----

----

| R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|---|----------------------------------------------------------------------------------------|

| Delaware                        | 36-3210283                              |
|---------------------------------|-----------------------------------------|
| (State or other jurisdiction of | (I.R.S. Employer Identification Number) |
| incorporation or organization)  |                                    |

| 606 S. Main St.                          |                                           |
|------------------------------------------|------------------------------------------------|
| Princeton, Illinois                      | 61356                                          |
| (Address of principal executive offices) |       (Zip code) |
|                                     |                                           |

| Large accelerated filer £ | Accelerated filer £ | Non-accelerated filer  £ | Smaller reporting company R |
|--------------------------------|--------------------------|-----------------------------------------|-----------------------------|
|                           |                     |

| Class                   | Outstanding at September 6, 2012 |
|-------------------------|----------------------------------|
| Common, par value $5.00 | 3,377,010                        |

----

|   | (a) | None. |
|--------|-----|-------|

|   | (a) | None. |
|--------|-----|-------|

|   | (a) | None. |
|--------|-----|-------|

|     |                                                     |   |   |                                             |   |
|----------|----------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
| By  | /s/ Thomas D. Ogaard    9/6/2012     |   | By     | /s/ Louis Casto    9/6/2012  |   |
|     | Thomas D. Ogaard                                    |   |   | Louis Casto                                      |   |
|     | President & Chief Executive OfficerSeptember 6, 2012 |   |   | Interim Chief Financial OfficerSeptember 6, 2012 |   |

----

| (dollars in thousands except share data)                                                                                                   |   | June 30,2012 |    |   | December 31,2011 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------------|--------|
|                                                                                                                                       |   | (unaudited)  |    |   |             |
| ASSETS                                                                                                                                     |   |         |    |   |             |   |
| Cash and due from banks                                                                                                                    |   | $            | 16,221  |   |             | $      | 16,307 |   |
| Interest-bearing deposits with financial institutions                                                                                      |   |         | 125,008 |   |             |   | 46,988 |   |
|         Total cash and cash equivalents                                                            |   |         | 141,229 |   |             |   | 63,295 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Loans held-for-sale, at lower of cost or market                                                                                            |   |         | 2,336   |   |             |   | 2,220 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Investment securities:                                                                                                                     |   |         |    |   |             |
|     Available-for-sale, at fair value                                                                                  |   |         | 215,881 |   |             |   | 251,747 |   |
|     Held-to-maturity, at amortized cost (fair value of $7,734 and $9,942)                                              |   |         | 7,643   |   |             |   | 9,836 |   |
|         Total investment securities                                                                |   |         | 223,524 |   |             |   | 261,583 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Loans:                                                                                                                                     |   |         |    |   |             |   |   |   |
|     Loans, net of unearned interest                                                                                    |   |         | 520,649 |   |             |   | 621,021 |   |
|     Allowance for loan losses                                                                                          |   |         | (22,472 | )      |             |   | (30,413 | ) |
|         Net loans                                                                                  |   |         | 498,177 |   |             |   | 590,608 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Premises and equipment, net of accumulated depreciation                                                                                    |   |         | 25,429  |   |             |   | 25,850 |   |
| Land held for sale, at lower of cost or market                                                                                             |   |         | 2,084   |   |             |   | 2,164 |   |
| Federal Reserve and Federal Home Loan Bank stock                                                                                           |   |         | 3,279   |   |             |   | 4,500 |   |
| Bank-owned life insurance                                                                                                                  |   |         | 24,727  |   |             |   | 24,330 |   |
| Accrued interest receivable                                                                                                                |   |         | 3,800   |   |             |   | 6,453 |   |
| Other real estate owned                                                                                                                    |   |         | 21,141  |   |             |   | 21,848 |   |
| Intangible assets, net of accumulated amortization                                                                                         |   |         | 1,603   |   |             |   | 1,877 |   |
| Other assets                                                                                                                               |   |         | 6,821   |   |             |   | 9,588 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         TOTAL ASSETS                                                                               |   | $            | 954,150 |   |             | $      | 1,014,316 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| LIABILITIES                                                                                                                                |   |         |    |   |             |   |   |   |
| Deposits:                                                                                                                                  |   |         |    |   |             |   |   |   |
|     Demand                                                                                                             |   | $            | 152,741 |   |             | $      | 171,939 |   |
|     Interest-bearing demand                                                                                            |   |         | 324,892 |   |             |   | 353,462 |   |
|     Savings                                                                                                            |   |         | 87,480  |   |             |   | 84,599 |   |
|     Time                                                                                                               |   |         | 312,058 |   |             |   | 307,295 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         Total deposits                                                                             |   |         | 877,171 |   |             |   | 917,295 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Borrowings:                                                                                                                                |   |         |    |   |             |   |   |   |
|     Customer repurchase agreements                                                                                     |   |         | 50,743  |   |             |   | 54,835 |   |
|     Advances from the Federal Home Loan Bank                                                                           |   |         | 0       |   |             |   | 5,000 |   |
|     Trust preferred securities                                                                                         |   |         | 25,000  |   |             |   | 25,000 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         Total borrowings                                                                           |   |         | 75,743  |   |             |   | 84,835 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| Other liabilities                                                                                                                          |   |         | 5,752   |   |             |   | 7,251 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         TOTAL LIABILITIES                                                                          |   |         | 958,666 |   |             |   | 1,009,381 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| COMMITMENTS AND CONTINGENT LIABILITIES                                                                                                     |   |         | -       |   |             |   | - |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                             |   |
| Preferred stock: no par value, 100,000 shares authorized: 25,083 shares issued and outstanding at June 30, 2012 and December 31, 2011 |   |         | 25,031  |   |             |   | 25,016 |   |
| Common stock: $5 par value, 7,000,000 shares authorized: 4,478,295 shares issued at June 30, 2012 and December 31, 2011               |   |         | 22,391  |   |             |   | 22,391 |   |
| Common stock warrants                                                                                                                      |   |         | 150     |   |             |   | 150 |   |
| Surplus                                                                                                                                    |   |         | 17,991  |   |             |   | 18,126 |   |
| Accumulated deficit                                                                                                                        |   |         | (47,924 | )      |             |   | (42,791 | ) |
| Accumulated other comprehensive income, net of tax                                                                                         |   |         | 984     |   |             |   | 5,378 |   |
| Less: cost of 1,125,770 and 1,137,266 treasury shares at June 30, 2012 and December 31, 2011                                               |   |         | (23,139 | )      |             |   | (23,335 | ) |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                       |   |         | (4,516  | )      |             |   | 4,935 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |
|         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                       |   | $            | 954,150 |   |             | $      | 1,014,316 |   |
|                                                                                                                                       |   |         |    |   |             |   |   |   |

----

|   (dollars in thousands except share data)                                                    |   | THREE MONTHSENDEDJune 30, 2012 |      |   | THREE MONTHSENDEDJune 30, 2011 |   |      | SIX MONTHSENDEDJune 30, 2012 |   |   | SIX MONTHSENDEDJune 30, 2011 |   |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|--------|--------------------------------|--------|-----------|------------------------------|--------|--------|------------------------------|--------|
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |
| Interest Income:                                                                                   |   |                           |      |   |                           |   |      |                         |   |   |                         |   |
|     Interest and fees on loans                                                 |   | $                              | 6,299     |   |                           | $      | 8,186     |                         |   | $      | 13,120                       |   |   | $ | 17,045 |   |
|     Interest and dividends on investment securities:                           |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
|         Taxable                                            |   |                           | 1,357     |   |                           |   | 1,591     |                         |   |   | 2,892                        |   |   |   | 3,107 |   |
|         Tax-exempt                                         |   |                           | 477       |   |                           |   | 763       |                         |   |   | 1,028                        |   |   |   | 1,661 |   |
|     Interest on interest-bearing deposits in other banks                       |   |                           | 48        |   |                           |   | 34        |                         |   |   | 95                           |   |   |   | 56 |   |
|             Total interest income      |   |                           | 8,181     |   |                           |   | 10,574    |                         |   |   | 17,135                       |   |   |   | 21,869 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Interest Expense:                                                                                  |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
|     Interest on deposits                                                       |   |                           | 914       |   |                           |   | 1,634     |                         |   |   | 1,932                        |   |   |   | 3,372 |   |
|     Interest on borrowings                                                     |   |                           | 208       |   |                           |   | 184       |                         |   |   | 424                          |   |   |   | 384 |   |
|             Total interest expense     |   |                           | 1,122     |   |                           |   | 1,818     |                         |   |   | 2,356                        |   |   |   | 3,756 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Net interest income                                                                                |   |                           | 7,059     |   |                           |   | 8,756     |                         |   |   | 14,779                       |   |   |   | 18,113 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Provision for loan losses                                                                          |   |                           | 10,025    |   |                           |   | 8,050     |                         |   |   | 10,100                       |   |   |   | 9,925 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Net interest income after provision  for loan losses                                     |   |                           | (2,966    | )      |                           |   | 706       |                         |   |   | 4,679                        |   |   |   | 8,188 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Non-interest income:                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
|     Trust and farm management fees                                             |   |                           | 316       |   |                           |   | 269       |                         |   |   | 606                          |   |   |   | 559 |   |
|     Service charges on deposit accounts                                        |   |                           | 966       |   |                           |   | 1,002     |                         |   |   | 1,936                        |   |   |   | 1,945 |   |
|     Other service charges                                                      |   |                           | 395       |   |                           |   | 421       |                         |   |   | 882                          |   |   |   | 826 |   |
|     Gains on sales of securities available-for-sale                            |   |                           | 5,098     |   |                           |   | 1,598     |                         |   |   | 5,652                        |   |   |   | 2,682 |   |
|     Brokerage fee income                                                       |   |                           | 167       |   |                           |   | 207       |                         |   |   | 321                          |   |   |   | 346 |   |
|     Mortgage banking income, net                                               |   |                           | 74        |   |                           |   | 288       |                         |   |   | 441                          |   |   |   | 740 |   |
|     Bank-owned life insurance income                                           |   |                           | 221       |   |                           |   | 225       |                         |   |   | 441                          |   |   |   | 446 |   |
|     Other operating income                                                     |   |                           | 1,112     |   |                           |   | 17        |                         |   |   | 1,213                        |   |   |   | 83 |   |
|             Total non-interest income  |   |                           | 8,349     |   |                           |   | 4,027     |                         |   |   | 11,492                       |   |   |   | 7,627 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Non-interest expense:                                                                              |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
|     Salaries and employee benefits                                             |   |                           | 4,373     |   |                           |   | 4,529     |                         |   |   | 9,147                        |   |   |   | 9,145 |   |
|     Occupancy                                                                  |   |                           | 645       |   |                           |   | 623       |                         |   |   | 1,297                        |   |   |   | 1,312 |   |
|     Equipment expense                                                          |   |                           | 788       |   |                           |   | 781       |                         |   |   | 1,551                        |   |   |   | 1,562 |   |
|     Federal insurance assessments                                              |   |                           | 1,056     |   |                           |   | 447       |                         |   |   | 1,972                        |   |   |   | 1,087 |   |
|     Intangible assets amortization                                             |   |                           | 141       |   |                           |   | 175       |                         |   |   | 281                          |   |   |   | 369 |   |
|     Data processing                                                            |   |                           | 417       |   |                           |   | 349       |                         |   |   | 789                          |   |   |   | 715 |   |
|     Marketing                                                                  |   |                           | 122       |   |                           |   | 139       |                         |   |   | 298                          |   |   |   | 294 |   |
|     Other real estate expense, net                                             |   |                           | 1,282     |   |                           |   | 1,433     |                         |   |   | 935                          |   |   |   | 2,015 |   |
|     Loan collection expenses                                                   |   |                           | 1,265     |   |                           |   | 371       |                         |   |   | 2,175                        |   |   |   | 534 |   |
|     Other operating expense                                                    |   |                           | 1,419     |   |                           |   | 1,386     |                         |   |   | 2,791                        |   |   |   | 2,635 |   |
|             Total non-interest expense |   |                           | 11,508    |   |                           |   | 10,233    |                         |   |   | 21,236                       |   |   |   | 19,668 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Loss before income taxes                                                                           |   |                           | (6,125    | )      |                           |   | (5,500    | )                            |   |   | (5,065                       | )      |   |   | (3,853 | ) |
| Income tax expense (benefit)                                                                       |   |                           | 0         |   |                           |   | (2,575    | )                            |   |   | 53                           |   |   |   | (2,663 | ) |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Net loss                                                                                           |   |                           | (6,125    | )      |                           |   | (2,925    | )                            |   |   | (5,118                       | )      |   |   | (1,190 | ) |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Dividends in arrears on preferred shares                                                           |   |                           | 314       |   |                           |   | 0         |                         |   |   | 627                          |   |   |   | 0 |   |
| Accretion of preferred stock discount                                                              |   |                           | 7         |   |                           |   | 7         |                         |   |   | 15                           |   |   |   | 15 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Net loss available to common stockholders                                                          |   | $                              | (6,446    | )      |                           | $      | (2,932    | )                            |   | $      | (5,760                       | )      |   | $ | (1,205 | ) |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Loss per share available to common stockholders:                                                   |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
|     Basic net loss per common share available to common stockholders           |   | $                              | (1.92     | )      |                           | $      | (0.88     | )                            |   | $      | (1.72                        | )      |   | $ | (0.36 | ) |
|     Diluted net loss per common share available to common stockholders         |   | $                              | (1.92     | )      |                           | $      | (0.88     | )                            |   | $      | (1.72                        | )      |   | $ | (0.36 | ) |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |
| Basic weighted average shares outstanding                                                          |   |                           | 3,354,896 |   |                           |   | 3,328,035 |                         |   |   | 3,352,167                    |   |   |   | 3,327,005 |   |
| Diluted weighted average shares outstanding                                                        |   |                           | 3,354,896 |   |                           |   | 3,328,035 |                         |   |   | 3,352,167                    |   |   |   | 3,327,005 |   |
|                                                                                               |   |                           |      |   |                           |   |      |                         |   |   |                         |   |   |   |   |   |

