UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C.  20549
  
  FORM
        10-Q
 (Mark
                  One)x
              QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIESEXCHANGE
                  ACT OF 1934
  For
                  the quarterly period ended
              September
                  30, 2008
  **OR**
  o
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIESEXCHANGE
                  ACT OF 1934
 
 For
                  the transition period from
              _____________________
                  to ________________________
  Commission
                  File Number029276
  FIRST
                  ROBINSON FINANCIAL CORPORATION(Exact
                  name of registrant as specified in its
                  charter)
 
 DELAWARE
              36-4145294(State
                  or other jurisdiction of
              (I.R.S.
                  Employerincorporation
                  or organization)
              Identification
                  Number)501
                  East Main Street, Robinson, Illinois
              62454(Address
                  of principal executive offices)
              (Zip
                  Code)
 
 Registrant’s
                  telephone number, including area code
              (618)
                  544-8621
 
 None
 (Former
        name, former address and former fiscal year, if changed since last
        report)
 
 Indicate
        by check mark **** whether
        the registrant (1) has filed all reports required to be filed by Section
        13 or
        15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
        (or
        for such shorter period that the registrant was required to file such reports),
        and (2) has been subject to such filing requirements for the past 90
        days.  Yes x No o
 
 Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, a non-accelerated filer or a smaller reporting
        company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
        Exchange Act.
  Larger
                  Accelerated Filer
              **o**
              Accelerated
                  Filer
              oNon-Accelerated
                  Filer
              **o**(Do not check if a smaller reporting company)
              Smaller
                  Reporting Company
              x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act.)   Yes o No x
 
 The
        number of shares outstanding of each of the issuer’s classes of common stock, as
        of the latest practicable date:  436,128 shares of common stock, par
        value $.01 per share, as of November 12, 2008.
  
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Index
        to
        Form 10-Q
 
 PAGEPART
                  1. FINANCIAL INFORMATIONItem
                  1.
              Financial
                  StatementsCondensed
                  Consolidated Balance Sheets as of September 30, 2008 And March
                  31,
                  2008
              3Condensed
                  Consolidated Statements of Income for the Three-Month And Six-Month
                  Periods Ended September 30, 2008 and 2007
              4Condensed
                  Consolidated Statements of Changes in Stockholders’ Equity For the
                  Six-Month Periods ended September 30, 2008 and 2007
              6Condensed
                  Consolidated Statements of Cash Flows for the Six-Month Periods
                  Ended
                  September 30, 2008 and 2007
              7Notes
                  to Condensed Consolidated Financial Statements
              9Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              15Item
                  3.
              Quantitative
                  and Qualitative Disclosures about Market Risk
              30Item
                  4.
              Controls
                  and Procedures
              30PART
                  II. OTHER INFORMATIONItem
                  1.
              Legal
                  Proceedings
              31Item
                  1.A.
              Risk
                  Factors
              31Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              31Item
                  3.
              Defaults
                  Upon Senior Executives
              31Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              32Item
                  5.
              Other
                  Information
              32Item
                  6.
              Exhibits
              32SIGNATURES
              33CERTIFICATIONS
              34
  2
 
 Item
        1:
 FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED BALANCE SHEETS
 (In
        thousands, except share data)
  (Unaudited)September 30, 2008
              
              March 31, 2008ASSETSCash
                  and cash equivalents
              
              $
              12,559
              
              $
              19,528Available-for-sale
                  securities
              
              
              46,852
              
              
              31,535Loans,
                  held for sale
              
              
              —
              
              
              101Loans,
                  net of allowance for loan losses of $752 and $727 at September
                  30, 2008
                  and March 31, 2008, respectively
              
              
              79,886
              
              
              76,145Federal
                  Reserve and Federal Home Loan Bank stock
              
              
              808
              
              
              808Premises
                  and equipment, net
              
              
              3,307
              
              
              2,851Foreclosed
                  assets held for sale, net
              
              
              90
              
              
              16Interest
                  receivable
              
              
              909
              
              
              758Deferred
                  income taxes
              
              
              44
              
              
              —Cash
                  surrender value of life insurance
              
              
              1,427
              
              
              1,396Other
                  assets
              
              
              704
              
              
              671Total
                  Assets
              
              $
              146,586
              
              $
              133,809LIABILITIES
                  AND STOCKHOLDERS’ EQUITY**Liabilities**Deposits
              
              
              115,559
              
              
              103,898Other
                  borrowings
              
              
              17,587
              
              
              16,253Advances
                  from borrowers for taxes and insurance
              
              
              77
              
              
              149Accrued
                  income taxes
              
              
              25
              
              
              159Deferred
                  income taxes
              
              
              —
              
              
              2Interest
                  payable
              
              
              252
              
              
              262Other
                  liabilities
              
              
              1,112
              
              
              1,210Total
                  Liabilities
              
              
              134,612
              
              
              121,933**Commitments
                  and Contingencies**
              
              
              —
              
              
              —**Stockholders’
                  Equity**Preferred
                  stock, $.01 par value; authorized 500,000 shares, no shares issued
                  and
                  outstanding
              
              
              —
              
              
              —Common
                  stock, $ .01 par value; authorized 2,000,000 shares; 859,625 shares
                  issued; outstanding September 30, 2008– 452,980 shares; March 31,
                  2008 – 451,464 shares
              
              
              9
              
              
              9Additional
                  paid-in capital, September 30, 2008 – 0 shares; March 31, 2008 –
                  7,231 shares
              
              
              8,772
              
              
              8,491Retained
                  earnings
              
              
              10,187
              
              
              10,114Accumulated
                  other comprehensive income
              
              
              234
              
              
              247Treasury
                  stock, at costCommon:
                  September 30, 2008 – 406,645 shares; March 31, 2008 – 400,930
                  shares
              
              
              (7,228
              )
              
              (6,985
              )Total
                  Stockholders’ Equity
              
              
              11,974
              
              
              11,876Total
                  Liabilities and Stockholders’ Equity
              
              $
              146,586
              
              $
              133,809
  See
        Notes
        to Condensed Consolidated Financial Statements.
  3
  FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME
 For
        the
        Three and Six-Month Periods Ended September 30, 2008 and 2007
 (In
        thousands, except per share data)
 (Unaudited)
 
 Three-Month Period
              
              Six-Month Period2008
              
              2007
              
              2008
              
              2007Interest
                  and Dividend Income:Loans
              
              $
              1,343
              
              $
              1,420
              
              $
              2,656
              
              $
              2,792Securities:Taxable
              
              
              519
              
              
              326
              
              
              929
              
              
              664Tax-exempt
              
              
              21
              
              
              25
              
              
              42
              
              
              49Other
                  interest income
              
              
              32
              
              
              89
              
              
              109
              
              
              108Dividends
                  on Federal Reserve Bank stock
              
              
              3
              
              
              7
              
              
              5
              
              
              14Total
                  Interest and Dividend Income
              
              
              1,918
              
              
              1,867
              
              
              3,741
              
              
              3,627Interest
                  Expense:Deposits
              
              
              710
              
              
              651
              
              
              1,394
              
              
              1,268Other
                  borrowings
              
              
              57
              
              
              157
              
              
              106
              
              
              274Total
                  Interest Expense
              
              
              767
              
              
              808
              
              
              1,500
              
              
              1,542Net
                  Interest Income
              
              
              1,151
              
              
              1,059
              
              
              2,241
              
              
              2,085Provision
                  for Loan Losses
              
              
              130
              
              
              15
              
              
              160
              
              
              30Net
                  Interest Income After Provision for Loan Losses
              
              
              1,021
              
              
              1,044
              
              
              2,081
              
              
              2,055Non-interest
                  income:Charges
                  and fees on deposit accounts
              
              
              231
              
              
              245
              
              
              448
              
              
              462Charges
                  and other fees on loans
              
              
              40
              
              
              19
              
              
              84
              
              
              57Net
                  gain on sale of loans
              
              
              30
              
              
              24
              
              
              72
              
              
              55Net
                  gain on sale of foreclosed assets
              
              
              —
              
              
              3
              
              
              —
              
              
              3Net
                  realized gain on sale of available-for-sale investments
              
              
              2
              
              
              —
              
              
              2
              
              
              —Other
              
              
              105
              
              
              104
              
              
              234
              
              
              202Total
                  Non-Interest Income
              
              
              408
              
              
              395
              
              
              840
              
              
              779Non-interest
                  expense:Compensation
                  and employee benefits
              
              
              569
              
              
              508
              
              
              1,301
              
              
              1,100Occupancy
                  and equipment
              
              
              158
              
              
              154
              
              
              333
              
              
              304Foreclosed
                  property expense
              
              
              6
              
              
              2
              
              
              7
              
              
              2Data
                  processing
              
              
              60
              
              
              52
              
              
              119
              
              
              103Audit,
                  legal and other professional
              
              
              49
              
              
              52
              
              
              99
              
              
              90Advertising
              
              
              52
              
              
              30
              
              
              97
              
              
              63Telephone
                  and postage
              
              
              33
              
              
              22
              
              
              59
              
              
              47Net
                  loss on sale of foreclosed property
              
              
              —
              
              
              —
              
              
              4
              
              
              —Net
                  loss on disposal of fixed assets
              
              
              —
              
              
              4
              
              
              —
              
              
              4Other
              
              
              135
              
              
              173
              
              
              276
              
              
              296Total
                  Non-Interest Expense
              
              
              1,062
              
              
              997
              
              
              2,295
              
              
              2,009
  See
        Notes
        to Condensed Consolidated Financial Statements.
  4
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
 For
        the
        Three and Six-Month Periods Ended September 30, 2008 and 2007
 (In
        thousands, except per share data)
 (Unaudited)
 
 Three-Month Period
              
              Six-Month Period2008
              
              2007
              
              2008
              
              2007Income
                  before income taxes
              
              
              367
              
              
              442
              
              
              626
              
              
              825Provision
                  for income taxes
              
              
              123
              
              
              150
              
              
              208
              
              
              260Net
                  Income
              
              $
              244
              
              $
              292
              
              $
              418
              
              $
              565Earnings
                  Per Share-Basic
              
              $
              0.56
              
              $
              0.64
              
              $
              0.95
              
              $
              1.22Earnings
                  Per Share-Diluted
              
              $
              0.54
              
              $
              0.61
              
              $
              0.92
              
              $
              1.16
 
 See
        Notes
        to Condensed Consolidated Financial Statements.
  5
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
 For
        the
        Six-Months Ended September 30, 2008 and 2007
 (In
        thousands, except per share data)
 (Unaudited)
 
 **Accumulated****Additional**
              
              
              
              **Other****Common Stock**
              
              **Paid-in**
              
              **Retained**
              
              **Comprehensive**
              
              **Treasury**
              
              
              
              **Comprehensive****Shares**
              
              **Amount**
              
              **Capital**
              
              **Earnings**
              
              **Income
                  (Loss)**
              
              **Stock**
              
              **Total**
              
              **Income****Balance,
                  April 1, 2007**
              
              
              484,908
              
              $
              9
              
              $
              8,406
              
              $
              9,459
              
              $
              (199
              )
              $
              (5,785
              )
              $
              11,890Comprehensive
                  incomeNet
                  income
              
              
              
              
              
              
              
              
              
              
              
              565
              
              
              
              
              
              
              
              
              565
              
              
              565Change
                  in unrealized (depreciation) on available-for-sale securities,
                  net of
                  taxes of $(17)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (30
              )
              
              
              
              
              (30
              )
              
              (30
              )Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              535Treasury
                  shares purchased
              
              
              (31,200
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,035
              )
              
              (1,035
              )Dividends
                  on common stock, $0.65 per share
              
              
              
              
              
              
              
              
              
              
              
              (316
              )
              
              
              
              
              
              
              
              (316
              )Stock
                  options exercised
              
              
              3,000
              
              
              
              
              
              49
              
              
              
              
              
              
              
              
              52
              
              
              101Incentive
                  compensation
              
              
              
              
              
              
              
              
              (10
              )
              
              
              
              
              
              
              
              
              
              
              (10
              )Rounding
              
              
              
              
              
              
              
              
              1
              
              
              
              
              
              
              
              
              
              
              
              1**Balance,
                  September 30, 2007**
              
              
              456,708
              
              $
              9
              
              $
              8,446
              
              $
              9,708
              
              $
              (229
              )
              $
              (6,768
              )
              $
              11,166**Balance,
                  April 1, 2008**
              
              
              451,464
              
              $
              9
              
              $
              8,491
              
              $
              10,114
              
              $
              247
              
              $
              (6,985
              )
              $
              11,876Comprehensive
                  incomeNet
                  income
              
              
              
              
              
              
              
              
              
              
              
              418
              
              
              
