,624 |   |   | $ | 865,243 |   |

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|                                         |   | Less Than Twelve Months |    |   | Over Twelve Months |   |       |                    |   |
|----------------------------------------------|--------|-------------------------|---------|--------|--------------------|--------|------------|-------------------------|--------|
|                                         |   | Gross Unrealized Losses |    |   | Fair Value         |   |       | Gross Unrealized Losses |   | Fair Value |   |   | Total Unrealized Losses |   |
|                                         |   |                    |    |   |
| Available for Sale Securities                |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |
| September 30, 2010:                          |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |
| Debt securities:                             |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |
| State and municipal securities               |   | $                       | 41,917  |   |               | $      | 1,303,083  |                    |   | $ | 56,265 |   |   | $ | 443,735 |   |   | $ | 98,182 |   |
| Corporate                                    |   |                    | 71,438  |   |               |   | 928,562    |                    |   |   | - |   |   |   | - |   |   |   | 71,438 |   |
| Mortgage-backed GSE residential*             |   |                    | 142,927 |   |               |   | 27,307,814 |                    |   |   | - |   |   |   | - |   |   |   | 142,927 |   |
| Total securities available for sale          |   | $                       | 256,282 |   |               | $      | 29,539,459 |                    |   | $ | 56,265 |   |   | $ | 443,735 |   |   | $ | 312,547 |   |
|                                         |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Available for Sale Securities                |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                           |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                             |   |                    |    |   |               |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government-sponsored enterprises (GSEs) |   | $                       | 247,182 |   |               | $      | 16,526,513 |                    |   | $ | - |   |   | $ | - |   |   | $ | 247,182 |   |
| State and municipal securities               |   |                    | 8,504   |   |               |   | 584,492    |                    |   |   | 385,197 |   |   |   | 4,917,796 |   |   |   | 393,701 |   |
| Corporate                                    |   |                    | 143,160 |   |               |   | 856,840    |                    |   |   | 55,332 |   |   |   | 972,500 |   |   |   | 198,492 |   |
| Mortgage-backed GSE residential              |   |                    | 217,795 |   |               |   | 15,005,641 |                    |   |   | - |   |   |   | - |   |   |   | 217,795 |   |
| Private-label residential                    |   |                    | -       |   |               |   | -          |                    |   |   | 5,271 |   |   |   | 601,448 |   |   |   | 5,271 |   |
| Private-label commercial                     |   |                    | -       |   |               |   | -          |                    |   |   | 2,468 |   |   |   | 173,981 |   |   |   | 2,468 |   |
| Total securities available for sale          |   | $                       | 616,641 |   |               | $      | 32,973,486 |                    |   | $ | 448,268 |   |   | $ | 6,665,725 |   |   | $ | 1,064,909 |   |

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|                                               |   | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, |   |
|----------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|
|                                               |   | 2010                            |       |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Basic losses per share:                            |   |                            |       |   |                           |   |   |   |   |   |   |   |
| Net loss                                           |   | $                               | (4,458,652 | )      |                           | $      | (19,956,455 | ) |   | $ | (30,882,433 | ) |   | $ | (19,909,603 | ) |
|                                               |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding         |   |                            | 13,795,040 |   |                           |   | 10,344,878 |   |   |   | 13,795,040 |   |   |   | 9,668,302 |   |
|                                               |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Losses per common share                            |   | $                               | (0.32      | )      |                           | $      | (1.93 | ) |   | $ | (2.24 | ) |   | $ | (2.06 | ) |
|                                               |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Diluted loss per share:                            |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                           |   | $                               | (4,458,652 | )      |                           | $      | (19,956,455 | ) |   | $ | (30,882,433 | ) |   | $ | (19,909,603 | ) |
|                                               |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding         |   |                            | 13,795,040 |   |                           |   | 10,344,878 |   |   |   | 13,795,040 |   |   |   | 9,668,302 |   |
| Effect of dilutive stock options and warrants      |   |                            | -          |   |                           |   | - |   |   |   | - |   |   |   | - |   |
| Weighted average diluted common shares outstanding |   |                            | 13,795,040 |   |                           |   | 10,344,878 |   |   |   | 13,795,040 |   |   |   | 9,668,302 |   |
|                                               |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Losses per common share                            |   | $                               | (0.32      | )      |                           | $      | (1.93 | ) |   | $ | (2.24 | ) |   | $ | (2.06 | ) |

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|                                                                             | Asset Derivatives        |   | Liability Derivatives   |   |
|----------------------------------------------------------------------------------|--------------------------|--------|-------------------------|--------|
|                                                                             | As of September 30, 2010 |   | As of December 31, 2009 |   | As of September 30, 2010 |   | As of December 31, 2009 |   |
|                                                                             | Balance Sheet Location   |   | Fair Value              |   | Balance Sheet Location |   | Fair Value |   | BalanceSheet Location |   | Fair Value |   | Balance Sheet Location |   | FairValue |   |
| Interest Rate Products                                                           | Other Assets             |   | $                       | -      |   | Other Assets |   | $ | - |   | Other Liabilities |   | $ | - |   | Other Liabilities |   | $ | - |   |
|                                                                             |                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total derivatives designated as hedging instruments under FASB ASC 815      |                     |   | $                       | -      |   |   |   | $ | - |   |   |   | $ | - |   |   |   | $ | - |   |
|                                                                             |                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments under FASB ASC 815:            |                     |
|                                                                             |                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                                           | Other Assets             |   | $                       | -      |   | Other Assets |   | $ | 13,757 |   | Other Liabilities |   | $ | - |   | Other Liabilities |   | $ | - |   |
|                                                                             |                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total derivatives not designated as hedging instruments under FASB ASC 815  |                     | $      | -                       |   |   |   | $ | 13,757 |   |   |   | $ | - |   |   |   | $ | - |   |

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|    Derivatives in FASB ASC 815 Cash Flow Hedging Relationships |                            | Amount of Loss Recognized in OCI on Derivative (Effective Portion) |   |    Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |   | Amount of Gain or Loss Reclassified from Accumulated OCI into Income (Effective Portion) |                             |    Location of Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |               | Amount of Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|--------------------------------------------------------------------------|---------------------------------|--------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                     | Three Months EndedSeptember 30, |                                                               |   | Three Months Ended September 30,                                                                          |   |                                                                                     | Three Months Ended September 30, |                                                                                                                                  |
|                                                                     | 2010                            |                                                               |   | 2009                                                                                                      |   |                                                                                     | 2010                             |                                                                                                                                  |               | 2009                                                                                                                   |   |   | 2010 |   |   | 2009 |   |
|                                                                     |                            |                                                               |   |                                                                                                      |   |                                                                                     |                             |                                                                                                                                  |               |                                                                                                                   |   |   |   |   |   |   |   |
| Interest Rate Products                                                   |                            | $                                                                  | -      |                                                                                                      |   | $                                                                                        | (13,338                          | )                                                                                                                                     | Interest Income    |                                                                                                                   | $      | 38,327 |   |   | $ | 102,805 |   | Other Income |   | $ | - |   |   | $ | (722 | ) |
|                                                                     |                            |                                                               |   |                                                                                                      |   |                                                                                     |                             |                                                                                                                                  |  Other Income |                                                                                                                   |   | - |   |   |   | (127,393 | ) |   |   |   |   |   |   |   |   |   |
| Total                                                                    |                            | $                                                                  | -      |                                                                                                      |   | $                                                                                        | (13,338                          | )                                                                                                                                     |               |                                                                                                                   | $      | 38,327 |   |   | $ | (24,588 | ) |   |   | $ | - |   |   | $ | (722 | ) |

|   Derivatives in FASB ASC 815 Cash Flow Hedging Relationships |                           | Amount of Loss Recognized in OCI on Derivative (Effective Portion) |   |   Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |   | Amount of Gain Reclassified from Accumulated OCI into Income (Effective Portion) |                           |   Location of Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |                    | Amount of Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|--------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------|------------------------------------------------------------------------------------------------------------------------|--------|
|                                                               | Nine Months EndedSeptember 30, |                                                               |   | Nine Months EndedSeptember 30,                                                                      |   |                                                                             | Nine Months Ended September 30 |                                                                                                                             |
|                                                               | 2010                           |                                                               |   | 2009                                                                                                |   |                                                                             | 2010                           |                                                                                                                             |                    | 2009                                                                                                                   |   |   | 2010 |   |   | 2009 |   |
|                                                               |                           |                                                               |   |                                                                                                |   |                                                                             |                           |                                                                                                                             |                    |                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                             |                           | $                                                                  | -      |                                                                                                |   | $                                                                                | (141,100                       | )                                                                                                                                | Interest Income         |                                                                                                                   | $      | 186,074 |   |   | $ | 1,423,993 |   | Other Income |   | $ | - |   |   | $ | (22,076 | ) |
|                                                               |                           |                                                               |   |                                                                                                |   |                                                                             |                           |                                                                                                                             | Other  Income |                                                                                                                   |   | 182,052 |   |   |   | 1,168,000 |   |   |   |   |   |   |   |   |   |   |
| Total                                                              |                           | $                                                                  | -      |                                                                                                |   | $                                                                                | (141,100                       | )                                                                                                                                |                    |                                                                                                                   | $      | 368,126 |   |   | $ | 2,591,993 |   |   |   | $ | - |   |   | $ | (22,076 | ) |

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|                                                                 |                                                |   | Amount of Loss Recognized in Income on DerivativeThree Months Ended September 30, |   |
|----------------------------------------------------------------------|-----------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|
| Derivatives Not Designated as Hedging Instruments Under FASB ASC 815 | Location of Loss Recognized in Income on Derivative |   | 2010                                                                              |   |   | 2009 |   |
|                                                                 |                                                |   |                                                                              |   |   |   |   |
| Interest Rate Products                                               | Other Income / Expense                              |   | $                                                                                 | -      |   |   | $ | (15,074 | ) |
|                                                                 |                                                |   |                                                                              |   |   |   |   |   |   |
| Total                                                                |                                                |   | $                                                                                 | -      |   |   | $ | (15,074 | ) |

|                                                                 |                                                          |   | Amount of Gain or (Loss) Recognized in Income on DerivativeNine Months Ended September 30, |    |
|----------------------------------------------------------------------|---------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|---------|
| Derivatives Not Designated as Hedging Instruments Under FASB ASC 815 | Location of Gain or (Loss) Recognized in Income on Derivative |   | 2010                                                                                       |    |   | 2009 |   |
|                                                                 |                                                          |   |                                                                                       |    |   |   |   |
| Interest Rate Products                                               | Other Income / Expense                                        |   | $                                                                                          | (13,682 | ) |   | $ | (152,225 | ) |
|                                                                 |                                                          |   |                                                                                       |    |   |   |   |   |   |
| Total                                                                |                                                          |   | $                                                                                          | (13,682 | ) |   | $ | (152,225 | ) |