----

|   (dollars in thousands)                                                                                     |   | THREE MONTHSENDEDJune 30, 2012 |    |   | THREE MONTHSENDEDJune 30, 2011 |   |   | SIX MONTHSENDEDJune 30, 2012 |   |   | SIX MONTHSENDEDJune 30, 2011 |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|--------|------------------------------|--------|--------|------------------------------|--------|
|                                                                                                              |   |                           |    |   |                           |   |   |                         |   |   |                         |   |
|                                                                                                              |   |                           |    |   |                           |   |   |                         |   |   |                         |   |
| Net Loss                                                                                                          |   | $                              | (6,125  | )      |                           | $      | (2,925 | )                            |   | $      | (5,118                       | )      |   | $ | (1,190 | ) |
|                                                                                                              |   |                           |    |   |                           |   |   |                         |   |   |                         |   |   |   |   |   |
| Other Comprehensive Income (Loss)                                                                                 |   |                           |    |   |                           |   |   |                         |   |   |                         |   |   |   |   |   |
|     Net unrealized gains on securities available for sale                                     |   | $                              | 949     |   |                           | $      | 2,039  |                         |   | $      | 1,258                        |   |   | $ | 1,541 |   |
|         Reclassification adjustment for realized gains included in income |   |                           | (5,098  | )      |                           |   | (1,598 | )                            |   |   | (5,652                       | )      |   |   | (2,682 | ) |
|         Post Retirement Obligation                                        |   |                           | (116    | )      |                           |   | -      |                         |   |   | (116                         | )      |   |   |   |   |
|     Other comprehensive income (loss), before tax effect                                      |   |                           | (4,265  | )      |                           |   | 441    |                         |   |   | (4,510                       | )      |   |   | (1,141 | ) |
|         Tax expense (benefit)                                             |   |                           | (116    | )      |                           |   | 171    |                         |   |   | (116                         | )      |   |   | (442 | ) |
|     Other comprehensive income (loss)                                                         |   |                           | (4,149  | )      |                           |   | 270    |                         |   |   | (4,394                       | )      |   |   | (699 | ) |
|                                                                                                              |   |                           |    |   |                           |   |   |                         |   |   |                         |   |   |   |   |   |
| Comprehensive Loss                                                                                                |   | $                              | (10,274 | )      |                           | $      | (2,655 | )                            |   | $      | (9,512                       | )      |   | $ | (1,889 | ) |
|                                                                                                              |   |                           |    |   |                           |   |   |                         |   |   |                         |   |   |   |   |   |
| See accompanying notes to unaudited condensed consolidated financial statements.                                  |   |                           |    |   |                           |   |   |                         |   |   |                         |   |   |

----

| (dollars in thousands except share data)For the Six Months EndedJune 30, 2012    |   | PreferredStock |   |   | CommonStock |   |   | CommonStockWarrants |   |   | Surplus |   |   | RetainedEarnings(AccumulatedDeficit) |   |   | AccumulatedOtherComprehensiveIncome,net of tax effect |   |    | TreasuryStock |   |   | Total  |   |
|----------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------|--------|--------|---------------------|--------|--------|---------|--------|--------|--------------------------------------|--------|--------|-------------------------------------------------------|--------|---------|---------------|--------|--------|--------|--------|
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |
| Balance, January 1, 2012                                                         |   | $              | 25,016 |   |        | $      | 22,391 |                |   | $      | 150     |   |   | $                                    | 18,126 |   |                                                  | $      | (42,791 | )             |   | $      | 5,378  |   |   | $ | (23,335 | ) |   | $ | 4,935 |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   | (5,118  | )             |   |   |   |   |   |   |   |   |   |   | (5,118 | ) |
| Accretion on preferred stock discount                                            |   |           | 15     |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   | (15     | )             |   |   |   |   |   |   |   |   |   |   | 0 |   |
| Sale of 2,496 shares of treasury common stock                                    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 | (35    | )      |                                                  |   |    |          |   |   |   |   |   |   | 43 |   |   |   | 8 |   |
| Award of 12,500 shares of nonvested common stock out of treasury common stock    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 | (195   | )      |                                                  |   |    |          |   |   |   |   |   |   | 214 |   |   |   | 19 |   |
| Forfeiture of 3,500 shares of common stock out of treasury common stock          |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 | 55     |   |                                                  |   |    |          |   |   |   |   |   |   | (61 | ) |   |   | (6 | ) |
| Amortization of unearned compensation expense                                    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss                                                         |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   | (4,394 | )      |   |   |   |   |   |   | (4,394 | ) |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, June 30, 2012                                                           |   | $              | 25,031 |   |        | $      | 22,391 |                |   | $      | 150     |   |   | $                                    | 17,991 |   |                                                  | $      | (47,924 | )             |   | $      | 984    |   |   | $ | (23,139 | ) |   | $ | (4,516 | ) |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| For the Six Months Ended                                                         |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2011                                                                    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2011                                                         |   | $              | 24,986 |   |        | $      | 22,391 |                |   | $      | 150     |   |   | $                                    | 18,275 |   |                                                  | $      | 11,589  |          |   | $      | 3,064  |   |   | $ | (23,594 | ) |   | $ | 56,861 |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   | (1,190  | )             |   |   |   |   |   |   |   |   |   |   | (1,190 | ) |
| Accretion on preferred stock discount                                            |   |           | 15     |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   | (15     | )             |   |   |   |   |   |   |   |   |   |   | 0 |   |
| Sale of 4,097 shares of treasury common stock                                    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 | (49    | )      |                                                  |   |    |          |   |   |   |   |   |   | 70 |   |   |   | 21 |   |
| Amortization of unearned compensation expense                                    |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss                                                         |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   | (699   | )      |   |   |   |   |   |   | (699 | ) |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, June 30, 2011                                                           |   | $              | 25,001 |   |        | $      | 22,391 |                |   | $      | 150     |   |   | $                                    | 18,259 |   |                                                  | $      | 10,384  |          |   | $      | 2,365  |   |   | $ | (23,524 | ) |   | $ | 55,026 |   |
|                                                                             |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited condensed consolidated financial statements. |   |           |   |   |        |   |   |                |   |   |    |   |   |                                 |   |   |                                                  |   |    |          |   |

----

| (dollars in thousands)                                                                   |      |   | SIX MONTHSENDEDJune 30, 2012 |    |   | SIX MONTHSENDEDJune 30, 2011 |   |
|------------------------------------------------------------------------------------------|-----------|--------|------------------------------|---------|--------|------------------------------|--------|
| Operating activities:                                                                    |      |   |                         |    |   |                         |   |
| Net loss                                                                                 |      |   | $                            | (5,118  | )      |                         | $      | (1,190 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |      |   |                         |    |   |
| Depreciation                                                                             |      |   |                         | 878     |   |                         |   | 966 |   |
| Provision for loan losses                                                                |      |   |                         | 10,100  |   |                         |   | 9,925 |   |
| Deferred income tax benefit                                                              |      |   |                         | 0       |   |                         |   | (2,503 | ) |
| Amortization of intangible assets and other purchase accounting adjustments, net         |      |   | 274                          |    |   |                         | 368    |   |
| Amortization of premiums and discounts on investment securities, net                     |      |   | 1,958                        |    |   |                         | 767    |   |
| Gains on sales of securities available-for-sale, net                                     |      |   |                         | (5,652  | )      |                         |   | (2,682 | ) |
| Gain on sale of land held-for-sale                                                       |      |   |                         | (75     | )      |                         |   | 0 |   |
| Compensation expense for vested stock options                                            |      |   |                         | 40      |   |                         |   | 33 |   |
| Forfeiture of stock options                                                              |      |   |                         | (6      | )      |                         |   | 0 |   |
| Sales of treasury stock                                                                  |      |   |                         | 8       |   |                         |   | 21 |   |
| Loss on sales of other real estate owned, net                                            |      |   |                         | 72      |   |                         |   | 1,069 |   |
| Loans originated for sale                                                                |      |   |                         | (31,545 | )      |                         |   | (27,245 | ) |
| Proceeds from sales of loans originated for sale                                         |      |   |                         | 31,429  |   |                         |   | 30,145 |   |
| Increase in accrued interest payable                                                     |      |   |                         | 569     |   |                         |   | 140 |   |
| Decrease in accrued interest receivable                                                  |      |   |                         | 2,653   |   |                         |   | 1,366 |   |
| Decrease in other assets                                                                 |      |   |                         | 763     |   |                         |   | 595 |   |
| Increase (decrease) in other liabilities                                                 |      |   |                         | (2,068  | )      |                         |   | 803 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Net cash provided by operating activities                                                |      |   |                         | 4,280   |   |                         |   | 12,578 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Investing activities:                                                                    |      |   |                         |    |   |                         |   |   |   |
| Proceeds from sales of investment securities available-for-sale                          |      |   |                         | 83,670  |   |                         |   | 83,036 |   |
| Proceeds from maturities of investment securities available-for-sale                     |      |   | 24,703                       |    |   |                         | 10,622 |   |
| Purchase of investment securities available-for-sale                                     |      |   |                         | (71,466 | )      |                         |   | (78,445 | ) |
| Proceeds from maturities of investment securities held-to-maturity                       |      |   | 2,059                        |    |   |                         | 1,267  |   |
| Proceeds from sale of land held-for-sale                                                 |      |   |                         | 155     |   |                         |   | 0 |   |
| Proceeds from sales of other real estate owned                                           |      |   |                         | 14,473  |   |                         |   | 3,245 |   |
| Proceeds from sale of Federal Reserve stock                                              |      |   |                         | 1,221   |   |                         |   | 0 |   |
| Net decrease in loans                                                                    |      |   |                         | 68,493  |   |                         |   | 23,895 |   |
| Purchases of premises and equipment                                                      |      |   |                         | (457    | )      |                         |   | (277 | ) |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Net cash provided by investing activities                                                |      |   |                         | 122,851 |   |                         |   | 43,343 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Financing activities:                                                                    |      |   |                         |    |   |                         |   |   |   |
| Net decrease in deposits                                                                 |      |   |                         | (40,124 | )      |                         |   | (23,546 | ) |
| Net decrease in short-term borrowings                                                    |      |   |                         | (9,092  | )      |                         |   | (2,272 | ) |
| Award of nonvested stock from treasury stock                                             |      |   |                         | 19      |   |                         |   | 0 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Net cash used in financing activities                                                    |      |   |                         | (49,197 | )      |                         |   | (25,818 | ) |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Increase in cash and cash equivalents                                                    |      |   |                         | 77,934  |   |                         |   | 30,103 |   |
| Cash and cash equivalents at beginning of period                                         |      |   |                         | 63,295  |   |                         |   | 43,880 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Cash and cash equivalents at end of period                                               |      |   | $                            | 141,229 |   |                         | $      | 73,983 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Supplemental disclosure of cash flow information:                                        |      |   |                         |    |   |                         |   |   |   |
| Cash paid during the period for:                                                         |      |   |                         |    |   |                         |   |   |   |
| Interest                                                                                 |      |   | $                            | 1,786   |   |                         | $      | 3,616 |   |
| Income taxes                                                                             |      |   | $                            | 16      |   |                         | $      | 896 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Supplemental disclosures of non-cash flow activities:                                    |      |   |                         |    |   |                         |   |   |   |
| Loans transferred to other real estate owned                                             |      |   | $                            | 13,838  |   |                         | $      | 1,970 |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| See accompanying notes to unaudited condensed consolidated financial statements.         |      |   |                         |    |   |
|                                                                                     |      |   |                         |    |   |                         |   |   |   |
| Interest expense                                                                         | 3,756,009 |   |                         |    |   |                         |   |   |   |
| less accrued interest payable 6/30/11                                                    | 1,475,021 |   |                         |    |   |                         |   |   |   |
| Cash paid during the period for interest                                                 | 3,616,003 |   |                         |    |   |                         |   |   |   |

----

----

|   (in thousands, except share data)                  |   | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |   |
|-----------------------------------------------------------|--------|----------------------------|-----------|--------|--------------------------|--------|
|                                                      |   | 2012                       |      |   | 2011                     |   |   | 2012 |   |   | 2011 |   |
|                                                      |   |                       |      |   |                     |   |   |   |   |   |   |   |
| Numerator:                                                |   |                       |      |   |                     |   |   |   |   |   |   |   |
| Net loss available to common stockholders                 |   | $                          | (6,446)   |   |                     | $      | (2,932) |   |   | $ | (5,760) |   |   | $ | (1,2050 |   |
|                                                      |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                              |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share - weighted average common shares |   |                       | 3,354,896 |   |                     |   | 3,328,035 |   |   |   | 3,352,167 |   |   |   | 3,327,005 |   |
|                                                      |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share available to common stockholders:      |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   | $                          | (1.92)    |   |                     | $      | (0.88) |   |   | $ | (1.72) |   |   | $ | (0.36) |   |
| Diluted                                                   |   | $                          | (1.92)    |   |                     | $      | (0.88) |   |   | $ | (1.72) |   |   | $ | (0.36) |   |

|                                                                           |   | Three Months EndedJune 30, |    |   | Six Months EndedJune 30, |   |
|--------------------------------------------------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                                                                           |   | 2012                       |    |   | 2011                     |   |   | 2012 |   |   | 2011 |   |
| Stock options to purchase shares of common stock                               |   |                       | 360,308 |   |                     |   | 555,277 |   |   |   | 360,308 |   |   |   | 555,277 |   |
|                                                                           |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Average dilutive potential common shares associated with common stock warrants |   |                       | 155,025 |   |                     |   | 155,025 |   |   |   | 155,025 |   |   |   | 155,025 |   |

----

| (in thousands)          |   | June 30, 2012        |   |   | December 31, 2011       |   |
|-------------------------|--------|----------------------|--------|--------|-------------------------|--------|
|                    |   | Gross CarryingAmount |   |   | AccumulatedAmortization |   |   | Gross CarryingAmount |   |   | AccumulatedAmortization |   |
|                    |   |                 |   |   |                    |   |   |   |   |   |   |   |
| Core deposit intangible |   | $                    | 9,004  |   |                    | $      | (7,437 | ) |   | $ | 9,004 |   |   | $ | (7,168 | ) |
| Other acquisition costs |   |                 | 234    |   |                    |   | (198 | ) |   |   | 234 |   |   |   | (193 | ) |
| Total                   |   | $                    | 9,238  |   |                    | $      | (7,635 | ) |   | $ | 9,238 |   |   | $ | (7,361 | ) |

| (in thousands)                   |   |   |   |
|----------------------------------|--------|--------|--------|
|                             |   |   |   |
| Balance, January 1, 2012         |   | $      | 2,437  |   |
| Servicing rights capitalized     |   |   | 206    |   |
| Amortization of servicing rights |   |   | (302   | ) |
| Valuation adjustment             |   |   | (195   | ) |
| Balance, June 30, 2012           |   | $      | 2,146  |   |

| (in thousands)           |   |   |   |
|--------------------------|--------|--------|--------|
|                     |   |   |   |
| Balance, January 1, 2012 |   | $      | 1,312  |   |
| Additions                |   |   | 195    |   |
| Reductions               |   |   | -      |   |
|                     |   |   |   |   |
| Balance, June 30, 2012   |   | $      | 1,507  |   |

