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
            June
      30, 2009




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 Number  029276FIRST
      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 markwhether 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File requested to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that
registrant was required to submit and post such
files).   Yes  o   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:  433,198 shares of common stock, par
value $.01 per share, as of August 12, 2009.










FIRST
ROBINSON FINANCIAL CORPORATION




Index to
Form 10-Q





PAGEPART
      1. FINANCIAL INFORMATIONItem
      1. Financial StatementsCondensed
      Consolidated Balance Sheets as of June 30, 2009And
      March 31, 2009
                                                    
                                                    3Condensed
      Consolidated Statements of Income for the Three-MonthPeriods
      Ended June 30, 2009 and 2008
                                                    
                                                    4Condensed
      Consolidated Statements of Changes in Stockholders’ EquityFor
      the Three-Month Periods ended June 30, 2009 and 2008
                                                    
                                                    5Condensed
      Consolidated Statements of Cash Flows for the Three-MonthPeriods
      Ended June 30, 2009 and  2008
                                                    
                                                    6Notes
      to Condensed Consolidated Financial Statements
                                                    
                                                    8Item
      2. Management’s Discussion and Analysis of Financial Condition
      andResults
      of Operations
                                                    
                                                    17Item
      3. Quantitative and Qualitative Disclosures about Market
    Risk
                                                    
                                                    30Item
      4T.  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
                                                    
                                                    31Item
      5.     Other Information
                                                    
                                                    31Item
      6.     Exhibits
                                                    
                                                    31SIGNATURES
                                                    
                                                    32CERTIFICATIONS




2




Item
1:
  FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED BALANCE SHEETS


(In
thousands, except share data)





(Unaudited)June 30, 2009
                    
                    
                    March 31, 2009ASSETSCash
      and cash equivalents
                    
                    $
                    3,999
                    
                    
                    $
                    5,424Interest-bearing
      deposits
                    
                    
                    2,813
                    
                    
                    
                    713Federal
      funds sold
                    
                    
                    —
                    
                    
                    
                    7,572Available-for-sale
      securities
                    
                    
                    68,452
                    
                    
                    
                    55,925Loans,
      held for sale
                    
                    
                    529
                    
                    
                    
                    392Loans,
      net of allowance for loan losses of $825 and $780 at June 30, 2009 and
      March 31, 2009, respectively
                    
                    
                    90,687
                    
                    
                    
                    86,365Federal
      Reserve and Federal Home Loan Bank stock
                    
                    
                    1,006
                    
                    
                    
                    811Premises
      and equipment, net
                    
                    
                    3,952
                    
                    
                    
                    3,940Foreclosed
      assets held for sale, net
                    
                    
                    46
                    
                    
                    
                    46Interest
      receivable
                    
                    
                    830
                    
                    
                    
                    824Prepaid
      income taxes
                    
                    
                    13
                    
                    
                    
                    81Cash
      surrender value of life insurance
                    
                    
                    1,466
                    
                    
                    
                    1,453Other
      assets
                    
                    
                    1,002
                    
                    
                    
                    873Total
      Assets
                    
                    $
                    174,795
                    
                    
                    $
                    164,419LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilitiesDeposits
                    
                    $
                    144,122
                    
                    
                    $
                    140,088Other
      borrowings
                    
                    
                    16,324
                    
                    
                    
                    9,914Short-term
      borrowings
                    
                    
                    400
                    
                    
                    
                    —Advances
      from borrowers for taxes and insurance
                    
                    
                    227
                    
                    
                    
                    166Deferred
      income taxes
                    
                    
                    275
                    
                    
                    
                    452Interest
      payable
                    
                    
                    356
                    
                    
                    
                    330Other
      liabilities
                    
                    
                    1,285
                    
                    
                    
                    1,162Total
      Liabilities
                    
                    
                    162,989
                    
                    
                    
                    152,112Commitments
      and Contingencies
                    
                    
                    —
                    
                    
                    
                    —Stockholders’
      EquityPreferred
      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 June 30, 2009– 435,148 shares; March 31, 2009 –
      435,232 shares
                    
                    
                    9
                    
                    
                    
                    9Additional
      paid-in capital
                    
                    
                    8,786
                    
                    
                    
                    8,791Retained
      earnings
                    
                    
                    10,376
                    
                    
                    
                    10,560Accumulated
      other comprehensive income
                    
                    
                    473
                    
                    
                    
                    782Treasury
      stock, at costCommon:
      June 30, 2009 – 424,477 shares; March 31, 2009 – 424,393
      shares
                    
                    
                    (7,838
                    )
                    
                    
                    (7,835
                    )Total
      Stockholders’ Equity
                    
                    
                    11,806
                    
                    
                    
                    12,307Total
      Liabilities and Stockholders’ Equity
                    
                    $
                    174,795
                    
                    
                    $
                    164,419





See Notes
to Condensed Consolidated Financial Statements




3




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF INCOME


For the
Three-Months Ended June 30, 2009 and 2008


(In
thousands, except per share data)


(Unaudited)




2009
                    
                    
                    2008Interest
      and Dividend Income:Loans
                    
                    $
                    1,347
                    
                    
                    $
                    1,313Securities:Taxable
                    
                    
                    567
                    
                    
                    
                    409Tax-exempt
                    
                    
                    38
                    
                    
                    
                    21Other
      interest income
                    
                    
                    4
                    
                    
                    
                    77Dividends
      on Federal Reserve Bank stock
                    
                    
                    3
                    
                    
                    
                    3Total
      Interest and Dividend Income
                    
                    
                    1,959
                    
                    
                    
                    1,823Interest
      Expense:Deposits
                    
                    
                    922
                    
                    
                    
                    684Other
      borrowings
                    
                    
                    10
                    
                    
                    
                    50Total
      Interest Expense
                    
                    
                    932
                    
                    
                    
                    734Net
      Interest Income
                    
                    
                    1,027
                    
                    
                    
                    1,089Provision
      for Loan Losses
                    
                    
                    45
                    
                    
                    
                    30Net
      Interest Income After Provision for Loan Losses
                    
                    
                    982
                    
                    
                    
                    1,059Non-Interest
      Income:Charges
      and fees on deposit accounts
                    
                    
                    220
                    
                    
                    
                    217Charges
      and other fees on loans
                    
                    
                    100
                    
                    
                    
                    44Net
      gain on sale of loans
                    
                    
                    127
                    
                    
                    
                    42Net
      realized gain on sale of investments
                    
                    
                    101
                    
                    
                    
                    —Other
                    
                    
                    118
                    
                    
                    
                    130Total
      Non-Interest Income
                    
                    
                    666
                    
                    
                    
                    433Non-Interest
      Expense:Compensation
      and employee benefits
                    
                    
                    650
                    
                    
                    
                    732Occupancy
      and equipment
                    
                    
                    184
                    
                    
                    
                    175Data
      processing
                    
                    
                    60
                    
                    
                    
                    59Audit,
      legal and other professional
                    
                    
                    85
                    
                    
                    
                    50Advertising
                    
                    
                    102
                    
                    
                    
                    45Telephone
      and postage
                    
                    
                    54
                    
                    
                    
                    25Net
      loss on sale of foreclosed assets
                    
                    
                    —
                    
                    
                    
                    4FDIC
      insurance
                    
                    
                    131
                    
                    
                    
                    6Other
                    
                    
                    158
                    
                    
                    
                    137Total
      Non-Interest Expense
                    
                    
                    1,424
                    
                    
                    
                    1,233Income
      Before Income Taxes
                    
                    
                    224
                    
                    
                    
                    259Provision
      For Income Taxes
                    
                    
                    60
                    
                    
                    
                    85Net
      Income
                    
                    $
                    164
                    
                    
                    $
                    174Basic
      Earnings Per Share
                    
                    $
                    0.39
                    
                    
                    $
                    0.40Diluted
      Earnings Per Share
                    
                    $
                    0.38
                    
                    
                    $
                    0.38





See Notes
to Condensed Consolidated Financial Statements


4





FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


For the
Three-Months Ended June 30, 2009 and 2008


(In
thousands, except per share data)


(Unaudited)





AccumulatedAdditional
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        OtherCommon Stock
                                                        
                                                        
                                                        Paid-in
                                                        
                                                        
                                                        Retained
                                                        
                                                        
                                                        Comprehensive
                                                        
                                                        
                                                        Treasury
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        ComprehensiveShares
                                                        
                                                        
                                                        Amount
                                                        
                                                        
                                                        Capital
                                                        
                                                        
                                                        Earnings
                                                        
                                                        
                                                        Income (Loss)
                                                        
                                                        
                                                        Stock
                                                        
                                                        
                                                        Total
                                                        
                                                        
                                                        LossBalance,
      April 1, 2008
                                                        
                                                        
                                                        451,464
                                                        
                                                        
                                                        $
                                                        9
                                                        
                                                        
                                                        $
                                                        8,491
                                                        
                                                        
                                                        $
                                                        10,114
                                                        
                                                        
                                                        $
                                                        247
                                                        
                                                        
                                                        $
                                                        (6,985
                                                        )
                                                        
                                                        $
                                                        11,876Comprehensive
      lossNet
      income
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        174
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        174
                                                        
                                                        
                                                        
                                                        174Change
      in unrealized (depreciation) on available-for-sale securities, net of
      taxes of $(308)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (514
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (514
                                                        )
                                                        
                                                        
                                                        (514
                                                        )Total
      comprehensive loss
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (340
                                                        )Treasury
      shares purchased
                                                        