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| As of September 30, 2010:           |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |        | Significant Unobservable Inputs(Level 3) |   |   | Total  |   |
|------------------------------------------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|-------------|------------------------------------------|--------|--------|--------|--------|
| Assets                                   |   |                                                          |   |   |                                         |   |        |                                     |   |   |   |   |
| Investment securities available-for-sale |   | $                                                             | -      |   |                                         | $      | 169,100,503 |                                     |   | $      | -      |   |   | $ | 169,100,503 |   |
| Derivative financial instruments         |   |                                                          | -      |   |                                         |   | -           |                                     |   |   | -      |   |   |   | - |   |
| Total assets at fair value               |   | $                                                             | -      |   |                                         | $      | 169,100,503 |                                     |   | $      | -      |   |   | $ | 169,100,503 |   |

| As of December 31, 2009:                   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |        | Significant Unobservable Inputs(Level 3) |   |   | Total  |   |
|-------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|-------------|------------------------------------------|--------|--------|--------|--------|
| Assets                                          |   |                                                          |   |   |                                         |   |        |                                     |   |   |   |   |
| Investment securities available-for-sale        |   | $                                                             | -      |   |                                         | $      | 111,541,113 |                                     |   | $      | -      |   |   | $ | 111,541,113 |   |
| Derivative financial instruments                |   |                                                          | -      |   |                                         |   | 13,757      |                                     |   |   | -      |   |   |   | 13,757 |   |
| Total fair value of assets on a recurring basis |   | $                                                             | -      |   |                                         | $      | 111,554,870 |                                     |   | $      | -      |   |   | $ | 111,554,870 |   |

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|                                                |   | Carrying value at September 30, 2010                          |   |   |                                         |   |    |                                     |   |
|-----------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|---------|------------------------------------------|--------|
|                                                |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |    | Significant Unobservable Inputs(Level 3) |   |   | Total |   |   | Total losses for the three months endedSeptember 30, 2010 |   |   | Total losses for the nine months endedSeptember 30, 2010 |   |
|                                                |   |                                                          |   |   |                                         |   |    |                                     |   |   |   |   |   |   |   |   |   |   |
| Nonperforming loans                                 |   | $                                                             | -      |   |                                         | $      | -       |                                     |   | $ | 112,393,182 |   |   | $ | 112,393,182 |   |   | $ | (9,369,675 | )  |   | $ | (20,774,875 | )  |
| Foreclosed assets                                   |   |                                                          | -      |   |                                         |   | 794,610 |                                     |   |   | 1,455,027 |   |   |   | 2,249,637 |   |   |   | (1,902,209 | ) |   |   | (7,880,013 | ) |
| Total fair value of assets on a non recurring basis |   | $                                                             | -      |   |                                         | $      | 794,610 |                                     |   | $ | 113,848,209 |   |   | $ | 114,642,819 |   |   | $ | (11,271,884 | ) |   | $ | (28,654,888 | ) |

|                                                |   | Carrying value at December 31, 2009                           |   |   |                                         |   |       |                                     |
|-----------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|------------|------------------------------------------|
|                                                |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |       | Significant Unobservable Inputs(Level 3) |   |   | Total |   |   | Total losses for the three months endedSeptember 30, 2009 |   |   | Total losses for the nine months endedSeptember 30, 2009 |   |
|                                                |   |                                                          |   |   |                                         |   |       |                                     |   |   |   |   |   |   |   |   |   |
| Nonperforming loans                                 |   | $                                                             | -      |   |                                         | $      | -          |                                     |   | $ | 80,723,630 |   |   | $ | 80,723,630 |   |   | $ | (621,580 | )  |   | $ | (5,842,688 | )  |
| Foreclosed assets                                   |   |                                                          | -      |   |                                         |   | 20,313,388 |                                     |   |   | 71,803,735 |   |   |   | 92,117,123 |   |   |   | (752,913 | ) |   |   | (1,268,141 | ) |
| Total fair value of assets on a non recurring basis |   | $                                                             | -      |   |                                         | $      | 20,313,388 |                                     |   | $ | 152,527,365 |   |   | $ | 172,840,753 |   |   | $ | (1,374,493 | ) |   | $ | (7,110,829 | ) |

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|                                                                                                |   | September 30, 2010 |        |   | December 31, 2009 |   |
|-----------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                                                                |   | CarryingAmount     |        |   | FairValue         |   |   | CarryingAmount |   |   | FairValue |   |
| Cash and balances due from banks, interest-bearing deposits with other banks and federal funds sold |   | $                  | 160,960,000 |   |              | $      | 160,960,000 |   |   | $ | 186,478,000 |   |   | $ | 186,478,000 |   |
| Investment securities                                                                               |   |               | 169,101,000 |   |              |   | 169,101,000 |   |   |   | 111,541,000 |   |   |   | 111,541,000 |   |
| Restricted equity securities                                                                        |   |               | 8,487,000   |   |              |   | 8,487,000 |   |   |   | 9,460,000 |   |   |   | 9,460,000 |   |
| Loans, net                                                                                          |   |               | 570,804,000 |   |              |   | 576,543,000 |   |   |   | 776,000,000 |   |   |   | 777,400,000 |   |
| Cash flow hedge derivative instrument                                                               |   |               | -           |   |              |   | - |   |   |   | 14,000 |   |   |   | 14,000 |   |
| Deposits                                                                                            |   |               | 895,464,000 |   |              |   | 907,795,000 |   |   |   | 1,045,215,000 |   |   |   | 1,057,778,000 |   |
| Federal funds purchased and securities sold under agreements to repurchase                          |   |               | 2,497,000   |   |              |   | 2,497,000 |   |   |   | 10,011,000 |   |   |   | 10,011,000 |   |
| Advances from the FHLB                                                                              |   |               | 89,646,000  |   |              |   | 86,795,000 |   |   |   | 90,140,000 |   |   |   | 88,829,000 |   |
| Other borrowings                                                                                    |   |               | 20,000,000  |   |              |   | 22,131,000 |   |   |   | 20,000,000 |   |   |   | 22,489,000 |   |
| Beneficial interest in debentures                                                                   |   |               | 10,310,000  |   |              |   | 10,310,000 |   |   |   | 10,310,000 |   |   |   | 10,310,000 |   |

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|                                   |   | South Georgia  |    | North Georgia |   |   | Florida |   |   | Treasury |   |   | Total  |   |
|----------------------------------------|--------|----------------|---------|---------------|--------|--------|---------|--------|--------|----------|--------|--------|--------|--------|
|                                   |   | (In thousands) |    |
| Three Months ended September 30, 20101 |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |
| Net interest income                    |   | $              | 2,843   |          |   | $      | 1,587   |   |   | $        | 19     |   |   | $      | 295 |   |   | $ | 4,744 |   |
| Provision for loan losses              |   |           | 957     |          |   |   | 48      |   |   |     | 988    |   |   |   | 1,107 |   |   |   | 3,100 |   |
| Noninterest income                     |   |           | 372     |          |   |   | (1,654  | )      |   |     | 5      |   |   |   | 3,129 |   |   |   | 1,852 |   |
| Noninterest expense                    |   |           | 1,573   |          |   |   | 1,428   |   |   |     | 514    |   |   |   | 4,440 |   |   |   | 7,955 |   |
| Income tax expense (benefit)           |   |           | -       |          |   |   | -       |   |   |     | -      |   |   |   | - |   |   |   | - |   |
| Net income (loss)                      |   |           | 685     |          |   |   | (1,543  | )      |   |     | (1,478 | )      |   |   | (2,123 | ) |   |   | (4,459 | ) |
| Total assets                           |   |           | 273,466 |          |   |   | 322,173 |   |   |     | 72,965 |   |   |   | 375,596 |   |   |   | 1,044,200 |   |
|                                   |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Three Months ended September 30, 2009  |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net interest income                    |   |           | 4,238   |          |   |   | 3,091   |   |   |     | 343    |   |   |   | (418 | ) |   |   | 7,254 |   |
| Provision for loan losses              |   |           | 3,110   |          |   |   | 11,612  |   |   |     | 2,632  |   |   |   | 14,084 |   |   |   | 31,438 |   |
| Noninterest income                     |   |           | 983     |          |   |   | (379    | )      |   |     | (53    | )      |   |   | 338 |   |   |   | 889 |   |
| Noninterest expense                    |   |           | 2,056   |          |   |   | 1,400   |   |   |     | 386    |   |   |   | 3,442 |   |   |   | 7,284 |   |
| Income tax expense (benefit)           |   |           | 19      |          |   |   | (3,502  | )      |   |     | (928   | )      |   |   | (6,212 | ) |   |   | (10,623 | ) |
| Net income (loss)                      |   |           | 36      |          |   |   | (6,798  | )      |   |     | (1,800 | )      |   |   | (11,394 | ) |   |   | (19,956 | ) |
| Total assets                           |   |           | 389,987 |          |   |   | 435,814 |   |   |     | 97,072 |   |   |   | 328,346 |   |   |   | 1,251,219 |   |
|                                   |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Nine Months ended September 30, 20101  |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net interest income                    |   |           | 9,776   |          |   |   | 4,587   |   |   |     | 315    |   |   |   | (354 | ) |   |   | 14,324 |   |
| Provision for loan losses              |   |           | 6,430   |          |   |   | 5,720   |   |   |     | 3,408  |   |   |   | 4,656 |   |   |   | 20,214 |   |
| Noninterest income                     |   |           | 1,589   |          |   |   | (6,288  | )      |   |     | (783   | )      |   |   | 6,063 |   |   |   | 581 |   |
| Noninterest expense                    |   |           | 5,654   |          |   |   | 5,832   |   |   |     | 2,181  |   |   |   | 11,812 |   |   |   | 25,479 |   |
| Income tax expense (benefit)           |   |           | -       |          |   |   | -       |   |   |     | -      |   |   |   | 95 |   |   |   | 95 |   |
| Net loss                               |   |           | (719    | )             |   |   | (13,253 | )      |   |     | (6,057 | )      |   |   | (10,854 | ) |   |   | (30,883 | ) |
|                                   |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Nine Months ended September 30, 2009   |   |           |    |          |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net interest income                    |   |           | 11,920  |          |   |   | 8,604   |   |   |     | 1,583  |   |   |   | 325 |   |   |   | 22,432 |   |
| Provision for loan losses              |   |           | 4,893   |          |   |   | 16,696  |   |   |     | 3,468  |   |   |   | 10,131 |   |   |   | 35,188 |   |
| Noninterest income                     |   |           | 3,013   |          |   |   | (577    | )      |   |     | 7      |   |   |   | 3,038 |   |   |   | 5,481 |   |
| Noninterest expense                    |   |           | 6,796   |          |   |   | 4,905   |   |   |     | 1,291  |   |   |   | 10,519 |   |   |   | 23,511 |   |
| Income tax expense (benefit)           |   |           | 1,103   |          |   |   | (4,615  | )      |   |     | (1,077 | )      |   |   | (6,286 | ) |   |   | (10,876 | ) |
| Net income (loss)                      |   |           | 2,141   |          |   |   | (8,959  | )      |   |     | (2,092 | )      |   |   | (11,001 | ) |   |   | (19,910 | ) |

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Item 2. 