----

|                                       |   | Amount (in thousands) |   |
|--------------------------------------------|--------|-----------------------|--------|
| For the six months ended December 31, 2012 |   | $                     | 142    |   |
| For the year ending December 31, 2013      |   |                  | 267    |   |
| For the year ending December 31, 2014      |   |                  | 251    |   |
| For the year ending December 31, 2015      |   |                  | 235    |   |
| For the year ending December 31, 2016      |   |                  | 221    |   |
| For the year ending December 31, 2017      |   |                  | 207    |   |
| Thereafter                                 |   |                  | 823    |   |

| (in thousands)                                                    |   | 2012   |   |   | 2011   |   |
|-------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net unrealized gains on securities available-for-sale             |   | $      | 1,258  |   |   | $      | 1,541 |   |
| Reclassification adjustment for realized gains included in income |   |   | (5,652 | )      |   |   | (2,682 | ) |
|                                                              |   |   |   |   |   |   |   |   |
| Post retirement benefit obligation                                |   |   | (116   | )      |   |   | - |   |
| Other comprehensive income (loss), before tax effect              |   |   | (4,510 | )      |   |   | (1,141 | ) |
| Tax expense (benefit)                                             |   |   | (116   | )      |   |   | (442 | ) |
| Other comprehensive income (loss)                                 |   | $      | (4,394 | )      |   | $      | (699 | ) |

| (in thousands)                                        |   | 2012   |   |   | 2011   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net unrealized gains on securities available-for-sale |   | $      | 4,915  |   |   | $      | 4,391 |   |
| Net unrealized benefit obligations                    |   |   | (646   | )      |   |   | (530 | ) |
|                                                  |   |   | 4,269  |   |   |   | 3,861 |   |
| Deferred tax valuation allowance                      |   |   | (1,652 | )      |   |   | - |   |
| Tax effect                                            |   |   | (1,633 | )      |   |   | (1,496 | ) |
| Net-of-tax amount                                     |   | $      | 984    |   |   | $      | 2,365 |   |

----

|   (in thousands)                                                                        |   | AmortizedCost |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|----------------------------------------------------------------------------------------------|--------|---------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
| Available-for-sale:                                                                          |   |          |    |   |                 |   |   |                  |   |   |      |   |
| United States Government and federal agency and U.S. Government sponsored enterprises (GSEs) |   | $             | 65,058  |   |                 | $      | 1,117  |                  |   | $      | (2        | )      |   | $ | 66,173 |   |
| State and Municipal                                                                          |   |          | 48,669  |   |                 |   | 2,814  |                  |   |   | (21       | )      |   |   | 51,462 |   |
| Collateralized mortgage obligations: GSE residential                                         |   |          | 94,039  |   |                 |   | 1,198  |                  |   |   | (191      | )      |   |   | 95,046 |   |
| Mutual funds                                                                                 |   |          | 3,200   |   |                 |   | -      |                  |   |   | -         |   |   |   | 3,200 |   |
| Total                                                                                        |   |          | 210,966 |   |                 |   | 5,129  |                  |   |   | (214      | )      |   |   | 215,881 |   |
| Held-to-maturity:                                                                            |   |          |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| State and Municipal                                                                          |   |          | 7,643   |   |                 |   | 97     |                  |   |   | (6        | )      |   |   | 7,734 |   |
| Total                                                                                        |   | $             | 218,609 |   |                 | $      | 5,226  |                  |   | $      | (220      | )      |   | $ | 223,615 |   |

| (in thousands)                                                                |   | AmortizedCost |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|----------------------------------------------------------------------------------------------|--------|---------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
| Available-for-sale:                                                                          |   |          |    |   |                 |   |   |                  |   |   |      |   |
| United States Government and federal agency and U.S. Government sponsored enterprises (GSEs) |   | $             | 76,694  |   |                 | $      | 1,374  |                  |   | $      | (46       | )      |   | $ | 78,022 |   |
| State and Municipal                                                                          |   |          | 89,264  |   |                 |   | 6,274  |                  |   |   | (55       | )      |   |   | 95,483 |   |
| Collateralized mortgage obligations: GSE residential                                         |   |          | 76,480  |   |                 |   | 1,796  |                  |   |   | (34       | )      |   |   | 78,242 |   |
| Total                                                                                        |   |          | 242,438 |   |                 |   | 9,444  |                  |   |   | (135      | )      |   |   | 251,747 |   |
| Held-to-maturity:                                                                            |   |          |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| State and Municipal                                                                          |   |          | 9,836   |   |                 |   | 114    |                  |   |   | (8        | )      |   |   | 9,942 |   |
| Total                                                                                        |   | $             | 252,274 |   |                 | $      | 9,558  |                  |   | $      | (143      | )      |   | $ | 261,689 |   |

----

|                                                                                      |   | June 30, 2012       |   |
|-------------------------------------------------------------------------------------------|--------|---------------------|--------|
| (in thousands)                                                                            |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total |   |
|                                                                                 |   | FairValue           |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
| United States government and federal agency and U.S. government-sponsored entities (GSEs) |   | $                   | 2,927  |   |   | $ | (2 | ) |   | $ | - |   |   | $ | - |   |   | $ | 2,927 |   |   | $ | (2 | ) |
| State and municipal                                                                       |   |                | 490    |   |   |   | (5 | ) |   |   | 711 |   |   |   | (22 | ) |   |   | 1,201 |   |   |   | (27 | ) |
| Collateralized mortgage obligations: GSE residential                                      |   |                | 22,367 |   |   |   | (191 | ) |   |   | - |   |   |   | - |   |   |   | 22,367 |   |   |   | (191 | ) |
| Mutual funds                                                                              |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Temporarily impaired securities                                                           |   | $                   | 25,784 |   |   | $ | (198 | ) |   | $ | 711 |   |   | $ | (22 | ) |   | $ | 26,495 |   |   | $ | (220 | ) |

|                                                                                      |   | December 31, 2011   |   |
|-------------------------------------------------------------------------------------------|--------|---------------------|--------|
| (in thousands)                                                                            |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total |   |
|                                                                                 |   | FairValue           |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
| United States government and federal agency and U.S. government-sponsored entities (GSEs) |   | $                   | 4,932  |   |   | $ | (46 | ) |   | $ | 0 |   |   | $ | 0 |   |   | $ | 4,932 |   |   | $ | (46 | ) |
| State and municipal                                                                       |   |                | 505    |   |   |   | (8 | ) |   |   | 1,597 |   |   |   | (55 | ) |   |   | 2,102 |   |   |   | (63 | ) |
| Collateralized mortgage obligations: GSE residential                                      |   |                | 6,083  |   |   |   | (34 | ) |   |   | 0 |   |   |   | 0 |   |   |   | 6,083 |   |   |   | (34 | ) |
| Temporarily impaired securities                                                           |   | $                   | 11,520 |   |   | $ | (88 | ) |   | $ | 1,597 |   |   | $ | (55 | ) |   | $ | 13,117 |   |   | $ | (143 | ) |

| (in thousands)                         |   | Adjusted Carrying Value |    |   | Fair Value |   |
|----------------------------------------|--------|-------------------------|---------|--------|------------|--------|
| Available-for-sale:                    |   |                    |    |   |       |   |
| Due in one year or less                |   | $                       | 855     |   |       | $      | 867 |   |
| Due after one year through five years  |   |                    | 21,639  |   |       |   | 22,476 |   |
| Due after five years through ten years |   |                    | 29,268  |   |       |   | 30,870 |   |
| Due after ten years                    |   |                    | 10,517  |   |       |   | 11,005 |   |
|                                   |   |                    | 62,279  |   |       |   | 65,218 |   |
| Mortgage-backed securities             |   |                    | 51,448  |   |       |   | 52,417 |   |
| Collateralized mortgage obligations    |   |                    | 94,039  |   |       |   | 95,046 |   |
| Mutual funds                           |   |                    | 3,200   |   |       |   | 3,200 |   |
|                                   |   | $                       | 210,966 |   |       | $      | 215,881 |   |
|                                   |   |                    |    |   |       |   |   |   |
| Held-to-maturity:                      |   |                    |    |   |       |   |   |   |
| Due in one year or less                |   | $                       | 2,656   |   |       | $      | 2,670 |   |
| Due after one year through five years  |   |                    | 3,231   |   |       |   | 3,293 |   |
| Due after five years through ten years |   |                    | 1,756   |   |       |   | 1,771 |   |
| Due after ten years                    |   |                    | -       |   |       |   | - |   |
|                                   |   | $                       | 7,643   |   |       | $      | 7,734 |   |

----

|                               |   | June 30,2012 |    |   | December 31,2011 |   |
|------------------------------------|--------|--------------|---------|--------|------------------|--------|
|                               |   |         |    |   |             |   |
| Commercial                         |   | $            | 50,914  |   |             | $      | 62,609 |   |
|                               |   |         |    |   |             |   |   |   |
| Agricultural                       |   |         | 22,392  |   |             |   | 61,251 |   |
|                               |   |         |    |   |             |   |   |   |
| Agricultural Real Estate           |   |         | 53,328  |   |             |   | 60,523 |   |
| Commercial Real Estate             |   |         | 230,902 |   |             |   | 235,103 |   |
| Commercial Real Estate Development |   |         | 30,124  |   |             |   | 58,279 |   |
| Residential Real Estate            |   |         | 91,793  |   |             |   | 97,172 |   |
|                               |   |         |    |   |             |   |   |   |
| Total real estate                  |   |         | 406,147 |   |             |   | 451,077 |   |
|                               |   |         |    |   |             |   |   |   |
| Consumer                           |   |         | 41,196  |   |             |   | 46,084 |   |
|                               |   |         |    |   |             |   |   |   |
| Total                              |   | $            | 520,649 |   |             | $      | 621,021 |   |

----

----

----

|                                                  |   | Commercial |   |   | Agricultural |   |   | AgriculturalReal Estate |   |   | CommercialReal Estate |   |   | CommercialReal EstateDevelopment |    |   | ResidentialReal Estate |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|-------------------------------------------------------|--------|------------|--------|--------|--------------|--------|--------|-------------------------|--------|--------|-----------------------|--------|--------|----------------------------------|---------|--------|------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| Allowance for Loan Losses                             |   |       |   |   |         |   |   |                    |   |   |                  |   |   |                             |    |   |                   |   |   |     |   |   |        |   |   |   |   |
| Balance, beginning of year                            |   | $          | 5,240  |   |         | $      | 55     |                    |   | $      | 548                   |   |   | $                                | 11,606  |   |                   | $      | 8,771  |     |   | $      | 2,855       |   |   | $      | 1,338  |   |   | $ | - |   |   | $ | 30,413 |   |
| Provision charged to expense                          |   |       | 225    |   |         |   | (39    | )                       |   |   | 920                   |   |   |                             | (60     | )      |                   |   | 7,362  |     |   |   | 1,173       |   |   |   | 510    |   |   |   | 9 |   |   |   | 10,100 |   |
| Less: loans charged off                               |   |       | 1,544  |   |         |   | -      |                    |   |   | 911                   |   |   |                             | 1,956   |   |                   |   | 13,474 |     |   |   | 1,194       |   |   |   | 667    |   |   |   | - |   |   |   | 19,746 |   |
| Recoveries                                            |   |       | 120    |   |         |   | -      |                    |   |   | -                     |   |   |                             | 342     |   |                   |   | 1,114  |     |   |   | 35          |   |   |   | 94     |   |   |   | - |   |   |   | 1,705 |   |
| Balance, end of period                                |   | $          | 4,041  |   |         | $      | 16     |                    |   | $      | 557                   |   |   | $                                | 9,932   |   |                   | $      | 3,773  |     |   | $      | 2,869       |   |   | $      | 1,275  |   |   | $ | 9 |   |   | $ | 22,472 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 1,290  |   |         | $      | -      |                    |   | $      | 173                   |   |   | $                                | 2,004   |   |                   | $      | 1,512  |     |   | $      | 1,727       |   |   | $      | 187    |   |   | $ | 0 |   |   | $ | 6,892 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 2,751  |   |         | $      | 16     |                    |   | $      | 384                   |   |   | $                                | 7,928   |   |                   | $      | 2,261  |     |   | $      | 1,142       |   |   | $      | 1,088  |   |   | $ | 9 |   |   | $ | 15,580 |   |
| Loans                                                 |   |       |   |   |         |   |   |                    |   |   |                  |   |   |                             |    |   |                   |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                        |   | $          | 50,914 |   |         | $      | 22,392 |                    |   | $      | 53,328                |   |   |                             | 230,837 |   |                   | $      | 30,124 |     |   | $      | 94,129      |   |   | $      | 41,196 |   |   | $ | - |   |   | $ | 520,649 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 4,413  |   |         | $      | -      |                    |   | $      | 3,545                 |   |   | $                                | 33,590  |   |                   | $      | 20,393 |     |   | $      | 9,547       |   |   | $      | 1,067  |   |   | $ | - |   |   | $ | 72,555 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 46,501 |   |         | $      | 22,392 |                    |   | $      | 49,783                |   |   | $                                | 197,247 |   |                   | $      | 9,731  |     |   | $      | 84,582      |   |   | $      | 40,129 |   |   | $ | - |   |   | $ | 448,094 |   |

|                         |   | Commercial |   |   | Agricultural |   |   | AgriculturalReal Estate |   |   | CommercialReal Estate |   |   | Real EstateDevelopment |   |   | Commercial Residential Real Estate |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|------------------------------|--------|------------|--------|--------|--------------|--------|--------|-------------------------|--------|--------|-----------------------|--------|--------|------------------------|--------|--------|------------------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| Allowance for Loan Losses    |   |       |   |   |         |   |   |                    |   |   |                  |   |   |                   |   |   |                               |   |   |     |   |   |        |   |   |   |   |
| Balance, beginning of year   |   | $          | 5,055  |   |         | $      | 28     |                    |   | $      | 284                   |   |   | $                      | 10,189 |   |                               | $      | 10,297 |     |   | $      | 2,555       |   |   | $      | 1,316  |   |   | $ | 16 |   |   | $ | 29,740 |   |
| Provision charged to expense |   |       | 268    |   |         |   | (12    | )                       |   |   | 1,184                 |   |   |                   | 713    |   |                               |   | 6,781  |     |   |   | 753         |   |   |   | 346    |   |   |   | (7 | ) |   |   | 10,026 |   |
| Less: loans charged off      |   |       | 1,303  |   |         |   | -      |                    |   |   | 911                   |   |   |                   | 1,292  |   |                               |   | 13,455 |     |   |   | 457         |   |   |   | 445    |   |   |   | - |   |   |   | 17,863 |   |
| Recoveries                   |   |       | 21     |   |         |   | -      |                    |   |   | -                     |   |   |                   | 322    |   |                               |   | 150    |     |   |   | 18          |   |   |   | 58     |   |   |   | - |   |   |   | 569 |   |
| Balance, end of period       |   | $          | 4,041  |   |         | $      | 16     |                    |   | $      | 557                   |   |   | $                      | 9,932  |   |                               | $      | 3,773  |     |   | $      | 2,869       |   |   | $      | 1,275  |   |   | $ | 9 |   |   | $ | 22,472 |   |