              
              
              
              
              
              418
              
              
              418Change
                  in unrealized (depreciation) on available-for-sale securities,
                  net of
                  taxes of $(7)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (13
              )
              
              
              
              
              (13
              )
              
              (13
              )Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              405Treasury
                  shares purchased
              
              
              (7,936
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              (282
              )
              
              (282
              )Transfer
                  of Unallocated Recognition and Retention Shares to Treasury
                  Shares
              
              
              
              
              
              
              
              
              125
              
              
              
              
              
              
              
              
              (125
              )
              
              —Dividends
                  on common stock, $0.75 per share
              
              
              
              
              
              
              
              
              
              
              
              (345
              )
              
              
              
              
              
              
              
              (345
              )Incentive
                  compensation
              
              
              
              
              
              
              
              
              (12
              )
              
              
              
              
              
              
              
              
              
              
              (12
              )Stock
                  options exercised
              
              
              9,452
              
              
              
              
              
              168
              
              
              
              
              
              
              
              
              164
              
              
              332**Balance,
                  September 30, 2008**
              
              
              452,980
              
              $
              9
              
              $
              8,772
              
              $
              10,187
              
              $
              234
              
              $
              (7,228
              )
              $
              11,974
 
 See
        Notes
        to Condensed Consolidated Financial Statements.
  6
  FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 For
        the
        Six-Months Ended September 30, 2008 and 2007
 (In
        thousands)
 (Unaudited)
 
 2008
              
              2007Cash
                  flows from operating activities:Net
                  income
              
              $
              418
              
              $
              565Items
                  not requiring (providing) cashDepreciation
                  and amortization
              
              
              147
              
              
              148Provision
                  for loan losses
              
              
              160
              
              
              30Amortization
                  of premiums and discounts on securities
              
              
              (16
              )
              
              (22
              )Amortization
                  of loan servicing rights
              
              
              25
              
              
              27Compensation
                  related to the exercise of options
              
              
              182
              
              
              69Deferred
                  income taxes
              
              
              (39
              )
              
              (4
              )Originations
                  of mortgage loans held for sale
              
              
              (4,531
              )
              
              (3,527
              )Proceeds
                  from the sale of mortgage loans
              
              
              4,704
              
              
              3,582Net
                  gain on loans sold
              
              
              (72
              )
              
              (55
              )Net
                  realized gain on available for sale securities sold
              
              
              (2
              )
              
              —Net
                  loss (gain) on sale of foreclosed property
              
              
              4
              
              
              (3
              )Net
                  loss on disposal of fixed assets
              
              
              —
              
              
              4Changes
                  in:Interest
                  receivable
              
              
              (151
              )
              
              (97
              )Cash
                  surrender value of life insurance
              
              
              (31
              )
              
              (27
              )Other
                  assets
              
              
              (76
              )
              
              (84
              )Accrued
                  income taxes
              
              
              (134
              )
              
              32Interest
                  payable
              
              
              (10
              )
              
              24Other
                  liabilities
              
              
              (98
              )
              
              (67
              )Net
                  cash provided by operating activities
              
              
              480
              
              
              595Cash
                  flows from investing activities:Purchase
                  of securities available for sale
              
              
              (21,062
              )
              
              —Proceeds
                  from maturities of available for sale securities
              
              
              1,000
              
              
              —Proceeds
                  from sale of available for sale securities
              
              
              953
              
              
              —Repayments
                  of principal on mortgage-backed securities
              
              
              3,790
              
              
              2,641Net
                  change in loans
              
              
              (3,991
              )
              
              (5,044
              )Proceeds
                  from sale of foreclosed assets
              
              
              12
              
              
              27Purchase
                  of premises and equipment
              
              
              (585
              )
              
              (41
              )Net
                  cash used in investing activities
              
              
              (19,883
              )
              
              (2,417
              )
 
 See
        Notes
        to Condensed Consolidated Financial Statements.
  7
  FIRST
        ROBINSON FINANCIAL CORPORATION
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 For
        The
        Six-Months Ended September 30, 2008 and 2007
 (In
        thousands)
 (Unaudited)
  2008
              
              2007Cash
                  flows from financing activities:Net
                  increase in deposits
              
              $
              11,661
              
              $
              5,137Proceeds
                  from other borrowings
              
              
              79,294
              
              
              65,451Repayment
                  of other borrowings
              
              
              (77,960
              )
              
              (62,825
              )Proceeds
                  from federal funds purchased
              
              
              —
              
              
              95,955Repayment
                  of federal funds purchased
              
              
              —
              
              
              (95,955
              )Purchase
                  of incentive plan shares
              
              
              (12
              )
              
              (10
              )Proceeds
                  received from exercise of stock options
              
              
              150
              
              
              32Purchase
                  of treasury stock
              
              
              (282
              )
              
              (1,034
              )Dividends
                  paid
              
              
              (345
              )
              
              (316
              )Net
                  decrease in advances from borrowers for taxes and
                  insurance
              
              
              (72
              )
              
              (63
              )Net
                  cash provided by financing activities
              
              
              12,434
              
              
              6,372(Decrease)
                  increase in cash and cash equivalents
              
              
              (6,969
              )
              
              4,550Cash
                  and cash equivalents at beginning of period
              
              
              19,528
              
              
              4,049Cash
                  and cash equivalents at end of period
              
              $
              12,559
              
              $
              8,599Supplemental
                  Cash Flows Information:Interest
                  paid
              
              $
              1,510
              
              $
              1,517Income
                  taxes paid (net of refunds)
              
              
              380
              
              
              232Real
                  estate acquired in settlement of loans
              
              
              90
              
              
              24
 
 See
        Notes
        to Condensed Consolidated Financial Statements.
  8
  FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 1.
              Basis
                  of Presentation
 
 The
        condensed consolidated financial statements include the accounts of First
        Robinson Financial Corporation (the “Company”) and its wholly owned subsidiary,
        First Robinson Savings Bank, National Association (the “Bank”). All significant
        intercompany accounts and transactions have been eliminated in consolidation.
        The accompanying condensed consolidated financial statements are unaudited
        and
        should be read in conjunction with the consolidated financial statements
        and
        notes thereto included in the Company’s Form 10-KSB filed with the Securities
        and Exchange Commission. The accompanying unaudited interim condensed
        consolidated financial statements have been prepared in accordance with the
        rules and regulations for reporting on Form 10-Q and Article 8-03 of Regulation
        of S-X. Accordingly, they do not include information or footnotes necessary
        for
        a complete presentation of financial condition, results of operations, changes
        in stockholders’ equity, and cash flows in conformity with accounting principles
        generally accepted in the United States of America. In the opinion of management
        of the Company, the unaudited condensed consolidated financial statements
        reflect all adjustments (consisting of normal recurring adjustments) necessary
        to present fairly the financial position of the Company at September 30,
        2008,
        the results of its operations for the three month and six month periods ended
        September 30, 2008 and 2007, the changes in stockholders’ equity for the six
        month periods ended September 30, 2008 and 2007, and cash flows for six month
        periods ended September 30, 2008 and 2007. The results of operations for
        those
        months ended September 30, 2008 are not necessarily indicative of the results
        to
        be expected for the full year.
 
 The
        Condensed Consolidated Balance Sheet of the Company, as of March 31, 2008,
        has
        been derived from the audited Consolidated Balance Sheet for the Company
        as of
        that date.
 
 2.
              Newly
                  Adopted Accounting
                  Pronouncements
  Effective
        April 1, 2008, the Company adopted Statement of Financial Standards
        No. 157, *Fair
        Value Measurements* (FAS
        157). FAS 157 defines fair value, establishes a framework for measuring fair
        value and expands disclosures about fair value measurements. FAS 157 has
        been
        applied prospectively as of the beginning of the year.
  FAS
        157
        defines fair value as the price that would be received to sell an asset or
        paid
        to transfer a liability in an orderly transaction between market participants
        at
        the measurement date. FAS 157 also establishes a fair value hierarchy which
        requires an entity to maximize the use of observable inputs and minimize
        the use
        of unobservable inputs when measuring fair value. The standard describes
        three
        levels of inputs that may be used to measure fair value:
 **Level
                  1**
              
              Quoted
                  prices in active markets for identical assets or
                  liabilities.**Level
                  2**
              
              Observable
                  inputs other than Level 1 prices, such as quoted prices for similar
                  assets
                  or liabilities; quoted prices in markets that are not active; or
                  other
                  inputs that are observable or can be corroborated by observable
                  market
                  data for substantially the full term of the assets or
                  liabilities.**Level
                  3**
              
              Unobservable
                  inputs that are supported by little or no market activity and that
                  are
                  significant to the fair value of the assets or
                  liabilities.
  Following
        is a description of the valuation methodologies used for instruments measured
        at
        fair value on a recurring basis and recognized in the accompanying condensed
        consolidated balance sheet at September 30, 2008.
  ***Available-for-Sale
        Securities***
  The
        fair
        value of available-for-sale securities are determined by various valuation
        methodologies. Where quoted market prices are available in an active market,
        securities are classified within Level 1. The Company has no Level 1 securities.
        If quoted market prices are not available, then fair values are estimated
        using
        pricing models or quoted prices of securities with similar characteristics.
        Level 2 securities include Obligations of U.S. government corporations and
        agencies, Obligations of states and political subdivisions, mortgage-backed
        securities, and collateralized mortgage obligations. In certain cases where
        Level 1 or Level 2 inputs are not available, securities are classified within
        Level 3 of the hierarchy. The Company has no Level 3 available-for-sale
        securities.
  9
  FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  The
        following table presents the Company’s assets that are measured at fair value on
        a recurring basis and the level within the FAS 157 hierarchy in which the
        fair
        value measurements fall as of September 30, 2008 (in thousands):
 
 **Carrying value at September 30, 2008****Description**
              
              **Fair Value**
              
              **Quoted Prices**
                **in**
                **Active Markets**
                **for Identical**
                **Assets**
                **(Level 1)**
              
              **Significant**
                **Other**
                **Observable**
                **Inputs**
                **(Level 2)**
              
              **Significant**
                **Unobservable**
                **Inputs**
                **(Level 3)**Available-for-sale
                  securities
              
              $
              46,852
              
              
              
              
              $
              46,852
  The
        Company may be required, from time to time, to measure certain other financial
        assets and liabilities on a nonrecurring basis. These adjustments to fair
        value
        usually result from application of lower-of-cost-or-market accounting or
        write-downs of individual assets. For assets measured at fair value on a
        nonrecurring basis in the first six months of fiscal 2009 that were still
        held
        on the balance sheet at September 30, 2008, the following table provides
        the
        level of valuation assumptions used to determine each adjustment and the
        fair
        value of the assets at September 30, 2008 (in thousands).
 
 **Carrying value at September 30, 2008****Quoted Prices in**
              
              **Significant****Active Markets**
              
              **Other**
              
              **Significant****for Identical**
              
              **Observable**
              
              **Unobservable****Assets**
              
              **Inputs**
              
              **Inputs****Description**
              
              **Fair Value**
              
              **(Level 1)**
              
              **(Level
                  2)**
              
              **(Level
                  3)**Impaired
                  loans
              
              $
              61
              
              
              
              
              
              
              
              $
              61
  ***Impaired
        Loans***
  Loans
        for
        which it is probable that the Company will not collect all principal and
        interest due according to contractual terms are measured for impairment in
        accordance with the provisions of Financial Accounting Standard No. 114
        (“FAS 114”) “Accounting by Creditors for Impairment of a Loan.” Allowable
        methods for estimating fair value include using the fair value of the collateral
        or collateral dependent loans or, where a loan is determined not to be
        collateral dependent, using the discounted cash flow method.
  If
        the
        impaired loan is identified as collateral dependent, then the fair value
        method
        of measuring the amount of the impairment is utilized. This method requires
        reviewing an independent appraisal of the collateral and applying a discount
        factor to the value based on management’s estimation process.
 
 The
        change in fair value of impaired loans that were valued based upon Level
        3
        inputs was approximately $13,000 and $11,000, respectively, for the three
        and
        six months ended September 30, 2008. The reduction is not recorded directly
        as
        an adjustment to current earnings or comprehensive income, but rather as
        a
        component in determining the overall adequacy of the allowance for loan losses.
        These adjustments to the estimated fair value of impaired loans may result
        in
        increases or decreases to the provision for loan losses recorded in current
        earnings.
 