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| Market/County |   | NumberofOffices |   |   | TotalLoans1 |   |    | TotalDeposits1 |   |   | MarketShare (%)2 |   |   | MarketShareRank2 |   |
|---------------|--------|-----------------|--------|--------|-------------|--------|---------|----------------|--------|--------|------------------|--------|--------|------------------|--------|
|          |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |
| South Georgia |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |
| Lowndes       |   |            | 4      |   |        | $      | 211,801 |           |   | $      | 293,369          |   |   |             | 23.9   |   |   |   | 1 |   |
| Decatur       |   |            | 3      |   |        |   | 39,256  |           |   |   | 98,365           |   |   |             | 27.6   |   |   |   | 1 |   |
| Grady         |   |            | 1      |   |        |   | 10,396  |           |   |   | 20,979           |   |   |             | 6.7    |   |   |   | 5 |   |
|          |   |            | 8      |   |        | $      | 261,453 |           |   | $      | 412,713          |   |   |             |   |   |   |   |   |   |
| North Georgia |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |   |   |   |   |   |
| Henry         |   |            | 2      |   |        | $      | 123,240 |           |   | $      | 65,159           |   |   |             | 3.5    |   |   |   | 10 |   |
| Hall          |   |            | 1      |   |        |   | 78,305  |           |   |   | 35,213           |   |   |             | 1.4    |   |   |   | 13 |   |
| Oconee        |   |            | 1      |   |        |   | 46,242  |           |   |   | 22,260           |   |   |             | 3.1    |   |   |   | 7 |   |
|          |   |            | 4      |   |        | $      | 247,787 |           |   | $      | 122,632          |   |   |             |   |   |   |   |   |   |
|          |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |   |   |   |   |   |
| Florida       |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |   |   |   |   |   |
| Marion        |   |            | 1      |   |        | $      | 55,795  |           |   | $      | 174,258          |   |   |             | 3.4    |   |   |   | 7 |   |
|          |   |            | 1      |   |        | $      | 55,795  |           |   | $      | 174,258          |   |   |             |   |   |   |   |   |   |
|          |   |            |   |   |        |   |    |           |   |   |             |   |   |             |   |   |   |   |   |   |

| 1 | Dollar amounts are presented in thousands as of September 30, 2010.  Amounts exclude $32.7 million in loans and $185.9 million in deposits assigned to the “Treasury” that are not allocated to any particular market (i.e. participation loans, employee and director accounts, brokered deposits, official checks, etc.). |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Based on the FDIC Summary of Deposits report as of June 30, 2010. |
|---|-------------------------------------------------------------------|

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| Market/County              |   | Total Population1 |        |   | PopulationGrowth (%)2 |   |   | Employment Growth (%)3 |   |   | UnemploymentRate (%)4 |   |   | Median 2010HouseholdIncome ($)5 |   |
|----------------------------|--------|-------------------|-------------|--------|-----------------------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|---------------------------------|--------|
|                       |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |
| Selected Georgia Counties: |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |
| South Georgia:             |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |
| Lowndes                    |   |              | 106,350     |   |                  |   | 15.5   |                   |   |   | -4.0                  |   |   |                            | 8.3    |   |   | $ | 40,728 |   |
| Decatur                    |   |              | 29,705      |   |                  |   | 5.2    |                   |   |   | -7.0                  |   |   |                            | 13.7   |   |   |   | 34,657 |   |
| Grady                      |   |              | 25,277      |   |                  |   | 6.8    |                   |   |   | -5.7                  |   |   |                            | 9.1    |   |   |   | 34,574 |   |
| North Georgia:             |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| Hall                       |   |              | 206,271     |   |                  |   | 72.8   |                   |   |   | -3.5                  |   |   |                            | 10.1   |   |   |   | 72,468 |   |
| Henry                      |   |              | 191,332     |   |                  |   | 37.4   |                   |   |   | -3.1                  |   |   |                            | 9.0    |   |   |   | 56,240 |   |
| Oconee                     |   |              | 35,118      |   |                  |   | 33.9   |                   |   |   | -1.4                  |   |   |                            | 6.5    |   |   |   | 66,216 |   |
|                       |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| State of Georgia           |   |              | 10,014,045  |   |                  |   | 22.3   |                   |   |   | -3.3                  |   |   |                            | 9.9    |   |   |   | 56,184 |   |
|                       |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| Selected Florida County:   |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| Marion                     |   |              | 343,804     |   |                  |   | 32.8   |                   |   |   | -4.0                  |   |   |                            | 13.8   |   |   |   | 39,724 |   |
|                       |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| State of Florida           |   |              | 18,917,612  |   |                  |   | 18.4   |                   |   |   | -1.7                  |   |   |                            | 11.3   |   |   |   | 49,910 |   |
|                       |   |              |        |   |                  |   |   |                   |   |   |                  |   |   |                            |   |   |   |   |   |   |
| National Total             |   |              | 311,212,863 |   |                  |   | 10.6   |                   |   |   | -1.4                  |   |   |                            | 9.5    |   |   |   | 54,442 |   |

| 1 | Estimated 2010 population from SNL Financial demographic data provided by Environmental Systems Research Institute (“ESRI”) based primarily on US Census data. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Estimated percentage population change from 2000 to 2010 from SNL Financial demographic data provided by ESRI based primarily on US Census data. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Total employment growth (not seasonally adjusted) for the Second Quarter 2010 year-to-date percentage change from the prior year’s year-to-date data provided by the Bureau of Labor Statistics Household Survey. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Unemployment rate (not seasonally adjusted) for the Second Quarter 2010 provided by the Bureau of Labor Statistics. |
|---|---------------------------------------------------------------------------------------------------------------------|

| 5 | Estimated 2010 Median Household Income from SNL Financial demographic data provided by ESRI based primarily on US Census data. |
|---|--------------------------------------------------------------------------------------------------------------------------------|

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| As of September  30, 2010                |   | South Georgia          |    |   | North Georgia |   |    | Florida |   |   | Treasury |   |   | Total  |    |
|----------------------------------------------------|--------|------------------------|---------|--------|---------------|--------|---------|---------|--------|--------|----------|--------|--------|--------|---------|
|                                               |   | (Dollars in Thousands) |    |
| Loans                                              |   |                   |    |   |          |   |    |    |   |   |     |   |   |   |    |
| Commercial and financial                           |   | $                      | 22,157  |   |          | $      | 34,780  |    |   | $      | 1,641    |   |   | $      | 17,301  |   |   | $ | 75,879 |   |
| Agricultural (including loans secured by farmland) |   |                   | 26,632  |   |          |   | 1,855   |    |   |   | 2,854    |   |   |   | -       |   |   |   | 31,341 |   |
| Real estate - construction                         |   |                   | 47,952  |   |          |   | 52,434  |    |   |   | 19,126   |   |   |   | 270     |   |   |   | 119,782 |   |
| Real estate - commercial                           |   |                   | 79,524  |   |          |   | 125,219 |    |   |   | 21,192   |   |   |   | 2,408   |   |   |   | 228,343 |   |
| Real estate - residential                          |   |                   | 78,516  |   |          |   | 33,106  |    |   |   | 10,893   |   |   |   | 6,529   |   |   |   | 129,044 |   |
| Installment loans to individuals and other loans   |   |                   | 6,605   |   |          |   | 467     |    |   |   | 206      |   |   |   | 6,190   |   |   |   | 13,468 |   |
|                                               |   |                   | 261,386 |   |          |   | 247,861 |    |   |   | 55,912   |   |   |   | 32,698  |   |   |   | 597,857 |   |
| Deferred loan fees and unearned interest, net      |   |                   | 67      |   |          |   | (74     | )       |   |   | (117     | )      |   |   | (11     | ) |   |   | (135 | ) |
|                                               |   |                   | 261,453 |   |          |   | 247,787 |    |   |   | 55,795   |   |   |   | 32,687  |   |   |   | 597,722 |   |
| Allowance for loan losses                          |   |                   | (7,072  | )      |          |   | (8,687  | )       |   |   | (1,876   | )      |   |   | (9,283  | ) |   |   | (26,918 | ) |
| Net loans                                          |   | $                      | 254,381 |   |          | $      | 239,100 |    |   | $      | 53,919   |   |   | $      | 23,404  |   |   | $ | 570,804 |   |
| Percentage of total                                |   |                   | 44.6    | %      |          |   | 41.9    | %       |   |   | 9.4      | %      |   |   | 4.1     | % |   |   | 100.0 | % |
|                                               |   |                   |    |   |          |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Deposits                                           |   |                   |    |   |          |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Noninterest-bearing demand                         |   | $                      | 65,858  |   |          | $      | 14,038  |    |   | $      | 5,280    |   |   | $      | 4,171   |   |   | $ | 89,347 |   |
| Interest-bearing demand and savings                |   |                   | 113,904 |   |          |   | 28,870  |    |   |   | 28,818   |   |   |   | 399     |   |   |   | 171,991 |   |
| Retail time less than $100,000                     |   |                   | 135,160 |   |          |   | 44,091  |    |   |   | 92,811   |   |   |   | 26      |   |   |   | 272,088 |   |
| Retail time greater than or equal to $100,000      |   |                   | 97,791  |   |          |   | 34,986  |    |   |   | 47,349   |   |   |   | -       |   |   |   | 180,126 |   |
| Retail time placed in CDARs program                |   |                   | -       |   |          |   | 647     |    |   |   | -        |   |   |   | -       |   |   |   | 647 |   |
| Brokered time1                                     |   |                   | -       |   |          |   | -       |    |   |   | -        |   |   |   | 94,495  |   |   |   | 94,495 |   |
| Internet time1                                     |   |                   | -       |   |          |   | -       |    |   |   | -        |   |   |   | 86,770  |   |   |   | 86,770 |   |
| Total deposits                                     |   | $                      | 412,713 |   |          | $      | 122,632 |    |   | $      | 174,258  |   |   | $      | 185,861 |   |   | $ | 895,464 |   |
| Percentage of total                                |   |                   | 46.1    | %      |          |   | 13.7    | %       |   |   | 19.5     | %      |   |   | 20.7    | % |   |   | 100.0 | % |