|                                                  |   | Commercial |   |   | Agricultural |   |   | AgriculturalReal Estate |   |   | CommercialReal Estate |   |   | CommercialReal EstateDevelopment |    |   | ResidentialReal Estate |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|-------------------------------------------------------|--------|------------|--------|--------|--------------|--------|--------|-------------------------|--------|--------|-----------------------|--------|--------|----------------------------------|---------|--------|------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| Allowance for Loan Losses                             |   |       |   |   |         |   |   |                    |   |   |                  |   |   |                             |    |   |                   |   |   |     |   |   |        |   |   |   |   |
| Balance, beginning of year                            |   | $          | 4,435  |   |         | $      | 99     |                    |   | $      | 107                   |   |   | $                                | 6,029   |   |                   | $      | 15,526 |     |   | $      | 1,897       |   |   | $      | 1,595  |   |   | $ | 38 |   |   | $ | 29,726 |   |
| Provision charged to expense                          |   |       | 4,494  |   |         |   | (35    | )                       |   |   | (2,675                | )      |   |                             | 24,479  |   |                   |   | 14,564 |     |   |   | 4,489       |   |   |   | 1,175  |   |   |   | (38 | ) |   |   | 51,803 |   |
| Less: loans charged off                               |   |       | 4,059  |   |         |   | 16     |                    |   |   | 2,242                 |   |   |                             | 18,951  |   |                   |   | 21,401 |     |   |   | 3,541       |   |   |   | 1,667  |   |   |   | - |   |   |   | 51,877 |   |
| Recoveries                                            |   |       | 370    |   |         |   | 7      |                    |   |   | 8                     |   |   |                             | 49      |   |                   |   | 82     |     |   |   | 10          |   |   |   | 235    |   |   |   | - |   |   |   | 761 |   |
| Balance, end of period                                |   | $          | 5,240  |   |         | $      | 55     |                    |   | $      | 548                   |   |   | $                                | 11,606  |   |                   | $      | 8,771  |     |   | $      | 2,855       |   |   | $      | 1,338  |   |   | $ | - |   |   | $ | 30,413 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 2,632  |   |         | $      | -      |                    |   | $      | 229                   |   |   | $                                | 2,337   |   |                   | $      | 8,215  |     |   | $      | 1,584       |   |   | $      | 219    |   |   | $ | - |   |   | $ | 15,216 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 2,608  |   |         | $      | 55     |                    |   | $      | 319                   |   |   | $                                | 9,269   |   |                   | $      | 556    |     |   | $      | 1,271       |   |   | $      | 1,119  |   |   | $ | - |   |   | $ | 15,197 |   |
| Loans                                                 |   |       |   |   |         |   |   |                    |   |   |                  |   |   |                             |    |   |                   |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                        |   | $          | 62,609 |   |         | $      | 61,251 |                    |   | $      | 60,523                |   |   |                             | 235,103 |   |                   | $      | 58,279 |     |   | $      | 97,172      |   |   | $      | 46,084 |   |   | $ | - |   |   | $ | 621,021 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 4,803  |   |         | $      | -      |                    |   | $      | 5,530                 |   |   | $                                | 35,042  |   |                   | $      | 45,944 |     |   | $      | 11,291      |   |   | $      | 1,680  |   |   | $ | - |   |   | $ | 104,290 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 57,806 |   |         | $      | 61,251 |                    |   | $      | 54,993                |   |   | $                                | 200,661 |   |                   | $      | 12,335 |     |   | $      | 85,881      |   |   | $      | 44,404 |   |   | $ | - |   |   | $ | 516,731 |   |

----

|                                                  |   | Commercial |    |   | Agricultural |   |   | AgriculturalReal Estate |   |   | CommercialReal Estate |   |   | Commercial Real Estate Development |    |   | ResidentialReal Estate |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|-------------------------------------------------------|--------|------------|---------|--------|--------------|--------|--------|-------------------------|--------|--------|-----------------------|--------|--------|------------------------------------|---------|--------|------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| Allowance for Loan Losses                             |   |       |    |   |         |   |   |                    |   |   |                  |   |   |                               |    |   |                   |   |   |     |   |   |        |   |   |   |   |
| Balance, beginning of year                            |   | $          | 4,435   |   |         | $      | 99     |                    |   | $      | 107                   |   |   | $                                  | 6,029   |   |                   | $      | 15,526 |     |   | $      | 1,897       |   |   | $      | 1,595  |   |   | $ | 38 |   |   | $ | 29,726 |   |
| Provision charged to expense                          |   |       | (592    | )      |         |   | (26    | )                       |   |   | 24                    |   |   |                               | 7,812   |   |                   |   | 1,182  |     |   |   | 1,461       |   |   |   | 124    |   |   |   | (12 | ) |   |   | 9,925 |   |
| Less: loans charged off                               |   |       | 1,556   |   |         |   | 16     |                    |   |   | 22                    |   |   |                               | 8,481   |   |                   |   | 8,462  |     |   |   | 1,438       |   |   |   | 682    |   |   |   | - |   |   |   | 20,657 |   |
| Recoveries                                            |   |       | 44      |   |         |   | -      |                    |   |   | -                     |   |   |                               | -       |   |                   |   | -      |     |   |   | 8           |   |   |   | 83     |   |   |   | - |   |   |   | 135 |   |
| Balance, end of period                                |   | $          | 2,331   |   |         | $      | 57     |                    |   | $      | 61                    |   |   | $                                  | 5,360   |   |                   | $      | 8,246  |     |   | $      | 1,928       |   |   | $      | 1,120  |   |   | $ | 26 |   |   | $ | 19,129 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 1,879   |   |         | $      | -      |                    |   | $      | -                     |   |   | $                                  | 1,169   |   |                   | $      | 4,722  |     |   | $      | 757         |   |   | $      | 298    |   |   | $ | - |   |   | $ | 8,825 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 452     |   |         | $      | 57     |                    |   | $      | 61                    |   |   | $                                  | 4,191   |   |                   | $      | 3,524  |     |   | $      | 1,171       |   |   | $      | 822    |   |   | $ | 26 |   |   | $ | 10,304 |   |
| Loans                                                 |   |       |    |   |         |   |   |                    |   |   |                  |   |   |                               |    |   |                   |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance                                        |   | $          | 129,771 |   |         | $      | 64,354 |                    |   | $      | 49,391                |   |   |                               | 201,571 |   |                   | $      | 75,126 |     |   | $      | 86,673      |   |   | $      | 50,801 |   |   | $ | - |   |   | $ | 657,687 |   |
| Ending Balance: individually evaluated for impairment |   | $          | 11,477  |   |         | $      | 1,822  |                    |   | $      | 1,078                 |   |   | $                                  | 31,919  |   |                   | $      | 40,345 |     |   | $      | 9,899       |   |   | $      | 1,066  |   |   | $ | - |   |   | $ | 97,606 |   |
| Ending Balance: collectively evaluated for impairment |   | $          | 118,294 |   |         | $      | 62,532 |                    |   | $      | 48,313                |   |   | $                                  | 169,652 |   |                   | $      | 34,781 |     |   | $      | 76,774      |   |   | $      | 49,735 |   |   | $ | - |   |   | $ | 560,081 |   |

----

|   | 1 | Prime Quality: This category includes all obligors whose balance sheet, current position, capitalization, profitability and cash flow have been demonstrated to be consistently of such high quality that the potential for significant disruption in their financial performance is virtually nonexistent. Such borrowers have excellent management in place with depth, well defined and established product lines or services, and operate businesses generally isolated from the normal influences of the business cycle. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2  | High Quality: Borrowers assigned this rating are considered above average with high quality and excellent credit standards based on leverage, liquidity and debt coverage ratios, as well as having excellent management in critical areas. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3  | Satisfactory “Average” Quality: This category includes borrowers that have average leverage, liquidity and debt service ratios that comparefavorably with industry standards. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4  | Low Pass: This risk rating includes borrowers that have below average leverage, liquidity and debt service coverage ratios and management thatmay not be as solid on a historical basis or may compare less favorably with industry standards but are still considered acceptable. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5  | Watch/Special Mention (OAEM): A borrower assigned to this rating category exhibits potential weaknesses or early warning signals that deserve close monitoring by management. If left uncorrected, these potential weaknesses may result in the borrower being unable to meet its financial obligations at some future date. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6  | Substandard: A substandard rating is assigned to a borrower whose credit is inadequately protected by the paying capacity of the borrower, or by the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These credits are characterized by the distinct possibility that the Corporation will sustain some loss if deficiencies are not corrected. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7  | Doubtful: Borrowers assigned to this rating category have all of the weaknesses inherent in a substandard rating with the added factor that the weaknesses are pronounced to the point where, on the basis of current facts, conditions and values, collection or liquidation in full is highly questionable or improbable. While the possibility of loss is extremely high, the existence of specific pending factors, which may work to the borrower’s advantage, warrants that the estimated loss be deferred until a more exact status can be determined. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Risk Rating: |   | Commercial |   |   | Agricultural |   |   | Agricultural Real Estate |   |   | CommercialReal Estate |   |   | CommercialReal EstateDevelopment |    |   | Total  |   |
|--------------|--------|------------|--------|--------|--------------|--------|--------|--------------------------|--------|--------|-----------------------|--------|--------|----------------------------------|---------|--------|--------|--------|
| 1-2          |   | $          | 3,312  |   |         | $      | 8,659  |                     |   | $      | 15,580                |   |   | $                                | 24,411  |   |   | $      | 161 |   |   | $ | 52,123 |   |
| 3            |   |       | 23,140 |   |         |   | 12,307 |                     |   |   | 18,609                |   |   |                             | 74,378  |   |   |   | 3,070 |   |   |   | 131,504 |   |
| 4            |   |       | 16,144 |   |         |   | 1,401  |                     |   |   | 13,780                |   |   |                             | 61,469  |   |   |   | 946 |   |   |   | 93,740 |   |
| 5            |   |       | 2,151  |   |         |   | -      |                     |   |   | 1,089                 |   |   |                             | 13,130  |   |   |   | 5,310 |   |   |   | 21,680 |   |
| 6            |   |       | 6,167  |   |         |   | 25     |                     |   |   | 2,571                 |   |   |                             | 57,514  |   |   |   | 18,776 |   |   |   | 85,053 |   |
| 7            |   |       | -      |   |         |   | -      |                     |   |   | 1,699                 |   |   |                             | -       |   |   |   | 1,861 |   |   |   | 3,560 |   |
| Total        |   | $          | 50,914 |   |         | $      | 22,392 |                     |   | $      | 53,328                |   |   | $                                | 230,902 |   |   | $      | 30,124 |   |   | $ | 387,660 |   |

|            |   | Residential |   |   |     |   |   |   |   |
|-----------------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
| Risk Rating:    |   | Real Estate |   |   | Consumer |   |   | Total  |   |
| Pass            |   | $           | 79,355 |   |     | $      | 38,529 |   |   | $ | 117,884 |   |
| Special Mention |   |        | 284    |   |     |   | 171    |   |   |   | 455 |   |
| Substandard     |   |        | 11,979 |   |     |   | 2,468  |   |   |   | 14,447 |   |
| Doubtful        |   |        | 175    |   |     |   | 28     |   |   |   | 203 |   |
| Total           |   | $           | 91,793 |   |     | $      | 41,196 |   |   | $ | 132,989 |   |

| Risk Rating: |   | Commercial |   |   | Agricultural |   |   | Agricultural Real Estate |   |   | Commercial Real Estate |   |   | Commercial Real Estate Development |    |   | Total  |   |
|--------------|--------|------------|--------|--------|--------------|--------|--------|--------------------------|--------|--------|------------------------|--------|--------|------------------------------------|---------|--------|--------|--------|
| 1-2          |   | $          | 4,509  |   |         | $      | 25,979 |                     |   | $      | 14,832                 |   |   | $                                  | 26,075  |   |   | $      | 376 |   |   | $ | 71,771 |   |
| 3            |   |       | 30,037 |   |         |   | 27,348 |                     |   |   | 24,142                 |   |   |                               | 87,772  |   |   |   | 8,348 |   |   |   | 177,647 |   |
| 4            |   |       | 18,892 |   |         |   | 7,096  |                     |   |   | 13,434                 |   |   |                               | 54,909  |   |   |   | 1,744 |   |   |   | 96,075 |   |
| 5            |   |       | 1,970  |   |         |   | 381    |                     |   |   | 1,769                  |   |   |                               | 4,582   |   |   |   | - |   |   |   | 8,702 |   |
| 6            |   |       | 7,201  |   |         |   | 447    |                     |   |   | 4,647                  |   |   |                               | 61,111  |   |   |   | 35,673 |   |   |   | 109,079 |   |
| 7            |   |       | -      |   |         |   | -      |                     |   |   | 1,699                  |   |   |                               | 654     |   |   |   | 12,138 |   |   |   | 14,491 |   |
| Total        |   | $          | 62,609 |   |         | $      | 61,251 |                     |   | $      | 60,523                 |   |   | $                                  | 235,103 |   |   | $      | 58,279 |   |   | $ | 477,765 |   |

|            |   | Residential |   |   |     |   |   |   |   |
|-----------------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
| Risk Rating:    |   | Real Estate |   |   | Consumer |   |   | Total  |   |
| Pass            |   | $           | 83,381 |   |     | $      | 42,826 |   |   | $ | 126,207 |   |
| Special Mention |   |        | 253    |   |     |   | 125    |   |   |   | 378 |   |
| Substandard     |   |        | 13,358 |   |     |   | 3,113  |   |   |   | 16,471 |   |
| Doubtful        |   |        | 180    |   |     |   | 20     |   |   |   | 200 |   |
| Total           |   | $           | 97,172 |   |     | $      | 46,084 |   |   | $ | 143,256 |   |