 In
        February 2007, the FASB issued SFAS No. 159, *The
        Fair Value Option for Financial Assets and Financial Liabilities - Including
        an
        Amendment of FASB Statement No. 115* .  This
        Statement permits entities to choose to measure many financial instruments
        and
        certain other items at fair value.  Unrealized gains and losses on
        items for which the fair value option has been elected will be reported in
        earnings.  The objective is to improve financial reporting by
        providing entities with the opportunity to mitigate volatility in reported
        earnings caused by measuring related assets and liabilities differently without
        having to apply complex hedge accounting provisions.  This Statement
        is expected to expand the use of fair value measurement, which is consistent
        with the FASB’s long-term measurement objectives for accounting for financial
        instruments.  SFAS No. 159 is effective for fiscal years beginning
        after November 15, 2007.  The Company has not elected the fair value
        option for any financial assets or liabilities as of September 30,
        2008.
  10
  FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 3.
              Federal
                  Home Loan Bank Stock
 
 The
        Company owns approximately $642,000 of Federal Home Loan Bank of Chicago
        (“FHLB”) stock.  During the third quarter of 2007, the FHLB of Chicago
        received a Cease and Desist Order from its regulator, the Federal Housing
        Finance Agency.  The order generally prohibits capital stock
        repurchases and redemptions until a time to be determined by the Federal
        Housing
        Finance Agency.  With regard to dividends, which have not been
        declared since July 24, 2007, the FHLB will continue to assess its dividend
        capacity each quarter and make appropriate requests for
        approval.  Management performed an analysis and deemed the investment
        in FHLB stock to be not impaired as of September 30, 2008.  During the
        second quarter of 2008, the Federal Home Loan Bank reported that it will
        no
        longer enter into new master commitments or renew existing master commitments
        to
        purchase mortgage loans from participating financial institutions under the
        Mortgage Partnership Finance (MPF) program.  It will continue to fund
        new loans under existing master commitments through October 31, 2008.  In
        September 2008, the FHLB announced a new MPF program, MPF Xtra, where the
        FHLB
        will sell a participant’s loans to Fannie Mae. The Company will participate in
        the new MPF program.
 
 4.
              Authorized
                  Share Repurchase Program
 
 On
        July
        24, 2008, the Board of Directors of First Robinson Financial Corporation
        voted
        to approve the extension and expansion of the repurchase program of its equity
        stock approved on September 18, 2007. The Company may repurchase up to 22,000
        additional shares of the Company’s outstanding common stock in the open market
        or in negotiated private transactions from time to time when deemed appropriate
        by management. The increase represents approximately 5% of the Company’s issued
        and outstanding shares.  As of July 24, 2008, the Company had
        repurchased 20,108 shares of its common stock out of the 25,000 shares that
        had
        been previously authorized for repurchase.  As a result of these
        actions, the Company is currently authorized to repurchase 26,892 shares
        of
        common stock. The program, with an original expiration date of September
        17,
        2008, has been extended to August 1, 2009 or the earlier of the completion
        of
        the repurchase of the 26,892 shares. As of September 30, 2008, 4,950 shares
        of
        the 26,892 have been purchased in the new program leaving 21,942 remaining
        to be
        purchased.
 
 5.
              Stock-based
                  Compensation
 
 On
        July
        29, 1998, the stockholders of the Company approved a Stock Option Plan (“SOP”)
        and a Recognition and Retention Plan (“RRP”). Options and restricted shares were
        granted to directors, officers and employees at the fair value of the shares
        as
        of that date. The plans were for a period of ten (10) years with a five year
        vesting period for both plans from the date of the grant. Prior to April
        1, 2006
        the Company accounted for the Plan under the recognition and measurement
        provisions of Accounting Principles Board Opinion No. 25, "Accounting for
        Stock
        Issued to Employees," and related Interpretations.
 
 In
        December 2004, the Financial Accounting Standards Board ("FASB") issued
        Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004),
        "Share Based Payment," which established standards for the accounting for
        transactions in which an entity exchanges its equity instruments for goods
        or
        services, and focuses primarily on accounting for transactions in which an
        entity obtains employee services. The SFAS requires a public entity to measure
        the cost of employee services received in exchange for its equity instruments
        based on the fair value at the grant date (with limited exceptions) and
        recognize that cost over the service period. This statement revises SFAS
        No.
        123, "Accounting for Stock-Based Compensation," and supersedes APB Opinion
        No.
        25, "Accounting for Stock Issued to Employees." Effective April 1, 2006,
        the
        Company adopted the provisions of SFAS No. 123 (revised 2004). As a result
        of
        adopting SFAS No. 123R on April 1, 2006, the Company did not record any
        additional compensation expense, as no stock options had been granted in
        recent
        years and options granted were fully vested prior to adoption. However, on
        April
        1, 2006, the Company reclassified $125,000 of unearned compensation, or 7,231
        shares, related to previously recognized compensation for restricted share
        awards that had been vested as of that date to additional paid-in capital
        as
        these awards represent equity awards as defined in SFAS No. 123R. The RRP
        expired July 29, 2008 and the unallocated 7,231 shares were transferred to
        Treasury Stock at that time.
  11
  FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 6.
              Earnings
                  Per Share for the Three-Month
                  Periods
 
 Basic
        earnings per share is calculated by dividing net income by the weighted average
        number of common shares outstanding during the period. Diluted earnings per
        share gives effect to the increase in the average shares outstanding which
        would
        have resulted from the exercise of dilutive stock options. As of September
        30,
        2008, all outstanding options had been exercised. Therefore, there is no
        dilutive effect with regards to options for the earnings per share calculation
        for the three month period ended September 30, 2008. The components of basic
        and
        diluted earnings per share for the three months ended September 30, 2008
        and
        2007 were computed as follows (dollar amounts in thousands except share
        data):
  WeightedAverage
              
              Per
                  ShareIncome
              
              Shares
              
              AmountFor
                  the Three-Months Ended September 30, 2008:Basic
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              244
              
              
              439,170
              
              $
              0.56Effect
                  of Dilutive Securities:Incentive
                  plan shares
              
              
              
              
              
              16,148Diluted
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              244
              
              
              455,318
              
              $
              0.54For
                  the Three-Months Ended September 30, 2007:Basic
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              292
              
              
              457,153
              
              $
              0.64Effect
                  of Dilutive Securities:Incentive
                  plan shares
              
              
              
              
              
              16,287Stock
                  options
              
              
              
              
              
              6,426Diluted
                  Earnings per Share:Income
                  available for common stockholders
              
              $
              292
              
              
              479,866
              
              $
              0.61
  12
  FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 7.
              Earnings
                  Per Share for the Six-Month
                  Periods
 
 Basic
        earnings per share is calculated by dividing net income by the weighted average
        number of common shares outstanding during the period. Diluted earnings per
        share gives effect to the increase in the average shares outstanding which
        would
        have resulted from the exercise of dilutive stock options. As of September
        30,
        2008, all outstanding options had been exercised. Therefore, there is no
        dilutive effect with regards to options for the earnings per share calculation
        for the six month period ended September 30, 2008. The components of basic
        and
        diluted earnings per share for the six months ended September 30, 2008 and
        2007
        were computed as follows (dollar amounts in thousands except share
        data):
 
 WeightedAverage
              
              Per
                  ShareIncome
              
              Shares
              
              AmountFor
                  the Six-Months Ended September 30, 2008:Basic
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              418
              
              
              439,386
              
              $
              0.95Effect
                  of Dilutive Securities:Unearned
                  incentive plan shares
              
              
              
              
              
              16,058Diluted
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              418
              
              
              455,444
              
              $
              0.92For
                  the Six-Months Ended September 30, 2007:Basic
                  Earnings per Share:Income
                  available to common stockholders
              
              $
              565
              
              
              462,677
              
              $
              1.22Effect
                  of Dilutive Securities:Unearned
                  incentive plan shares
              
              
              
              
              
              16,146Stock
                  options
              
              
              
              
              
              6,541Diluted
                  Earnings per Share:Income
                  available for common stockholders
              
              $
              565
              
              
              485,364
              
              $
              1.16
  13
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 8.
              Recent
                  Accounting Pronouncements
 
 In
        October 2008, The Financial Accounting Standards Board (‘FASB’) issued FASB
        Staff Position No. 157-3, “Determining the Fair Value of a Financial Asset When
        the Market for That Asset is Not Active.” FSP 157-3 clarifies the application of
        Statement of Financial Accounting Standards No. 157 (FAS 157), “Fair Value
        Measurements,” in a market that is not active and provides an example to
        illustrate key considerations in determining fair value of financial assets
        when
        the market for that financial asset is not active. FSP 157-3 applies to
        financial assets within the scope of accounting prouncements that require
        or
        permit fair value measurements in accordance with FAS 157. FSP 157-3 was
        effective upon the issuance and included prior periods for which financial
        statements had not been issued. The application of FSP 157-3 did not have
        a
        material impact on the Company’s condensed consolidated financial
        statements
 
 In
        March 2008, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards No. 161 (FAS 161), “Disclosures
        about Derivative Instruments and Hedging Activities — an amendment of FASB
        Statement No. 133.” FAS 161 requires qualitative disclosures about
        objectives and strategies for using derivatives, quantitative disclosures
        about
        fair value amounts of gain and losses on derivative instruments, and disclosures
        about credit-risk-related contingent features in derivative agreements. FAS
        161
        is effective for fiscal years beginning after November 15, 2008. The
        Company does not expect the implementation of FAS 161 to have a material
        impact
        on its consolidated financial statements.
 
 In
        December, 2007, the FASB issued Statement of Financial Standards No. 160
        (FAS 160), “Noncontrolling Interests in Consolidated Financial Statements — an
        amendment of ARB No. 51.” FAS 160 requires that a noncontrolling interest
        in a subsidiary be reported separately within equity and the amount of
        consolidated net income specifically attributable to the noncontrolling interest
        be identified in the consolidated financial statements. It also calls for
        consistency in the manner of reporting changes in the parent’s ownership
        interest and requires fair value measurement of any noncontrolling equity
        investment retained in deconsolidation. FAS 160 is effective for fiscal years
        beginning after December 15, 2008. The Company does not expect the
        implementation of FAS 160 to have a material impact on its consolidated
        financial statements.
 
 In
        December 2007, the FASB issued Statement of Financial Accounting Standards
        No. 141(R) (FAS 141(R)), “Business Combinations.” FAS 141(R) will
        significantly change the financial accounting and reporting of business
        combination transactions. FAS 141(R) establishes principles for how an acquirer
        recognizes and measures the identifiable assets acquired, liabilities assumed,
        and any noncontrolling interest in the acquiree; recognizes and measures
        goodwill acquired in the business combination or a gain from a bargain purchase;
        and determines what information to disclose to enable users of the financial
        statements to evaluate the nature and financial effects of the business
        combination. FAS 141(R) is effective for acquisition dates in fiscal years
        beginning after December 15, 2008. The Company does not expect the
        implementation of FAS 141(R) to have a material impact on its consolidated
        financial statements.
  14
  Item
        2:
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 **Forward-Looking
        Statements**
 
 When
        used
        in this filing and in future filings by First Robinson Financial Corporation
        (the “Company”) with the Securities and Exchange Commission, in the Company’s
        press releases or other public or shareholder communications, or in oral
        statements made with the approval of an authorized executive officer, the
        words
        or phrases “believe,” “expect,” “should,” “would be,” “will allow,” “intends
        to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,”
“estimate,” “project” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private Securities
        Litigation Reform Act of 1995. Examples of forward-looking statements include,
        but are not limited to, estimates with respect to our financial condition,
        results of operations and business that are subject to various factors that
        could cause actual results to differ materially from these estimates and
        most
        other statements that are not historical in nature. Such statements are subject
        to risks and uncertainties, including but not limited to changes in economic
        conditions in the Company’s market area; legislative/regulatory provisions;
        monetary and fiscal policies of the U.S. Government, including policies of
        the
        U.S. Treasury and the Federal Reserve Board; the quality of composition of
        the
        loan or investment portfolios; changes in accounting principles, policies,
        or
        guidelines; fluctuations in interest rates; deposit flows; demand for loans
        in
        the Company’s market area; real estate values; credit quality and adequacy of
        reserves; competition; customer growth and retention; earnings growth and
        expectations; new products and services; technological factors affecting
        operations, pricing of products and services; employees; unforseen difficulties
        and higher than expected costs associated with the implementation of our
        Strategic Plan; or failure to improve operating efficiencies through expense
        controls; all or some of which could cause actual results to differ materially
        from historical earnings and those presently anticipated or projected.
        References in this filing to “we,” “us,” and “our” refer to the Company and/or
        the Bank, as the content requires. The Company does not undertake, and
        specifically disclaims any obligation, to update any forward-looking statements
        to reflect occurrences or unanticipated events or circumstances after the
        date
        of such statements.
 