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| As of Quarter End                                  |   | Sep-10                 |    |   | Jun-10 |   |    | Mar-10 |   |   | Dec-09  |   |   | Sep-09 |    |
|----------------------------------------------------|--------|------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                               |   | (Dollars in Thousands) |    |
| Commercial and financial                           |   | $                      | 75,879  |   |   | $      | 77,874  |   |   | $      | 78,395  |   |   | $      | 84,771  |   |   | $ | 88,863 |   |
| Agricultural (including loans secured by farmland) |   |                   | 31,341  |   |   |   | 38,438  |   |   |   | 42,396  |   |   |   | 40,215  |   |   |   | 44,470 |   |
| Real estate - construction                         |   |                   | 119,782 |   |   |   | 154,015 |   |   |   | 181,318 |   |   |   | 204,663 |   |   |   | 269,804 |   |
| Real estate - commercial                           |   |                   | 228,343 |   |   |   | 237,006 |   |   |   | 264,341 |   |   |   | 275,927 |   |   |   | 283,404 |   |
| Real estate - residential                          |   |                   | 129,044 |   |   |   | 136,096 |   |   |   | 171,843 |   |   |   | 174,879 |   |   |   | 181,048 |   |
| Installment loans to individuals and other loans   |   |                   | 13,468  |   |   |   | 11,234  |   |   |   | 19,542  |   |   |   | 24,949  |   |   |   | 24,561 |   |
|                                               |   |                   | 597,857 |   |   |   | 654,663 |   |   |   | 757,835 |   |   |   | 805,404 |   |   |   | 892,150 |   |
|                                               |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Deferred loan fees and unearnedinterest, net       |   |                   | (135    | )      |   |   | (138    | )      |   |   | (103    | )      |   |   | (90     | ) |   |   | (169 | ) |
| Total loans                                        |   |                   | 597,722 |   |   |   | 654,525 |   |   |   | 757,732 |   |   |   | 805,314 |   |   |   | 891,981 |   |
| Allowance for loan losses                          |   |                   | (26,918 | )      |   |   | (34,518 | )      |   |   | (30,529 | )      |   |   | (29,314 | ) |   |   | (40,000 | ) |
| Net loans                                          |   | $                      | 570,804 |   |   | $      | 620,007 |   |   | $      | 727,203 |   |   | $      | 776,000 |   |   | $ | 851,981 |   |

| As of Quarter End                                  |   | Sep-10 |   |   | Jun-10 |   |   | Mar-10 |   |   | Dec-09 |   |   | Sep-09 |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial and financial                           |   |   | 12.69  | %      |   |   | 11.90  | %      |   |   | 10.35  | %      |   |   | 10.53  | % |   |   | 9.96 | % |
| Agricultural (including loans secured by farmland) |   |   | 5.24   | %      |   |   | 5.87   | %      |   |   | 5.59   | %      |   |   | 4.99   | % |   |   | 4.99 | % |
| Real estate - construction                         |   |   | 20.04  | %      |   |   | 23.53  | %      |   |   | 23.93  | %      |   |   | 25.41  | % |   |   | 30.25 | % |
| Real estate - commercial                           |   |   | 38.20  | %      |   |   | 36.21  | %      |   |   | 34.88  | %      |   |   | 34.26  | % |   |   | 31.77 | % |
| Real estate - residential                          |   |   | 21.60  | %      |   |   | 20.79  | %      |   |   | 22.68  | %      |   |   | 21.72  | % |   |   | 20.30 | % |
| Installment loans to individuals and other loans   |   |   | 2.25   | %      |   |   | 1.72   | %      |   |   | 2.58   | %      |   |   | 3.10   | % |   |   | 2.75 | % |
|                                               |   |   | 100.02 | %      |   |   | 100.02 | %      |   |   | 100.01 | %      |   |   | 100.01 | % |   |   | 100.02 | % |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred loan fees and unearnedinterest, net       |   |   | -0.02  | %      |   |   | -0.02  | %      |   |   | -0.01  | %      |   |   | -0.01  | % |   |   | -0.02 | % |
| Total loans                                        |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |   |   | 100.00 | % |
| Allowance for loan losses                          |   |   | -4.50  | %      |   |   | -5.27  | %      |   |   | -4.03  | %      |   |   | -3.64  | % |   |   | -4.48 | % |
| Net loans                                          |   |   | 95.50  | %      |   |   | 94.73  | %      |   |   | 95.97  | %      |   |   | 96.36  | % |   |   | 95.52 | % |

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|                                     |   | September 30, 2010     |    |   | December 31, 2009 |   |   | September 30, 2009 |   |
|------------------------------------------|--------|------------------------|---------|--------|-------------------|--------|--------|--------------------|--------|
|                                     |   | $ Amount               |    |   | % to Total        |   |   | $ Amount           |   |   | % to Total |   |   | $ Amount |   |   | % to Total |   |
|                                     |   | (Dollars in Thousands) |    |
| Construction and development:            |   |                   |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Acquisition and development:             |   |                   |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential                   |   | $                      | 55,300  |   |              |   | 46.2   | %                  |   | $ | 83,868 |   |   |   | 41.0 | % |   | $ | 109,941 |   |   |   | 40.7 | % |
| Commercial and multi-family              |   |                   | 37,782  |   |              |   | 31.5   | %                  |   |   | 58,477 |   |   |   | 28.6 | % |   |   | 79,370 |   |   |   | 29.4 | % |
| Construction:                            |   |                   |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential spec              |   |                   | 3,109   |   |              |   | 2.6    | %                  |   |   | 10,364 |   |   |   | 5.1 | % |   |   | 11,939 |   |   |   | 4.4 | % |
| 1-4 family residential pre-sold          |   |                   | 1,145   |   |              |   | 1.0    | %                  |   |   | 304 |   |   |   | 0.1 | % |   |   | 261 |   |   |   | 0.1 | % |
| 1-4 family residential other             |   |                   | 4,444   |   |              |   | 3.7    | %                  |   |   | 14,501 |   |   |   | 7.1 | % |   |   | 17,239 |   |   |   | 6.4 | % |
| Commercial owner-occupied                |   |                   | 539     |   |              |   | 0.4    | %                  |   |   | 704 |   |   |   | 0.3 | % |   |   | 2,506 |   |   |   | 0.9 | % |
| Commercial not owner-occupied            |   |                   | 16,081  |   |              |   | 13.4   | %                  |   |   | 27,994 |   |   |   | 13.7 | % |   |   | 32,533 |   |   |   | 12.1 | % |
| Hotel/motel                              |   |                   | 221     |   |              |   | 0.2    | %                  |   |   | 2,427 |   |   |   | 1.2 | % |   |   | 5,558 |   |   |   | 2.1 | % |
| Multi-family properties                  |   |                   | 973     |   |              |   | 0.8    | %                  |   |   | 4512 |   |   |   | 2.2 | % |   |   | 4,898 |   |   |   | 1.8 | % |
| Special purpose property                 |   |                   | 188     |   |              |   | 0.2    | %                  |   |   | 1,512 |   |   |   | 0.7 | % |   |   | 1,840 |   |   |   | 0.7 | % |
| Other                                    |   |                   | -       |   |              |   | 0.0    | %                  |   |   | - |   |   |   | 0.0 | % |   |   | 3,719 |   |   |   | 1.4 | % |
| Total construction and development loans |   | $                      | 119,782 |   |              |   | 100.0  | %                  |   | $ | 204,663 |   |   |   | 100.0 | % |   | $ | 269,804 |   |   |   | 100.0 | % |
| Percentage of total loans                |   |                   | 20.0    | %      |              |   |   |               |   |   | 25.4 | % |   |   |   |   |   |   | 30.3 | % |   |   |   |   |

|                               |   | September 30, 2010 |    |   | December 31, 2009 |   |   | September 30, 2009 |   |
|------------------------------------|--------|--------------------|---------|--------|-------------------|--------|--------|--------------------|--------|
|                               |   | $ Amount           |    |   | % to Total        |   |   | $ Amount           |   |   | % to Total |   |   | $ Amount |   |   | % to Total |   |
| Commercial real estate:            |   |               |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied:                    |   |               |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Office                             |   | $                  | 25,452  |   |              |   | 11.1   | %                  |   | $ | 40,718 |   |   |   | 14.8 | % |   | $ | 41,197 |   |   |   | 14.5 | % |
| Retail                             |   |               | 17,741  |   |              |   | 7.8    | %                  |   |   | 18,576 |   |   |   | 6.7 | % |   |   | 19,005 |   |   |   | 6.7 | % |
| Other                              |   |               | 25,232  |   |              |   | 11.1   | %                  |   |   | 39,783 |   |   |   | 14.4 | % |   |   | 40,220 |   |   |   | 14.2 | % |
| Not owner-occupied:                |   |               |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office                             |   |               | 18,654  |   |              |   | 8.2    | %                  |   |   | 27,342 |   |   |   | 9.9 | % |   |   | 22,068 |   |   |   | 7.8 | % |
| Retail                             |   |               | 45,039  |   |              |   | 19.7   | %                  |   |   | 36,524 |   |   |   | 13.2 | % |   |   | 44,985 |   |   |   | 15.9 | % |
| Other                              |   |               | 14,836  |   |              |   | 6.5    | %                  |   |   | 24,035 |   |   |   | 8.7 | % |   |   | 25,487 |   |   |   | 9.0 | % |
| Other:                             |   |               |    |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hotel/motel                        |   |               | 28,191  |   |              |   | 12.3   | %                  |   |   | 25,756 |   |   |   | 9.3 | % |   |   | 22,186 |   |   |   | 7.8 | % |
| Industrial                         |   |               | 4,701   |   |              |   | 2.1    | %                  |   |   | 4,300 |   |   |   | 1.6 | % |   |   | 4,405 |   |   |   | 1.5 | % |
| Multi-family properties            |   |               | 10,673  |   |              |   | 4.7    | %                  |   |   | 19,462 |   |   |   | 7.1 | % |   |   | 26,783 |   |   |   | 9.5 | % |
| Special purpose property           |   |               | 37,824  |   |              |   | 16.5   | %                  |   |   | 38,748 |   |   |   | 14.0 | % |   |   | 37,068 |   |   |   | 13.1 | % |
| Other                              |   |               | -       |   |              |   | 0.0    | %                  |   |   | 683 |   |   |   | 0.3 | % |   |   | - |   |   |   | 0.0 | % |
| Total commercial real estate loans |   | $                  | 228,343 |   |              |   | 100.0  | %                  |   | $ | 275,927 |   |   |   | 100.0 | % |   | $ | 281,781 |   |   |   | 100.0 | % |
| Percentage of total loans          |   |               | 38.2    | %      |              |   |   |               |   |   | 34.3 | % |   |   |   |   |   |   | 31.8 | % |   |   |   |   |