----

| Risk Rating: |   | Commercial |    |   | Agricultural |   |   | Agricultural Real Estate |   |   | Commercial Real Estate |   |   | Commercial Real Estate Development |    |   | Total  |   |
|--------------|--------|------------|---------|--------|--------------|--------|--------|--------------------------|--------|--------|------------------------|--------|--------|------------------------------------|---------|--------|--------|--------|
| 1-2          |   | $          | 14,869  |   |         | $      | 20,023 |                     |   | $      | 14,327                 |   |   | $                                  | 11,712  |   |   | $      | 407 |   |   | $ | 61,338 |   |
| 3            |   |       | 53,622  |   |         |   | 31,303 |                     |   |   | 21,672                 |   |   |                               | 72,560  |   |   |   | 8,941 |   |   |   | 188,098 |   |
| 4            |   |       | 31,031  |   |         |   | 9,324  |                     |   |   | 10,016                 |   |   |                               | 40,664  |   |   |   | 1,965 |   |   |   | 93,000 |   |
| 5            |   |       | 10,526  |   |         |   | 1,170  |                     |   |   | 1,928                  |   |   |                               | 29,112  |   |   |   | 3,270 |   |   |   | 46,006 |   |
| 6            |   |       | 19,584  |   |         |   | 2,534  |                     |   |   | 1,448                  |   |   |                               | 47,523  |   |   |   | 60,543 |   |   |   | 131,632 |   |
| 7            |   |       | 139     |   |         |   | -0-    |                     |   |   | -0-                    |   |   |                               | -0-     |   |   |   | -0- |   |   |   | 139 |   |
| Total        |   | $          | 129,771 |   |         | $      | 64,354 |                     |   | $      | 49,391                 |   |   | $                                  | 201,571 |   |   | $      | 75,126 |   |   | $ | 520,213 |   |

|            |   | Residential |   |   |     |   |   |   |   |
|-----------------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
| Risk Rating:    |   | Real Estate |   |   | Consumer |   |   | Total  |   |
| Pass            |   | $           | 75,087 |   |     | $      | 48,141 |   |   | $ | 123,228 |   |
| Special Mention |   |        | 924    |   |     |   | 283    |   |   |   | 1,207 |   |
| Substandard     |   |        | 10,450 |   |     |   | 2,377  |   |   |   | 12,827 |   |
| Doubtful        |   |        | 212    |   |     |   | 0      |   |   |   | 212 |   |
| Total           |   | $           | 86,673 |   |     | $      | 50,801 |   |   | $ | 137,474 |   |

|                               |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | >90 Days Total |   |   | Past Due Past Due |   |   | TotalCurrent |   |   | Total Loans |   |    | >90 Days & Accruing |   |
|------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|--------------|--------|--------|-------------|--------|---------|----------------------------|--------|
| Commercial                         |   | $                   | 424    |   |                | $      | 74     |              |   | $      | -                 |   |   | $            | 498    |   |        | $      | 46,985  |                       |   | $ | 47,483 |   |   | $ | - |   |
| Agricultural                       |   |                | -      |   |                |   | -      |              |   |   | -                 |   |   |         | -      |   |        |   | 22,392  |                       |   |   | 22,392 |   |   |   | - |   |
| Agricultural Real Estate           |   |                | -      |   |                |   | -      |              |   |   | -                 |   |   |         | -      |   |        |   | 49,783  |                       |   |   | 49,783 |   |   |   | - |   |
| Commercial Real Estate             |   |                | 460    |   |                |   | -      |              |   |   | -                 |   |   |         | 460    |   |        |   | 198,687 |                       |   |   | 199,147 |   |   |   | - |   |
| Commercial Real Estate Development |   |                | -      |   |                |   | -      |              |   |   | -                 |   |   |         | -      |   |        |   | 11,869  |                       |   |   | 11,869 |   |   |   | - |   |
| Residential Real Estate            |   |                | 31     |   |                |   | 418    |              |   |   | -                 |   |   |         | -449   |   |        |   | 84,807  |                       |   |   | 85,256 |   |   |   | - |   |
| Consumer                           |   |                | 278    |   |                |   | 139    |              |   |   | -                 |   |   |         | 417    |   |        |   | 40,229  |                       |   |   | 40,646 |   |   |   | - |   |
| Non-Accrual                        |   |                | 22     |   |                |   | 1,536  |              |   |   | 54,851            |   |   |         | 56,409 |   |        |   | 7,664   |                       |   |   | 64,073 |   |   |   | - |   |
| Total                              |   | $                   | 1,215  |   |                | $      | 2,167  |              |   | $      | 54,851            |   |   | $            | 58,233 |   |        | $      | 462,416 |                       |   | $ | 520,649 |   |   | $ | - |   |

----

|                               |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | >90 Days Past Due |   |   | Total Past Due |   |   | TotalCurrent |   |   | Total Loans |   |    | >90 Days & Accruing |   |
|------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|--------------|--------|--------|-------------|--------|---------|----------------------------|--------|
| Commercial                         |   | $                   | 1,205  |   |                | $      | 248    |                 |   | $      | 63             |   |   | $            | 1,516  |   |        | $      | 57,411  |                       |   | $ | 58,927 |   |   | $ | 63 |   |
| Agricultural                       |   |                | -      |   |                |   | -      |                 |   |   | -              |   |   |         | -      |   |        |   | 61,251  |                       |   |   | 61,251 |   |   |   | - |   |
| Agricultural Real Estate           |   |                | 80     |   |                |   | 18     |                 |   |   | -              |   |   |         | 98     |   |        |   | 54,895  |                       |   |   | 54,993 |   |   |   | - |   |
| Commercial Real Estate             |   |                | 3,631  |   |                |   | 1,702  |                 |   |   | 1,588          |   |   |         | 6,921  |   |        |   | 195,302 |                       |   |   | 202,223 |   |   |   | 1,588 |   |
| Commercial Real Estate Development |   |                | -      |   |                |   | 114    |                 |   |   | -              |   |   |         | 114    |   |        |   | 14,656  |                       |   |   | 14,770 |   |   |   | - |   |
| Residential Real Estate            |   |                | 3,308  |   |                |   | 342    |                 |   |   | -              |   |   |         | 3,650  |   |        |   | 87,877  |                       |   |   | 88,527 |   |   |   | - |   |
| Consumer                           |   |                | 540    |   |                |   | 349    |                 |   |   | -              |   |   |         | 889    |   |        |   | 44,194  |                       |   |   | 45,083 |   |   |   | - |   |
| Non-Accrual                        |   |                | 4,375  |   |                |   | 7,414  |                 |   |   | 62,579         |   |   |         | 74,368 |   |        |   | 20,879  |                       |   |   | 95,247 |   |   |   | - |   |
| Total                              |   | $                   | 13,139 |   |                | $      | 10,187 |                 |   | $      | 64,230         |   |   | $            | 87,556 |   |        | $      | 533,465 |                       |   | $ | 621,021 |   |   | $ | 1,651 |   |

|                               |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | >90 Days Past Due |   |   | Total Past Due |   |   | TotalCurrent |   |   | Total Loans |   |    | >90 Days & Accruing |   |
|------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|--------------|--------|--------|-------------|--------|---------|----------------------------|--------|
| Commercial                         |   | $                   | 790    |   |                | $      | 1,052  |                 |   | $      | 274            |   |   | $            | 2,116  |   |        | $      | 117,808 |                       |   | $ | 119,924 |   |   | $ | 274 |   |
| Agricultural                       |   |                | 656    |   |                |   | -      |                 |   |   | -              |   |   |         | 656    |   |        |   | 61,876  |                       |   |   | 62,532 |   |   |   | - |   |
| Agricultural Real Estate           |   |                | 20     |   |                |   | -      |                 |   |   | -              |   |   |         | 20     |   |        |   | 48,293  |                       |   |   | 48,313 |   |   |   | - |   |
| Commercial Real Estate             |   |                | 4,350  |   |                |   | 3,238  |                 |   |   | -              |   |   |         | 7,588  |   |        |   | 169,126 |                       |   |   | 176,714 |   |   |   | - |   |
| Commercial Real Estate Development |   |                | 698    |   |                |   | -      |                 |   |   | 2,195          |   |   |         | 2,893  |   |        |   | 39,575  |                       |   |   | 42,468 |   |   |   | 2,195 |   |
| Residential Real Estate            |   |                | -      |   |                |   | 1,763  |                 |   |   | -              |   |   |         | 1,763  |   |        |   | 77,819  |                       |   |   | 79,582 |   |   |   | - |   |
| Consumer                           |   |                | 880    |   |                |   | 343    |                 |   |   | -              |   |   |         | 1,223  |   |        |   | 48,907  |                       |   |   | 50,130 |   |   |   | - |   |
| Non-Accrual                        |   |                | 272    |   |                |   | 722    |                 |   |   | 74,582         |   |   |         | 75,576 |   |        |   | 2,448   |                       |   |   | 78,024 |   |   |   | - |   |
| Total                              |   | $                   | 7,666  |   |                | $      | 7,118  |                 |   | $      | 77,051         |   |   | $            | 91,835 |   |        | $      | 565,852 |                       |   | $ | 657,687 |   |   | $ | 2,469 |   |

----

|                                |   |     |   |   |      |   |   |      |   |   | Six MonthsEnded |   |   | Three MonthsEnded |   |
|-------------------------------------|--------|----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------------|--------|--------|-------------------|--------|
|                                |   |     |   |   |      |   |   |      |   |   | Average         |   |   |              |   |   | Interest |   |   | Average |   |   | Accrued |   |   | Interest |   |
|                                |   |     |   |   | Unpaid    |   |   |      |   |   | Investment      |   |   | Interest          |   |   | Income |   |   | Investment |   |   | Interest |   |   | Income |   |
|                                |   | Recorded |   |   | Principal |   |   | Specific  |   |   | in Impaired     |   |   | Income            |   |   | Recognized |   |   | in Impaired |   |   | Income |   |   | Recognized |   |
|                                |   | Balance  |   |   | Balance   |   |   | Allowance |   |   | Loans           |   |   | Recognized        |   |   | Cash Basis |   |   | Loans |   |   | Recognized |   |   | Cash Basis |   |
|                                |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| With no related allowance recorded: |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                          |   | $        | 2,933  |   |      | $      | -      |      |   | $      | 3,323           |   |   | $                 | 46     |   |   | $ | 61 |   |   | $ | 3,209 |   |   | $ | 3,317 |   |   | $ | 17 |   |   | $ | 17 |   |
| Commercial Real Estate              |   |     | 25,140 |   |      |   | -      |      |   |   | 26,502          |   |   |              | 230    |   |   |   | 238 |   |   |   | 38,660 |   |   |   | 25,823 |   |   |   | 141 |   |   |   | 136 |   |
| Commercial & Agricultural       |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate Development             |   |     | 9,767  |   |      |   | -      |      |   |   | 9,922           |   |   |              | 71     |   |   |   | 81 |   |   |   | 18,104 |   |   |   | 9,907 |   |   |   | 34 |   |   |   | 31 |   |
| Residential Real Estate             |   |     | 4,013  |   |      |   | -      |      |   |   | 4,228           |   |   |              | 43     |   |   |   | 46 |   |   |   | 5,254 |   |   |   | 4,163 |   |   |   | 23 |   |   |   | 17 |   |
| Consumer                            |   |     | 400    |   |      |   | -      |      |   |   | 466             |   |   |              | 11     |   |   |   | 11 |   |   |   | 1,057 |   |   |   | 446 |   |   |   | 5 |   |   |   | 5 |   |
|                                |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| With an allowance recorded:         |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                          |   | $        | 1,479  |   |      | $      | 1,139  |      |   | $      | 1,589           |   |   | $                 | 15     |   |   | $ | 22 |   |   | $ | 1,510 |   |   | $ | 1,578 |   |   | $ | 8 |   |   | $ | 5 |   |
| Commercial Real Estate              |   |     | 11,996 |   |      |   | 1,229  |      |   |   | 13,167          |   |   |              | 16     |   |   |   | 33 |   |   |   | 16,981 |   |   |   | 12,157 |   |   |   | 15 |   |   |   | 15 |   |
| Commercial & Agricultural       |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate Development             |   |     | 10,627 |   |      |   | 983    |      |   |   | 16,279          |   |   |              | 11     |   |   |   | 11 |   |   |   | 27,678 |   |   |   | 16,022 |   |   |   | 7 |   |   |   | 7 |   |
| Residential Real Estate             |   |     | 5,533  |   |      |   | 1,491  |      |   |   | 5,697           |   |   |              | 102    |   |   |   | 92 |   |   |   | 6,121 |   |   |   | 5,540 |   |   |   | 34 |   |   |   | 23 |   |
| Consumer                            |   |     | 667    |   |      |   | 153    |      |   |   | 691             |   |   |              | 16     |   |   |   | 15 |   |   |   | 971 |   |   |   | 688 |   |   |   | 8 |   |   |   | 5 |   |
|                                |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total:                              |   |     |   |   |      |   |   |      |   |   |            |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                          |   | $        | 61,942 |   |      | $      | 3,351  |      |   | $      | 70,782          |   |   | $                 | 389    |   |   | $ | 446 |   |   | $ | 106,142 |   |   | $ | 68,796 |   |   | $ | 222 |   |   | $ | 211 |   |
| Residential                         |   | $        | 9,546  |   |      | $      | 1,491  |      |   | $      | 9,925           |   |   | $                 | 145    |   |   | $ | 138 |   |   | $ | 11,375 |   |   | $ | 9,703 |   |   | $ | 57 |   |   | $ | 40 |   |
| Consumer                            |   | $        | 1,067  |   |      | $      | 153    |      |   | $      | 1,157           |   |   | $                 | 27     |   |   | $ | 26 |   |   | $ | 2,028 |   |   | $ | 1,134 |   |   | $ | 13 |   |   | $ | 10 |   |