                                                        
                                                        (1,186
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (41
                                                        )
                                                        
                                                        
                                                        (41
                                                        )Dividends
      on common stock, $0.75 per share
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (346
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (346
                                                        )Stock
      options exercised
                                                        
                                                        
                                                        9,452
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        168
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        164
                                                        
                                                        
                                                        
                                                        332Balance,
      June 30, 2008
                                                        
                                                        
                                                        459,730
                                                        
                                                        
                                                        $
                                                        9
                                                        
                                                        
                                                        $
                                                        8,659
                                                        
                                                        
                                                        $
                                                        9,942
                                                        
                                                        
                                                        $
                                                        (267
                                                        )
                                                        
                                                        $
                                                        (6,862
                                                        )
                                                        
                                                        $
                                                        11,481Balance,
      April 1, 2009
                                                        
                                                        
                                                        435,232
                                                        
                                                        
                                                        $
                                                        9
                                                        
                                                        
                                                        $
                                                        8,791
                                                        
                                                        
                                                        $
                                                        10,560
                                                        
                                                        
                                                        $
                                                        782
                                                        
                                                        
                                                        $
                                                        (7,835
                                                        )
                                                        
                                                        $
                                                        12,307Comprehensive
      lossNet
      income
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        164
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        164
                                                        
                                                        
                                                        
                                                        164Unrealized
      appreciation (depreciation) on available-for-sale
    securities:Unrealized
      appreciation (depreciation) on available-for-sale securities, net of taxes
      of $(135)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (242
                                                        )Less
      reclassification adjustment for realized gains included in income net of
      taxes $34
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        67Total
      unrealized depreciation on available-for-sale securities, net of taxes of
      $(169)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (309
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (309
                                                        )
                                                        
                                                        (309
                                                        )Total
      comprehensive loss
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (145
                                                        )Treasury
      shares purchased
                                                        
                                                        
                                                        (84
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (3
                                                        )
                                                        
                                                        
                                                        (3
                                                        )Dividends
      on common stock, $0.80 per share
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (348
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (348
                                                        )Incentive
      compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (5
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (5
                                                        )Balance,
      June 30, 2009
                                                        
                                                        
                                                        435,148
                                                        
                                                        
                                                        $
                                                        9
                                                        
                                                        
                                                        $
                                                        8,786
                                                        
                                                        
                                                        $
                                                        10,376
                                                        
                                                        
                                                        $
                                                        473
                                                        
                                                        
                                                        $
                                                        (7,838
                                                        )
                                                        
                                                        $
                                                        11,806





See Notes
to Condensed Consolidated Financial Statements


5


FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


For the
Three-Months Ended June 30, 2009 and 2008


(In
thousands)


(Unaudited)





2009
                    
                    
                    2008Cash
      flows from operating activities:Net
      income
                    
                    $
                    164
                    
                    
                    $
                    174Items
      not requiring (providing) cashDepreciation
      and amortization
                    
                    
                    75
                    
                    
                    
                    74Provision
      for loan losses
                    
                    
                    45
                    
                    
                    
                    30Amortization
      of premiums and discounts on securities
                    
                    
                    24
                    
                    
                    
                    (16
                    )Amortization
      of loan servicing rights
                    
                    
                    115
                    
                    
                    
                    16Compensation
      related to options exercised
                    
                    
                    —
                    
                    
                    
                    182Deferred
      income taxes
                    
                    
                    (8
                    )
                    
                    
                    (20
                    )Originations
      of mortgage loans held for sale
                    
                    
                    (13,632
                    )
                    
                    
                    (2,654
                    )Proceeds
      from the sale of mortgage loans
                    
                    
                    13,622
                    
                    
                    
                    2,797Net
      gain on loans sold
                    
                    
                    (127
                    )
                    
                    
                    (42
                    )Net
      loss on sale of foreclosed property
                    
                    
                    —
                    
                    
                    
                    4Net
      realized gain on sale of securities
                    
                    
                    (101
                    )
                    
                    
                    —Cash
      surrender value of life insurance
                    
                    
                    (13
                    )
                    
                    
                    (16
                    )Changes
      in:Interest
      receivable
                    
                    
                    (6
                    )
                    
                    
                    (23
                    )Other
      assets
                    
                    
                    (249
                    )
                    
                    
                    (95
                    )Interest
      payable
                    
                    
                    26
                    
                    
                    
                    (26
                    )Other
      liabilities
                    
                    
                    123
                    
                    
                    
                    (110
                    )Income
      taxes, prepaid/accrued
                    
                    
                    68
                    
                    
                    
                    39Net
      cash provided by operating activities
                    
                    
                    126
                    
                    
                    
                    314Cash
      flows from investing activities:Purchase
      of available-for-sale securities
                    
                    
                    (26,983
                    )
                    
                    
                    (14,224
                    )Proceeds
      from maturities of available-for-sale securities
                    
                    
                    330
                    
                    
                    
                    —Proceeds
      from sales of available-for-sale securities
                    
                    
                    10,440
                    
                    
                    
                    —Repayment
      of principal on mortgage-backed securities
                    
                    
                    3,285
                    
                    
                    
                    1,940Purchase
      of Federal Home Loan Bank stock
                    
                    
                    (195
                    )
                    
                    
                    —Net
      change in loans
                    
                    
                    (4,367
                    )
                    
                    
                    1,045Purchase
      of premises and equipment
                    
                    
                    (82
                    )
                    
                    
                    (57
                    )Proceeds
      from sale of foreclosed assets
                    
                    
                    —
                    
                    
                    
                    12Net
      cash used in investing activities
                    
                    
                    (17,572
                    )
                    
                    
                    (11,284
                    )





See Notes
to Condensed Consolidated Financial Statements.


6




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


For The
Three-Months Ended June 30, 2009 and 2008


(In
thousands)


(Unaudited)




2009
                        
                        
                        2008Cash
      flows from financing activities:Net
      increase in deposits
                        
                        $
                        4,034
                        
                        
                        $
                        638Proceeds
      from other borrowings
                        
                        
                        26,172
                        
                        
                        
                        37,988Repayment
      of other borrowings
                        
                        
                        (19,762
                        )
                        
                        
                        (35,480
                        )Proceeds
      from short-term borrowings
                        
                        
                        400
                        
                        
                        
                        —Purchase
      of incentive plan shares
                        
                        
                        (5
                        )
                        
                        
                        —Proceeds
      received from exercise of stock options
                        
                        
                        —
                        
                        
                        
                        150Purchase
      of treasury stock
                        
                        
                        (3
                        )
                        
                        
                        (41
                        )Dividends
      paid
                        
                        
                        (348
                        )
                        
                        
                        (346
                        )Net
      increase in advances from borrowers for taxes and
insurance
                        
                        
                        61
                        
                        
                        
                        52Net
      cash  provided by financing activities
                        
                        
                        10,549
                        
                        
                        
                        2,961Decrease
      in cash and cash equivalents
                        
                        
                        (6,897
                        )
                        
                        
                        (8,009
                        )Cash
      and cash equivalents at beginning of period
                        
                        
                        13,709
                        
                        
                        
                        19,528Cash
      and cash equivalents at end of period
                        
                        $
                        6,812
                        
                        
                        $
                        11,519Supplemental
      Cash Flows Information:Interest
      paid
                        
                        $
                        906
                        
                        
                        $
                        760Income
      taxes paid (net of refunds)
                        
                        
                        —
                        
                        
                        
                        65Real
      estate acquired in settlement of loans
                        
                        
                        —
                        
                        
                        
                        90





See Notes
to Condensed Consolidated Financial Statements.


7




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-K 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 June 30, 2009, the results of
its operations for the three month periods ended June 30, 2009 and 2008, the
changes in stockholders’ equity for the three month periods ended June 30, 2009
and 2008, and cash flows for the three month periods ended June 30, 2009 and
2008.  The results of operations for those months ended June 30, 2009
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, 2009, has
been derived from the audited Consolidated Balance Sheet for the Company as of
that date.





2.
            Newly Adopted and
      Recent Accounting
Pronouncements





In
December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations—A Replacement
of FASB Statement No. 141” (“SFAS No. 141(R)”) and Statement
No. 160, “Noncontrolling
Interests in Consolidated Financial Statements—An Amendment of ARB
No. 51” (“SFAS No. 160”). SFAS No. 141(R) establishes principles and
requirements for how an acquirer recognizes and measures certain items in a
business combination, as well as disclosures about the nature and financial
effects of a business combination. SFAS No. 160 establishes accounting and
reporting standards surrounding noncontrolling interest, or minority interests,
which are the portions of equity in a subsidiary not attributable, directly or
indirectly, to a parent. The pronouncements are effective for fiscal years
beginning on or after December 15, 2008 and apply prospectively to business
combinations, meaning they were effective for the Company beginning April 1,
2009. Presentation and disclosure requirements related to noncontrolling
interests must be retrospectively applied. The application of SFAS No. 141(R)
and SFAS No. 160 did not have a material impact on the Company’s condensed
consolidated financial statements.





In March
2008, the FASB issued Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133” (“SFAS No. 161”). SFAS No. 161 requires enhanced
qualitative disclosures about objectives and strategies for using derivatives,
quantitative disclosures about fair value amounts of and gains and losses on
derivative instruments, and disclosures about credit-risk-related contingent
features in derivative agreements. SFAS No. 161 was effective for the Company
for the interim period beginning April 1, 2009, and did not have an effect on
the Company’s condensed consolidated financial statements.