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| As of Quarter End                             |   | Sep-10                 |    |   | Jun-10 |   |    | Mar-10 |   |   | Dec-09    |   | Sep-09 |   |
|-----------------------------------------------|--------|------------------------|---------|--------|--------|--------|---------|--------|--------|--------|-----------|--------|--------|--------|
|                                          |   | (Dollars In Thousands) |    |
| Noninterest-bearing demand                    |   | $                      | 89,347  |   |   | $      | 86,534  |   |   | $      | 95,228    |   |   | $      | 100,458 |   |   | $ | 106,573 |   |
| Interest-bearing demand and savings           |   |                   | 171,991 |   |   |   | 181,530 |   |   |   | 252,662   |   |   |   | 250,232 |   |   |   | 241,073 |   |
| Retail time less than $100,000                |   |                   | 272,088 |   |   |   | 281,064 |   |   |   | 302,125   |   |   |   | 305,381 |   |   |   | 317,403 |   |
| Retail time greater than or equal to $100,000 |   |                   | 180,126 |   |   |   | 182,973 |   |   |   | 191,579   |   |   |   | 179,325 |   |   |   | 184,339 |   |
| Retail time placed in CDARs programs          |   |                   | 647     |   |   |   | 6,849   |   |   |   | 12,819    |   |   |   | 29,532 |   |   |   | 41,799 |   |
| Brokered time1                                |   |                   | 94,495  |   |   |   | 97,120  |   |   |   | 113,701   |   |   |   | 133,012 |   |   |   | 119,237 |   |
| Internet time1                                |   |                   | 86,770  |   |   |   | 117,344 |   |   |   | 99,093    |   |   |   | 47,275 |   |   |   | 19,214 |   |
| Total deposits                                |   | $                      | 895,464 |   |   | $      | 953,414 |   |   | $      | 1,067,207 |   |   | $      | 1,045,215 |   |   | $ | 1,029,638 |   |

| As of Quarter End                             |   | Sep-10 |   |   | Jun-10 |   |   | Mar-10 |   |   | Dec-09 |   |   | Sep-09 |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Noninterest-bearing demand                    |   |   | 9.98   | %      |   |   | 9.07   | %      |   |   | 8.92   | %      |   |   | 9.61   | % |   |   | 10.35 | % |
| Interest-bearing demand and savings           |   |   | 19.21  | %      |   |   | 19.04  | %      |   |   | 23.68  | %      |   |   | 23.94  | % |   |   | 23.41 | % |
| Retail time less than $100,000                |   |   | 30.38  | %      |   |   | 29.48  | %      |   |   | 28.31  | %      |   |   | 29.22  | % |   |   | 30.83 | % |
| Retail time greater than or equal to $100,000 |   |   | 20.12  | %      |   |   | 19.19  | %      |   |   | 17.95  | %      |   |   | 17.15  | % |   |   | 17.90 | % |
| Retail time placed in CDARs program           |   |   | 0.07   | %      |   |   | 0.72   | %      |   |   | 1.20   | %      |   |   | 2.83   | % |   |   | 4.06 | % |
| Brokered time1                                |   |   | 10.55  | %      |   |   | 10.19  | %      |   |   | 10.65  | %      |   |   | 12.73  | % |   |   | 11.58 | % |
| Internet time1                                |   |   | 9.69   | %      |   |   | 12.31  | %      |   |   | 9.29   | %      |   |   | 4.52   | % |   |   | 1.87 | % |
| Total deposits                                |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |   |   | 100.00 | % |

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| For the Three Months Ended September 30, |   |                   |    |   | 2010                   |   |   |              |   |   |           |   |   | 2009                   |      |   |              |   |
|------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|--------|-------------------|--------|--------|----------------|--------|--------|------------------------|-----------|--------|-------------------|--------|
|                                     |   | AverageBalance         |    |   | InterestIncome/Expense |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | InterestIncome/Expense |      |   | AverageYield/Rate |   |
|                                     |   | (Dollars In Thousands) |    |
| Interest-earning assets:                 |   |                   |    |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |
| Loans                                    |   | $                      | 632,982 |   |                   | $      | 8,219  |              |   |   | 5.15           | %      |   | $                      | 914,699   |   |              | $      | 13,120 |   |   |   | 5.69 | % |
| Investment securities:                   |   |                   |    |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Taxable                                  |   |                   | 189,561 |   |                   |   | 1,666  |              |   |   | 3.49           | %      |   |                   | 130,555   |   |              |   | 1,487 |   |   |   | 4.52 | % |
| Nontaxable                               |   |                   | 6,312   |   |                   |   | 97     |              |   |   | 6.06           | %      |   |                   | 12,539    |   |              |   | 196 |   |   |   | 6.20 | % |
| Other short-term investments             |   |                   | 144,000 |   |                   |   | 103    |              |   |   | 0.28           | %      |   |                   | 126,030   |   |              |   | 80 |   |   |   | 0.25 | % |
| Total interest-earning assets            |   | $                      | 972,855 |   |                   | $      | 10,085 |              |   |   | 4.11           | %      |   | $                      | 1,183,823 |   |              | $      | 14,883 |   |   |   | 4.99 | % |
| Interest-bearing liabilities:            |   |                   |    |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Demand deposits                          |   | $                      | 147,194 |   |                   | $      | 212    |              |   |   | 0.57           | %      |   | $                      | 206,329   |   |              | $      | 294 |   |   |   | 0.57 | % |
| Savings deposits                         |   |                   | 28,729  |   |                   |   | 18     |              |   |   | 0.25           | %      |   |                   | 36,576    |   |              |   | 23 |   |   |   | 0.25 | % |
| Time deposits                            |   |                   | 666,826 |   |                   |   | 3,943  |              |   |   | 2.35           | %      |   |                   | 683,548   |   |              |   | 5,882 |   |   |   | 3.41 | % |
| FHLB advances                            |   |                   | 89,735  |   |                   |   | 873    |              |   |   | 3.86           | %      |   |                   | 101,303   |   |              |   | 1,052 |   |   |   | 4.12 | % |
| Notes payable                            |   |                   | 30,310  |   |                   |   | 258    |              |   |   | 3.38           | %      |   |                   | 30,310    |   |              |   | 262 |   |   |   | 3.43 | % |
| Other short-term borrowings              |   |                   | 2,592   |   |                   |   | 4      |              |   |   | 0.64           | %      |   |                   | 12,461    |   |              |   | 49 |   |   |   | 1.56 | % |
| Total interest-bearing liabilities       |   | $                      | 965,386 |   |                   | $      | 5,308  |              |   |   | 2.18           | %      |   | $                      | 1,070,527 |   |              | $      | 7,562 |   |   |   | 2.80 | % |
|                                     |   |                   |    |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Interest rate spread                     |   |                   |    |   |                   |   |   |              |   |   | 1.93           | %      |   |                   |      |   |              |   |   |   |   |   | 2.19 | % |
| Net interest income                      |   |                   |    |   |                   | $      | 4,777  |              |   |   |           |   |   |                   |      |   |              | $      | 7,321 |   |   |   |   |   |
| Net interest margin                      |   |                   |    |   |                   |   |   |              |   |   | 1.95           | %      |   |                   |      |   |              |   |   |   |   |   | 2.45 | % |

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| For the Nine Months Ended September 30, |   |                   |      |   | 2010                   |   |   |              |   |   |           |   |   | 2009                   |      |   |              |   |
|-----------------------------------------|--------|------------------------|-----------|--------|------------------------|--------|--------|-------------------|--------|--------|----------------|--------|--------|------------------------|-----------|--------|-------------------|--------|
|                                    |   | AverageBalance         |      |   | InterestIncome/Expense |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | InterestIncome/Expense |      |   | AverageYield/Rate |   |
|                                    |   | (Dollars In Thousands) |      |
| Interest-earning assets:                |   |                   |      |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |
| Loans                                   |   | $                      | 711,899   |   |                   | $      | 27,006 |              |   |   | 5.07%          |   |   | $                      | 930,502   |   |              | $      | 41,098 |   |   |   | 5.91% |   |
| Investment securities:                  |   |                   |      |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Taxable                                 |   |                   | 155,819   |   |                   |   | 4,331  |              |   |   | 3.72%          |   |   |                   | 145,540   |   |              |   | 5,213 |   |   |   | 4.79% |   |
| Nontaxable                              |   |                   | 8,368     |   |                   |   | 387    |              |   |   | 6.18%          |   |   |                   | 17,008    |   |              |   | 778 |   |   |   | 6.11% |   |
| Other short-term investments            |   |                   | 170,975   |   |                   |   | 307    |              |   |   | 0.24%          |   |   |                   | 130,488   |   |              |   | 233 |   |   |   | 0.24% |   |
| Total interest-earning assets           |   | $                      | 1,047,061 |   |                   | $      | 32,031 |              |   |   | 4.09%          |   |   | $                      | 1,223,538 |   |              | $      | 47,322 |   |   |   | 5.17% |   |
| Interest-bearing liabilities:           |   |                   |      |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Demand deposits                         |   | $                      | 184,799   |   |                   | $      | 840    |              |   |   | 0.61%          |   |   | $                      | 211,970   |   |              | $      | 879 |   |   |   | 0.55% |   |
| Savings deposits                        |   |                   | 33,445    |   |                   |   | 62     |              |   |   | 0.25%          |   |   |                   | 35,756    |   |              |   | 67 |   |   |   | 0.25% |   |
| Time deposits                           |   |                   | 689,880   |   |                   |   | 13,301 |              |   |   | 2.58%          |   |   |                   | 719,647   |   |              |   | 19,640 |   |   |   | 3.65% |   |
| FHLB advances                           |   |                   | 89,786    |   |                   |   | 2,598  |              |   |   | 3.87%          |   |   |                   | 105,153   |   |              |   | 3,204 |   |   |   | 4.07% |   |
| Notes payable                           |   |                   | 30,310    |   |                   |   | 747    |              |   |   | 3.29%          |   |   |                   | 27,306    |   |              |   | 715 |   |   |   | 3.50% |   |
| Other short-term borrowings             |   |                   | 5,147     |   |                   |   | 28     |              |   |   | 0.73%          |   |   |                   | 10,107    |   |              |   | 120 |   |   |   | 1.59% |   |
| Total interest-bearing liabilities      |   | $                      | 1,033,367 |   |                   | $      | 17,576 |              |   |   | 2.27%          |   |   | $                      | 1,109,939 |   |              | $      | 24,625 |   |   |   | 2.97% |   |
|                                    |   |                   |      |   |                   |   |   |              |   |   |           |   |   |                   |      |   |              |   |   |   |   |   |   |   |
| Interest rate spread                    |   |                   |      |   |                   |   |   |              |   |   | 1.82%          |   |   |                   |      |   |              |   |   |   |   |   | 2.20% |   |
| Net interest income                     |   |                   |      |   |                   | $      | 14,455 |              |   |   |           |   |   |                   |      |   |              | $      | 22,709 |   |   |   |   |   |
| Net interest margin                     |   |                   |      |   |                   |   |   |              |   |   | 1.85%          |   |   |                   |      |   |              |   |   |   |   |   | 2.48% |   |