 **Overview**
 
 First
        Robinson Financial Corporation (the “Company”) is the holding company for First
        Robinson Savings Bank, National Association (the “Bank”). The Company is
        headquartered in Robinson, Illinois and operates three full service offices
        and
        one drive-up facility in Crawford County. A full-service branch in Vincennes,
        Indiana has a target opening set for December 2008. Assets grew $12.8 million
        from $133.8 million at March 31, 2008 to $146.6 million at September 30,
        2008.
        See “Financial Condition” for more information. The Company earned $244,000 for
        the three month period ending September 30, 2008, versus $292,000 in the
        same
        period of 2007, a decrease of 16.4%. Earnings for the three months ended
        September 30, 2008 were positively impacted by a $92,000, or 8.7%, increase
        in
        net interest income and a $13,000, or 3.3%, increase in non-interest income,
        which were more than offset by an increase of $115,000, or 766.7% in provision
        for loan losses and an increase of $65,000, or 6.5%, in non-interest expense
        when compared to the prior year. Basic earnings per share for the September
        30,
        2008 three month period were $0.56 per share versus $0.64 per share for the
        same
        period of 2007. Diluted earnings per share reflect incentive plan shares
        and the
        potential dilutive impact of stock options granted under the stock option
        plan.
        Diluted earnings per share for the three months ending September 30, 2008
        were
        $0.54 per share, versus $0.61 per share for the three months ending September
        30, 2007. For the six month period ended September 30, 2008, the earnings
        for
        the Company were $418,000 compared to $565,000 for the same period in the
        prior
        year, a decrease of 26.0%. Positively impacting earnings for the six month
        period ending September 30, 2008 compared to September 30, 2007 were an increase
        of $26,000, or 1.3%, in net interest income after provision for loan losses
        and
        a $61,000, or 7.8%, increase in non-interest income, which were more than
        offset
        by a $286,000, or 14.2%, increase in non-interest expense. Basic earnings
        per
        share for the September 30, 2008 six month period were $0.95 per share versus
        $1.22 per share for the same period of 2007. Diluted earnings per share reflect
        incentive plan shares and the potential dilutive impact of stock options
        granted
        under the stock option plan. Diluted earnings per share for the six months
        ending September 30, 2008 were $0.92 per share, versus $1.16 per share for
        the
        six months ending September 30, 2007.
 
 The
        Company’s principal business, through its operating subsidiary, the Bank,
        consists of accepting deposits from the general public and investing these
        funds
        primarily in loans, mortgage-backed securities and other securities. Loans
        consist primarily of loans secured by residential real estate located in
        our
        market area, consumer loans, commercial loans, and agricultural
        loans.
 
 The
        Company’s results of operations are dependent primarily on net interest income,
        which is the difference between interest earned on interest-earning assets
        and
        the interest paid on interest-bearing liabilities. Net interest income is
        a
        function of “interest rate spread,” which is the difference between the average
        yield earned on interest-earning assets and the average rate paid on
        interest-bearing liabilities. The interest rate spread is affected by
        regulatory, economic and competitive factors that influence interest rates,
        loan
        demand and deposit flows. To a lesser extent, the results of operations are
        also
        affected by other income, and general, administrative and other expense,
        the
        provision for losses on loans and income tax expense. Other income consists
        primarily of service charges and gains
        (losses) on sales of loans. General, administrative and other expense consists
        primarily of salaries and employee benefits, occupancy and office expenses,
        advertising, data processing expenses and the costs associated with being
        a
        publicly held company.
  15
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 Operations
        are significantly affected by prevailing economic conditions, competition
        and
        the monetary, fiscal and regulatory policies of government agencies. Lending
        activities are influenced by the demand for and supply of housing, competition
        among lenders, the level of interest rates and the availability of funds.
        Deposit flows and costs of funds are influenced by prevailing market rates
        of
        interest, competing investments, account maturities and the levels of personal
        income and savings in the Company’s market area.
 
 Historically,
        the Company’s mission has been to originate loans on a profitable basis to the
        communities served. In seeking to accomplish this mission, the Board of
        Directors and management have adopted a business strategy designed (i) to
        maintain the Bank's capital
        level in excess of regulatory requirements; (ii) to maintain asset quality,
        (iii) to maintain, and if possible, increase earnings; and (iv) to manage
        exposure to changes in interest rates.
 
 **Business
        Strategy and Recent Events**
 
 The
        Bank,
        the Company’s operating subsidiary, is a
        community-oriented, locally owned financial institution offering
        community-banking services to residents and businesses of Crawford County,
        Illinois, our primary market area. O n
        February 29, 2008, the Bank acquired a commercial building on Kimmel Road
        near
        the junction of U.S. Route 41 and Hart Street in Vincennes, Indiana. Our
        goal is
        to establish a full service branch office in that location by the fourth
        quarter
        of calendar 2008, and we recently received regulatory approval to do so.
        This
        will allow the Bank to move into an area with a population that is nearly
        double
        that of our current market in Crawford County. We are still committed to
        growing
        our institution in Crawford County and gaining a larger share of the market,
        however this new location will provide additional opportunities that are
        still
        within 40 miles of our home office.
 
 Periodically,
        the Board of Directors and management meet to strategically plan for the
        future.
        We review and discuss both current and new products and services to determine
        their effect on our profitability and customer service. The Board of
        Directors approved the submission of an application to the OCC for fiduciary
        powers and on July 1, 2008, approval of fudiciary powers was received. A
        trust
        officer began employment with the Bank in July and we began offering trust
        services shortly thereafter.  We
        also
        monitor any and all current events and economic trends in our local area
        that
        could materially impact the Bank’s earnings. At the present time, the employment
        market has remained stable in Crawford County and economic trends in the
        area
        also appear stable, although such trends are inherently difficult to predict.
 
 The
        strategic plan identifies the most critical issue to our success as consistent
        earnings. Net earnings have remained relatively consistent. A positive factor
        in
        maintaining consistent earnings is the Bank’s overall asset quality, which is
        strong. The Bank continues to offer fixed rate residential real estate mortgages
        through programs with the Federal Home Loan Bank of Chicago (“FHLB”) and USDA
        Rural Development. However, the FHLB originally stated, per Exhibit 99.1
        on Form
        8-K as furnished with the Securities and Exchange Commission on April 28,
        2008,
        that as of July 31, 2008, it would no longer be purchasing residential real
        estate mortgages as it is discontinuing the fixed rate program. On June 10,
        2008, the FHLB furnished to the Securities and Exchange Commission a report
        on
        Form 8-K indicating it is extending the purchasing of residential real estate
        loans until October 31, 2008. In September 2008, the FHLB announced a new
        fixed
        rate program in which First Robinson will participate. The new program is
        similar to the current program but FHLB will sell a participant’s loans to
        Fannie Mae instead of being the investor itself.
 
 Our
        Internet banking service, “Netteller” remains very popular and the number of
        customers actively using the service is increasing. It has allowed us to
        offer
        bill paying, cash management and also direct deposit and payroll services
        to our
        business customers. In January 2007, we began offering “Reward Checking”. The
        deposit product has been very successful, growing to over 1,200 accounts
        with a
        total balance of approximately $12.0 million. The product offers
        higher-than-market interest rates, which can be earned by customers if they
        meet
        specific transaction-based criteria. Our criteria promote the use of our
        internet-based services and technology. We realize the risks involved with
        promoting internet-based transactions, however, the Company has installed
        firewalls and incorporated additional security features to mitigate the
        possibility of security data breaches. We cannot be certain all of the Company’s
        systems are entirely free from vulnerability to attack, despite safeguards
        we
        have installed.  Additionally, we rely on and do business with a variety of
        third-party service providers, agents and vendors with respect to the Company’s
        business, data security and communications needs.  If information security
        is breached, or one of our agents or vendors breaches compliance procedures,
        information could be lost or misappropriated, resulting in financial loss
        or
        costs to us or damages to others.  These costs or losses could materially
        exceed the Company’s amount of insurance coverage which would adversely affect
        the Company’s business.
  16
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 Another
        factor in maintaining consistent earnings is the continued growth in our
        investment brokerage service provided to our customers through PrimeVest
        Financial Services. With the investment brokerage products offered by PrimeVest
        and the investment products the Bank offers, we are able to serve the investment
        needs of our customers and the community.
 
 Recently,
        the Department of the Treasury announced its Capital Purchase Plan, whereby
        public bank holding companies such as the Company may, with approval, sell
        preferred stock and warrants in exchange for a capital infusion that would
        count
        as Tier 1 equity. The Company has no plans to participate in this program,
        as it
        believes its capital level is adequate for all forseeable needs.
 
 We
        continue to maintain a strong presence in the community and are pleased to
        be
        the only independent community bank in Robinson, Palestine and Oblong, Illinois.
        To visit First Robinson Savings Bank on the web go to www.frsb.net .
 
 **Recent
        Legislation and Government Recovery Programs**
  *Emergency
        Economic Stabilization Act of 2008.* On
        October 3, 2008, President Bush signed the Emergency Economic Stabilization
        Act
        of 2008 (“EESA”) into law, giving the US Treasury and other banking agencies
        authority to take certain actions to restore liquidity and stability to the
        U.S.
        banking markets. A number of programs to implement the EESA have been announced.
        Those programs include the following: (a) a capital purchase program whereby
        the
        US Treasury, on behalf of the US government, will purchase up to $250 billion
        of
        preferred stock, along with warrants to purchase common stock, from certain
        financial institutions; (b) a temporary liquidity guarantee program that
        has
        both a debt guarantee component, whereby the FDIC will guarantee until June
        30,
        2012, the senior unsecured debt issued by eligible financial institutions
        between October 14, 2008 and June 30, 2009, and an account transaction guarantee
        component, whereby the FDIC will insure 100% of non-interest bearing deposit
        transaction accounts held at eligible financial institutions, such as payment
        processing accounts, payroll accounts and working capital accounts through
        December 31, 2009; and (c) a temporary raise in the FDIC’s basic limit on
        federal deposit insurance coverage from $100,000 to $250,000 per depositor
        (although the EESA provides that the basic deposit insurance limit will return
        to $100,000 after December 31, 2009).
 
 The
        Company has determined that it will not participate in the capital purchase
        program but is awaiting the diclosure of the final ruling before making a
        decision on the temporary liquidity guarantee program.
 
 *Proposed
        Increase in FDIC Insurance Premiums* .
        In
        connection with a determination that the Deposit Insurance Fund’s reserve ratio
        must be restored to 1.15%, the FDIC’s board of directors has proposed raising
        deposit insurance premiums by seven basis points across the board during
        the
        first quarter of 2009. In addition, it has proposed a series of risk-based
        adjustments to take affect in the second quarter of 2009. Pursuant to this
        component of the proposal, assessment rates could be lowered for smaller
        institutions with Tier 1 capital ratios greater than 10 percent by up to
        two
        basis points. The proposal also calls for reduced premiums for smaller banks
        with high amounts of long-term unsecured debt.
 
 If
        this
        proposal is adopted in its proposed form, the effect on the Bank is not expected
        to be material.
  17
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 **Asset
        Quality**
  ***Delinquencies*** .
        When a
        borrower fails to make a required payment on a loan, the Bank attempts to
        cause
        the delinquency to be cured by contacting the borrower. In the case of loans
        secured by real estate, reminder notices are sent to borrowers. If payment
        is
        late, appropriate late charges are assessed and a notice of late charges
        is sent
        to the borrower. If the loan is between 60-90 days delinquent, the loan will
        generally be referred to the Bank’s legal counsel for collection.
  When
        a
        loan becomes more than 90 days delinquent and collection of principal and
        interest is considered doubtful, or is otherwise impaired, the Bank will
        generally place the loan on non-accrual status and previously accrued interest
        income on the loan is charged against current income. Delinquent consumer
        loans
        are handled in a similar manner as to those described above. The Bank’s
        procedures for repossession and sale of consumer collateral are subject to
        various requirements under applicable consumer protection laws.
  The
        following table sets forth the Bank’s loan delinquencies by type, by amount and
        by percentage of type at September 30, 2008.
  Loans
                  Delinquent For:30-89
                  Days(1)
              
              90
                  Days and Over(1)
              
              Nonaccrual
              
              Total
                  Delinquent LoansNumber
              
              Amount
              
              Percent
                of
                  Loan Category
              
              Number
              
              Amount
              
              Percent
                of
                  Loan Category
              
              Number
              
              Amount
              
              Percent
                  of Loan Category
              
              Number
              
              Amount
              
              Percent of
                  Loan Category(Dollars
                  in thousands)Real
                  Estate:One-
                  to four-family
              
              6
              
              $
              279
              
              
              0.70
              %
              
              —
              
              
              —
              
              
              —
              
              
              5
              
              $
              157
              
              
              0.39
              %
              
              11
              
              $
              436
              
              
              1.09
              %Commercial
                  and agricultural real estate
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Consumer
                  and other loans
              