|                                |   |     |   |   |      |   |         |      |   |   | Average     |   |   |       |        |   | Interest   |   |
|-------------------------------------|--------|----------|--------|--------|-----------|--------|--------------|-----------|--------|--------|-------------|--------|--------|------------|-------------|--------|------------|--------|
|                                |   |     |   |   | Unpaid    |   |         |      |   |   | Investment  |   |   | Interest   |        |   | Income     |   |
|                                |   | Recorded |   |   | Principal |   |         | Specific  |   |   | in Impaired |   |   | Income     |        |   | Recognized |   |
|                                |   | Balance  |   |   | Balance   |   |         | Allowance |   |   | Loans       |   |   | Recognized |        |   | Cash Basis |   |
| With no related allowance recorded: |   |     |   |   |      |   |         |      |   |   |        |   |   |       |        |   |       |   |
| Commercial                          |   | $        | 1,300  |   |      | $      | 1,631        |      |   | $      | -0-         |   |   | $          | 5,593       |   |       | $      | 74 $77 |   |   |   |   |
| Commercial Real Estate              |   |     | 33,494 |   |      |   | 55,356       |      |   |   | -0-         |   |   |       | 24,916      |   |       |   | 721 |   |   |   | 861 |   |
| Commercial Real Estate Development  |   |     | 23,970 |   |      |   | 46,275       |      |   |   | -0-         |   |   |       | 25,961      |   |       |   | 323 |   |   |   | 371 |   |
| Residential Real Estate             |   |     | 7,305  |   |      |   | 9,773        |      |   |   | -0-         |   |   |       | 5,993       |   |       |   | 173 |   |   |   | 205 |   |
| Consumer                            |   |     | 1,119  |   |      |   | 1,359        |      |   |   | -0-         |   |   |       | 559         |   |       |   | 50 |   |   |   | 54 |   |
| With an allowance recorded:         |   |     |   |   |      |   |         |      |   |   |        |   |   |       |        |   |       |   |   |   |   |   |   |   |
| Commercial                          |   | $        | 3,566  |   |      | $      | 3,566        |      |   | $      | 2,632       |   |   | $          | 2,737       |   |       | $      | 148 |   |   | $ | 165 |   |
| Commercial Real Estate              |   |     | 8,666  |   |      |   | 8,666 2,566  |      |   |   | 13,398      |   |   |       | 424         |   |       |   | 478 |   |   |   |   |   |
| Commercial Real Estate Development  |   |     | 21,974 |   |      |   | 21,974 8,215 |      |   |   | 20,241      |   |   |       | 1,335 1,420 |   |       |   |   |   |   |   |   |   |
| Residential Real Estate             |   |     | 3,986  |   |      |   | 4,365 1,584  |      |   |   | 3,930 157   |   |   |       | 172         |   |       |   |   |   |   |   |   |   |
| Consumer                            |   |     | 561    |   |      |   | 561          |      |   |   | 219         |   |   |       | 665         |   |       |   | 23 |   |   |   | 24 |   |
| Total:                              |   |     |   |   |      |   |         |      |   |   |        |   |   |       |        |   |       |   |   |   |   |   |   |   |
| Commercial                          |   | $        | 92,970 |   |      | $      | 137,468      |      |   | $      | 13,413      |   |   | $          | 92,845      |   |       | $      | 3,025 |   |   | $ | 3,372 |   |
| Residential                         |   | $        | 11,291 |   |      | $      | 14,138       |      |   | $      | 1,584       |   |   | $          | 9,923       |   |       | $      | 330 |   |   | $ | 377 |   |
| Consumer                            |   | $        | 1,680  |   |      | $      | 1,920        |      |   | $      | 219         |   |   | $          | 1,224       |   |       | $      | 73 |   |   | $ | 78 |   |

----

|                                |   |             |   |   |                   |   |   |              |   |   | Six MonthsEnded                   |   |   | Three MonthsEnded        |   |
|-------------------------------------|--------|------------------|--------|--------|------------------------|--------|--------|-------------------|--------|--------|-----------------------------------|--------|--------|--------------------------|--------|
|                                |   | Recorded Balance |   |   | UnpaidPrincipalBalance |   |   | SpecificAllowance |   |   | AverageInvestmentin ImpairedLoans |   |   | InterestIncomeRecognized |   |   | Average Investmentin ImpairedLoans |   |   | InterestIncomeRecognized |   |
| With no related allowance recorded: |   |             |   |   |                   |   |   |              |   |   |                              |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                          |   | $                | 9,737  |   |                   | $      | 11,450 |              |   | $      | -0-                               |   |   | $                        | 9,812  |   |   | $ | 55 |   |   | $ | 9,922 |   |   | $ | 27 |   |
| Commercial Real Estate              |   |             | 25,852 |   |                   |   | 34,249 |              |   |   | -0-                               |   |   |                     | 19,378 |   |   |   | 36 |   |   | $ | 29,481 |   |   | $ | 13 |   |
| Commercial Real Estate Development  |   |             | 25,631 |   |                   |   | 42,877 |              |   |   | -0-                               |   |   |                     | 26,163 |   |   |   | 96 |   |   | $ | 29,627 |   |   | $ | 46 |   |
| Residential Real Estate             |   |             | 6,374  |   |                   |   | 7,588  |              |   |   | -0-                               |   |   |                     | 5,527  |   |   |   | 15 |   |   | $ | 6,846 |   |   | $ | 4 |   |
| Consumer                            |   |             | 657    |   |                   |   | 783    |              |   |   | -0-                               |   |   |                     | 329    |   |   |   | 8 |   |   | $ | 731 |   |   | $ | 3 |   |

| With an allowance recorded:        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial                         |   | $      | 3,562  |   |   | $      | 3,930  |   |   | $      | 1,879  |   |   | $      | 2,735  |   |   | $      | 8      |   |   | $      | 3,691  |   |   | $      | 2      |   |
| Commercial Real Estate             |   |   | 7,145  |   |   |   | 7,351  |   |   |   | 1,169  |   |   |   | 12,638 |   |   |   | 181    |   |   | $      | 7,159  |   |   | $      | 85     |   |
| Commercial Real Estate Development |   |   | 14,714 |   |   |   | 15,294 |   |   |   | 4,722  |   |   |   | 16,611 |   |   |   | 151    |   |   | $      | 14,799 |   |   | $      | 73     |   |
| Residential Real Estate            |   |   | 3,525  |   |   |   | 3,615  |   |   |   | 757    |   |   |   | 3,699  |   |   |   | 36     |   |   | $      | 3,548  |   |   | $      | 11     |   |
| Consumer                           |   |   | 409    |   |   |   | 409    |   |   |   | 298    |   |   |   | 589    |   |   |   | 6      |   |   | $      | 412    |   |   | $      | 3      |   |

| Total:  |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial   |   | $      | 86,641 |   |   | $      | 115,151 |   |   | $      | 7,770  |   |   | $      | 87,336 |   |   | $      | 527    |   |   | $      | 94,677 |   |   | $      | 246    |   |
| Residential  |   | $      | 9,899  |   |   | $      | 11,203  |   |   | $      | 757    |   |   | $      | 9,226  |   |   | $      | 51     |   |   | $      | 10,394 |   |   | $      | 15     |   |
| Consumer     |   | $      | 1,066  |   |   | $      | 1,192   |   |   | $      | 298    |   |   | $      | 917    |   |   | $      | 14     |   |   | $      | 1,143  |   |   | $      | 6      |   |

----

|                               |   | June 30, 2012      |   |   |                                                                    |   |   |                                                     |   |
|------------------------------------|--------|--------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|                               |   | TotalTroubled Debt |   |   | Troubled debt restructuringsperforming in accordancewith modified terms |   |   | Troubled debt restructuringsnot performing in accordance |   |
|                               |   | Restructurings     |   |   | Accruing                                                                |   |   | Nonaccrual                                               |   |   | with modified terms |   |
|                               |   |               |   |   |                                                                    |   |   |                                                     |   |   |   |   |
| Commercial                         |   | $                  | 1,185  |   |                                                                    | $      | 1,118  |                                                     |   | $ | 48 |   |   | $ | 19 |   |
| Agricultural                       |   |               | -      |   |                                                                    |   | -      |                                                     |   |   | - |   |   |   | - |   |
| Agricultural Real Estate           |   |               | -      |   |                                                                    |   | -      |                                                     |   |   | - |   |   |   | - |   |
| Commercial Real Estate             |   |               | 11,694 |   |                                                                    |   | 1,562  |                                                     |   |   | - |   |   |   | 10,132 |   |
| Commercial Real Estate Development |   |               | 2,684  |   |                                                                    |   | -      |                                                     |   |   | 42 |   |   |   | 2,642 |   |
| Residential Real Estate            |   |               | 4,707  |   |                                                                    |   | 2,448  |                                                     |   |   | 258 |   |   |   | 2,001 |   |
| Consumer                           |   |               | 48     |   |                                                                    |   | 7      |                                                     |   |   | 41 |   |   |   | - |   |
|                               |   |               |   |   |                                                                    |   |   |                                                     |   |   |   |   |   |   |   |   |
| Total                              |   | $                  | 20,318 |   |                                                                    | $      | 5,135  |                                                     |   | $ | 389 |   |   | $ | 14,794 |   |

|                               |   | December 31, 2011  |   |   |                                                                    |   |   |                                                     |   |
|------------------------------------|--------|--------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|                               |   | TotalTroubled Debt |   |   | Troubled debt restructuringsperforming in accordancewith modified terms |   |   | Troubled debt restructuringsnot performing in accordance |   |
|                               |   | Restructurings     |   |   | Accruing                                                                |   |   | Nonaccrual                                               |   |   | with modified terms |   |
|                               |   |               |   |   |                                                                    |   |   |                                                     |   |   |   |   |
| Commercial                         |   | $                  | 928    |   |                                                                    | $      | 928    |                                                     |   | $ | -0- |   |   | $ | -0- |   |
| Agricultural                       |   |               | -0-    |   |                                                                    |   | -0-    |                                                     |   |   | -0- |   |   |   | -0- |   |
| Agricultural Real Estate           |   |               | -0-    |   |                                                                    |   | -0-    |                                                     |   |   | -0- |   |   |   | -0- |   |
| Commercial Real Estate             |   |               | 11,588 |   |                                                                    |   | 506    |                                                     |   |   | -0- |   |   |   | 11,082 |   |
| Commercial Real Estate Development |   |               | 2,711  |   |                                                                    |   | -0-    |                                                     |   |   | -0- |   |   |   | 2,711 |   |
| Residential Real Estate            |   |               | 3,963  |   |                                                                    |   | 1,618  |                                                     |   |   | 884 |   |   |   | 1,461 |   |
| Consumer                           |   |               | 188    |   |                                                                    |   | 145    |                                                     |   |   | 43 |   |   |   | -0- |   |
|                               |   |               |   |   |                                                                    |   |   |                                                     |   |   |   |   |   |   |   |   |
| Total                              |   |               | 19,378 |   |                                                                    |   | 3,197  |                                                     |   |   | 927 |   |   |   | 15,254 |   |

|                               |   | Period Ended June 30, 2012 |   |   | Year Ended December 31, 2011 |   |
|------------------------------------|--------|----------------------------|--------|--------|------------------------------|--------|
|                               |   | Number of                  |   |   | Recorded                     |   |   | Number of |   |   | Recorded |   |
|                               |   | Modifications              |   |   | Investment                   |   |   | Modifications |   |   | Investment |   |
| Commercial                         |   |                       | 3      |   |                         | $      | 19 |   |   |   | 1 |   |   | $ | 928 |   |
| Agricultural                       |   |                       | -      |   |                         |   | - |   |   |   | 0 |   |   |   | 0 |   |
| Agricultural Real Estate           |   |                       | -      |   |                         |   | - |   |   |   | 0 |   |   |   | 0 |   |
| Commercial Real Estate             |   |                       | 1      |   |                         |   | 1,063 |   |   |   | 1 |   |   |   | 506 |   |
| Commercial Real Estate Development |   |                       | -      |   |                         |   | - |   |   |   | 0 |   |   |   | 0 |   |
| Residential Real Estate            |   |                       | 5      |   |                         |   | 1,058 |   |   |   | 13 |   |   |   | 2,463 |   |
| Consumer                           |   |                       | 1      |   |                         |   | 9 |   |   |   | 0 |   |   |   | 0 |   |
|                               |   |                       |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                              |   |                       | 10     |   |                         | $      | 2,149 |   |   |   | 15 |   |   | $ | 3,897 |   |

----

----

|                               |   | June 30,2012 |   |   | December 31,2011 |   |   | June 30,2011 |   |
|------------------------------------|--------|--------------|--------|--------|------------------|--------|--------|--------------|--------|
| Commercial                         |   | $            | 3,431  |   |             | $      | 3,682  |         |   | $ | 9,847 |   |
| Agricultural                       |   |         | -      |   |             |   | -      |         |   |   | 1,822 |   |
| Agricultural Real Estate           |   |         | 3,545  |   |             |   | 5,530  |         |   |   | 1,078 |   |
| Commercial Real Estate             |   |         | 31,755 |   |             |   | 32,880 |         |   |   | 24,857 |   |
| Commercial Real Estate Development |   |         | 18,255 |   |             |   | 43,510 |         |   |   | 32,658 |   |
| Residential Real Estate            |   |         | 6,537  |   |             |   | 8,644  |         |   |   | 7,091 |   |
| Consumer                           |   |         | 550    |   |             |   | 1,001  |         |   |   | 671 |   |
| Total                              |   | $            | 64,073 |   |             | $      | 95,247 |         |   | $ | 78,024 |   |

|   | Level 1 | Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.  Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2 | Valuations for assets and liabilities traded in less active dealer or broker markets.  Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

| June 30, 2012                                                                                |   | Fair Value Measurements Using |    |
|----------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
| (in thousands)                                                                               |   | Fair Value                    |    |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |
|                                                                                         |   |                          |    |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                                                         |   |                          |    |   |   |   |   |   |   |   |   |   |
| Available-for-sale securities                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| United States Government and federal agency and U.S. Government sponsored enterprises (GSEs) |   | $                             | 66,173  |   |   | $ | - |   |   | $ | 66,173 |   |   | $ | - |   |
| State and Municipal                                                                          |   |                          | 51,462  |   |   |   | - |   |   |   | 51,462 |   |   |   | - |   |
| Collateralized mortgage obligations:                                                         |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSE Residential                                                                              |   |                          | 95,046  |   |   |   | - |   |   |   | 95,046 |   |   |   | - |   |
| Mutual funds                                                                                 |   |                          | 3,200   |   |   |   | - |   |   |   | 3,200 |   |   |   | - |   |
| Total                                                                                        |   | $                             | 215,881 |   |   | $ | - |   |   | $ | 215,881 |   |   | $ | - |   |

| December 31, 2011                                                                            |   |  Fair Value Measurements Using |    |
|----------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                         |   |                                |    |   | Quoted Prices in |   |   |   |   |   | Significant |   |
| (in thousands)                                                                               |   |                                |    |   | Active Markets for |   |   | Significant Other |   |   | Unobservable |   |
|                                                                                         |   | Fair Value                          |    |   | Identical Assets |   |   | Observable Inputs |   |   | Inputs |   |
|                                                                                         |   |                                |    |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Available-for-sale securities                                                                |   |                                |    |   |   |   |   |   |   |   |   |   |
| United States Government and federal agency and U.S. Government sponsored enterprises (GSEs) |   | $                                   | 78,022  |   |   | $ | - |   |   | $ | 78,022 |   |   | $ | - |   |
| State and Municipal                                                                          |   |                                | 95,483  |   |   |   | - |   |   |   | 95,483 |   |   |   | - |   |
| Collateral mortgage obligations:                                                             |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSE Residential                                                                              |   |                                | 78,242  |   |   |   | - |   |   |   | 78,242 |   |   |   | - |   |
| Total                                                                                        |   | $                                   | 251,747 |   |   | $ | - |   |   | $ | 251,747 |   |   | $ | - |   |