|                                                                                    |   | Sep-10 |   |   | Jun-10 |   |   | Mar-10 |   |   | Dec-09 |   |   | Sep-09 |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net interest margin:                                                                    |   |   | 1.95%  |   |   |   | 1.89%  |   |   |   | 1.71%  |   |   |   | 2.05%  |   |   |   | 2.45% |   |
| Impact of nonperforming loans                                                           |   |   | 0.86%  |   |   |   | 0.83%  |   |   |   | 1.03%  |   |   |   | 0.88%  |   |   |   | 0.47% |   |
| Impact of excess liquidity                                                              |   |   | 0.18%  |   |   |   | 0.24%  |   |   |   | 0.22%  |   |   |   | 0.15%  |   |   |   | 0.14% |   |
| Net interest margin, as adjusted for impact of nonperforming loans and excess liquidity |   |   | 2.99%  |   |   |   | 2.96%  |   |   |   | 2.96%  |   |   |   | 3.08%  |   |   |   | 3.06% |   |

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|   | · | lending policies and procedures, including changes in underwriting standards and collection, charge-off and recovery practices; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes in international, national, regional and local economic and business conditions that affect the collectability of the portfolio; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes in the nature and volume of the loan portfolio; |
|--------|--------|---------------------------------------------------------|

|   | · | experience, ability, and depth of lending management and other relevant staff; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | levels of and trends in delinquencies and impaired loans; |
|--------|--------|-----------------------------------------------------------|

|   | · | changes in the quality of our loan review system; |
|--------|--------|---------------------------------------------------|

|   | · | value of underlying collateral for collateral-dependent loans; |
|--------|--------|----------------------------------------------------------------|

|   | · | existence and effect of any concentrations of credit, and changes in the level of such concentrations; and |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | other external factors such as competition and legal and regulatory requirements. |
|--------|--------|-----------------------------------------------------------------------------------|

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| As of                                              |   | September 30, 2010     |   |   | December 31, 2009                              |   |   | December 31, 2008 |   |   | December 31, 2007                              |   |
|----------------------------------------------------|--------|------------------------|--------|--------|------------------------------------------------|--------|--------|-------------------|--------|--------|------------------------------------------------|--------|
|                                               |   | Amount                 |   |   | Percentage of Loans in Category to Total Loans |   |   | Amount            |   |   | Percentage of Loans in Category to Total Loans |   |   | Amount |   |   | Percentage of Loans in Category to Total Loans |   |   | Amount |   |   | Percentage of Loans in Category to Total Loans |   |
|                                               |   | (Dollars in Thousands) |   |
| Commercial and financial                           |   | $                      | 3,059  |   |                                           |   | 12.7   | %                 |   | $      | 1,415                                          |   |   |   | 10.5 | % |   | $ | 1,382 |   |   |   | 9.1 | % |   | $ | 229 |   |   |   | 8.6 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural (including loans secured by farmland) |   |                   | 1,988  |   |                                           |   | 5.2    | %                 |   |   | 196                                            |   |   |   | 5.0 | % |   |   | 112 |   |   |   | 5.1 | % |   |   | 1,029 |   |   |   | 4.5 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate – construction                   |   |                   | 10,302 |   |                                           |   | 20.0   | %                 |   |   | 16,828                                         |   |   |   | 25.4 | % |   |   | 11,950 |   |   |   | 33.0 | % |   |   | 8,383 |   |   |   | 38.2 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate – commercial                     |   |                   | 3,734  |   |                                           |   | 38.2   | %                 |   |   | 5,121                                          |   |   |   | 34.3 | % |   |   | 2,552 |   |   |   | 28.9 | % |   |   | 2,008 |   |   |   | 27.0 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate – residential                    |   |                   | 4,823  |   |                                           |   | 21.6   | %                 |   |   | 3,179                                          |   |   |   | 21.7 | % |   |   | 2,417 |   |   |   | 20.5 | % |   |   | 815 |   |   |   | 18.9 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer and other loans                           |   |                   | 170    |   |                                           |   | 2.3    | %                 |   |   | 415                                            |   |   |   | 3.1 | % |   |   | 176 |   |   |   | 3.4 | % |   |   | 215 |   |   |   | 2.8 | % |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unallocated                                        |   |                   | 2,842  |   |                                           |   | N/A    |              |   |   | 2,160                                          |   |   |   | N/A |   |   |   | 785 |   |   |   | N/A |   |   |   | 227 |   |   |   | N/A |   |
|                                               |   |                   |   |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                              |   | $                      | 26,918 |   |                                           |   | 100.0  | %                 |   | $      | 29,314                                         |   |   |   | 100.0 | % |   | $ | 19,374 |   |   |   | 100.0 | % |   | $ | 12,906 |   |   |   | 100.0 | % |

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|                                                                                               |   | Nine months endedSeptember 30,2010 |    |   | Year endedDecember 31,2009 |   |    | Year endedDecember 31,2008 |   |   | Year endedDecember 31,2007 |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|----------------------------|--------|---------|----------------------------|--------|--------|----------------------------|--------|
|                                                                                               |   |  (Dollars in Thousands)       |
|                                                                                               |   |                               |    |   |                       |   |    |                       |   |   |                       |   |
| Balance at beginning of year                                                                       |   | $                                  | 29,314  |   |                       | $      | 19,374  |                       |   | $      | 12,906                     |   |   | $ | 11,006 |   |
| Charge-offs:                                                                                       |   |                               |    |   |                       |   |    |                       |   |   |                       |   |   |   |   |   |
| Commercial and financial                                                                           |   |                               | 2,327   |   |                       |   | 5,965   |                       |   |   | 709                        |   |   |   | 66 |   |
| Agricultural (including loans secured by farmland)                                                 |   |                               | 3,497   |   |                       |   | 1,108   |                       |   |   | -                          |   |   |   | 10 |   |
| Real estate – construction and development                                                   |   |                               | 13,273  |   |                       |   | 21,212  |                       |   |   | 8,023                      |   |   |   | 324 |   |
| Real estate – commercial                                                                     |   |                               | 1,061   |   |                       |   | 4,906   |                       |   |   | 25                         |   |   |   | 257 |   |
| Real estate – residential                                                                    |   |                               | 2,929   |   |                       |   | 3,063   |                       |   |   | 3,188                      |   |   |   | 65 |   |
| Installment loans to individuals and other loans                                                   |   |                               | 305     |   |                       |   | 5,494   |                       |   |   | 183                        |   |   |   | 146 |   |
|                                                                                               |   |                               | 23,392  |   |                       |   | 41,748  |                       |   |   | 12,128                     |   |   |   | 868 |   |
| Recoveries:                                                                                        |   |                               |    |   |                       |   |    |                       |   |   |                       |   |   |   |   |   |
| Commercial and financial                                                                           |   |                               | 206     |   |                       |   | 138     |                       |   |   | 38                         |   |   |   | 55 |   |
| Agricultural (including loans secured by farmland)                                                 |   |                               | 35      |   |                       |   | 38      |                       |   |   | 38                         |   |   |   | 56 |   |
| Real estate – construction and development                                                   |   |                               | 41      |   |                       |   | 8       |                       |   |   | 2                          |   |   |   | - |   |
| Real estate – commercial                                                                     |   |                               | 371     |   |                       |   | 19      |                       |   |   | 340                        |   |   |   | 28 |   |
| Real estate – residential                                                                    |   |                               | 29      |   |                       |   | 38      |                       |   |   | 33                         |   |   |   | 108 |   |
| Installment loans to individuals and other loans                                                   |   |                               | 100     |   |                       |   | 259     |                       |   |   | 94                         |   |   |   | 121 |   |
|                                                                                               |   |                               | 782     |   |                       |   | 500     |                       |   |   | 545                        |   |   |   | 368 |   |
| Net charge-offs                                                                                    |   |                               | 22,610  |   |                       |   | 41,248  |                       |   |   | 11,583                     |   |   |   | 500 |   |
| Additions provided to the allowance charged to operations                                          |   |                               | 20,214  |   |                       |   | 51,188  |                       |   |   | 18,050                     |   |   |   | 2,400 |   |
| Balance at end of year                                                                             |   | $                                  | 26,918  |   |                       | $      | 29,314  |                       |   | $      | 19,373                     |   |   | $ | 12,906 |   |
|                                                                                               |   |                               |    |   |                       |   |    |                       |   |   |                       |   |   |   |   |   |
| Average balance of loans outstanding                                                               |   | $                                  | 711,899 |   |                       | $      | 915,674 |                       |   | $      | 955,253                    |   |   | $ | 883,334 |   |
|                                                                                               |   |                               |    |   |                       |   |    |                       |   |   |                       |   |   |   |   |   |
| Ratio of net charge-offs during the year to average loans outstanding during the year (annualized) |   |                               | 4.25    | %      |                       |   | 4.50    | %                          |   |   | 1.21                       | %      |   |   | 0.06 | % |