In April
2009, the FASB issued FASB Staff Position on FAS 157-4, “Determining Fair Value When the
Volume and Level of Activity For the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (FSP
157-4).  FSP 157-4 provides additional guidance for estimating fair
value in accordance with SFAS 157 when the volume and level of activity for the
asset or liability have decreased significantly.  FSP 157-4 also
provides guidance on identifying circumstances that indicate a transaction is
not orderly.  The provisions of FSP 157-4 were effective for the
Company’s interim period ended June 30, 2009.  FSP 157-4 did not have
a material effect on the Company’s condensed consolidated financial
statements.





In April
2009, the FASB issued FASB Staff Position on FAS 115-2 and FAS 124-2, “Recognition and Presentation
of Other-Than-Temporary Impairments”(the FSP).  The FSP
establishes a methodology of determining and recording other-than-temporary
impairments of debt securities and expands disclosures about fair value
measurements.  The provisions of the FSP were effective for the
Company’s interim period ended June 30, 2009.   The disclosure
provisions of these FASB Staff Positions are reflected in the Company’s
condensed consolidated financial statements.





In April
2009, the FASB issued FASB Staff Position on FAS 107-1 and APB 28-1, “Interim Disclosures About Fair
Value of Financial Instruments” (the FSP).  The FSP requires
disclosures about fair value of financial instruments in interim reporting
periods of publicly-traded companies that were previously only required to be
disclosed in annual financial statements.  The provisions of the FSP
are effective for the Company for the interim period ended June 30, 2009. The
disclosure provisions of these FASB Staff Positions are reflected in the
Company’s condensed consolidated financial statements.




8




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





In May
2009, the FASB issued Statement No. 165, “Subsequent
Events”.  SFAS No. 165 establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or available to be
issued.  The Statement does not apply to subsequent events or
transactions that are within the scope of other generally accepted accounting
principles (GAAP) that provide different guidance on the accounting treatment
for subsequent events or transactions.  The Statement was effective
for interim or annual financial periods after June 15, 2009.  The
Company adopted  the provisions of FAS 165 for the quarter ended June
30, 2009, as required, and adoption did not have a material impact on the
Company’s condensed consolidated financial statements.





On June
12, 2009, the FASB issued SFAS No. 166, “Accounting for Transfers
of  Financial Assets”, (“SFAS 166”). SFAS 166 is
a  revision to FAS 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities”, and
will require more information about transfers of financial assets, including
securitization transactions, and where companies have continuing exposure to the
risks related to transferred financial assets.  SFAS 166 also
eliminates the concept of a “qualifying special-purpose entity”, changes the
requirements for derecognizing financial assets and requires additional
disclosures.  SFAS 166 will be effective as of the beginning of the
Company’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period and for interim and
annual reporting periods thereafter.  Earlier application is
prohibited.  The recognition and measurement provisions of SFAS 166
shall be applied to transfers that occur on or after the effective
date.  The Company will adopt SFAS 166 on April 1, 2010, as
required.  Management has not determined the impact adoption may have
on the Company’s consolidated financial statements.





On June
12, 2009, the FASB issued Statement of Financial Accounting Standards No. 167,
“Amendments to FASB
Interpretation No. 46(R)” (“SFAS167”).  SFAS 167 is a revision
to FASB Interpretation No. 46(R), “Consolidation of Variable Interest
Entities,” and changes how a company determines when an entity that is
insufficiently capitalized or is not controlled through voting (or similar
rights) should be consolidated.  The determination of whether a
company is required to consolidate an entity is based on, among other things, an
entity’s purpose and design and a company’s ability to direct the activities of
the entity that most significantly impact the entity’s economic
performance.  SFAS 167 will be effective as of the Company’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter.  Earlier adoption is prohibited.  The
Compay will adopt SFAS 167 on April 1, 2010, as required.  Management
has not determined the impact adoption may have on the Company’s consolidated
financial statements.





On June
29, 2009, the FASB issued Statement of Financial Accounting Standards No. 168
(“SFAS 168”) “Accounting
Standards Codification TM and the Hierarchy of Generally Accepted Accounting
Principles” – a replacement of FASB Statement No. 162.  SFAS
168 establishes the FASB Accounting Standards Codification TM as a source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with US GAAP.  SFAS 168 will be effective for financial
statements issued for interim and annual reporting periods ending after
September 15, 2009, for most entities.  On the effective date, all
non-SEC accounting and reporting standards will be superceded.  The
Company will adopt SFAS 168 for the quarterly period ended September 30, 2009,
as required, and adoption is not expected to have a material impact on the
Company’s consolidated financial statements.





3.
            Fair Value
      Measurements




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.




Statement
of Financial Standards No. 157, Fair Value Measurements(“FAS
157”). 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:




9




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





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 June 30, 2009 and March 31, 2009.




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, and mortgage-backed
securities. 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.




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 June 30, 2009 and March 31, 2009 (in
thousands):





Carrying value at June 30, 2009Description
                          
                          Fair Value
                          
                          
                          Quoted Pricesin
                            Active Marketsfor IdenticalAssets
                            (Level 1)
                          
                          
                          SignificantOtherObservableInputs
                            (Level 2)
                          
                          
                          Significant
                            Unobservable
                            Inputs
                            (Level 3)Available-for-sale
      securities
                          
                          $
                          68,452
                          
                          
                          $
                          —
                          
                          
                          $
                          68,452
                          
                          
                          $
                          —




Carrying value at March 31, 2009Description
                        
                        Fair Value
                        
                        
                        Quoted Pricesin
                          Active Marketsfor IdenticalAssets
                          (Level 1)
                        
                        
                        SignificantOtherObservableInputs
                          (Level 2)
                        
                        
                        Significant
                          Unobservable
                          Inputs
                          (Level 3)Available-for-sale
      securities
                        
                        $
                        55,925
                        
                        
                        $
                        —
                        
                        
                        $
                        55,925
                        
                        
                        $
                        —




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.   Following is a description of
the valuation methodologies for assets and liabilities measured at fair value on
a non-recurring basis and recognized in the accompanying balance sheets, as well
as the general classification of such assets and liabilities pursuant to the
valuation hierarchy.




10




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




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.





Impaired
loans are classified within Level 3 of the fair value hierarchy.





Mortgage
Servicing Rights





The fair
value used to determine the valuation allowance is estimated using discounted
cash flow models.  Due to the nature of the valuation inputs, mortgage
servicing rights are classified within Level 3 of the hierarchy.





The
following table presents the fair value measurement of assets measured at fair
value on a nonrecurring basis and the level within the FAS 157 fair value
hierarchy in which the fair value measurements fall at June 30, 2009
and  March 31, 2009:




Carrying value at June 30, 2009Quoted Prices in
                        
                        
                        SignificantActive Markets
                        
                        
                        Other
                        
                        
                        Significantfor Identical
                        
                        
                        Observable
                        
                        
                        UnobservableAssets
                        
                        
                        Inputs
                        
                        
                        InputsDescription
                        
                        Fair Value
                        
                        
                        (Level 1)
                        
                        
                        (Level 2)
                        
                        
                        (Level 3)Impaired
      loans
                        
                        $
                        137
                        
                        
                        $
                        —
                        
                        
                        $
                        —
                        
                        
                        $
                        137




Carrying value at March 31, 2009Quoted Prices in
                          
                          
                          SignificantActive Markets
                          
                          
                          Other
                          
                          
                          Significantfor Identical
                          
                          
                          Observable
                          
                          
                          UnobservableAssets
                          
                          
                          Inputs
                          
                          
                          InputsDescription
                          
                          Fair Value
                          
                          
                          (Level 1)
                          
                          
                          (Level 2)
                          
                          
                          (Level 3)Impaired
      loans
                          
                          $
                          154
                          
                          
                          $
                          —
                          
                          
                          $
                          —
                          
                          
                          $
                          154Mortgage
      servicing rights
                          
                          
                          243
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          243





The
following methods were used to estimate fair values of the Company’s financial
instruments.  The fair values of certain of these instruments were
calculated by discounting expected cash flows, which involves significant
judgments by management and uncertainties.  Fair value is the
estimated amount at which financial assets or liabilities could be exchanged in
a current transaction between willing parties, other than in a forced or
liquidation sale.  Because no market exists for certain of these
financial instruments and
because management does not intend to sell these financial instruments, the
Company does not know whether the fair values shown below represent values at
which the respective financial instruments could be sold individually or in the
aggregate.





11




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Carrying
amount is the estimated fair value for cash and cash equivalents,
interest-bearing deposits, loans held for sale, federal funds sold, Federal
Reserve and Federal Home Loan Bank stocks, accrued interest receivable and
payable, and advances from borrowers for taxes and
insurance.  Security fair values equal quoted market prices, if
available.  If quoted market prices are not available, fair value is
estimated based on quoted market prices of similar securities.  The
fair value of loans is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.  Loans with
similar characteristics were aggregated for purposes of the
calculations.  On demand deposits, savings accounts, NOW accounts, and
certain money market deposits the carrying amount approximates fair
value.  The fair value of fixed-maturity time deposits is estimated
using a discounted cash flow calculation that applies the rates currently
offered for deposits of similar remaining maturities. On other borrowings and
short-term borrowings, rates currently available to the Company for debt with
similar terms and remaining maturities are used to estimate the fair value of
existing debt.





The fair
value of commitments to originate loans is estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining
terms of the agreements and the present creditworthiness of the
counterparties.  For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates.  The fair value of forward sale commitments is
estimated based on current market prices for loans of similar terms and credit
quality.  The fair values of letters of credit and lines of credit are
based on fees currently charged for similar agreements or on the estimated cost
to terminate or otherwise settle the obligations with the counterparties at the
reporting date.