              7
              
              
              22
              
              
              0.35
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              7
              
              
              22
              
              
              0.35
              %State
                  & Municipal Gov’t .
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Commercial
                  business and agricultural finance
              
              1
              
              
              62
              
              
              0.42
              
              
              —
              
              
              —
              
              
              —
              
              
              1
              
              
              21
              
              
              0.14
              
              
              2
              
              
              83
              
              
              0.56
              %Total
              
              14
              
              $
              363
              
              
              0.43
              %
              
              —
              
              
              —
              
              
              —
              
              
              6
              
              $
              178
              
              
              0.21
              %
              
              20
              
              $
              541
              
              
              0.64
              %
  
 (1)
              Loans
                  are still accruing.
  18
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 ***Non-Performing
        Assets*** .
        The
        table below sets forth the amounts and categories of non-performing assets
        in
        the Bank’s loan portfolio. Loans are placed on non-accrual status when the
        collection of principal and/or interest become doubtful. Foreclosed assets
        include assets acquired in settlement of loans.
 September 30,
                
                March 31,
                
                September 30,2008
                
                2008
                
                2007(In
                    thousands)Non-accruing
                    loans:One-
                    to four-family
                
                $
                157
                
                $
                143
                
                $
                84Commercial
                    and agriculture real estate
                
                
                —
                
                
                126
                
                
                224Consumer
                    and other loans
                
                
                —
                
                
                —
                
                
                2Commercial
                    business and agricultural finance
                
                
                21
                
                
                23
                
                
                67Total
                
                
                178
                
                
                292
                
                
                377Foreclosed
                    assets:One-
                    to four-family
                
                
                90
                
                
                16
                
                
                —Total
                
                
                90
                
                
                16
                
                
                —Total
                    non-performing assets
                
                $
                268
                
                $
                308
                
                $
                377Total
                    as a percentage of total assets
                
                
                0.18
                %
                
                0.23
                %
                
                0.32
                %
  Gross
        interest income which would have been recorded had the non-accruing loans
        been
        current in accordance with their original terms amounted to approximately
        $6,000
        for the three months and $10,000 for the six months ended September 30, 2008
        and
        $3,000 for the three months and $5,000 for the six months ended September
        30,
        2007.
 
 ***Classified
        Assets*** .
        Federal
        regulations provide for the classification of loans and other assets, such
        as
        debt and equity securities, considered by the Office of the Comptroller of
        the
        Currency (“OCC”) to be of lesser quality, as “substandard,” “doubtful” or
“loss.” An asset is considered “substandard” if it is inadequately protected by
        the current net worth and paying capacity of the obligor or the collateral
        pledged, if any. “Substandard” assets include those characterized by the
“distinct possibility” that the insured institution will sustain “some loss” if
        the deficiencies are not corrected. Assets classified as “doubtful” have all of
        the weaknesses inherent in those classified “substandard” with the added
        characteristic that the weaknesses present make “collection or liquidation in
        full” on the basis of currently existing facts, conditions and values, “highly
        questionable and improbable.” Assets classified as “loss” are those considered
“uncollectible” and of such little value that their continuance as assets
        without the establishment of a specific loss reserve is not
        warranted.
 
 When
        an
        insured institution classifies problem assets as either substandard or doubtful,
        it may establish general allowances for losses in an amount deemed prudent
        by
        management. General allowances represent loss allowances which have been
        established to recognize the inherent risk associated with lending activities,
        but which, unlike specific allowances, have not been allocated to particular
        problem assets. When an insured institution classifies problem assets as
“loss,”
it is required either to establish a specific allowance for losses equal
        to 100%
        of that portion of the asset so classified or to charge-off such amount.
        An
        institution’s determination as to the classification of its assets and the
        amount of its valuation allowances is subject to review by the regulatory
        authorities, who may order the establishment of additional general or specific
        loss allowances.
 
 In
        connection with the filing of its periodic reports with the OCC and in
        accordance with its classification of assets policy, the Bank regularly reviews
        loans in its portfolio to determine whether such assets require classification
        in accordance with applicable regulations. On the basis of management’s review
        of its assets, at September 30, 2008, the Bank had classified a total of
        $459,000 of its assets as substandard and $59,000 as doubtful. At September
        30,
        2008, total classified assets comprised $518,000, or 4.2% of the Bank’s capital,
        and 0.4% of the Bank’s total assets.
  19
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 ***Other
        Loans of Concern*** *.* As of
        September 30, 2008, there were $4.1 million in loans identified, but not
        classified, by the Bank with respect to which known information about the
        possible credit problems of the borrowers or the cash flows of the business
        have
        caused management to have some doubts as to the ability of the borrowers
        to
        comply with present loan repayment terms and which may result in the future
        inclusion of such items in the non-performing asset categories.
 
 ***Allowance
        for Loan Losses*** *.* The
        allowance for loan losses is maintained at a level which, in management’s
        judgment, is adequate to absorb credit losses inherent in the loan portfolio.
        The amount of the allowance is based on management’s evaluation of the
        collectibility of the loan portfolio, including the nature of the portfolio,
        credit concentrations, trends in historical loss experience, specific impaired
        loans and economic conditions. Allowances for impaired loans are generally
        determined based on collateral values. The allowance is increased by a provision
        for loan losses, which is charged to expense and reduced by charge-offs,
        net of
        recoveries.
 
 Real
        estate properties acquired through foreclosure are recorded at the fair market
        value minus 20% of the fair market value if the property is appraised at
        $50,000
        or less. If the property is appraised at greater than $50,000, then the property
        is recorded at the fair market value less 10% of the market fair value. If
        fair
        value at the date of foreclosure is lower than the balance of the related
        loan,
        the difference will be charged-off to the allowance for loan losses at the
        time
        of transfer. Valuations are periodically updated by management and if the
        value
        declines, a specific provision for losses on such property is established
        by a
        charge to operations. At September 30, 2008, the Bank had one real estate
        property acquired through foreclosure. The property is for sale.
 
 Although
        management believes that it uses the best information available to determine
        the
        allowance, unforeseen market conditions could result in adjustments and net
        earnings could be significantly affected if circumstances differ substantially
        from the assumptions used in making the final determination. Future additions
        to
        the Bank’s allowance for loan losses will be the result of periodic loan,
        property and collateral reviews and thus cannot be predicted in advance.
        In
        addition, federal regulatory agencies, as an integral part of the examination
        process, periodically review the Bank’s allowance for loan losses. Such agencies
        may require the Bank to increase the allowance based upon their judgment
        of the
        information available to them at the time of their examination. At September
        30,
        2008, the Bank had a total allowance for loan losses of $752,000, representing
        0.94% of the Bank’s loans, net. At March 31, 2008, the Bank’s total allowance
        for loan losses to the Bank’s loans, net was at 0.95%.
  20
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 The
        distribution of the Bank’s allowance for losses on loans at the dates indicated
        is summarized as follows:
  September
                  30, 2008
              
              March
                  31, 2008Amount
                  of
                Loan
                  Loss
                Allowance
              
              Loan
                Amounts by
                Category
              
              Percent of
                Loans in Each
                Category to
                Total Loans
              
              Amount of
                Loan Loss
                Allowance
              
              Loan
                Amounts by
                Category
              
              Percent of
                Loans in
                Each
                Category to
                Total Loans(Dollars
                  in thousands)One-
                  to four-family
              
              $
              49
              
              $
              39,944
              
              
              47.79
              %
              $
              62
              
              $
              39,024
              
              
              50.21
              %Multi-family
              
              
              —
              
              
              1,288
              
              
              1.54
              
              
              —
              
              
              618
              
              
              0.80Commercial
                  andagricultural
                  real estate
              
              
              455
              
              
              15,405
              
              
              18.43
              
              
              481
              
              
              14,527
              
              
              18.69Construction
                  ordevelopment
              
              
              —
              
              
              3,880
              
              
              4.64
              
              
              —
              
              
              2,909
              
              
              3.74Consumer
                  and other loans.
              
              
              35
              
              
              6,292
              
              
              7.53
              
              
              27
              
              
              6,221
              
              
              8.00State
                  and MunicipalGovernments
              
              
              —
              
              
              2,088
              
              
              2.50
              
              
              —
              
              
              2,720
              
              
              3.50Commercial
                  businessand
                  agriculturalfinance
              
              
              213
              
              
              14,683
              
              
              17.57
              
              
              157
              
              
              11,710
              
              
              15.06Gross
                  Loans
              
              
              
              
              
              83,580
              
              
              100.00
              %
              
              
              
              
              77,729
              
              
              100.00
              %Unallocated
              
              
              —
              
              
              
              
              
              
              
              
              —Deferred
                  loan fees
              
              
              
              
              
              (5
              )
              
              
              
              
              
              
              
              (6
              )Undisbursed
                  portion of loans
              
              
              
              
              
              (2,937
              )
              
              
              
              
              
              
              
              (750
              )Total
              
              $
              752
              
              $
              80,638
              
              
              
              
              $
              727
              
              $
              76,973
 
 The
        following table sets forth an analysis of the Bank’s allowance for loan
        losses.
 
 Three
                  Months Ended
                September
                  30,
              
              Six
                  Months Ended
                September
                  30,2008
              
              2007
              
              2008
              
              2007(Dollars
                  in thousands)Balance
                  at beginning of period
              
              $
              757
              
              $
              720
              
              $
              727
              
              $
              729Charge-offs:One-
                  to four-family
              
              
              —
              
              
              —
              
              
              —
              
              
              4Commercial
                  non-residential real estate
              
              
              123
              
              
              —
              
              
              123
              
              
              —Consumer
                  and other loans
              
              
              20
              
              
              8
              
              
              24
              
              
              12Total
                  charge-offs
              
              
              143
              
              
              8
              
              
              147
              
              
              16Recoveries:One-
                  to four-family
              
              
              —
              
              
              —
              
              
              1
              
              
              —Consumer
                  and other loans
              
              
              8
              
              
              4
              
              
              11
              
              
              8Total
                  recoveries
              
              
              8
              
              
              4
              
              
              12
              
              
              8Net
                  charge-offs .
              
              
              135
              
              
              4
              
              
              135
              
              
              8Additions
                  charged to operations
              
              
              130
              
              
              15
              
              
              160
              
              
              30Transfer
                  for off-balance sheet credit exposure
              
              
              —
              
              
              1
              
              
              —
              
              
              (19
              )Balance
                  at end of period
              
              $
              752
              
              $
              732
              
              $
              752
              
              $
              732Ratio
                  of net charge-offs during the period toaverage
                  loans outstanding during the period
              
              
              0.17
              %
              
              0.01
              %
              
              0.18
              %
              
              0.01
              %Ratio
                  of net charge-offs during the period toaverage
                  non-performing assets
              
              
              39.06
              %
              
              1.57
              %
              
              41.73
              %
              
              3.53
              %
  21
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 **Financial
        Condition**
 
 Total
        assets of the Company increased by $12.8 million, or 9.5%, to $146.6 million
        at
        September 30, 2008 from $133.8 million at March 31, 2008. The increase in
        assets
        was primarily due to an increase of $15.3 million, or 48.6%, in available
        for
        sale securities, an increase of $3.8 million, or 4.9%, loans receivable,
        net, an
        increase of $456,000, or 16.0%, in premises and equipment, and an increase
        of
        $151,000, or 19.9% in interest receivable, offset, in part, by a $7.0 million,
        or 35.7%, decrease in cash and cash equivalents.
 
 The
        total
        decrease in cash and cash equivalents was derived substantially from federal
        funds sold decreasing by $14.0 million, or 80.7%, to $3.4 million at September
        30, 2008 from $17.4 million at March 31, 2008. The decrease in federal funds
        sold was offset, in part, by the increase of $7.0 million in cash and other
        interest earning deposit accounts from $2.2 million at March 31, 2008 to
        $9.2
        million at September 30, 2008. The decrease resulted from the funds being
        used
        to purchase additional available-for-sale securities.
 
 Available-for-sale
        investment securities increased to $46.8 million at September 30, 2008 compared
        to $31.5 million at March 31, 2008, a $15.3 million increase. The increase
        resulted from the purchase of $21.1 million in mortgage-backed securities
        and
        the amortization of $16,000 of premiums and discounts on investments, offset
        by
        $3.8 million in repayments on mortgage-backed securities, by $1.0 million
        in
        proceeds from the maturity of an available for sale security, by $953,000
        in
        proceeds from the sale of available-for-sale securities and the $20,000 decrease
        in the market valuation of the available-for-sale portfolio. The investment
        portfolio is managed to limit the Company's exposure to risk by investing
        primarily in mortgage-backed securities and other securities which are either
        directly or indirectly backed by the federal government or a local municipal
        government. The Company owns no equity securities in Freddie Mac nor Fannie
        Mae.
 