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| Category                                         | Net Carrying Value* | Collateral Description                                    | Average Carrying Value/Unit                                  |
|--------------------------------------------------|---------------------|-----------------------------------------------------------|--------------------------------------------------------------|
|                                             |                |                                                      |                                                         |
| Construction & Development: undeveloped land |  $51.9 million |  29 parcels of undeveloped land totaling 5,285 acres |  $6,800 per residential acre$13,400 per commercial acre |
| Construction & Development: developed lots   |  $3.6 million  |  120 residential lots                                |  $30,000 per lot                                        |
| 1-4 Family Residential                           |  $11.9 million |  82 houses                                           |  $145,200 per house                                     |
| Commercial Real Estate                           |  $34.1 million |  34 commercial properties                            |  $1 million per property                                |
| Agriculture                                      |  $5.2 million  |  9 parcels of farm/timber land totaling 1,349 acres  |  $3,900 per acre                                        |
| Multi-Family Residential                         |  $4.4 million  |  34 condominium units                                |  $129,000 per unit                                      |
| Commercial and Industrial                        |  $1.1 million  |  Non-real estate collateral                          |  $70,600 per loan                                       |
| Consumer                                         | $126,000            |  Non-real estate collateral                          |  $12,600 per loan                                       |
| Total                                            | $112.4 million      |                                                      |                                                         |

| As of Quarter End                                               |   | Sep-10                 |    |   | Jun-10 |   |    | Mar-10 |   |   | Dec-09  |   |   | Sep-09 |   |
|-----------------------------------------------------------------|--------|------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|
|                                                            |   | (Dollars In Thousands) |    |
| Loans accounted for on a nonaccrual basis                       |   | $                      | 118,444 |   |   | $      | 136,239 |   |   | $      | 138,290 |   |   | $      | 92,272 |   |   | $ | 64,808 |   |
| Accruing loans which are contractually past due                 |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| 90 days or more as to principal or interest payments            |   |                   | 11      |   |   |   | 206     |   |   |   | -       |   |   |   | 15     |   |   |   | 4 |   |
| Troubled debt restructurings not included above                 |   |                   | -       |   |   |   | -       |   |   |   | 880     |   |   |   | 881    |   |   |   | - |   |
| Total nonperforming loans                                       |   | $                      | 118,455 |   |   | $      | 136,445 |   |   | $      | 139,170 |   |   | $      | 93,168 |   |   | $ | 64,812 |   |
|                                                            |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Ratio of  nonperforming loans to total loans          |   |                   | 19.82   | %      |   |   | 20.85   | %      |   |   | 18.37   | %      |   |   | 11.57  | % |   |   | 7.27 | % |
|                                                            |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Reserves allocated to nonperforming loans:                      |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Specific Reserves                                               |   | $                      | 5,695   |   |   | $      | 11,371  |   |   | $      | 14,234  |   |   | $      | 12,056 |   |   | $ | 8,765 |   |
| General Reserves                                                |   |                   | 366     |   |   |   | 1,115   |   |   |   | 624     |   |   |   | 388    |   |   |   | 300 |   |
| Total reserves allocated to nonperforming loans                 |   | $                      | 6,061   |   |   | $      | 12,486  |   |   | $      | 14,858  |   |   | $      | 12,444 |   |   | $ | 9,065 |   |
|                                                            |   |                   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Total reserves allocated as a percentage of nonperforming loans |   |                   | 5.12    | %      |   |   | 9.15    | %      |   |   | 10.68   | %      |   |   | 13.36  | % |   |   | 13.99 | % |

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|                                                    |   | South Georgia          |   |   | NorthGeorgia |   |    | Florida |   |   | Treasury |   |   | Total  |   |
|---------------------------------------------------------|--------|------------------------|--------|--------|--------------|--------|---------|---------|--------|--------|----------|--------|--------|--------|--------|
|                                                    |   | (Dollars In Thousands) |   |
| Loans accounted for on a nonaccrual basis               |   | $                      | 25,431 |   |         | $      | 61,927  |    |   | $      | 31,086   |   |   | $      | -      |   |   | $ | 118,444 |   |
| Accruing loans which are contractually past due         |   |                   |   |   |         |   |    |    |   |   |     |   |   |   |   |   |   |   |   |   |
| 90 days or more as to principal or interest payments    |   |                   | -      |   |         |   | -       |    |   |   | -        |   |   |   | 11     |   |   |   | 11 |   |
| Troubled debt restructurings not included above         |   |                   | -      |   |         |   | -       |    |   |   | -        |   |   |   | -      |   |   |   | - |   |
| Total nonperforming loans                               |   | $                      | 25,431 |   |         | $      | 61,927  |    |   | $      | 31,086   |   |   | $      | 11     |   |   | $ | 118,455 |   |
| Foreclosed assets                                       |   |                   | 6,966  |   |         |   | 74,724  |    |   |   | 18,571   |   |   |   | -      |   |   |   | 100,261 |   |
| Total nonperforming assets                              |   | $                      | 32,397 |   |         | $      | 136,651 |    |   | $      | 49,657   |   |   | $      | 11     |   |   | $ | 218,716 |   |
| Ratio of nonperforming loans to total loans in market   |   |                   | 9.73   | %      |         |   | 24.99   | %       |   |   | 55.71    | %      |   |   | 0.03   | % |   |   | 19.82 | % |
| Ratio of nonperforming assets to total assets in market |   |                   | 11.85  | %      |         |   | 42.42   | %       |   |   | 68.06    | %      |   |   | 0.00   | % |   |   | 20.95 | % |

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| Category                                         | Book Value          | Collateral Description                                    | Average Carrying Value/Unit                                    |
|--------------------------------------------------|---------------------|-----------------------------------------------------------|----------------------------------------------------------------|
|                                             |                |                                                      |                                                           |
| Construction & Development: undeveloped land |  $58.8 million |  53 parcels of undeveloped land totaling 1,816 acres |  $14,400 per residential acre$155,500 per commercial acre |
| Construction & Development: developed lots   |  $20.8 million |  975 residential lots                                |  $21,300 per lot                                          |
| 1-4 Family Residential                           |  $8.2 million  |  61 houses                                           |  $134,300 per house                                       |
| Commercial Real Estate                           |  $7.0 million  |  19 commercial properties                            |  $367,000 per property                                    |
| Multi-Family Residential                         |  $4.4 million  |  11 condominium units                                |  $405,400 per unit                                        |

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|                                                              |   | Three Months Ended September 30, |   |   |   |   |   | Nine Months Ended September 30, |   |   |    |   |
|-------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------------------------------------|--------|--------|---------|--------|
|                                                              |   | 2010                                  |   |   | 2009   |   |   | Pct. Chg.                            |   |   | 2010    |   |   | 2009 |   |   | Pct. Chg. |   |
|                                                              |   | (Dollars in Thousands)                |   |
| Noninterest income:                                               |   |                                  |   |   |   |   |   |                                 |   |   |    |   |   |   |   |   |   |   |
| Service charges on deposit accounts                               |   | $                                     | 565    |   |   | $      | 944    |                                 |   |   | -40.1%  |   |   | $ | 2,012 |   |   | $ | 2,626 |   |   |   | -23.4% |   |
| Mortgage origination fees                                         |   |                                  | 332    |   |   |   | 150    |                                 |   |   | 121.3%  |   |   |   | 860 |   |   |   | 614 |   |   |   | 40.1% |   |
| ATM/debit card fee income                                         |   |                                  | 171    |   |   |   | 212    |                                 |   |   | -19.3%  |   |   |   | 604 |   |   |   | 620 |   |   |   | -2.6% |   |
| Securities transactions, net                                      |   |                                  | 2,405  |   |   |   | 93     |                                 |   |   | 2486.0% |   |   |   | 3,236 |   |   |   | 865 |   |   |   | 274.1% |   |
| Earnings on bank-owned life insurance                             |   |                                  | 142    |   |   |   | 148    |                                 |   |   | -4.1%   |   |   |   | 355 |   |   |   | 430 |   |   |   | -17.4% |   |
| Loss on disposal of assets                                        |   |                                  | (1,939 | )      |   |   | (755   | )                                    |   |   | -156.8% |   |   |   | (7,855 | ) |   |   | (1,276 | ) |   |   | -463.9% |   |
| Gain (loss) on derivative instrument                              |   |                                  | -      |   |   |   | (143   | )                                    |   |   | 100.0%  |   |   |   | 163 |   |   |   | 1,026 |   |   |   | -84.15 |   |
| Other noninterest income                                          |   |                                  | 176    |   |   |   | 240    |                                 |   |   | -26.7%  |   |   |   | 1,206 |   |   |   | 577 |   |   |   | -5.2% |   |
| Total noninterest income                                          |   | $                                     | 1,852  |   |   | $      | 889    |                                 |   |   | 108.32% |   |   | $ | 581 |   |   | $ | 5,482 |   |   |   | -89.4% |   |
| Noninterest income (annualized) as a percentage of average assets |   |                                  | 0.68%  |   |   |   | 0.27%  |                                 |   |   |    |   |   |   | 0.07% |   |   |   | 0.56% |   |   |   |   |   |