----

|                                  |   |   | Fair Value atJune 30, 2012 |   | ValuationTechnique           | Unobservable Inputs           |   |  Range (Weighted Average) |
|---------------------------------------|--------|--------|----------------------------|--------|------------------------------|-------------------------------|--------|--------------------------------|
| Impaired loans (collateral dependent) |   | $      | 16,511                     |   | Market comparable properties | Comparability adjustments (%) |   |                           | (16.5%) |   |
| Mortgage servicing rights             |   |   | 2,146                      |   | Contracted sales price       | None                          |   |                           | not applicable |   |
| Other real estate owned               |   |   | 3,947                      |   | Market comparable properties | Marketability discount        |   | 5%                             |  to |  15% |

|                                  |   | Fair Value Measurements Using |   |
|---------------------------------------|--------|-------------------------------|--------|
|                                  |   | FairValue                     |   |   | Quoted Prices inActive Markets forIdentical Assets |   |   | Significant OtherObservable Inputs |   |   | SignificantUnobservableInputs |   |
|                                  |   |                          |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Impaired loans (collateral dependent) |   | $                             | 16,511 |   |   |   | - |   |   |   | - |   |   | $ | 16,511 |   |
| Mortgage servicing rights             |   |                          | 2,146  |   |   |   | - |   |   |   | - |   |   |   | 2,146 |   |
| Other real estate owned               |   |                          | 3,947  |   |   |   | - |   |   |   | - |   |   |   | 3,947 |   |

----

|                                  |   | Fair Value Measurements Using |   |
|---------------------------------------|--------|-------------------------------|--------|
|                                  |   | FairValue                     |   |   | Quoted Prices inActive Markets forIdentical Assets |   |   | Significant OtherObservable Inputs |   |   | SignificantUnobservableInputs |   |
|                                  |   |                          |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Impaired loans (collateral dependent) |   | $                             | 32,903 |   |   |   | - |   |   |   | - |   |   | $ | 32,903 |   |
| Mortgage servicing rights             |   |                          | 2,437  |   |   |   | - |   |   |   | - |   |   |   | 2,437 |   |
| Other real estate owned               |   |                          | 7,098  |   |   |   | - |   |   |   | - |   |   |   | 7,098 |   |

| June 30, 2012                                                |   |     |    |   | Fair Value                     |   |    |             |   |   |         |   |
|--------------------------------------------------------------|--------|----------|---------|--------|--------------------------------|--------|---------|------------------|--------|--------|--------------|--------|
|                                                         |   |     |    |   | Measurements                   |   |    |             |   |   |         |   |
|                                                         |   |     |    |   | Using:                         |   |    |             |   |   |         |   |
|                                                         |   |     |    |   | Quoted PricesIn Active Markets |   |    | SignificantOther |   |   | Significant  |   |
|                                                         |   |     |    |   | for Identical                  |   |    | Observable       |   |   | Unobservable |   |
|                                                         |   | Carrying |    |   | Assets                         |   |    | Inputs           |   |   | Inputs       |   |
|                                                         |   | Amount   |    |   | (Level 1)                      |   |    | (Level 2)        |   |   | (Level 3)    |   |
| Financial Assets:                                            |   |     |    |   |                           |   |    |             |   |   |         |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |
| Cash and due from banks                                      |   | $        | 16,221  |   |                           | $      | 16,221  |             |   | $      |         |   |   | $ |   |   |
| Interest-bearing deposits in financial institutions          |   |     | 125,008 |   |                           |   | 125,008 |             |   |   |         |   |   |   |   |   |
| Held to maturity investment securities                       |   |     | 7,643   |   |                           |   |    |             |   |   | 7,734        |   |   |   |   |   |
| Loans, net, including loans held for sale                    |   |     | 500,513 |   |                           |   |    |             |   |   |         |   |   |   | 501,837 |   |
| Accrued interest receivable                                  |   |     | 3,800   |   |                           |   |    |             |   |   | 3,800        |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
| Financial Liabilities:                                       |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
| Non-interest bearing demand deposits                         |   | $        | 152,741 |   |                           | $      |    |             |   | $      | 152,741      |   |   | $ |   |   |
| Interest-bearing deposits                                    |   |     | 724,430 |   |                           |   |    |             |   |   | 727,594      |   |   |   |   |   |
| Borrowings                                                   |   |     | 75,743  |   |                           |   |    |             |   |   |         |   |   |   | 75,743 |   |
| Accrued interest payable                                     |   |     | 1,447   |   |                           |   |    |             |   |   | 1,447        |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
| Unrecognized financial instruments (net of contract amount): |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
|                                                         |   |     |    |   |                           |   |    |             |   |   |         |   |   |   |   |   |
| Commitments to originate loans                               |   | $        | -       |   |                           | $      | -       |             |   | $      | -            |   |   | $ | - |   |
| Lines of credit                                              |   |     | -       |   |                           |   | -       |             |   |   | -            |   |   |   | - |   |
| Letters of credit                                            |   |     | -       |   |                           |   | -       |             |   |   | -            |   |   |   | - |   |

----

| December 31, 2011                                            |   |          |    |
|--------------------------------------------------------------|--------|---------------|---------|
|                                                         |   | CarryingValue |    |   | FairValue |   |
|                                                         |   |          |    |   |   |   |
| Financial Assets:                                            |   |          |    |   |   |   |
| Cash and due from banks                                      |   | $             | 16,307  |   |   | $ | 16,307 |   |
| Interest-bearing deposits in financial institutions          |   |          | 46,988  |   |   |   | 46,988 |   |
| Investment securities                                        |   |          | 261,583 |   |   |   | 261,689 |   |
| Loans, net, including loans held-for-sale                    |   |          | 592,828 |   |   |   | 658,359 |   |
| Accrued interest receivable                                  |   |          | 6,453   |   |   |   | 6,453 |   |
|                                                         |   |          |    |   |   |   |   |   |
|                                                         |   |          |    |   |   |   |   |   |
| Financial Liabilities:                                       |   |          |    |   |   |   |   |   |
| Non-interest-bearing demand deposits                         |   | $             | 171,939 |   |   | $ | 171,939 |   |
| Interest-bearing deposits                                    |   |          | 745,356 |   |   |   | 750,355 |   |
| Borrowings                                                   |   |          | 84,835  |   |   |   | 84,829 |   |
| Accrued interest payable                                     |   |          | 877     |   |   |   | 877 |   |
|                                                         |   |          |    |   |   |   |   |   |
| Unrecognized financial instruments (net of contract amount): |   |          |    |   |   |   |   |   |
| Commitments to originate loans                               |   |          | -0-     |   |   |   | -0- |   |
| Lines of credit                                              |   |          | -0-     |   |   |   | -0- |   |
| Letters of credit                                            |   |          | -0-     |   |   |   | -0- |   |

----

|                                                |   | Three Months Ended |   |   | Six Months Ended |   |
|-----------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                |   | June 30,           |   |   | June 30,         |   |
|                                                |   | 2012               |   |   | 2011             |   |   | 2012 |   |   | 2011 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |
| Computed "expected" tax benefit                     |   | $                  | (2,107 | )      |             | $      | (1,870 | ) |   | $ | (1,722 | ) |   | $ | (1,310 | ) |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in income taxes resulting from: |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt income                                   |   |               | (175   | )      |             |   | (300 | ) |   |   | (382 | ) |   |   | (610 | ) |
| State income tax, net of federal tax effect         |   |               | (264   | )      |             |   | (692 | ) |   |   | (229 | ) |   |   | (627 | ) |
| Bank-owned life insurance income                    |   |               | (82    | )      |             |   | (77 | ) |   |   | (164 | ) |   |   | (155 | ) |
| Change in valuation allowance                       |   |               | 2,577  |   |             |   | 0 |   |   |   | 2,469 |   |   |   | 0 |   |
| Other, net                                          |   |               | 51     |   |             |   | 364 |   |   |   | 81 |   |   |   | (39 | ) |
| Actual tax expense (benefit)                        |   | $                  | -      |   |             | $      | (2,575 | ) |   | $ | 53 |   |   | $ | (2,663 | ) |

----

|                                         |   | Actual |    |   | Minimum CapitalRequirement |   |   | MinimumTo Be Well-Capitalized UnderPrompt CorrectiveAction Provisions |   |
|----------------------------------------------|--------|--------|---------|--------|----------------------------|--------|--------|-----------------------------------------------------------------------|--------|
|                                         |   | Amount |    |   | Ratio                      |   |   | Amount                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of June 30, 2012:                         |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                         |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to risk-weighted assets):     |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                         |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (7,736) |   |                       |   | (1.31) | %                                                                     |   | $ | 47,270 |   |   |   | 8.00 | % |   | $ | 70,830 |   |   |   | 12.00 | % |
| Citizens First National Bank                 |   |   | 25,496  |   |                       |   | 4.33   | %                                                                     |   |   | 47,215 |   |   |   | 8.00 | % |   |   | 70,823 |   |   |   | 12.00 | % |
|                                         |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to risk-weighted assets):    |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (7,736) |   |                       |   | (1.31) | %                                                                     |   | $ | 23,610 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Citizens First National Bank                 |   |   | 17,932  |   |                       |   | 3.05   | %                                                                     |   |   | 23,608 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
|                                         |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to average adjusted assets): |   |   |    |   |                       |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (7,736) |   |                       |   | (0.80) | %                                                                     |   | $ | 38,740 |   |   |   | 4.00 | % |   | $ | 77,480 |   |   |   | 8.00 | % |
| Citizens First National Bank                 |   |   | 17,932  |   |                       |   | 1.85   | %                                                                     |   |   | 38,737 |   |   |   | 4.00 | % |   |   | 77,474 |   |   |   | 8.00 | % |

----

|                     |   | Actual |    |   |   Minimum CapitalRequirement |   |   | MinimumTo Be Well-Capitalized UnderPrompt CorrectiveAction Provisions |   |
|----------------------------------------------|--------|--------|---------|--------|-----------------------------------|--------|--------|-----------------------------------------------------------------------|--------|
|                                         |   | Amount |    |   | Ratio                             |   |   | Amount                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2011:                     |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                         |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to risk-weighted assets):     |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (3,418) |   |                              |   | (0.50) | %                                                                     |   | $ | 55,204 |   |   |   | 8.00 | % |   | $ | 81,306 |   |   |   | 12.00 | % |
| Citizens First National Bank                 |   |   | 31,554  |   |                              |   | 4.60   | %                                                                     |   |   | 54,892 |   |   |   | 8.00 | % |   |   | 82,339 |   |   |   | 12.00 | % |
|                                         |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to risk-weighted assets):    |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (3,418) |   |                              |   | (0.50) | %                                                                     |   | $ | 27,102 |   |   |   | 4.00 | % |   | $ |     N/A |   |   |   |   N/A | % |
| Citizens First National Bank                 |   |   | 22,707  |   |                              |   | 3.31   | %                                                                     |   |   | 27,446 |   |   |   | 4.00 | % |   |   |     N/A |   |   |   |   N/A | % |
|                                         |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to average adjusted assets): |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Princeton National Bancorp, Inc.             |   | $      | (3,418) |   |                              |   | (0.32) | %                                                                     |   | $ | 42,365 |   |   |   | 4.00 | % |   | $ | 84,729 |   |   |   | 8.00 | % |
| Citizens First National Bank                 |   |   | 22,707  |   |                              |   | 2.14   | %                                                                     |   |   | 42,354 |   |   |   | 4.00 | % |   |   | 84,718 |   |   |   | 8.00 | % |
|                                         |   |   |    |   |                              |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                               |   | June 30,2012 |    |   | December 31,2011 |   |   | June 30,2011 |   |
|------------------------------------|--------|--------------|---------|--------|------------------|--------|--------|--------------|--------|
|                               |   | Amount       |    |   | % of Total       |   |   | Amount       |   |   | % ofTotal |   |   | Amount |   |   | % of Total |   |
| Commercial                         |   | $            | 50,914  |   |             |   | 9.8    | %            |   | $ | 62,609 |   |   |   | 10.1 | % |   | $ | 129,771 |   |   |   | 19.7 | % |
|                               |   |         |    |   |             |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural                       |   |         | 22,392  |   |             |   | 4.3    | %            |   |   | 61,251 |   |   |   | 9.9 | % |   |   | 64,354 |   |   |   | 9.8 | % |
|                               |   |         |    |   |             |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural real estate           |   |         | 53,328  |   |             |   | 10.3   | %            |   |   | 60,523 |   |   |   | 9.7 | % |   |   | 49,391 |   |   |   | 7.5 | % |
| Commercial real estate             |   |         | 230,902 |   |             |   | 44.3   | %            |   |   | 235,103 |   |   |   | 37.9 | % |   |   | 201,571 |   |   |   | 30.6 | % |
| Commercial real estate development |   |         | 30,124  |   |             |   | 5.8    | %            |   |   | 58,279 |   |   |   | 9.4 | % |   |   | 75,126 |   |   |   | 11.4 | % |
| Residential real estate            |   |         | 91,793  |   |             |   | 17.6   | %            |   |   | 97,172 |   |   |   | 15.6 | % |   |   | 86,673 |   |   |   | 13.2 | % |
| Total Real Estate                  |   |         | 406,147 |   |             |   | 78.0   | %            |   |   | 451,077 |   |   |   | 72.6 | % |   |   | 412,761 |   |   |   | 62.8 | % |
|                               |   |         |    |   |             |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer                           |   |         | 41,196  |   |             |   | 7.9    | %            |   |   | 46,084 |   |   |   | 7.4 | % |   |   | 50,801 |   |   |   | 7.7 | % |
| Total loans                        |   | $            | 520,649 |   |             |   | 100.0  | %            |   | $ | 621,021 |   |   |   | 100.0 | % |   | $ | 657,687 |   |   |   | 100.0 | % |
|                               |   |         |    |   |             |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                       |   | $            | 954,150 |   |             |   |   |         |   | $ | 1,014,316 |   |   |   |   |   |   | $ | 1,069,761 |   |   |   |   |   |
| Loans to total assets              |   |         | 54.6    | %      |             |   |   |         |   |   | 61.2 | % |   |   |   |   |   |   | 61.5 | % |   |   |   |   |