 The
        Company's net loan portfolio increased by $3.8 million to $79.9 million at
        September 30, 2008 from $76.1 million at March 31, 2008. Loans on one to
        four-family real estate increased by $1.0 million, or 2.6%; loans on
        multi-family properties increased by $670,000, or 108.4%; commercial
        nonresidential real estate and farmland loans increased by $878,000, or 6.0%;
        construction and development loans increased by $971,000, or 33.4%; consumer
        and
        other loans increased by $71,000, or 1.1%; and commercial business and
        agricultural finance loans increased $3.0 million, or 25.4%. These increases
        were offset, in part, by the decrease of $632,000, or 23.2%, in loans to
        state
        and municpal governments. The total amount of undisbursed closed-ended lines
        of
        credit increased by $2.2 million, or 291.6% from $750,000 at March 31, 2008
        to
        $2.9 million at September 30, 2008.
  At
        September 30, 2008, the allowance for loan losses was $752,000, or 0.94%,
        of the
        net loan portfolio, which increased $25,000 from the allowance for loan losses
        at March 31, 2008 at $727,000, or 0.95%, of the net loan portfolio. During
        the
        first six-months of fiscal 2009, the Company charged off $147,000 of loan
        losses, $123,000 in commercial non-residential real estate and $24,000 in
        consumer and other loans. The chargeoffs of $147,000 were offset by $11,000
        in
        recoveries in consumer and other loans and $1,000 in recoveries in loans
        for
        one- to four- family dwellings. Management reviews the adequacy of the allowance
        for loan losses quarterly, and believes that its allowance is adequate; however,
        the Company cannot assure that future chargeoffs and/or provisions will not
        be
        necessary. See “Asset Quality” for further information on
        delinquencies.
 
 The
        Company had one foreclosed real estate property held for sale at September
        30,
        2008 and March 31, 2008. Foreclosed assets are carried at lower of cost or
        net
        realizable value. The real estate property held March 31, 2008, with a fair
        value of $16,000, was sold for $12,000 during the three and six months ended
        September 30, 2008. Also during the six months ended September 30, 2008,
        one
        loan was transferred to other real estate owned at a fair value of $90,000.
        The
        property is for sale.
 
 Total
        deposits increased by $11.7 million, or 11.2%, to $115.6 million at September
        30, 2008 from $103.9 million at March 31, 2008. The increase in total deposits
        was due to an increase of $3.6 million in certificates of deposit, an increase
        of $3.6 million in non-interest bearing demand deposits, and an increase
        of $4.5
        million in savings, NOW, and money market accounts. The growth in certificates
        of deposit can be linked to two new types of certificates being offered,
        one for
        27 months and one for 54 months. The customer has one opportunity to adjust
        the
        rate being paid on their certificate during the term of the certificate to
        the
        current rate being offered. Part of the increase in demand, savings, now
        and
        money markets accounts can be attributed to the deposit of $6,000,000 by
        a local
        municipality on September 30, 2008. The remaining growth in deposit accounts
        can
        be attributed to the instability of the stock market and customers looking
        for
        safe, secure, insured investments.
 
 Other
        borrowings, consisting entirely of repurchase agreements, increased $1.3
        million, or 8.2% from $16.3 million at March 31, 2008 to $17.6 million at
        September 30, 2008. The obligations are secured by mortgage-backed securities
        and US Government agency obligations held in safekeeping at Independent Bankers
        Bank in Springfield, Illinois. At September 30, 2008, the average rate on
        the
        repurchase agreements was 1.18% compared to 1.37% at March 31, 2008. The
        rate on
        approximately $16.7 million of the repurchase agreements reprice daily. All
        agreements mature periodically within 24 months.
  22
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 Advances
        from borrowers for taxes and insurance decreased by $72,000 from $149,000
        at
        March 31, 2008 to $77,000 at September 30, 2008. Accrued income taxes payable
        decreased $134,000. Accrued interest payable decreased by $10,000 and other
        liabilities decreased $98,000 from $1.2 million at March 31, 2008 to $1.1
        million at September 30, 2008.
 
 Stockholders'
        equity at September 30, 2008 was $12.0 million compared to $11.9 million
        at
        March 31, 2008, an increase of $98,000, or 0.8%. Factors relating to the
        increase in stockholders’ equity can be attributed to the addition of $418,000
        in net income offset by $345,000 in dividends declared and paid, the increase
        in
        additional paid-in-capital of $168,000 relating to the options exercised
        during
        the period and the increase of $125,000 in additional paid-in-capital due
        to the
        expiration of the Recognition and Retention Plan (“RRP”) on July 29, 2008 offset
        by the purchase of $12,000 in incentive plan shares related to the Directors
        Retirment Plan. These increases are partially offset by the repurchase of
        $282,000 in treasury shares and the receipt of the $125,000 in RRP shares
        offset
        by the issuance of $164,000 in shares of First Robinson Financial stock relating
        to the exercise of stock options and the decrease of $13,000 in accumulated
        other comprehensive income due to the decline in the fair value of securities
        available for sale.
 
 **Results
        of Operations**
 
 **Net
        Income**
 
 The
        Company earned $244,000 for the three month period ending September 30, 2008,
        versus $292,000 in the same period of 2007, a decrease of 16.4%. Earnings
        for
        the three months ended September 30, 2008 were positively impacted by a $92,000,
        or 8.7%, increase in net interest income and a $13,000, or 3.3%, increase
        in
        non-interest income, which were more than offset by an increase of $115,000,
        or
        766.7% in provision for loan losses and an increase of $65,000, or 6.5%,
        in
        non-interest expense when compared to the prior year. For the six month period
        ended September 30, 2008, the earnings for the Company were $418,000 compared
        to
        $565,000 for the same period in the prior year, a decrease of 26.0%. Positively
        impacting earnings for the six month period ending September 30, 2008 compared
        to September 30, 2007 were an increase of $26,000, or 1.3%, in net interest
        income after provision for loan losses and a $61,000, or 7.8%, increase in
        non-interest income, which were more than offset by a $286,000, or 14.2%,
        increase in non-interest expense. The decrease in income in both the three-month
        and six-month periods can be attributed to increases in the provision for
        loan
        losses and non-interest expense, as described below.
 
 **Net
        Interest Income**
 
 For
        the
        three-month period ended September 30, 2008, net interest income totaled
        $1,151,000, an increase of 8.7%, or $92,000, compared to the same period
        of
        2007. Net interest income increased in the three-month period ended September
        30, 2008 versus the comparable period of 2007 due to an increase of $51,000,
        or
        2.7%, in total interest income and the decrease of $41,000, or 5.1%, in total
        interest expense. The increase in total interest income was primarily due
        to an
        increase of $193,000, or 59.2%, in interest income from taxable securities
        offset, in part, by the decrease of $77,000, or 5.4%, in interest income
        from
        loans, the decrease of $57,000, or 64.0%, in other interest income, the decrease
        of $4,000, or 16.0%, in tax-exempt securities interest income and the decrease
        of $4,000, or 57.1%, in dividends from Federal Home Loan Bank (“FHLB”) and
        Federal Reserve Bank (“FRB”) stocks, due to the non-payment of a dividend by the
        FHLB. The decrease in total interest expense is due to the decrease of $100,000,
        or 63.7% to $57,000 in interest expense on other borrowings, offset by interest
        expense on deposits increasing $59,000, or 9.1%, for the three months ended
        September 30, 2008 to $710,000 from $651,000 for the three months ended
        September 30, 2007.
 
 For
        the
        six-month period ended September 30, 2008, net interest income totaled
        $2,241,000, an increase of $156,000, or 7.5%, over the same period in the
        prior
        year. Contributing to the increase was the increase of $114,000, or 3.1%,
        in
        total interest income and the decrease of $42,000, or 2.7% in total interest
        expense. The increase in total interest income can be attributed to a $265,000,
        or 39.9%, increase interest income from taxable securities and a $1,000,
        or
        0.9%, increase in other interest income offset, in part, by the decrease
        of
        $136,000, or 4.9%, in interest income from loans, the decrease of $9,000,
        or
        64.3%, in dividends from FHLB and FRB stocks, the decrease of $7,000, or
        14.3%,
        in tax-exempt securities interest income. The decrease in total interest
        expense
        is due to interest expense on other borrowings decreasing by $168,000, or
        61.3%
        to $106,000 for the six months ended September 30, 2008 from $274,000 for
        the
        same comparible period in 2007. While interest expense on deposits increased
        $126,000, or 9.9%, for the six months ended September 30, 2008 to $1,394,000
        from $1,268,000 for the six months ended September 30, 2007.
  23
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 For
        the
        three-months ended September 30, 2008 total average interest earning assets
        increased by $16.2 million, or 14.2%, to $130.1 million as of September 30,
        2008
        from $113.9 million as of September 30, 2007. However, the yield on the earning
        assets decreased by 66 basis points when comparing the three months ended
        September 30, 2008 to the same period in 2007. Total average interest bearing
        liabilities for the three months ended September 30, 2008 were $114.1 million
        compared to $94.7 million as of September 30, 2007, an increase of $19.4
        million, or 20.4%. As was the case with the yield on assets, the cost on
        the
        average interest bearing liabilities decreased by 72 basis points. For the
        three-month period ended September 30, 2008, the net interest spread increased
        6
        basis points to 3.21% versus 3.15% in the comparable period of 2007. The
        six-month period ending September 30, 2008 is a copy of the three-months
        ended
        September 30, 2008, as far as the increase in both interest-earning assets
        and
        interest-bearing liabilities and the decrease in the yield earned and paid.
        However, unlike the three-month period, the net interest rate spread for
        the
        six-months ended September 30, 2008 decreased 9 basis points to 3.14% from
        3.23%
        for the six-months ended September 30, 2007.
 
 The
        average daily loan balances for the quarter ended September 30, 2008 increased
        $2.8 million, or 3.8%, to $77.9 million, versus $75.1 million for the same
        period of 2007. During the same period, the yield on loans decreased 67 basis
        points to 6.89% from 7.56% for the September 30, 2008 quarter compared to
        the
        September 2007 quarter. The average daily loan balances for the six-month
        period
        ending September 30, 2008 increased 3.5% to $76.7 million, versus the average
        daily loan balances of $74.1 million for the same period of 2007. The yield
        on
        loans, for the six-months ended September 30, 2008, declined by 61 basis
        points
        to 6.93% from 7.54% in the same six-month period of 2007.
 
 The
        average daily securities balances, the Company’s interest-earning demand
        deposits and the federal funds sold balances for the second quarter of fiscal
        year 2009 increased $13.3 million, or 35.1%, to $51.3 million, versus $38.0
        million for the same period of fiscal year 2008. During the same period,
        income
        from these sources increased by $132,000, or 30.0%, to $572,000 versus $440,000
        during the second quarter of fiscal year 2008. The average daily balances
        of
        securities, interest-earning demand deposits and federal funds sold for the
        first six months of fiscal 2009 increased $15.5 million, or 44.1%, to $50.7
        million, versus $35.2 million for the same period of fiscal year 2008. During
        the same periods, income from securities, interest-earning demand deposits
        and
        federal funds sold increased by $259,000, or 31.5%, to $1,080,000 versus
        $821,000 during the six months of fiscal 2008. The increase in investment
        interest income was primarily the result of the $15.5 million, or 44.1%,
        increase in average daily balance of investments outstanding when comparing
        the
        six-months ended September 2008 to the six-months ended September
        2007.
 
 Dividends
        received from FHLB and FRB stocks decreased by $4,000, or 57.1%, when comparing
        the September 2008 quarter to the September 2007 quarter and $9,000, or 64.3%,
        for the six-months ended September 2008 from the six-months ended September
        2007. The rate of return on the FRB stock was steady at 6.00% for the September
        2008 quarter, the September 2007 quarter, and the six-months ended September
        2008 and 2007. The FHLB Chicago paid no dividends during the quarter ended
        nor
        the six-months ended September 30, 2008. On September 26, 2007, the Company
        received a letter from the FHLB of Chicago regarding a Consent Cease and
        Desist
        Order it was issued from its regulator, the Federal Housing Finance Board,
        now
        the Federal Housing Finance Agency. The Order prohibits the FHLB of Chicago
        from
        repurchasing or redeeming any of its capital stock without prior approval
        from
        its regulator. The Order also proposes that the declaration of a dividend
        by the
        FHLB of Chicago on its capital stock be subject to prior written approval.
        The
        Company can make no prediction as to if or when the FHLB will resume dividend
        payments.
 