12


FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





June
      30, 2009
                      
                      
                      March
      31, 2009Carrying
                      
                      
                      
                      
                      
                      
                      CarryingAmount
                      
                      
                      Fair
      Value
                      
                      
                      Amount
                      
                      
                      Fair
      Value(In
      thousands)Financial
      assetsCash
      and cash equivalents
                      
                      $
                      3,999
                      
                      
                      $
                      3,999
                      
                      
                      $
                      5,424
                      
                      
                      $
                      5,424Interest-bearing
      deposits
                      
                      
                      2,813
                      
                      
                      
                      2,813
                      
                      
                      
                      713
                      
                      
                      
                      713Federal
      funds sold
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      7,572
                      
                      
                      
                      7,572Available-for-sale
      securities
                      
                      
                      68,452
                      
                      
                      
                      68,452
                      
                      
                      
                      55,925
                      
                      
                      
                      55,925Loans
      held for sale
                      
                      
                      529
                      
                      
                      
                      529
                      
                      
                      
                      392
                      
                      
                      
                      392Loans,
      net of allowance for loan losses
                      
                      
                      90,687
                      
                      
                      
                      91,788
                      
                      
                      
                      86,365
                      
                      
                      
                      87,092Federal
      Reserve and Federal Home Loan Bank stock
                      
                      
                      1,006
                      
                      
                      
                      1,006
                      
                      
                      
                      811
                      
                      
                      
                      811Interest
      receivable
                      
                      
                      830
                      
                      
                      
                      830
                      
                      
                      
                      824
                      
                      
                      
                      824Financial
      liabilitiesDeposits
                      
                      
                      144,122
                      
                      
                      
                      136,768
                      
                      
                      
                      140,088
                      
                      
                      
                      135,883Other
      borrowings
                      
                      
                      16,324
                      
                      
                      
                      16,328
                      
                      
                      
                      9,914
                      
                      
                      
                      9,927Short-term
      borrowings
                      
                      
                      400
                      
                      
                      
                      400
                      
                      
                      
                      —
                      
                      
                      
                      —Advances
      from borrowers for taxes and insurance
                      
                      
                      227
                      
                      
                      
                      227
                      
                      
                      
                      166
                      
                      
                      
                      166Interest
      payable
                      
                      
                      356
                      
                      
                      
                      356
                      
                      
                      
                      330
                      
                      
                      
                      330Unrecognized
      financial instruments(net
      of contract amount)Commitments
      to originate loans
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —Letters
      of credit
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —Lines
      of credit
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —




4.
            Federal Home Loan Bank
      Stock





The
Company owns approximately $836,000 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 Board.  The order generally prohibits capital stock
repurchases and redemptions until a time to be determined by the Federal Housing
Finance Board.  The FHLB will continue to provide liquidity and
funding through advances.  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 Company’s
investment in FHLB stock to be not impaired as of June 30, 2009.





5.
            Authorized Share
      Repurchase Program





On July
23, 2009, the Board of Directors of the Company voted to approve the extension
and expansion of the repurchase program of its equity stock approved on July 24,
2008.  The Company may repurchase up to 10,000 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 2.5% of the Company’s issued and
outstanding shares.  As of July 22, 2009, the Company had repurchased
22,782 shares of its common stock out of the 26,892 shares that had been
previously authorized for repurchase leaving 4,110 remaining to be
purchased.  As a result of these actions, the Company is currently
authorized to repurchase 14,110 shares of common stock.  The program
has been extended to August 2, 2010 or  the earlier of the completion
of the repurchase of the 14,110 shares.   As of August 10, 2009,
1,950 shares of the 14,110 have been purchased in the expanded program leaving
12,160 remaining to be purchased.


13


FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





6.
            Investment
      Securities





The
amortized cost and approximate fair values of available-for-sale securities are
as follows:




Amortized
                      Cost
                    
                    
                    GrossUnrealizedGains
                    
                    
                    GrossUnrealizedLosses
                    
                    
                    ApproximateFair Value(In
      thousands)June
      30, 2009U.S.
      government agencies
                    
                    $
                    22,451
                    
                    
                    $
                    206
                    
                    
                    $
                    —
                    
                    
                    $
                    22,657Mortgage-backed
      securities
                    
                    
                    40,567
                    
                    
                    
                    646
                    
                    
                    
                    111
                    
                    
                    
                    41,102State
      and political subdivisions
                    
                    
                    4,660
                    
                    
                    
                    55
                    
                    
                    
                    22
                    
                    
                    
                    4,693$
                    67,678
                    
                    
                    $
                    907
                    
                    
                    $
                    133
                    
                    
                    $
                    68,452March
      31, 2009U.S.
      government agencies
                    
                    $
                    9,793
                    
                    
                    $
                    199
                    
                    
                    $
                    —
                    
                    
                    $
                    9,992Mortgage-backed
      securities
                    
                    
                    39,878
                    
                    
                    
                    1,045
                    
                    
                    
                    22
                    
                    
                    
                    40,901State
      and political subdivisions
                    
                    
                    5,002
                    
                    
                    
                    52
                    
                    
                    
                    22
                    
                    
                    
                    5,032$
                    54,673
                    
                    
                    $
                    1,296
                    
                    
                    $
                    44
                    
                    
                    $
                    55,925





The
amortized cost and fair value of available-for-sale securities at June 30, 2009,
by contractual maturity, are shown below.  Expected maturities will
differ from contractual maturities because issuers may have the right to call or
prepay obligations with or without call or prepayment penalties.




Amortized
                      Cost
                    
                    
                    Fair
                      Value(In
      thousands)Within
      one year
                    
                    $
                    9,226
                    
                    
                    $
                    9,303One
      to five years
                    
                    
                    16,291
                    
                    
                    
                    16,460Five
      to ten years
                    
                    
                    1,594
                    
                    
                    
                    1,587Investment
      securities
                    
                    
                    27,111
                    
                    
                    
                    27,350Mortgage-backed
      securities
                    
                    
                    40,567
                    
                    
                    
                    41,102Totals
                    
                    $
                    67,678
                    
                    
                    $
                    68,452




Proceeds
from the sale of investment securities available-for-sale during the three
months ended June 30, 2009 were $10,440,000.  Gross gains of $108,000
and gross losses of $7,000 were realized on the sales.





14





FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





The
following table shows our investments’ gross unrealized losses and fair value
(in thousands), aggregated by investment category and length of time that
individual securities have been in a continuous unrealized loss position at June
30, 2009 and March 31, 2009.  At June 30, 2009, the Company does not
hold any security that it considers other-than-temporarily
impaired.





Description of Securities
                          
                          Less than 12 Months
                          
                          
                          More than 12 Months
                          
                          
                          TotalFair Value
                          
                          
                          Unrealized
                            Losses
                          
                          
                          Fair Value
                          
                          
                          Unrealized
                            Losses
                          
                          
                          Fair Value
                          
                          
                          Unrealized
                            LossesAs
      of June 30, 2009Mortgage-backed
      securities
                          
                          $
                          8,654
                          
                          
                          $
                          110
                          
                          
                          $
                          120
                          
                          
                          $
                          1
                          
                          
                          $
                          8,774
                          
                          
                          $
                          111State
      and political subdivisions
                          
                          
                          311
                          
                          
                          
                          15
                          
                          
                          
                          224
                          
                          
                          
                          7
                          
                          
                          
                          535
                          
                          
                          
                          22Total
      temporarily impaired securities
                          
                          $
                          8,965
                          
                          
                          $
                          125
                          
                          
                          $
                          344
                          
                          
                          $
                          8
                          
                          
                          $
                          9,309
                          
                          
                          $
                          133As
      of March 31, 2009Mortgage-backed
      securities
                          
                          $
                          6,307
                          
                          
                          $
                          20
                          
                          
                          $
                          125
                          
                          
                          $
                          2
                          
                          
                          $
                          6,432
                          
                          
                          $
                          22State
      and political subdivisions
                          
                          
                          290
                          
                          
                          
                          16
                          
                          
                          
                          225
                          
                          
                          
                          6
                          
                          
                          
                          515
                          
                          
                          
                          22Total
      temporarily impaired securities
                          
                          $
                          6,597
                          
                          
                          $
                          36
                          
                          
                          $
                          350
                          
                          
                          $
                          8
                          
                          
                          $
                          6,947
                          
                          
                          $
                          44





There are
15 securities in an unrealized loss position in the investment portfolio at June
30, 2009, all due to interest rate changes and not credit
events.  These unrealized losses are considered temporary and,
therefore, have not been recognized into income, because the issuers are of high
credit quality and management has the ability and intent to hold for the
foreseeable future.  The fair value is expected to recover as the
investments approach their maturity date or there is a downward shift in
interest rates.  All mortgage-backed securities in the portfolio are
residential properties.