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|                                                               |   | Three Months Ended September 30, |   |   |   |   |   | Nine Months Ended September 30, |   |   |   |   |
|--------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------------------------------------|--------|--------|--------|--------|
|                                                               |   | 2010                                  |   |   | 2009   |   |   | Pct. Chg.                            |   |   | 2010   |   |   | 2009 |   |   | Pct. Chg. |   |
|                                                               |   | (Dollars in Thousands)                |   |
| Noninterest expenses:                                              |   |                                  |   |   |   |   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Salaries and wages                                                 |   | $                                     | 2,457  |   |   | $      | 2,947  |                                 |   |   | -16.6% |   |   | $ | 8,452 |   |   | $ | 10,425 |   |   |   | -18.9% |   |
| Deferred loan cost                                                 |   |                                  | (170   | )      |   |   | (356   | )                                    |   |   | -52.2% |   |   |   | (578 | ) |   |   | (1,126 | ) |   |   | -48.7% |   |
| Employee benefits                                                  |   |                                  | 568    |   |   |   | 1,041  |                                 |   |   | -45.4% |   |   |   | 1,177 |   |   |   | 3,008 |   |   |   | -60.9% |   |
| Net occupancy expense of premises                                  |   |                                  | 418    |   |   |   | 569    |                                 |   |   | -26.5% |   |   |   | 1,436 |   |   |   | 1,757 |   |   |   | -18.3% |   |
| Furniture and equipment expense                                    |   |                                  | 457    |   |   |   | 502    |                                 |   |   | -9.0%  |   |   |   | 1,457 |   |   |   | 1,504 |   |   |   | -3.1% |   |
| Advertising and business development                               |   |                                  | 42     |   |   |   | 91     |                                 |   |   | -53.8% |   |   |   | 213 |   |   |   | 296 |   |   |   | -28.0% |   |
| Supplies and printing                                              |   |                                  | 21     |   |   |   | 77     |                                 |   |   | -72.7% |   |   |   | 164 |   |   |   | 259 |   |   |   | -36.7% |   |
| Telephone and internet charges                                     |   |                                  | 126    |   |   |   | 157    |                                 |   |   | -19.7% |   |   |   | 443 |   |   |   | 496 |   |   |   | -10.7% |   |
| Postage and courier                                                |   |                                  | 109    |   |   |   | 127    |                                 |   |   | -14.2% |   |   |   | 339 |   |   |   | 395 |   |   |   | -14.2% |   |
| Legal and accounting fees                                          |   |                                  | 164    |   |   |   | 245    |                                 |   |   | -33.1% |   |   |   | 524 |   |   |   | 599 |   |   |   | -12.5% |   |
| Deposit insurance                                                  |   |                                  | 1,468  |   |   |   | 520    |                                 |   |   | 182.3% |   |   |   | 3,218 |   |   |   | 1,639 |   |   |   | 96.3% |   |
| Director fees and expenses                                         |   |                                  | 5      |   |   |   | 121    |                                 |   |   | -95.9% |   |   |   | 228 |   |   |   | 429 |   |   |   | -46.9% |   |
| Service charges and fees                                           |   |                                  | 60     |   |   |   | 87     |                                 |   |   | -31.0% |   |   |   | 172 |   |   |   | 359 |   |   |   | -52.1% |   |
| Foreclosure and repossession expenses                              |   |                                  | 1,283  |   |   |   | 582    |                                 |   |   | 120.4% |   |   |   | 5,246 |   |   |   | 1,792 |   |   |   | 192.7% |   |
| Loan servicing costs                                               |   |                                  | 533    |   |   |   | 207    |                                 |   |   | 157.5% |   |   |   | 1,740 |   |   |   | 657 |   |   |   | 164.8% |   |
| Other noninterest expense                                          |   |                                  | 414    |   |   |   | 367    |                                 |   |   | 12.8%  |   |   |   | 1,248 |   |   |   | 1,023 |   |   |   | 22.0% |   |
| Total noninterest expense                                          |   | $                                     | 7,955  |   |   | $      | 7,284  |                                 |   |   | 9.2%   |   |   | $ | 25,479 |   |   | $ | 23,512 |   |   |   | 8.4% |   |
| Noninterest expense as a percentage of average assets (annualized) |   |                                  | 2.90%  |   |   |   | 2.25%  |                                 |   |   |   |   |   |   | 2.90% |   |   |   | 2.39% |   |   |   |   |   |

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| Contractual Obligations                                 |   | Total                  |    |   | Less than1 year |   |   | 1 to 3years |   |   | 3 to 5years |   |   | More than5 years |   |
|---------------------------------------------------------|--------|------------------------|---------|--------|-----------------|--------|--------|-------------|--------|--------|-------------|--------|--------|------------------|--------|
|                                                    |   | (Dollars In Thousands) |    |
| Federal Home Loan Bank of Atlanta Advances              |   | $                      | 89,646  |   |            | $      | 5,669  |        |   | $      | 46,404      |   |   | $                | 36,884 |   |   | $ | 689 |   |
| Operating Lease Obligations                             |   |                   | 876     |   |            |   | 373    |        |   |   | 388         |   |   |             | 115    |   |   |   | - |   |
|                                                    |   |                   |    |   |            |   |   |        |   |   |        |   |   |             |   |   |   |   |   |   |
| Guaranteed Preferred Beneficial Interests in Debentures |   |                   | 10,310  |   |            |   | -      |        |   |   | -           |   |   |             | -      |   |   |   | 10,310 |   |
| Other Borrowings                                        |   |                   | 20,000  |   |            |   | -      |        |   |   | 20,000      |   |   |             | -      |   |   |   |   |   |
| Total                                                   |   | $                      | 120,832 |   |            | $      | 6,042  |        |   | $      | 66,792      |   |   | $                | 36,999 |   |   | $ | 10,999 |   |

|                         |   | Sep-10 |       |   | Dec-09 |   |
|------------------------------|--------|--------|------------|--------|--------|--------|
| Commitments to extend credit |   | $      | 63,487,000 |   |   | $      | 89,064,000 |   |
| Standby letters of credit    |   | $      | 1,812,000  |   |   | $      | 3,682,000 |   |

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|   · |  “Well capitalized” if the institution has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 5.0% or greater, and is not subject to any order or written directive by any such regulatory authority to meet and maintain a specific capital level for any capital measure. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   · |  “Adequately capitalized” if the institution has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 4.0% or greater, a leverage ratio of 4.0% or greater, and is not categorized as well capitalized. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   · | “Undercapitalized” if the institution has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio of less than 4.0%, or a leverage ratio of less than 4.0%. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   · |  “Significantly undercapitalized” if the institution has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 3.0%, or a leverage ratio of less than 3.0%. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   ·  | “Critically undercapitalized” if the institution’s tangible equity is equal to or less than 2.0% of average quarterly tangible assets. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                              |   | CompanyConsolidated |   |   | Bank   |   |   | MinimumRegulatoryRequirement |   |
|---------------------------------------------------|--------|---------------------|--------|--------|--------|--------|--------|------------------------------|--------|
| Total Capital to Risk Weighted Assets             |   |                | 5.59%  |   |   |   | 5.92%  |                         |   |   | 8.00% |   |
| Tier 1 Capital to Risk Weighted Assets            |   |                | 3.79%  |   |   |   | 4.64%  |                         |   |   | 4.00% |   |
| Tier 1 Capital to Average Assets (Leverage Ratio) |   |                | 2.37%  |   |   |   | 2.90%  |                         |   |   | 4.00% |   |

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Item 3. 

|  Contractual Maturity Gap   |   | 3-Month                |    |   | 6-Month |   |    | 1-Year |   |
|----------------------------------|--------|------------------------|---------|--------|---------|--------|---------|--------|--------|
|                             |   | (Dollars In Thousands) |    |
| Regulatory Defined               |   |                   |    |   |    |   |    |   |   |
| Rate Sensitive Assets (RSA)      |   | $                      | 285,042 |   |    | $      | 330,063 |   |   | $ | 432,678 |   |
| Rate Sensitive Liabilities (RSL) |   |                   | 104,631 |   |    |   | 247,915 |   |   |   | 390,737 |   |
| RSA minus RSL (Gap)              |   | $                      | 180,411 |   |    | $      | 82,148  |   |   | $ | 41,941 |   |
|                             |   |                   |    |   |    |   |    |   |   |   |   |   |
| Gap Ratio (RSA/RSL)              |   |                   | 2.72    |   |    |   | 1.33    |   |   |   | 1.11 |   |

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| Repricing Gap                    |   | 3-Month                |    |   | 6-Month |   |    | 1-Year |   |
|----------------------------------|--------|------------------------|---------|--------|---------|--------|---------|--------|--------|
|                             |   | (Dollars In Thousands) |    |
| Regulatory Defined               |   |                   |    |   |    |   |    |   |   |
| Rate Sensitive Assets (RSA)      |   | $                      | 438,402 |   |    | $      | 463,716 |   |   | $ | 531,556 |   |
| Rate Sensitive Liabilities (RSL) |   |                   | 367,831 |   |    |   | 502,248 |   |   |   | 645,070 |   |
| RSA minus RSL (Gap)              |   | $                      | 70,571  |   |    | $      | (38,532 | )      |   | $ | (113,514 | ) |
|                             |   |                   |    |   |    |   |    |   |   |   |   |   |
| Gap Ratio (RSA/RSL)              |   |                   | 1.19    |   |    |   | 0.92    |   |   |   | 0.82 |   |
|                             |   |                   |    |   |    |   |    |   |   |   |   |   |
| Management-Adjusted              |   |                   |    |   |    |   |    |   |   |   |   |   |
| Rate Sensitive Assets (RSA)      |   | $                      | 392,026 |   |    | $      | 501,715 |   |   | $ | 583,526 |   |
| Rate Sensitive Liabilities (RSL) |   |                   | 375,198 |   |    |   | 516,345 |   |   |   | 670,930 |   |
| RSA minus RSL (Gap)              |   | $                      | (16,828 | )      |    | $      | (14,630 | )      |   | $ | (87,404 | ) |
|                             |   |                   |    |   |    |   |    |   |   |   |   |   |
| Gap Ratio (RSA/RSL)              |   |                   | 1.05    |   |    |   | 0.97    |   |   |   | 0.87 |   |

| Market      |   | Effect on Net Interest Income |   |
|-------------|--------|-------------------------------|--------|
| Rate Change |   | Gradual                       |   |   | Immediate |   |
| +300 bps    |   | 19.88                         | %      |   |   | 32.38 | % |
| +200 bps    |   | 17.59                         | %      |   |   | 24.37 | % |
| +100 bps    |   | 11.53                         | %      |   |   | 13.73 | % |
| -25 bps     |   | -1.82                         | %      |   |   | -1.82 | % |

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Item 4. 

Item 1.  Legal Proceedings

ITEM 1A.  Risk Factors

Item 2.  Unregistered 

Item 3.  Defaults 

Item 4.  (Removed 

Item 5.  Other Information

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| Item 6.Exhibits |
|-----------------|
|            |   |   |
|            | 31.1 | Rule 13a-14(a) Certification of CEO. |
|            |   |   |
|            | 31.2 | Rule 13a-14(a) Certification of CFO. |
|            |   |   |
|            | 32.1 | Section 1350 Certification of CEO. |
|            |   |   |
|            | 32.2 | Section 1350 Certification of CFO. |

SIGNATURES

|   | PAB BANKSHARES, INC.   |   |                                                                                                                  |
|--------|------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
|   | Registrant             |   |                                                                                                                  |
|   |                   |   |                                                                                                                  |
|   | Date:November 10, 2010 | By:    | /s/ Donald J. Torbert, Jr.                                                                                            |
|   |                   |   | Donald J. Torbert, Jr. President and Chief Executive Officer (principal executive officer of the registrant)          |
|   |                   |   |                                                                                                                  |
|   |                   |   |                                                                                                                  |
|   | Date:November 10, 2010 | By:    | By: /s/ Nicole S. Stokes                                                                                              |
|   |                   |   | Nicole S. Stokes Executive Vice President and Chief Financial Officer (principal financial officer of the registrant) |

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