 Total
        interest expense decreased $41,000, or 5.1%, to $767,000 for the three-month
        period ended September 30, 2008, from $808,000 for the comparable period
        in
        2007. Contributing to the decrease was a 72 basis point decrease in the
        Company's daily cost of funds to 2.69%, versus 3.41% for the same period
        of
        2007, partially offset by, the increase of $19.4 million in the average balance
        of interest bearing liabilities from $94.7 million at September 30, 2007
        to
        $114.1 million at September 30, 2008. Total interest expense also decreased
        $42,000, or 2.7%, to $1,500,000 for the six-month period ended September
        30,
        2008, from $1,542,000 for the comparable period in 2007. The decrease was
        primarily the result of a 67 basis point decrease in the daily cost of funds
        to
        2.69%, versus 3.36% for the same period of 2007, offset in part, by the increase
        of $20.0 million in the average balance of interest-bearing liabilities to
        $111.7 million at September 30, 2008 from $91.7 million as of September 30,
        2007.
  On
        an
        average daily basis, total interest-bearing deposits increased $17.4 million,
        or
        22.2%, to $95.6 million for the three-month period ended September 30, 2008,
        versus $78.2 million in the same period in 2007. The average cost of funds
        decreased by 36 basis points to 2.97% for the September 2008 quarter versus
        the
        September 2007 quarter at 3.33%. The average daily balance of interest-bearing
        deposits for the six-month period ended September 2008 also increased by
        $16.6
        million, or 21.3%, to $94.5 million from $77.9 million. When comparing the
        average cost of funds on deposits for the September 2008 six-month period
        to the
        same period ending September 30, 2007 there was a decrease of 67 basis points
        from 3.26% to 2.95%.
  24
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 For
        the
        three-months ended September 30, 2008 versus the same period of 2007, the
        average daily balance of short-term borrowings and federal funds purchased
        increased $1.9 million, or 11.9%, from $16.5 million to $18.4 million. The
        average cost of funds decreased for the September 2008 quarter by 257 basis
        points from 3.80% to 1.23%. The average daily balance of short-term borrowings
        for the six-months ended September 30, 2008 increased by $3.4 million, or
        24.8%,
        to $17.2 million from $13.8 million for the six-month period ending September
        30, 2007 while the average cost of funds decreased by 273 basis points to
        1.24%
        from 3.97% when comparing the six-months of fiscal year 2009 to fiscal year
        2008.
 
 **Provision
        for Loan Losses**
 
 The
        provision for loan losses for the quarter ended September 30, 2008 was $130,000
        an increase of $115,000, or 766.7%, over the quarter ended September 30,
        2007.
        The loan loss provision for the six-month period ending September 30, 2008
        was
        $160,000, or 433.3%, compared to $30,000 for the six-months ended September
        30,
        2007. The provision for both periods reflects management's analysis of the
        Company's loan portfolio based on the information which was available to
        the
        Company. Management meets on a quarterly basis to review the adequacy of
        the
        allowance for loan losses based on Company guidelines. Classified loans are
        reviewed by the loan officers to arrive at specific reserve levels for those
        loans. Once the specific reserve for each loan is calculated, management
        calculates general reserves for each loan category based on a combination
        of
        loss history adjusted for current national and local economic conditions,
        trends
        in delinquencies and charge-offs, trends in volume and term of loans, changes
        in
        underwriting standards, and industry conditions. While the Company cannot
        assure
        that future chargeoffs and/or provisions will not be necessary, the Company's
        management believes that, as of September 30, 2008, its allowance for loan
        losses was adequate.
  25
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 **Non-Interest
        Income**
 Non-interest
        income categories for the three and six-month periods ended September 30,
        2008
        and 2007 are shown in the following table:
 
 Three Months EndedSeptember 30,2008
              
              2007
              
              % Change(In
                  thousands)Non-interest
                  income:Charges
                  and fees on deposit accounts
              
              $
              231
              
              $
              245
              
              
              (5.7
              )%Charges
                  and other fees on loans
              
              
              40
              
              
              19
              
              
              110.5Net
                  gain on sale of loans
              
              
              30
              
              
              24
              
              
              25.0Net
                  gain on sale of foreclosed property
              
              
              —
              
              
              3
              
              
              (100
              )Net
                  realized gain on sale of available-for-sale securities
              
              
              2
              
              
              —
              
              
              —Other
              
              
              105
              
              
              104
              
              
              1.0Total
                  Non-Interest Income
              
              $
              408
              
              $
              395
              
              
              3.3
              %
 
 Six Months EndedSeptember 30,2008
              
              2007
              
              %
                  Change(In
                  thousands)Non-interest
                  income:Charges
                  and fees on deposit accounts
              
              $
              448
              
              $
              462
              
              
              (3.0
              )%Charges
                  and other fees on loans
              
              
              84
              
              
              57
              
              
              47.4Net
                  gain on sale of loans
              
              
              72
              
              
              55
              
              
              30.9Net
                  gain on sale of foreclosed property
              
              
              —
              
              
              3
              
              
              (100.0
              )Net
                  realized gain on sale of available for sale securities
              
              
              2
              
              
              —
              
              
              —Other
              
              
              234
              
              
              202
              
              
              15.8Total
                  Non-Interest Income
              
              $
              840
              
              $
              779
              
              
              7.8
              %
 
 Charges
        and fees on deposit accounts decreased $14,000 for the three-month and $14,000
        for the six-month periods ended September 30, 2008 versus the same periods
        in
        2007. This decrease is primarily from a drop in overdraft and insufficient
        funds
        fees. Charges and other fees on loans increased in both the three and six-month
        periods ending September 30, 2008, by $21,000 and $27,000, respectivley,
        when
        compared to the same periods in 2007 due to an increase in mortgage servicing
        rights and other loans serviced by the Bank.
 
 The
        increase of $6,000 for the quarter ended September 30, 2008 and $17,000 for
        the
        six-months ended September 30, 2008, in gains on the sale of loans, resulted
        primarily from an increase in the amount of loans sold when comparing 2008
        to
        2007. For the three-months ended September 30, 2008, the Company sold $1.9
        million in mortgage loans versus $1.6 million in the comparable period of
        2007.
        The Company sold $4.5 million in loans for the six-month period ending September
        30, 2008 compared to $3.5 million during the same period in 2007.
 
 Other
        income consists of normal recurring fee income such as commissions from
        PrimeVest Investment Services, our investment brokerage service, the cash
        value
        of life insurance, ATM/Debit card interchange income and fees, and safe deposit
        box rent, as well as other income that management classifies as non-recurring.
        Other income increased $1,000 and $32,000, respectively, in the three and
        six-month periods ended September 30, 2008 versus the same period of 2007.
        The
        primary driver behind the increases in the three and six-month periods can
        be
        attributed to the increase in commission received from the sale of annuities
        and
        other investments by our PrimeVest bokerage service and the increase in
        ATM/debit card interchange income resulting from the promotion of the use
        of
        debit cards in relation to “Reward Checking”.
  26
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 **Non-Interest
        Expense**
 
 Non-interest
        expense categories for the three and six-month periods ended September 30,
        2008,
        and 2007 are shown in the following table:
  Three Months EndedSeptember 30,2008
              
              2007
              
              %
                  Change(In
                  thousands)Non-interest
                  expense:Compensation
                  and employee benefits
              
              $
              569
              
              $
              508
              
              
              12.0
              %Occupancy
                  and equipment
              
              
              158
              
              
              154
              
              
              2.6Foreclosed
                  property expense
              
              
              6
              
              
              2
              
              
              200.0Data
                  processing
              
              
              60
              
              
              52
              
              
              15.4Audit,
                  legal and other professional
              
              
              49
              
              
              52
              
              
              (5.8
              )Advertising
              
              
              52
              
              
              30
              
              
              73.3Telephone
                  and postage
              
              
              33
              
              
              22
              
              
              50.0Net
                  loss on disposal of fixed assets
              
              
              —
              
              
              4
              
              
              (100.0
              )Other
              
              
              135
              
              
              173
              
              
              (22.0
              )Total
                  Non-Interest Expense
              
              $
              1,062
              
              $
              997
              
              
              6.5
              %
 
 Six
                  Months EndedSeptember
                  30,2008
              
              2007
              
              %
                  Change(In
                  thousands)Non-interest
                  expense:Compensation
                  and employee benefits
              
              $
              1,301
              
              $
              1,100
              
              
              18.3
              %Occupancy
                  and equipment
              
              
              333
              
              
              304
              
              
              9.5Foreclosed
                  property expense
              
              
              7
              
              
              2
              
              
              250.0Data
                  processing
              
              
              119
              
              
              103
              
              
              15.5Audit,
                  legal and other professional
              
              
              99
              
              
              90
              
              
              10.0Advertising
              
              
              97
              
              
              63
              
              
              54.0Telephone
                  and postage
              
              
              59
              
              
              47
              
              
              25.5Net
                  loss on sale of foreclosed property
              
              
              4
              
              
              —
              
              
              —Net
                  loss on disposal of fixed assets
              
              
              —
              
              
              4
              
              
              (100.0
              )Other
              
              
              276
              
              
              296
              
              
              (6.8
              )Total
                  Non-Interest Expense
              
              $
              2,295
              
              $
              2,009
              
              
              14.2
              %
  Compensation
        and employee benefits increased by $61,000 when comparing the September 2008
        and
        2007 quarters primarily due to a $55,000 increase in salaries, an $8,000
        increase in costs associated with insurance benefits paid by the Company
        for
        employees and a $4,000 increase in contributions to the 401(k) plan offset
        by a
        $5,000 decrease in market value of the shares held in the Directors Retirement
        Plan and a decrease of $3,000 in fees paid to Directors. When comparing the
        six
        months ended September 30, 2008 to the same period in 2007, there was a $201,000
        increase in compensation and employee benefits. The largest contributing
        factors
        were a $98,000 increase in expense related to options exercised, a $76,000,
        or
        10.0%, increase in salaries, a $13,000 increase in the market value of the
        shares held in the Directors Retirement Plan, an $18,000 increase in costs
        associated with insurance benefits paid by the Company for employees and
        a
        $9,000 increase in contributions to the 401(k) plan. These increases are
        offset,
        in part, by a $7,000 decrease in fees paid to the Directors. Fees paid to
        the
        Directors decreased due to there being six Directors now as opposed to seven
        in
        the previous year. The increase in salaries can be attributed to the hiring
        of a
        trust officer in July 2008 and the hiring of five, during August and September
        2008, of the employees for the branch in Vincennes, Indiana. Salary and employee
        benefits may increase in the near future when all of the Vincennes staff
        is
        hired. However, as all options have now been exercised and the options expired
        on July 29th of this year, there should be no future expenses associated
        with
        options.
  27
  FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 Occupancy
        and equipment expense increased by $4,000 for the three-month period ending
        September 30, 2008 compared to September 30, 2007 and increased by $29,000
        when
        comparing the six-month periods ending September 30, 2008 to September
        30, 2007.
        These increases for the three-month period and six-month period reflects
        an
        increase in the costs associated with updating and maintaining the office
        buildings and beginning to remodel the facility in Vincennes. Occupancy and
        equipment expense could increase in the coming year due to the new branch
        in
        Vincennes, Indiana.
 
 Data
        processing expenses increased $8,000 for the three-months and $16,000 for
        the
        six-months ended September 30, 2008 compared to the same periods in the prior
        year due to the cost of keeping up with advances in technology.
 
 Audit,
        legal and other professional fees decreased $3,000 for the three-month period
        and increased $9,000 for the six-month period ended September 30, 2008 compared
        to the same periods in the prior year. The decrease for the three-month period
        is primarily due to a decrease of $10,000, or 23.8%, in audit expense, offset
        by
        a $7,000, or 77.8%, increase in legal expense. For the six-month period,
        the
        increase of $9,000, is derived from the increase of $7,000, or 35.0%, in
        legal
        fees, the increase of $3,000 for a network assessment performed on the computer
        system of the Company, and an increase of $1,000 in transfer agent expenses,
        offset by the decrease of $2,000 in audit and accounting expenses.
 
 Other
        expense includes miscellaneous operating expenses such as office supplies,
        ATM/Debit card interchange fees, check processing fees, loan expenses, federal
        deposit insurance premiums and assessments by the bank regulators among others.
        When comparing the September 30, 2008 quarter to the September 30, 2007 quarter,
        the decrease of $38,000 in other expenses can be attributed, in part, to
        decreases in expenses related to check processing costs, business entertainment
        expense and expenses associated with stationary and printing costs. The decrease
        of $20,000 in other expenses in the six-month period ending September 30,
        2008
        verses the same period in 2007 is, in part, the result of decreases in expenses
        associated with check processing costs, bounce protection program expenses,
        stationary and printing costs, and business entertainment expense. Offsetting
        these decreases is the increase of $18,000 in other expenses that can be
        attributed, in part, in costs to a consulting company for ideas in improving
        non-interest income and cutting non-interest expenses.
 