15


FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





7.
            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 resulting from the exercise of dilutive stock options and the effect
of the incentive plan shares.  As of June 30, 2009 and 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 periods ended June 30, 2009 or 2008.  The
components of basic and diluted earnings per share for the three months ended
June 30, 2009 and 2008 were computed as follows (dollar amounts in thousands
except share data):





WeightedAverage
                                            
                                            
                                            Per ShareIncome
                                            
                                            
                                            Shares
                                            
                                            
                                            AmountFor
      the Three-Months Ended June 30, 2009:Basic
      Earnings per Share:Income
      available to common stockholders
                                            
                                            $
                                            164
                                            
                                            
                                            
                                            419,264
                                            
                                            
                                            $
                                            0.39Effect
      of Dilutive Securities:Incentive
      plan shares
                                            
                                            
                                            
                                            
                                            
                                            
                                            15,897Diluted
      Earnings per Share:Income
      available to common stockholders
                                            
                                            $
                                            164
                                            
                                            
                                            
                                            435,161
                                            
                                            
                                            $
                                            0.38For
      the Three-Months Ended June 30, 2008:Basic
      Earnings per Share:Income
      available to common stockholders
                                            
                                            $
                                            174
                                            
                                            
                                            
                                            439,605
                                            
                                            
                                            $
                                            0.40Effect
      of Dilutive Securities:Incentive
      plan shares
                                            
                                            
                                            
                                            
                                            
                                            
                                            15,968Diluted
      Earnings per Share:Income available for common stockholders
                                            
                                            $
                                            174
                                            
                                            
                                            
                                            455,573
                                            
                                            
                                            $
                                            0.38





8.
            Subsequent
      Events




Subsequent
events have been evaluated through August 13, 2009, which is the date the
financial statements were issued.





In July
2009, a $2.5 million secured line of credit for the Company was approved by
Independent Bankers’ Bank (“IBB”) located in Springfield,
Illinois.  The loan documents have not been executed by the time of
this filing.  The current $600,000 line of credit the Company has with
IBB matured as of July 31, 2009.  The $600,000 line has been extended
and will be paid off with proceeds from the $2.5 million line when the loan
documents are executed.


16





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 nationally and 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.





Critical
Accounting Policies





The
accounting and reporting policies of the Company are in accordance with
accounting principles generally accepted in the United States and conform to
general practices within the banking industry. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions.
The financial position and results of operations can be affected by these
estimates and assumptions and are integral to the understanding of reported
results. Critical accounting policies are those policies that management
believes are the most important to the portrayal of the Company's financial
condition and results, and they require management to make estimates that are
difficult, subjective, or complex.





Allowance for Loan Losses -
The allowance for loan losses provides coverage for probable losses inherent in
the Company's loan portfolio. Management evaluates the adequacy of the allowance
for credit losses each quarter based on changes, if any, in underwriting
activities, the loan portfolio composition (including product mix and
geographic, industry or customer-specific concentrations), trends in loan
performance, regulatory guidance and economic factors. This evaluation is
inherently subjective, as it requires the use of significant management
estimates. Many factors can affect management's estimates of specific and
expected losses, including volatility of default probabilities, rating
migrations, loss severity and economic and political conditions. The allowance
is increased through provisions charged to operating earnings and reduced by net
charge-offs.





The
Company determines the amount of the allowance based on relative risk
characteristics of the loan portfolio. The allowance recorded for commercial
loans is based on reviews of individual credit relationships and an analysis of
the migration of commercial loans and actual loss experience. The allowance
recorded for homogeneous consumer loans is based on an analysis of loan mix,
risk characteristics of the portfolio, fraud loss and bankruptcy experiences,
and historical losses, adjusted for current trends, for each homogenous category
or group of loans. The allowance for credit losses relating to impaired loans is
based on the loan's observable market price, the collateral for certain
collateral-dependent loans, or the discounted cash flows using the loan's
effective interest rate.





Regardless
of the extent of the Company's analysis of customer performance, portfolio
trends or risk management processes, certain inherent but undetected losses are
probable within the loan portfolio. This is due to several factors including
inherent delays in obtaining information regarding a customer's financial
condition or changes in their unique business conditions, the judgmental nature
of individual loan evaluations, regulatory input, collateral assessments and the
interpretation of economic trends. Volatility of economic or customer-specific
conditions affecting the identification and estimation of losses for larger
non-homogeneous credits and the sensitivity of assumptions utilized to establish
allowances for homogeneous groups of loans are among other factors. The Company
estimates a range of inherent losses related to the existence of the exposures.
The estimates are based upon the Company's evaluation of risk associated with
the commercial and consumer allowance levels and the estimated impact of the
current economic environment.


17


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





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, Illinois and one full service office
in Knox County, Indiana.  Assets grew $10.4 million from $164.4
million at March 31, 2009 to $174.8 million at June 30, 2009.  See
“Financial Condition” for more information. The Company earned $164,000 for the
three month period ending June 30, 2009, versus $174,000 in the same period of
2008, a decrease of 5.7%. Earnings for the three months ended June 30, 2009 were
positively impacted by a $233,000, or 53.8%, increase in non-interest income
which was more than offset by an increase of $191,000, or 15.5%, in non-interest
expense and a decrease of $77,000, or 7.3% in net interest income after
provision when compared to the prior year. Basic earnings per share for the June
30, 2009 three month period were $0.39 per share versus $0.40 per share for the
same period of 2008.  Diluted earnings per share reflect incentive
plan shares and the potential dilutive impact of stock options granted under the
stock option plan and the effect of the incentive plan
shares.  Diluted earnings per share for the three months ending June
30, 2009 and June 30, 2008 were $0.38 per share.





The
Company’s principal business, through its operating subsidiary, the Bank,
consists of accepting deposits from the general public in our market area 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.  With the addition of a branch in Vincennes,
Indiana, our market area has expanded to include Knox and surrounding counties
in Indiana along with Crawford and contiguous counties in Illinois.





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.





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.





In
response to the current national and international economic recession, however,
the U.S. government has taken a variety of actions intended to stimulate the
national economy, including the passage of legislation, such as the Emergency
Economic Stabilization Act of 2008 (the “EESA”), and the implementation of
certain programs by federal agencies.





The first
program put forth by the U.S. Treasury pursuant to its authority under the EESA
was the Troubled Asset Relief Program’s Capital Purchase Program (the
“CPP”).  Pursuant to the CPP, the US Treasury, on behalf of the US
government, intends to purchase up to $250 billion of preferred stock, along
with warrants to purchase common stock, from certain financial institutions that
applied to receive funds.  The CPP is intended to shore up bank
capital and to stimulate lending.  Neither the Company nor the Bank
has participated in the CPP.


18




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Another
recently implemented program intended to stabilize the nation’s banking system
is the Term Asset-Backed Securities Loan Facility (the “TALF”) promulgated by
the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  The program, which became operational in March, 2009, is
intended to increase credit availability and support economic activity by
facilitating renewed issuance of consumer and small business asset-backed
securities (“ABS”) and commercial mortgage-backed securities
(“CMBS”).  Under TALF, the Federal Reserve Bank of New York will
finance the purchase of eligible ABS and CMBS by investors that own eligible
collateral so long as such investor maintains an account relationship with a
primary dealer.  Generally, eligible ABS must be newly issued, highly
rated ABS collateralized by student loans, auto loans, credit card loans, and
loans guaranteed by the Small Business Administration.  Eligible CMBS
must also meet certain requirements, including:  (i) it must entitle
its holders to payments of principal and interest throughout its remaining term,
(ii) it must bear interest at a fixed pass-through rate or at a rate based on
the weighted average of the underlying fixed mortgage rates, and (iii) the CMBS
must not be junior to other securities with claims on the same pool of
loans.  Minimum loan sizes under the TALF will be $10 million and TALF
loans will generally have a three year maturity.  The Federal Reserve
has also determined that certain high-quality commercial mortgage-backed
securities issued before January 1, 2009 will become eligible collateral under
the TALF.  Starting in June 2009, however, TALF loans secured by SBA
Pool Certificates, SBA Development Company Participation Certificates, or ABS
secured by student loans or commercial mortgages will have a five-year maturity
if the borrower so elects.  The facility will cease making loans on
December 31, 2009 unless the Federal Reserve extends such date.





In
response to the current reserve ratios of the Deposit Insurance Fund, and the
need to restore it to its statutory minimum, the Federal Deposit Insurance
Corporation (the “FDIC”) announced on May 22, 2009, a final rule imposing a 5
basis point special assessment on each insured depository institution’s assets
minus Tier 1 capital as of June 30, 2009 (although no institution’s special
assessment will exceed 10 basis points times the institution’s assessment base
for the second quarter of 2009).  The special assessment is payable on
September 30, 2009.  The FDIC also announced that an additional
special assessment later in 2009 is “probable.”  In addition, the FDIC
made changes to its risk-based assessment rates effective April 1,
2009.





Finally,
the FDIC promulgated a temporary liquidity guarantee program that had both a
debt guarantee component, whereby the FDIC agreed to guarantee certain senior
unsecured debt issued by eligible financial institutions between October 14,
2008 and October 31, 2009, and a transaction account guarantee component,
whereby the FDIC agreed to insure 100% of non-interest bearing deposit
transaction accounts held at eligible financial institutions, such as lawyers’
trust accounts, payment processing accounts, payroll accounts and working
capital accounts through December 31, 2009.  The FDIC has proposed an
extension of the transaction account guarantee component of this program but, as
of the date of this filing, no extension has been finalized.  The Bank
opted out of participation in the debt guarantee program but does participate in
the transaction account guarantee program.





On May
22, 2009, President Obama signed into law the Credit Card Accountability,
Responsibility and Disclosure Act of 2009 (the “Credit Card
Act”).  The law made significant changes to the Truth in Lending Act
as implemented by the Federal Reserve’s Regulation Z.  The Credit Card
Act imposes a number of changes upon credit card issuers by February 2010,
although a limited number of changes go into effect in August
2009.  This has no impact on the Company as the Company does not issue
credit cards.