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|                                                           |   | June 30,2012 |   |   | December 31,2011 |   |    | June 30,2011 |   |
|----------------------------------------------------------------|--------|--------------|--------|--------|------------------|--------|---------|--------------|--------|
| Non-accrual                                                    |   | $            | 49,099 |   |             | $      | 79,943  |         |   | $ | 69,550 |   |
| 90 days past due and accruing                                  |   |         | -      |   |             |   | 1,651   |         |   |   | 2,469 |   |
| Restructured                                                   |   |         | 20,318 |   |             |   | 19,378  |         |   |   | 24,950 |   |
| Total non-performing loans                                     |   | $            | 69,417 |   |             | $      | 100,972 |         |   | $ | 96,969 |   |
| Other real estate owned                                        |   |         | 21,141 |   |             |   | 21,848  |         |   |   | 18,308 |   |
| Total non-performing assets                                    |   | $            | 91,455 |   |             | $      | 122,820 |         |   | $ | 115,277 |   |
| Non-performing loans to total loans (net of unearned interest) |   |         | 13.33  | %      |             |   | 16.26   | %            |   |   | 14.74 | % |
| Non-performing assets to total assets                          |   |         | 9.58   | %      |             |   | 12.11   | %            |   |   | 10.78 | % |

| Loan-to-Value |   | Amount |   |
|---------------|--------|--------|--------|
| 0 - 50%       |   | $      | 388    |   |
| 50 - 60%      |   | $      | 58     |   |
| 60 - 70%      |   | $      | -      |   |
| 70 - 80%      |   | $      | 87     |   |
| 80 - 90%      |   | $      | 241    |   |
| 90% +         |   | $      | -      |   |

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|                                                                             |   | June 30,2012 |    |   | December 31,2011 |   |    | June 30,2011 |   |
|----------------------------------------------------------------------------------|--------|--------------|---------|--------|------------------|--------|---------|--------------|--------|
|                                                                             |   |         |    |   |             |   |    |         |   |
| Amount of loans outstanding at end of period (net of unearned interest)          |   | $            | 520,649 |   |             | $      | 621,021 |         |   | $ | 657,687 |   |
| Average amount of loans outstanding for the period (net of unearned interest)    |   | $            | 567,217 |   |             | $      | 584,928 |         |   | $ | 691,101 |   |
| Allowance for loan losses at beginning of year                                   |   | $            | 30,413  |   |             | $      | 29,726  |         |   | $ | 29,726 |   |
| Charge-offs:                                                                     |   |         |    |   |             |   |    |         |   |   |   |   |
| Agricultural                                                                     |   |         | -       |   |             |   | 2,258   |         |   |   | 38 |   |
| Commercial                                                                       |   |         | 1,544   |   |             |   | 44,411  |         |   |   | 18,498 |   |
| Real estate-mortgage                                                             |   |         | 17,535  |   |             |   | 3,541   |         |   |   | 1,439 |   |
| Installment                                                                      |   |         | 667     |   |             |   | 1,667   |         |   |   | 682 |   |
|                                                                             |   |         |    |   |             |   |    |         |   |   |   |   |
| Total charge-offs                                                                |   |         | 19,746  |   |             |   | 51,877  |         |   |   | 20,657 |   |
| Recoveries:                                                                      |   |         |    |   |             |   |    |         |   |   |   |   |
| Agricultural                                                                     |   |         | -       |   |             |   | 15      |         |   |   | -0- |   |
| Commercial                                                                       |   |         | 120     |   |             |   | 501     |         |   |   | 45 |   |
| Real estate-mortgage                                                             |   |         | 1,491   |   |             |   | 10      |         |   |   | 7 |   |
| Installment                                                                      |   |         | 94      |   |             |   | 235     |         |   |   | 83 |   |
|                                                                             |   |         |    |   |             |   |    |         |   |   |   |   |
| Total recoveries                                                                 |   |         | 1,705   |   |             |   | 761     |         |   |   | 135 |   |
|                                                                             |   |         |    |   |             |   |    |         |   |   |   |   |
| Net loans charged off                                                            |   |         | 18,041  |   |             |   | 51,116  |         |   |   | 20,522 |   |
| Provision for loan losses                                                        |   |         | 10,100  |   |             |   | 51,803  |         |   |   | 9,925 |   |
|                                                                             |   |         |    |   |             |   |    |         |   |   |   |   |
| Allowance for loan losses at end of period                                       |   | $            | 22,472  |   |             | $      | 30,413  |         |   | $ | 19,129 |   |
|                                                                             |   |         |    |   |             |   |    |         |   |   |   |   |
| Net loans charged off to average loans (annualized)                              |   |         | 6.36    | %      |             |   | 8.74    | %            |   |   | 5.94 | % |
| Allowance for loan losses non-performing loans                                   |   |         | 32.37   | %      |             |   | 30.12   | %            |   |   | 19.73 | % |
| Allowance for loan losses to total loans at of period (net of unearned interest) |   |         | 4.32    | %      |             |   | 4.90    | %            |   |   | 2.91 | % |

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|                                                  |   | June 30 |   |   | December 31 |   |
|-------------------------------------------------------|--------|---------|--------|--------|-------------|--------|
|                                                  |   | 2012    |   |   | 2011        |   |   | 2010 |   |
| Cash and due from banks                               |   | $       | 8,169  |   |        | $      | 18,362 |   |   | $ | 14,769 |   |
| Interest-bearing deposits with financial institutions |   |    | 78,952 |   |        |   | 54,987 |   |   |   | 55,352 |   |
| Total                                                 |   | $       | 87,121 |   |        | $      | 73,349 |   |   | $ | 70,121 |   |
|                                                  |   |    |   |   |        |   |   |   |   |   |   |   |
| Percent of average total assets                       |   |    | 8.79   | %      |        |   | 6.79 | % |   |   | 6.06 | % |

|                                                  |   | June 30 |    |   | December 31 |   |
|-------------------------------------------------------|--------|---------|---------|--------|-------------|--------|
|                                                  |   | 2012    |    |   | 2011        |   |   | 2010 |   |
| Cash and due from banks                               |   | $       | 16,221  |   |        | $      | 16,307 |   |   | $ | 12,992 |   |
| Interest-bearing deposits with financial institutions |   |    | 125,008 |   |        |   | 46,988 |   |   |   | 30,888 |   |
| Total                                                 |   | $       | 141,229 |   |        | $      | 63,295 |   |   | $ | 43,880 |   |
|                                                  |   |    |    |   |        |   |   |   |   |   |   |   |
| Percent of average total assets                       |   |    | 14.25   | %      |        |   | 6.20 | % |   |   | 4.00 | % |

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|                                               |   |                            |    |   |                            |   |
|----------------------------------------------------|--------|---------------------------------|---------|--------|---------------------------------|--------|
|                                               |   | Six Months Ended, June 30, 2012 |    |   | Six Months Ended, June 30, 2011 |   |
|                                               |   | Average                         |    |   |                            |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                               |   | Balance                         |    |   | Interest                        |   |   | Cost |   |   | Balance |   |   | Interest |   |   | Cost |   |
| Average Interest-Earning Assets                    |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                          |   | $                               | 78,952  |   |                            | $      | 95 |   |   |   | 0.24 | % |   | $ | 47,180 |   |   | $ | 56 |   |   |   | 0.24 | % |
| Taxable investment securities                      |   |                            | 221,725 |   |                            |   | 2,892 |   |   |   | 2.63 | % |   |   | 162,888 |   |   |   | 3,107 |   |   |   | 3.85 | % |
| Tax-exempt investment securities                   |   |                            | 53,409  |   |                            |   | 1,558 |   |   |   | 5.88 | % |   |   | 84,713 |   |   |   | 2,517 |   |   |   | 5.99 | % |
| Net loans                                          |   |                            | 539,361 |   |                            |   | 13,183 |   |   |   | 4.93 | % |   |   | 604,960 |   |   |   | 17,119 |   |   |   | 5.71 | % |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-earning assets                      |   |                            | 893,447 |   |                            |   | 17,728 |   |   |   | 4.00 | % |   |   | 899,741 |   |   |   | 22,799 |   |   |   | 5.11 | % |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average non-interest earning assets                |   |                            | 97,321  |   |                            |   |   |   |   |   |   |   |   |   | 190,943 |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total average assets                               |   | $                               | 990,768 |   |                            |   |   |   |   |   |   |   |   | $ | 1,090,684 |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average Interest-Bearing Liabilities               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                   |   | $                               | 345,585 |   |                            | $      | 545 |   |   |   | 0.32 | % |   | $ | 382,769 |   |   | $ | 1,176 |   |   |   | 0.62 | % |
| Savings deposits                                   |   |                            | 88,297  |   |                            |   | 24 |   |   |   | 0.05 | % |   |   | 81,035 |   |   |   | 29 |   |   |   | 0.07 | % |
| Time deposits                                      |   |                            | 301,081 |   |                            |   | 1,346 |   |   |   | 0.90 | % |   |   | 351,130 |   |   |   | 2,167 |   |   |   | 1.24 | % |
| Interest-bearing demand notes issued to the U.S.   |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury                                           |   |                            | -       |   |                            |   | - |   |   |   | 0.00 | % |   |   | 1,075 |   |   |   | - |   |   |   | 0.00 | % |
| Federal funds purchased and customer repurchase    |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agreements                                         |   |                            | 54,203  |   |                            |   | 171 |   |   |   | 0.64 | % |   |   | 37,506 |   |   |   | 120 |   |   |   | 0.65 | % |
| Advances from Federal Home Loan Bank               |   |                            | 4,093   |   |                            |   | 8 |   |   |   | 0.39 | % |   |   | 6,746 |   |   |   | 32 |   |   |   | 0.96 | % |
| Trust preferred securities                         |   |                            | 25,000  |   |                            |   | 262 |   |   |   | 2.11 | % |   |   | 25,000 |   |   |   | 232 |   |   |   | 1.87 | % |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities                 |   |                            | 818,259 |   |                            |   | 2,356 |   |   |   | 0.58 | % |   |   | 885,261 |   |   |   | 3,756 |   |   |   | 0.86 | % |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net yield on average interest-earning assets       |   |                            | $       | 15,372 |                            |   |   | 3.47 | % |   |   |   |   |   | $ | 19,043 |   |   |   | 4.27 | % |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average non-interest-bearing liabilities           |   |                            | 166,698 |   |                            |   |   |   |   |   |   |   |   |   | 147,665 |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average stockholders' equity                       |   |                            | 5,811   |   |                            |   |   |   |   |   |   |   |   |   | 57,758 |   |   |   |   |   |   |   |   |   |
|                                               |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total average liabilities and stockholders' equity |   | $                               | 990,768 |   |                            |   |   |   |   |   |   |   |   | $ | 1,090,684 |   |   |   |   |   |   |   |   |   |

|                                  |   | For the Six Months Ended |   |
|---------------------------------------|--------|--------------------------|--------|
|                                  |   | June 30,                 |   |
|                                  |   | 2012                     |   |   | 2011 |   |
| Net interest income as stated         |   | $                        | 17,135 |   |   | $ | 18,113 |   |
| Tax equivalent adjustment-investments |   |                     | 530    |   |   |   | 856 |   |
| Tax equivalent adjustment-loans       |   |                     | 63     |   |   |   | 74 |   |
|                                  |   |                     |   |   |   |   |   |   |
| Tax equivalent net interest income    |   | $                        | 17,728 |   |   | $ | 19,043 |   |

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| (a) | Disclosure controls and procedures.  Management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012.  The Corporation’s disclosure controls and procedures are the controls, along with other procedures that are designed to ensure that it will record, process, summarize and report in a timely manner the information it must disclose in reports that it files with or submits to the SEC.  Thomas D. Ogaard, President and Chief Executive Officer, along with other senior management reviewed and participated in this evaluation.  Based on this evaluation, management concluded that, as of the date of the evaluation, disclosure controls were effective. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Internal controls.  Aside from the changes implemented by management as noted below, there have been no significant changes in our internal accounting controls or in other factors during the quarter ended June 30, 2012. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1) | To ensure proper financial reporting, the Corporation utilizes a migration analysis to support the qualitative factor adjustments.  A review of the June 30, 2012 allowance for loan losses calculation was performed including a thorough review of the migration analysis, qualitative factors, and all appraisals on impaired loans received subsequent to June 30, 2012.  Management determined the appropriate allowance for loan losses amount necessary based on generally accepted accounting principles which resulted in the balance of the allowance for loan losses as of June 30, 2012.  Management has not specifically correlated its qualitative factors for the changes in appraisals due to changes in market conditions.  Management continues to obtain subsequent appraisal information to support its qualitative factors and will enhance its documentation by September 30, 2012. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | The evaluation of the allowance for loan losses continues to be subject to enhanced consideration of the loan migration analysis, thereby providing a more objective level of information in support of the qualitative factors used in calculating the allowance for loan losses. The Allowance Review Committee, meets on a quarterly basis, or more often if deemed necessary, to determine the adequacy of the allowance for loan losses calculation. As of June 30, 2012, the Allowance Review Committee included as members the Chief Executive Officer, Chief Credit Officer, EVP & Senior Commercial Banking Manager, SVP Retail Banking and VP & Credit Risk Analytics. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3) | The credit administration department implemented a more robust tracking system of the entire appraisal services process as part of the Corporation’s “real estate, asset valuation standards, and procedures” that includes standards and procedures surrounding the timing of such.  The appraisal services tracking system identifies the date appraisals were ordered within credit administration’s the loan services group through tracking the appraisal technical review process within the credit analysis group.  Each group maintains an independent tracking system on these two key components so  that the deliverables associated with the Bank’s real estate, asset valuation standards and procedures are met, along with ensuring the accurate and timely reporting of valuations as they impact its financial reporting.  Management has also enhanced and documented the timing requirement of both the appraisal ordering and their review process to ensure the information is received timely for accurate reporting related to the quarterly financial statement preparation process. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 1) | Having the Company’s former Chief Operating Officer assumed the responsibilities of the Chief Financial Officer during substantially the entire quarter. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | Having the internal audit perform an audit of the accounting functions with the primary objective of evaluating the process and significant control points for effectiveness, adequacy and efficiency of operations.  Deficiencies identified as a result of the audit have been assessed by management and remediation measures are being taken. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3) | Contracting with independent contractors with experience in financial accounting and reporting in June to prepare regulatory and SEC reports. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------|