 **Income
        Tax Expense**
 
 Income
        tax expense decreased $27,000, or 18.0%, for the three-months ending September
        30, 2008, compared to the same period in 2007. Income tax expense for the
        six-moth period decreased $52,000, or 20.0%, compared to the same period
        of
        2007. Both decreases were attributed in part to decreased profitability.
        The
        combined state and federal income tax expense as a percentage of income before
        income tax expense decreased to 33.5% during the three-month period of 2008
        compared to 33.9% during the same period in 2007. The combined state and
        federal
        income tax expense as a percentage of income before income tax expense increased
        to 33.2% for the six-months ended September 30, 2008 compared to 31.5% for
        the
        six-month period ending September 30, 2007.
 
 **Off-Balance
        Sheet Arrangements**
 
 The
        Company has entered into performance standby and financial standby letters
        of
        credit with various local commercial businesses in the aggregate amount of
        $381,000. The letters of credit are collateralized and underwritten, as
        currently required by loan policy, in the same manner as any commercial loan.
        The advancement of any funds on these letters of credit is not
        anticipated.
 
 **Liquidity
        and Capital Resources**
 
 The
        Company’s principal sources of funds are deposits and principal and interest
        payments collected on loans, investments and related securities. While scheduled
        loan repayments and maturing investments are relatively predictable, deposit
        flows and early loan prepayments are more influenced by interest rates, general
        economic conditions and competition.
 
 Liquidity
        resources are used principally to meet outstanding commitments on loans,
        to fund
        maturing certificates of deposit and deposit withdrawals and to meet operating
        expenses. The Company anticipates no foreseeable problems in meeting current
        loan commitments **.** At
        September 30, 2008, outstanding commitments to extend credit, amounted to
        $18.9
        million (including $11.8 million, in available revolving and closed-ended
        commercial and agricultural lines of credit). **** Management
        believes that loan repayments and other sources of funds will be adequate
        to
        meet any foreseeable liquidity needs.
  28
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
 Management’s
        Discussion and Analysis of Financial Condition
 And
        Results of Operations
 
 The
        Company maintains a $25.8 million line of credit with the FHLB, which can
        be
        accessed immediately. The Company regularly uses FHLB Letters of Credit as
        security for public unit deposits. The available line of credit with the
        FHLB is
        reduced by the amount of these letters of credit. However, as of September
        there
        were no FHLB letters of credit pledged. The available line of credit with
        the
        FHLB is also reduced by $1.6 million for the credit enhancement reserve
        established as a result of the participation in the FHLB Mortgage Partnership
        Finance (“MPF”) program. The Company also maintains a $5.0 million revolving
        line of credit and a $600,000 revolving line of credit with Independent Banker’s
        Bank located in Springfield, Illinois. Subsequent to September 30, 2008 the
        Company borrowed $558,000 on this line of credit. The Company has also
        established borrowing capabilities at the discount window with the Federal
        Reserve Bank of St. Louis.
 
 Liquidity
        management is both a daily and long-term responsibility of management. We
        adjust
        our investments in liquid assets based upon management's assessment of (i)
        expected loan demand, (ii) expected deposit flows, (iii) yields available
        on
        interest-bearing investments and (iv) the objectives of its asset/liability
        management program. Excess liquidity generally is invested in interest-earning
        overnight deposits and other short-term government and agency
        obligations.
 
 The
        Company and the Bank are subject to capital requirements of the federal bank
        regulatory agencies which require the Bank to maintain minimum ratios of
        Tier I
        capital to total risk-weighted assets and total capital to risk-weighted
        assets
        of 4% and 8% respectively. Tier I capital consists of total stockholders’ equity
        calculated in accordance with generally accepted accounting principals less
        intangible assets, and total capital is comprised of Tier I capital plus
        certain
        adjustments, the only one of which is applicable to the Bank is the allowance
        for loan losses. Risk-weighted assets refer to the on- and off-balance sheet
        exposures of the Bank adjusted for relative risk levels using formulas set
        forth
        by OCC regulations. The Bank is also subject to an OCC leverage capital
        requirement, which calls for a minimum ratio of Tier I capital to quarterly
        average total assets of 3% to 5%, depending on the institution’s composite
        ratings as determined by its regulators. Both the Bank and the Company are
        considered well-capitalized under federal regulations.
 
 At
        September 30, 2008 the Bank’s compliance with all of the aforementioned capital
        requirements is summarized below:
  To be Well CapitalizedUnder the PromptFor Capital
              
              Corrective ActionActual
              
              Adequacy Purposes
              
              ProvisionsAmount
              
              Ratio
              
              Amount
              
              Ratio
              
              Amount
              
              RatioTotal
                  Risk-Based Capital(to
                  Risk-Weighted Assets)
              
              $
              12,832
              
              
              15.62
              %
              $
              6,574
              
              
              8.00
              %
              $
              8,218
              
              
              10.00
              %Tier
                  I Capital(to
                  Risk-Weighted Assets)
              
              
              12,068
              
              
              14.69
              
              
              3,287
              
              
              4.00
              
              
              4,931
              
              
              6.00Tier
                  I Capital(to
                  Average Assets)
              
              
              12,068
              
              
              8.65
              
              
              5,578
              
              
              4.00
              
              
              6,973
              
              
              5.00
 
 At
        the
        time of the conversion of the Bank to a stock organization, a special
        liquidation account was established for the benefit of eligible account holders
        and the supplemental account holders in an amount equal to the net worth
        of the
        Bank. This special liquidation account will be maintained for the benefit
        of
        eligible account holders and the supplemental account holders who continue
        to maintain
        their accounts in the Bank after June 27, 1997. In the unlikely event of
        a
        complete liquidation, each eligible and the supplemental eligible account
        holders will be entitled to receive a liquidation distribution from the
        liquidation account in an amount proportionate to the current adjusted
        qualifying balances for accounts then held. The Bank may not declare or pay
        cash
        dividends on or repurchase any of its common stock if stockholders’ equity would
        be reduced below applicable regulatory capital requirements or below the
        special
        liquidation account.
  29
 
 FIRST
        ROBINSON FINANCIAL CORPORATION
  Item:
        3 **Quantitative
        and Qualitative Disclosures about Market Risk**
 
 Not
        applicable.
 
 Item:
        4 **Controls
        and Procedures**
 
 Any
        control system, no matter how well designed and operated, can provide only
        reasonable (not absolute) assurance that its objectives will be met.
        Furthermore, no evaluation of controls can provide absolute assurance that
        all
        control issues and instances of fraud, if any, have been detected.
 
 **Disclosure
        Controls and Procedures**
 
 The
        Company’s management, with the participation of the Company’s Chief Executive
        Officer and Chief Financial Officer, has evaluated the effectiveness of the
        Company’s disclosure controls and procedures (as such term is defined in Rules
        13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period
        covered by this report. Based upon that evaluation, the Company’s Chief
        Executive Officer and Chief Financial Officer have concluded that, as of
        September 30, 2008, the Company’s disclosure controls and procedures were
        effective to provide reasonable assurance that (i) the information required
        to
        be disclosed in this Report was recorded, processed, summarized and reported
        within the time periods specified in the SEC’s rules and forms, and (ii)
        information required to be disclosed by the Company in the reports that it
        files
        or submits under the Exchange Act is accumulated and communicated to Company’s
        management, including its principal executive and principal financial officers,
        or persons performing similar functions, as appropriate to allow timely
        decisions regarding disclosure.
  **Internal
        Control Over Financial Reporting**
 
 There
        have been no changes in the Company’s internal control over financial reporting
        (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
        Act) during the fiscal quarter to which this report relates that have materially
        affected, or are reasonably likely to materially affect, the Company’s internal
        control over financial reporting.
  30
 
 PART
        II
        OTHER INFORMATION
 
 
 Item 1.
              Legal
                  Proceedings
 None
 
 Item 1.A.
              Risk
                  Factors
 There
        have been no material changes in the Company’s risk factors from those disclosed
        in its Annual Report on Form 10-KSB
 
 Item 2.
              Unregistered
                  Sales of Equity Securities and Use of
                  Proceeds
 The
        following table provides information about purchases by the Company for the
        quarter ended September
        30, 2008 regarding the Company’s common stock.
 
 PURCHASES
        OF EQUITY SECURITIES BY COMPANY (1)
 
 Period
              
              Total Number of
                Shares
                Purchased
              
              Average Price Paid
                per Share
              
              Total Number of
                Shares Purchased as
                Part of Publicly
                Announced Plans or
                Programs
              
              Maximum Number of
                Shares that May Yet
                Be Purchased Under
                the Plans or Programs7/1/2008 –
                  7/31/2008
              
              
              2,300
              
              $
              35.50
              
              
              2,300
              
              
              26,3928/1/2008 –
                  8/31/2008
              
              
              4,231
              
              
              35.54
              
              
              3,900
              
              
              22,4929/1/2008
                  – 9/30/2008
              
              
              550
              
              
              36.00
              
              
              550
              
              
              21,942Total
              
              
              7,081
              
              $
              35.56
              
              
              6,750
              
              
              21,942
 (1)
        On
        July 24, 2008, the Board of Directors of First Robinson Financial Corporation
        voted to approve the extension and expansion of the repurchase program of
        its
        equity stock approved on September 18, 2007. The Company may repurchase up
        to
        22,000 additional shares of the Company’s outstanding common stock in the open
        market or in negotiated private transactions from time to time when deemed
        appropriate by management. The increase represents approximately 5% of the
        Company’s issued and outstanding shares.  As of July 24, 2008, the
        Company had repurchased 20,108 shares of its common stock out of the 25,000
        shares that had been previously authorized for repurchase.  As a
        result of these actions, the Company is currently authorized to repurchase
        26,892 shares of common stock. The Program, with an original expiration date
        of
        September 17, 2008, has been extended to August 1, 2009 or the completion
        of the
        repurchase of the 26,892 shares. As of September 30, 2008, 4,950 shares of
        the
        26,892 have been purchased in the new program leaving 21,942 remaining to
        be
        purchased.
 
 Item 3.
              Defaults
                  Upon Senior Executives
 None
  31
 
 PART
        II
        OTHER INFORMATION
 
 Item 4.
              Submission
                  of Matters to a Vote of Security
                  Holders
 (a)
              On
                  July 24, 2008, the Company held its Annual Meeting of
                  Stockholders.
 
 (b)
              At
                  the meeting, Rick L. Catt and Steven E. Neeley were elected as
                  directors
                  for terms to expire in 2011. Those directors continuing in office
                  are J.
                  Douglas Goodwine, Robin E. Guyer, Scott F. Pulliam, and William
                  K.
                  Thomas.
 
 (c)
              Stockholders
                  voted on the following matters:
  (i)
              The
                  election of the following two directors of the
                  Corporation:
 
 BROKER**VOTES:**
              
              FOR
              
              WITHHELD
              
              ABSTAIN
              
              NON-VOTESRick
                  L. Catt
              
              
              382,261
              
              
              1,400
              
              
              —
              
              
              —Steven
                  E. Neeley
              
              
              380,645
              
              
              3,016
              
              
              —
              
              
              —
  (ii)
              The
                  ratification of the appointment of BKD, LLP as auditors for the
                  Company
                  for the fiscal year ending March 31,
                  2009:
 
 BROKER**VOTES:**
              
              FOR
              
              WITHHELD
              
              ABSTAIN
              
              NON-VOTES381,565
              
              
              1,996
              
              
              100
              
              
              —
  Item 5.
              Other
                  Information
 None
 
 Item 6.
              Exhibits
  1.
              Exhibit
                  31: Section 302 Certifications
 
 2.
              Exhibit
                  32: Section 906 Certifications
 
 32
  SIGNATURES
 
 Pursuant
        to the requirements of **** the
        Securities Exchange Act of 1934, the registrant has duly caused this report
        to
        be signed on its behalf by the undersigned thereunto duly
        authorized.
 
 FIRST
                  ROBINSON FINANCIALCORPORATIONDate:
                  November 14, 2008
              /s/
                  Rick L. CattRick
                  L. CattPresident
                  and Chief Executive OfficerDate:
                  November 14, 2008
              /s/
                  Jamie E. McReynoldsJamie
                  E. McReynoldsChief
                  Financial Officer and Vice
                  President
  33
  EXHIBIT
        INDEX
 
 **Exhibit
        No.**
 
 31.1
              Certification
                  by the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200231.2
              Certification
                  by the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200232
              Certifications
                  of the CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley
                  Act of
                  2002
  34