The
extent to which these programs and others like them will succeed in ameliorating
tight credit conditions or otherwise result in an improvement in the national
economy is uncertain.  It is also likely, but not certain, that
additional legislation affecting financial institutions (such as the Bank) and
their holding companies (such as the Company) will be enacted.





Legislative
and regulatory changes continue to be proposed with respect to consumer
financial products and services.  The most significant of these
proposals was released by the U.S. Treasury in June 2009 and involves the
creation of a new, independent federal agency to be called the Consumer
Financial Protection Agency.  The proposed agency would regulate
consumer financial products and services and provide minimum, uniform rules with
respect to such products, including products currently offered by the
Bank.  The proposal also includes a rollback of preemption for
federally chartered banks (like the Bank) such that a broad category of state
consumer law not currently applicable to the Bank would be applicable to the
operations and product offerings of the Bank, its subsidiaries and its
affiliates.  In addition, the proposed agency would have sole
rulemaking and interpretive authority.  Debate continues with respect
to the creation and powers of the proposed agency and there is no way to predict
whether it will be created and, if it is, the authority it will
possess.





We
continue to maintain a strong presence in the community and are pleased to be
one of the few independent community banks in our primary market
area.  To visit First Robinson Savings Bank on the web, go
to  www.frsb.net.


19




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 June 30, 2009.





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
              
              
              5
              
              
              $
              170
              
              
              
              0.38
              %
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              8
              
              
              $
              182
              
              
              
              0.41
              %
              
              
              13
              
              
              $
              352
              
              
              
              0.79
              %State
      and municipal government
              
              
              2
              
              
              
              97
              
              
              
              2.10
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              2
              
              
              
              97
              
              
              
              2.10
              %Consumer
      and other loans
              
              
              6
              
              
              
              9
              
              
              
              0.10
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              1
              
              
              
              7
              
              
              
              0.08
              
              
              
              7
              
              
              
              16
              
              
              
              0.18
              %Commercial
      business and agriculturalfinance
              
              
              3
              
              
              
              68
              
              
              
              0.38
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              2
              
              
              
              27
              
              
              
              0.15
              
              
              
              5
              
              
              
              95
              
              
              
              0.53
              %Total
              
              
              16
              
              
              $
              344
              
              
              
              0.36
              %
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              11
              
              
              $
              216
              
              
              
              0.23
              %
              
              
              27
              
              
              $
              560
              
              
              
              0.59
              %





(1)
            Loans
      are still accruing.




20


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.





June 30,
                    
                    
                    March 31,
                    
                    
                    June 30,2009
                    
                    
                    2009
                    
                    
                    2008(In thousands)Non-accruing
      loans:One-
      to four-family
                    
                    $
                    182
                    
                    
                    $
                    192
                    
                    
                    $
                    115Commercial
      and agriculture real estate
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    123Consumer
      and other loans
                    
                    
                    7
                    
                    
                    
                    14
                    
                    
                    
                    9Commercial
      business and agricultural finance
                    
                    
                    27
                    
                    
                    
                    29
                    
                    
                    
                    21Total
                    
                    
                    216
                    
                    
                    
                    235
                    
                    
                    
                    268Foreclosed/Repossessed
      assets:One-
      to four-family
                    
                    
                    46
                    
                    
                    
                    46
                    
                    
                    
                    90Total
                    
                    
                    46
                    
                    
                    
                    46
                    
                    
                    
                    90Total
      non-performing assets
                    
                    $
                    262
                    
                    
                    $
                    281
                    
                    
                    $
                    358Total
      as a percentage of total assets
                    
                    
                    0.15
                    %
                    
                    
                    0.17
                    %
                    
                    
                    0.26
                    %




Gross
interest income which would have been recorded had the non-accruing loans been
current in accordance with their original terms amounted to approximately $3,000
for the three months ended June 30, 2009 and $5,000 for the three months ended
June 30, 2008.





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 Company 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 June 30, 2009, the Company had
classified a total of $376,000 of its assets as substandard and $135,000 as
doubtful.  At June 30, 2009, total classified assets comprised
$511,000, or 4.3% of the Company’s capital, and 0.3% of the Company’s total
assets.


21




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Other Loans of
Concern.  As of June 30,
2009, there were $4.6 million in loans identified, but not classified, by the
Company 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.





At June
30, 2009, the Company had a commercial loan in the amount of $1.0 million,
secured by the common stock of a financial institution.  The borrower
has been under increased regulatory pressure with respect to its capital
position in recent months due to the borrower’s deteriorating investment
portfolio.  The borrower is in the process of securing additional
capital to address the regulatory concerns.  The allowance for loan
losses reflects management’s best estimate of the anticipated losses in this
loan.  Due to the nature of the collateral, the Company could incur
additional losses.





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 value
minus 20% of the fair 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 value less 10% of the 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 June 30, 2009, the Bank had
one real estate property acquired through foreclosure.  The property
is considered as held 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 Company’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
operations.  Such agencies may require the Bank to increase the Bank’s
allowance for loan losses, increase classified assets, or take other actions
that could significantly affect the Company’s earnings based upon their judgment
of the information available to them at the time of their
examination.  At June 30, 2009, the Company had a total allowance for
loan losses of $825,000, representing 0.90% of the Company’s loans,
net.   At March 31, 2009, the Company’s total allowance for loan
losses to the Company’s loans, net was at 0.90%.


22


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





The
distribution of the Company’s allowance for losses on loans at the dates
indicated is summarized as follows:




June 30, 2009
                                                                    
                                                                    
                                                                    March 31, 2009Amount 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 including loans held for sale
                                                                    
                                                                    $
                                                                    85
                                                                    
                                                                    
                                                                    $
                                                                    44,407
                                                                    
                                                                    
                                                                    
                                                                    46.45
                                                                    %
                                                                    
                                                                    $
                                                                    66
                                                                    
                                                                    
                                                                    $
                                                                    43,903
                                                                    
                                                                    
                                                                    
                                                                    48.59
                                                                    %Multi-family
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    1,235
                                                                    
                                                                    
                                                                    
                                                                    1.29
                                                                    
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    1,242
                                                                    
                                                                    
                                                                    
                                                                    1.38Commercial
      and agricultural real estate
                                                                    
                                                                    
                                                                    477
                                                                    
                                                                    
                                                                    
                                                                    15,712
                                                                    
                                                                    
                                                                    
                                                                    16.44
                                                                    
                                                                    
                                                                    
                                                                    458
                                                                    
                                                                    
                                                                    
                                                                    14,793
                                                                    
                                                                    
                                                                    
                                                                    16.37Construction
      or development
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    2,864
                                                                    
                                                                    
                                                                    
                                                                    3.00
                                                                    
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    2,624
                                                                    
                                                                    
                                                                    
                                                                    2.90Consumer
      and other loans.
                                                                    
                                                                    
                                                                    34
                                                                    
                                                                    
                                                                    
                                                                    8,756
                                                                    
                                                                    
                                                                    
                                                                    9.16
                                                                    
                                                                    
                                                                    
                                                                    34
                                                                    
                                                                    
                                                                    
                                                                    7,783
                                                                    
                                                                    
                                                                    
                                                                    8.62State
      and Municipal Governments
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    4,609
                                                                    
                                                                    
                                                                    
                                                                    4.82
                                                                    
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    2,172
                                                                    
                                                                    
                                                                    
                                                                    2.40Commercial
      business and agricultural finance
                                                                    
                                                                    
                                                                    229
                                                                    
                                                                    
                                                                    
                                                                    18,012
                                                                    
                                                                    
                                                                    
                                                                    18.84
                                                                    
                                                                    
                                                                    
                                                                    222
                                                                    
                                                                    
                                                                    
                                                                    17,835
                                                                    
                                                                    
                                                                    
                                                                    19.74Gross
      Loans
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    95,595
                                                                    
                                                                    
                                                                    
                                                                    100.00
                                                                    %
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    90,352
                                                                    
                                                                    
                                                                    
                                                                    100.00
                                                                    %Unallocated
                                                                    
                                                                    
                                                                    —
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    —Deferred
      loan fees
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    (3
                                                                    )
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    (4
                                                                    )Undisbursed
      portion of loans
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    (3,551
                                                                    )
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    (2,811
                                                                    )Total
                                                                    
                                                                    $
                                                                    825
                                                                    
                                                                    
                                                                    $
                                                                    92,041
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    $
                                                                    780
                                                                    
                                                                    
                                                                    $
                                                                    87,537





The
following table sets forth an analysis of the Company’s allowance for loan
losses.





Three Months Ended
                          June 30,2009
                        
                        
                        2008(In
      thousands)Balance
      at beginning of period
                        
                        $
                        780
                        
                        
                        $
                        727Charge-offs:Consumer
      and other loans
                        
                        
                        6
                        
                        
                        
                        4Total
                        
                        
                        6
                        
                        
                        
                        4Recoveries:One-
      to four-family
                        
                        
                        —
                        
                        
                        
                        1Consumer
      and other loans
                        
                        
                        6
                        
                        
                        
                        3Total
                        
                        
                        6
                        
                        
                        
                        4Net
      charge-offs
                        
                        
                        —
                        
                        
                        
                        —Additions
      charged to operations
                        
                        
                        45
                        
                        
                        
                        30Balance
      at end of period
                        
                        $
                        825
                        
                        
                        $
                        757Ratio
      of net charge-offs during the period to average loans outstanding during
      the period
                        
                        
                        0.00
                        %
                        
                        
                        0.00
                        %Ratio
      of net charge-offs during the period to average non-performing
      assets
                        
                        
                        0.00
                        %
                        
                        
                        0.00
                        %


23





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 $10.4 million, or 6.3%, to $174.8 million at
June 30, 2009 from $164.4 million at March 31, 2009. The increase in assets was
primarily due to an increase of $12.5 million, or 22.4%, in available for sale
securities, an increase of $4.3 million, or 5.0%, loans receivable, net, offset,
in part, by a $6.9 million, or 50.3%, decrease in cash and cash
equivalents.





The total
decrease in cash and cash equivalents was derived substantially from federal
funds sold decreasing by $7.6 million, or 100.0%, to no federal funds sold at
June 30, 2009 from $7.6 million at March 31, 2009. The decrease in federal funds
sold was offset, in part, by the increase of $675,000 in cash and other interest
earning deposit accounts from $6.1 million at March 31, 2009 to $6.8 million at
June 30, 2009. The decrease resulted from the funds being used to purchase
additional available-for-sale securities and to fund loan growth.  The
Company’s non-interest earning deposits are with Independent Bankers Bank
(“IBB”) located in Springfield, Illinois.  As IBB is a participant in
the Transaction Account Guarantee Program, the Company’s deposits are
insured.





Available-for-sale
investment securities increased to $68.4 million at June 30, 2009 compared to
$55.9 million at March 31, 2009, a $12.5 million increase. The increase resulted
from the purchase of $27.0 million in available-for-sale securities and the
realized gain on sale of available-for-sale securities of $101,000 offset by
$3.3 million in repayments on mortgage-backed securities, by $330,000 in
proceeds from the maturity of available-for-sale securities, and by $10.4
million in proceeds from the sale of available-for-sale securities, the $478,000
decrease in the market valuation of the available-for-sale portfolio, and the
amortization of $24,000 of premiums and discounts on investments. 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.





During
April 2009, the Company was required to purchase $195,000 in additional Federal
Home Loan Bank (“FHLB”) stock which increased our holdings to
$836,000.  The amount of required investment in FHLB stock is
calculated based on a formula which includes the amount of  one- to-
four family dwelling loans held in the Company’s loan portfolio and the amount
of mortgage-backed securities held in the Company’s investment
portfolio.  Due to the increase in both of these factors on the
balance sheet, we were required to purchase the additional shares.





The
Company's net loan portfolio including loans held for sale increased by $4.4
million to $91.2 million at June 30, 2009 from $86.8 million at March 31, 2009.
Loans on one- to four-family real estate, including one- to four-family loans
held for sale, increased by $504,000, or 1.1%; commercial nonresidential real
estate and farmland loans increased by $919,000, or 6.2%; construction and
development loans increased by $240,000, or 9.2%; consumer and other loans
increased by $973,000, or 12.5%; loans to state and municpal governments
increased by $2.4 million, or 112.2%; and commercial business and agricultural
finance loans increased $177,000, or 1.0%.  These increases were
offset, in part, by the decrease of $7,000, in loans on multi-family
properties.  The total amount of undisbursed closed-ended lines of
credit increased by $740,000, or 26.3% from $2.8 million at March 31, 2009 to
$3.6 million at June 30, 2009.





At June
30, 2009, the allowance for loan losses was $825,000, or 0.90% of the net loan
portfolio, an increase of $45,000 from the allowance for loan losses at March
31, 2009 of $780,000, or 0.90% of the net loan portfolio. During the first
three-months of fiscal 2010, the Company charged off $6,000 of loan losses, all
in consumer and other loans. The chargeoffs of $6,000 were offset by $6,000 in
recoveries, all in consumer and other loans. 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 June 30, 2009
with no change from March 31, 2009.  Foreclosed assets are carried at
lower of cost or fair value.  When foreclosed assets are acquired, any
required adjustment is charged to allowance for loan losses.  All
subsequent activity is included in current operations.





Total
deposits increased by $4.0 million, or 2.9%, to $144.1 million at June 30, 2009
from $140.1 million at March 31, 2009. The increase in total deposits was due to
an increase of $2.0 million in certificates of deposit, and an increase
of  $2.8 million in savings, NOW, and money market accounts, offset by
the decrease of $728,000 in non-interest bearing demand
deposits


24




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Other
borrowings, consisting entirely of repurchase agreements, increased $6.4
million, or 64.7% from $9.9 million at March 31, 2009 to $16.3 million at June
30, 2009. The obligations are secured by mortgage-backed securities and US
Government agency obligations held at Independent Bankers Bank in Springfield,
Illinois.  At June 30, 2009, the average rate on the repurchase
agreements was 0.19% compared to 0.30% at March 31, 2009.  The rate on
approximately $15.5 million of the repurchase agreements reprice
daily.  All agreements mature periodically within 24
months.





The
short-term borrowing is a $400,000 draw the Company accessed on its $600,000
line with Independent Bankers’ Bank in Springfield, Illinois.  The
line requires quarterly interest payments at a rate of 3.25%.





Stockholders'
equity at June 30, 2009 was $11.8 million compared to $12.3 million at March 31,
2009, a decrease of $501,000, or 4.1%.  Factors relating to the
decrease in stockholders’ equity can be attributed to the addition of $164,000
in net income offset by  $348,000 in dividends declared and paid, the
decrease of $309,000 in accumulated other comprehensive income due to the
decrease in the fair value of securities available for sale, the decrease in
additional paid-in-capital of $5,000 due to the purchase of incentive plan
shares related to the Directors Retirment Plan and the repurchase of $3,000 in
treasury shares.





Results
of Operations





Net
Income





The
Company earned $164,000 for the three month period ending June 30, 2009, versus
$174,000 in the same period of 2008, a decrease of 5.7%. Earnings for the three
months ended June 30, 2009 were positively impacted by a $233,000, or 53.8%,
increase in non-interest income which was more than offset by an increase of
$191,000, or 15.5%, in non-interest expense and a decrease of $77,000, or 7.3%,
in net interest income after provision when compared to the prior year. Basic
earnings per share for the June 30, 2009 three month period were $0.39 per share
versus $0.40 per share for the same period of 2008.  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 June 30, 2009 and June 30, 2008 were $0.38
per share.





Net
Interest Income





For the
three-month period ended June 30, 2009, net interest income totaled $1,027,000,
a decrease of 5.7%, or $62,000, compared to the same period of 2008. Net
interest income decreased in the three-month period ended June 30, 2009 versus
the comparable period of 2008 due to an increase of $198,000, or 27.0%, in total
interest expense, offset by the increase of $136,000, or 7.5%, in total interest
income. The increase in total interest expense is due to the increase
of  $238,000, or 34.8%, in interest expense on deposits, offset by the
decrease of $40,000, or 80.0%, in interest expense on other borrowings for the
three months ended June 30, 2009 compared to the three months ended June 30,
2008.  The increase of $158,000, or 38.6%, in interest income from
taxable securities; the increase of $34,000, or 2.6%, from loans receivable; the
increase of $17,000, or 81.0%, from tax-exempt securities; offset by the
decrease of $73,000, or 94.8%, in interest income on deposits and federal funds
sold are the contributing factors to the increase of $136,000 in interest
income.





For
the three-months ended June 30, 2009 total average interest earning assets
increased by $31.6 million, or 25.0%, to $158.0 million as of June 30, 2009 from
$126.3 million as of June 30, 2008.  However, the yield on the earning
assets decreased by 81 basis points when comparing the three months ended June
30, 2009 to the same period in 2008.  Total average interest bearing
liabilities for the three months ended June 30, 2009 were $145.4 million
compared to $108.9 million as of June 30, 2008, an increase of $36.5 million, or
33.5%.   The cost on the average interest bearing liabilities
decreased by 13 basis points.  For the three-month period ended June
30, 2009, the net interest spread decreased 68 basis points to 2.40% versus
3.08% in the comparable period of 2008.  The decrease in the net
interest spread can be partially attributed to market pressures pushing loan and
investment rates down while still requiring the Bank to pay mid-market deposit
rates.  The rates on other borrowings follow the federal funds rates
and are not as locally market driven.  The decrease in the federal
funds rate and the growth in available for sale securities and loans have helped
to sustain net interest income.


25




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





The
average daily loan balances for the quarter ended June 30, 2009 increased $11.2
million, or 14.9%, to $86.6 million, versus $75.4 million for the same period of
2008.  During the same period, the yield on loans decreased 75 basis
points to 6.22% from 6.97% for the June 30, 2009 quarter compared to the June
30, 2008 quarter.





The
average daily securities balances, the Company’s interest-earning deposits and
the federal funds sold balances for the first quarter of fiscal year 2010
increased $20.3 million, or 40.5%, to $70.2 million, versus $49.9 million for
the same period of fiscal year 2009. However, the yield on available-for-sale
securities, interest-earning deposits and federal funds sold decreased by 58
basis points to 3.47% for the three months ended June 30, 2009 compared to 4.05%
for the three months ended June 30, 2008.





On an
average daily basis, total interest-bearing deposits increased $37.9 million, or
40.8%, to $131.0 million for the three-month period ended June 30, 2009, versus
$93.1 million in the same period in 2008. The average cost of funds on deposits
decreased by 12 basis points to 2.82% for the June 2009 quarter versus the June
2008 quarter at 2.94%.





For the
three-months ended June 30, 2009 versus the same period of 2008, the average
daily balance of short-term borrowings decreased $1.5 million, or 9.6%, from
$15.8 million to $14.3 million.  The average cost of funds decreased
for the June 2009 quarter by 99 basis points from 1.26% to 0.27%.





Provision
for Loan Losses





The
provision for loan losses for the quarter ended June 30, 2009 was $45,000 with a
50.0% increase over the provision of $30,000 for the June 30, 2008
quarter.  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 June 30, 2009, its
allowance for loan losses was adequate.





Non-Interest
Income


Non-interest
income categories for the three-month periods ended June 30, 2009 and 2008 are
shown in the following table:





Three Months EndedJune 30,Non-interest income:
                                    
                                    2009
                                    
                                    
                                    2008
                                    
                                    
                                    % Change(In thousands)Charges and fees on deposit accounts
                                    
                                    $
                                    220
                                    
                                    
                                    $
                                    217
                                    
                                    
                                    
                                    1.4
                                    %Charges
      and other fees on loans
                                    
                                    
                                    100
                                    
                                    
                                    
                                    44
                                    
                                    
                                    
                                    127.3Net
      gain on sale of loans
                                    
                                    
                                    127
                                    
                                    
                                    
                                    42
                                    
                                    
                                    
                                    202.4Net
      realized gain on sale of available-for-sale securities
                                    
                                    
                                    101
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —Other
                                    
                                    
                                    118
                                    
                                    
                                    
                                    130
                                    
                                    
                                    
                                    (9.2
                                    )Total
      non-interest income
                                    
                                    $
                                    666
                                    
                                    
                                    $
                                    433
                                    
                                    
                                    
                                    53.8
                                    %





Non-interest
income increased $233,000 when comparing the three-months ended June 30, 2009 to
June 30, 2008.  The largest contributing factors to the increase were
the increase in gain on sale of loans and the realized gain on sale of
securities.  The gain on sale of loans is due to the sale of $13.6
million in loans for the three-months ended June 30, 2009 compared to $2.7
million in loans sold during the three months ended June 30,
2008.  During the June 2009 quarter, the Company sold $10.4 million in
available-for-sale securities resulting in a net realized gain of
$101,000.


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-month periods ended June 30, 2009 and 2008 are
shown in the following table:





Three Months EndedJune 30,2009
                              
                              
                              2008
                              
                              
                              % ChangeNon-interest expense:
                              
                              (In thousands)Compensation
      and employee benefits
                              
                              $
                              650
                              
                              
                              $
                              732
                              
                              
                              
                              (11.2
                              )%Occupancy
      and equipment
                              
                              
                              184
                              
                              
                              
                              175
                              
                              
                              
                              5.1Data
      processing
                              
                              
                              60
                              
                              
                              
                              59
                              
                              
                              
                              1.7Audit,
      legal and other professional
                              
                              
                              85
                              
                              
                              
                              50
                              
                              
                              
                              70.0Advertising
                              
                              
                              102
                              
                              
                              
                              45
                              
                              
                              
                              126.7Telephone
      and postage
                              
                              
                              54
                              
                              
                              
                              25
                              
                              
                              
                              116.0Loss
      on sale of foreclosed property
                              
                              
                              —
                              
                              
                              
                              4
                              
                              
                              
                              (100.0
                              )FDIC
      Insurance
                              
                              
                              131
                              
                              
                              
                              6
                              
                              
                              
                              2,083.3Other
                              
                              
                              158
                              
                              
                              
                              137
                              
                              
                              
                              15.3Total
      non-interest expense
                              
                              $
                              1,424
                              
                              
                              $
                              1,233
                              
                              
                              
                              15.5
                              %




Compensation
and employee benefits decreased by $82,000 when comparing the June 2009 and 2008
quarters primarily due to the decrease of $182,000 in expenses accosicated with
the exercise of options and a $33,000 decrease in market value of the shares
held in the Directors Retirement Plan offset, in part, by a $121,000 increase in
salaries and accrued paid time off days. The increase in salaries can be
attributed to the hiring of a trust officer in July 2008 and the hiring, during
the second quarter of fiscal 2009, the full-time employees for the Vincennes,
Indiana branch.





Advertising
expense increased $57,000 for the three months ended June 30,
2009  when compared to the same period of the prior year due to
increased advertising in a new market area, Vincennes, Indiana. On May 1st, 2009,
in response to a marketing program to promote branding, our deposit product
called “Reward Checking” was renamed Kasasa TM
Cash.   This promotion has also led to the increase in
advertising.





Telephone
and postage expense increased by $29,000 for the three-months ended June 30,
2009 when compared to the same period in 2008.  During August 2008,
the Company signed with a company that would supply all lines necessary for
integrated technologies, secure networking, and communicating with branches and
ATMs.  The addition of phones and lines at the new branch in Vincennes
also contributed to the increases.





The
increase of $125,000 in Federal Deposit Insurance Corporation (“FDIC”) insurance
was due to the increase in the assessment from 5 basis points to 12 basis points
paid on deposits and the additional 5 basis point special assessment on each
insured depository institution's assets minus Tier 1 capital as of June 30,
2009. The amount of the special assessment for any institution will not exceed
10 basis points times the institution's assessment base for the second quarter
2009. The special assessment will be collected on September 30, 2009. An
additional special assessment of up to 5 basis points later in 2009 is probable,
but the amount is uncertain. The additional amount  imposed on the
Company, as a result of the June 30, 2009 final rule, was approximately
$82,000.





Income
Tax Expense





The
provision in income tax expense decreased $25,000, or 29.4%, for the
three-months ending June 30, 2009, compared to the same period in 2008. The
decreases can be 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 26.8% during the three-month period ended June 30, 2009
compared to 32.8% during the same period in 2008.


27




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





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
$395,000. The letters of credit are collateralized and underwritten, as
currently required by our 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 June 30, 2009,
outstanding commitments to extend credit amounted to $20.9 million (including
$12.7 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.





The
Company maintains a $24.5 million line of credit with the FHLB, which can be
accessed immediately.  As of June 30, 2009 and 2008, there were no
advances outstanding for either period.  However, the available line
of credit with the FHLB was reduced by $1.2 million for the credit enhancement
reserve established as a result of the participation in the FHLB Mortgage
Partnership Finance (“MPF”) program.  At June 30, 2009, the Company
also maintained 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.  The Company borrowed $400,000 of the $600,000 in June 2009
and $200,000 in July 2009. Also, in July 2009, the Company obtained a $2.5
million secured revolving line of credit with Independent Banker’s Bank located
in Springfield, Illinois replacing the $600,000 line of credit. The Company has
also established borrowing capabilities at the discount window with the Federal
Reserve Bank of St. Louis.Investment securities of
$3,000,000 have been pledged as collateral.  As of June 30, 2009 and
2008, no amounts were outstanding at the Federal Reserve discount
window.





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 adjusted assets and to risk-weighted assets of 4%, and total
capital to risk-weighted assets of 8% respectively.  Generally, 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.


28


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





At June
30, 2009, 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)
                                
                                $
                                12,885
                                
                                
                                
                                13.53
                                %
                                
                                $
                                7,621
                                
                                
                                
                                8.00
                                %
                                
                                $
                                9,527
                                
                                
                                
                                10.00
                                %Tier
      I Capital(to
      Risk-Weighted Assets)
                                
                                
                                12,046
                                
                                
                                
                                12.64
                                
                                
                                
                                3,811
                                
                                
                                
                                4.00
                                
                                
                                
                                5,716
                                
                                
                                
                                6.00Tier I Capital(to
      Average Assets)
                                
                                
                                12,046
                                
                                
                                
                                7.01
                                
                                
                                
                                6,872
                                
                                
                                
                                4.00
                                
                                
                                
                                8,590
                                
                                
                                
                                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:  4T    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 June
30, 2009 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  1A.
            Risk
      Factors


None





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 June 30, 2009 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 Programs4/1/2009
      – 4/30/2009
                            
                            
                            
                            125
                            
                            
                            $
                            35.00
                            
                            
                            
                            84
                            
                            
                            
                            4,1105/1/2009
      – 5/31/2009
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            4,1106/1/2009–
      6/30/2009
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            4,110Total
                            
                            
                            
                            125
                            
                            
                            $
                            35.00
                            
                            
                            
                            84
                            
                            
                            
                            4,110


(1)  On
July 23, 2009, the Board of Directors of the Company voted to approve the
extension and expansion of the repurchase program of its equity stock approved
on July 24, 2008.  The Company may repurchase up to 10,000 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 2.5% of the Company’s issued
and outstanding shares.  As of July 22, 2009, the Company had
repurchased 22,782 shares of its common stock out of the 26,892 shares that had
been previously authorized for repurchase leaving 4,110 remaining to be
purchased.  As a result of these actions, the Company is currently
authorized to repurchase 14,110 shares of common stock.  The program
has been extended to August 2, 2010 or  the earlier of the completion
of the repurchase of the 14,110 shares.   As of August 3, 2009,
950 shares of the 14,110 have been purchased in the expanded program leaving
13,160 remaining to be purchased.





Item
      3.
            Defaults Upon Senior
      Executives


None





Item
      4.
            Submission of Matters
      to a Vote of Security
Holders


None





Item
      5.
            Other
      Information


None





Item
      6.
            Exhibits




1.
            Exhibit
      31: Section 302 Certifications





2.
            Exhibit
      32: Section 906 Certifications




31


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:    August 13,
      2009
                /s/ Rick L. CattRick
      L. CattPresident
      and Chief Executive OfficerDate:    August 13,
      2009
                /s/ Jamie E. McReynoldsJamie
      E. McReynoldsChiefFinancial Officer
      and Vice President




32




EXHIBIT
INDEX





Exhibit
No.





31.1
            Certification
      by the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





31.2
            Certification
      by the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





32
            Certifications
      of the CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002


33